They say the situation in the Foreign Exchange market is still fragile. This is significant because it marks an end to the snb referring to the franc as significantlyovervalue. The august Consumer Price index comes at 8 30 a. M. Eastern time that hits with weekly jobless claims and the bank of england has a policy decision due around 7 00 a. M. Eastern time. Tesla announcing plans to unveil its highly anticipated truck. That will happen on october 26th the tesla semiis wh is what thee calling it that date a setback. Elon musk expressing his excitement saying the batterypowered beast is worth seeing in person shares of tesla, down marginally on that news a bit of deal news shares of Tenet Healthcare are jumping on reports that the company hired advisers to explore options including a possible sale. Last month they said they would replace the ceo and some Board Members after concerns from glenn view capital then net h that stock up 14 in the premarket. Equifax says a web server flaw in its open Source Software led to the breach that compromised all that data for up to 143 million u. S. Customers. The ceo is expected to testify before a house panel on october 3rd. Nearly 40 u. S. States have joined a probe into how equifax handled the breach. President trump hosted Democratic Leadership for dinner at the white house last night and reached another deal maybe ylan mui joins us from washington first it was the debt ceiling and now daca Chuck Schumer and nancy pelosi saying President Trump agreed during that din tore Work Together on a package that would replace the program to protect undocumented children and address Border Security without funding for trumps border wall. But that bipartisan spirit could already be on the rocks. Just minutes after the democrats made that announcement, White House Press secretary Sarah Huckabee sanders denied it tweeting that there was no agreement between them to exclude the wall shim schumers spokesperson said the president still plans to push for the wall, just not part of this deal. Already gop conservative lawmakers are up in arms immigration was not the top iiio only discussion last night they talked trade and tax reform last night trump tweeted china has a tax rate of 15 . We should do Everything Possible to match them in order to win with our economy, jobs and wages. As you know Stephen Mnuchin said at delivering alpha that a 15 rate is unlikely, last night the head of the Freedom Caucus told reporters that gop leadership is aiming for Something Like 20 . Big mistake for pelosi and schumer negotiation 101 with donald trump do you not come out and put out a statement that puts him in a box so he cant look like hes at least participating in a win. Unless youre playing politics and youre not involved in this i thought it was terrible. How do you go a dinner and put out a Statement Like that and think that youre actually especially after theres been this kumbaya moment supposedly well see i think that they think that they probably are getting close to where something is getting done. The idea of going out and saying theres no wall, and saying they agreed to these things, and were walking away with everything we want. The 15 we heard ylan talk about and mnuchin, what he told us he was on brett baer last night. Its funny brett was referencing things from our interview. Which brett has been doing for a few days hes fair that way. I talk about him obviously but he kind of walked it back. Hes like i didnt say it wasnt going to be 15, okay the president the goal is 15. The president wants 15 i want 15. He was very sensitive. Its true he did not the way you Say Something what he says, well see, we cant promise it will be 15. In d. C. You can never be honest it helps in d. C. Just to lie. Not just in d. C. , try new york, too. In media. Anything you say will be taken to the enth degree its better to stick to the story. Peel know youre full of crap. Its just you know what im talking about. Yes i know exactly what youre talking about. Which is your point with this daca meeting im telling you in this case the democrats are full of in this way why would you if you wanted if you cared about the merits of this issue, and you wanted to get something done, if that was your goal in life, putting out a statement that tries to put the other person youre trying to negotiate with in a box like this is such a terrible disingenuous move and it creates all kind of ill will bingo i was wondering how you would skirt the overall lead story what story are we missing donald trump wants to help these people and hes sincere in wanting them to stay he is, when he said i understand i hope he does. But youre skirt ag rouing ad thats what youre seeing. Here i am criticizing the democrats not really. Im waiting for you to wake up one morning to tell me that donald trump did something wrong. Youre saying this trump is a volatile nut, if you dont do exactly what he wants, you will never get a deal because hes going to be a child and youre saying its already done no, youre saying those things no, im not i thought you would come in and say wow, this is really great. Maybe hes not a white supremacist, not all about keeping muslims out. Maybe east not all about building a wall. Maybe he wants to let these young people who have been here their whole life you just told me all politics lie what am i supposed to do think you ought to say wow, maybe i misjudged. Give trump the benefit of the dont have you ever woke up one moment and thought about anything that hes done that could be potentially wrong at this point im siding with him against republicans. Here i am telling you that i think the democrats have done something that is terrible terrible youre on the ej you get your same talking points with krugman every morning. I understand that its 91 groundbreaking coverage of these things is down the Mainstream Media path every ceo you look for a way heres the unique thing, andrew. I only want you to be your best youre showing your colors this morning. Because wouldnt you think i would side with the Freedom Caucus rather than pelosi and schumer . Im not. So youre just in favor of a deal getting done. Im in favor of getting anything yesterday we were hearing the private sector doesnt get anything done. How about these guys in government you have seen a more ineffective group which gets to trumps base, 20 are concerned about immigration. A much bigger portion of them are tired of things not getting done does this satisfy the base by saying we will cut deals and make things happen who is the guy in iowa, the most the republican who already tweeted about this hes nashing his teeth. Hes saying this will cost trump his base i thought you wanted to build the wall i do you want the wall yeah. I want Border Security you want a wall these 800,000 are here. Theyve grown up here. Theyve youre ready to kick them out. No. Oh no this is what you do with ceos, dirty andrew thats not what i want to do. The 8 00,000, i dont want another 800,000 five years from now. Let this group stay here, but tighten the borders. Youre not in cahoots with the president on that. His talking points were different than that in previous years. Thats basically what it is. Even what pelosi and schumer said last night that part is true tied with Border Security, not necessarily the wall the point is they were there for dinner theyre talking about things you have to wonder what mcconnell and ryan think about these things this is his way of operating this could potentially bring a deal to the table. Watching mcconnell or these guys that so totally screwed up the obama care bill, watching them see deals being done without them involved, theres just the theres a schadenfreude there for me which im surprised, because it involves nancy pelosi and Chuck Schumer. Somebody just tweeted me, you would think these two are brothers. This sounds like scaramucci and Reince Priebus no. Youre an Old Testament no, scaramucci and priebus didnt live in the white house together what happened to kane, he got banished forever or something . The outcome was not good for him. He got in trouble more news this is you yeah. Go for it. President trump blocked a chinabacked investor. This is too little too late from buying American Semiconductor company lattice over National Security concerns. They finally block it. Why didnt they block the i dont know. What is more important . Lattice semiconductor security comes back to this depends where your priorities are. Where your bread is buttered. Where your bacon is fried. The white house saying the National Security risk posed by the transaction relates to among other things the chinese governments role in supporting this transaction this is the fourth time in the past 27 years that a u. S. President has blocked a deal like this. Shares of lattice took a dip late yesterday on the news but theyre rebounding in early trade. Were now getting response to the china block of the deal. Its unch basically. This is interesting in how it plays out in this next story the u. S. Department of Homeland Security ordered all federal agegys to stagencying to stop using software made by kaspersky lab. They are concerned about ties between officials and russian intelligence agencies. The Cybersecurity Software is widely used in the United States in the public and private sector Kaspersky Labs says it is disappointed with the decision donald trump tweeting just now. No deal was made last night on daca, massive Border Security would have to be agree ed d to exchange for consent would be subject to vote this gets back to our conversation no deal being made i will bequeath you more reading. Go on. Go back to the top go back to the top go further back go further back to lattice go to lattice. You can do lattice. Lets do it on tv i didnt want to do lattice you told me you did go for it. I didnt want to go lattice lets talk markets. Go for it. Please i bequeath it to you. Im worried about this eric, you look so young. 1 130 billion under management . A lot of capital. A lot of capital, yes. Thats a lot of weight on your shoulders youre at u. S. Bank. U. S. Bank chief Investment Officer. I am. You have some help. I have some great team also Michael Tyler chief Investment Officer at Eastern Bank Wealth Management eric freedman, chief Investment Officer of u. S. Bank wealth management, more than 130 billion under management is all this you just saw 15 minutes of dont know whether i would call it noise. Does any of this factor into your Investment Decisions . It does the key thing is what is priced in right now its healthcare and tax reform we argue both are excluded from market prices. Most of the chatter weve seen across the market has been on will we see more substantive progress, administratively on either topic what were seeing is that neither are factored in. So we do think that the Global Economy is certainly showing momentum, markets are following. So we think that if there is some more substantive progress, that would be the next leg higher, a lot of risk asset. We want to retain that progrowth stance for our clients. Thats worked out for us this year data suggests we should continue that stance. Michael tyler, how about you . What have you heard so far in the headlines would cause you to do anything differently in your investing . Anything i think we are in a global pick up in demand growth thats a good thing. So, what would worry me would be issues that come up that would deflect that you know, i think to some degrees there optimism that we might get tax reform next year theres very few people in the markets now who think it will happen this year this year we have strong corporate earnings that will carry the markets through. Im looking ahead to next year i want to see some form of tax reform i want to see the immigration debate resolved because 800,000 people is actually a meaningful portion of our population growth on a yearonyear basis. And frankly Economic Growth and corporate Earnings Growth depends on having more people here, more consumers, more producers, more students thats one of the engines that makes the American Economy grow. I dont know, does it matter to you whether the highend get tax cuts it does it is certainly important. Supposedly theyre not now. Was a bit of a difference from april april the discussion from the white house was that the top tier would be moving lower certainly yesterday the suggestion was that they would be flat or potentially increase. Thats something that we do think about, the wealth effect and if there is a knockon effect of consumption. Well have Kevin Mccarthy on today. What do you think kevin brady thought when he heard that i dont think their plan includes i dont think they intentionally are trying to cut taxes for rich people, but part of the process, that will be part of it unless its different than what theyre proposing. Well see about that. Lets face it. The wealthiest people, its not going change their consumption or their spending all that much if they get a tax cut. If you get a middle class tax cut that affects hundreds of millions of people that has an impact on their ability to spend money to invest in their homes and businesses thats where you can see a much more profound impact from a tax reform package, possibly a tax cut as well. Though i dont think thats priced into the markets yet. Those are the people who could benefit most and in turn benefit the economy the most no backup in rates in your view at this point it gets to be gradual our take is that the fed is assetprice dependent. Chair yellen will see how the run off reacts in terms of market activity. We think it will be gradual. I cant imagine it would be a fast rise at this point. All right so the rest of this year and next year equities continue to be a place to invest or not . We do we think corporate Profit Growth momentum is there. That certainly youre seeing that in europe which has demographic challenges, challenges in terms of its ability to be more shareholder friendly momentum is positive were getting more synchronized Global Reaction to, i think, the stimulus weve seen as well as ongoing corporate profitabilities. It feels good to us. Thats where were staying gentlemen, thank you. Sorkin, this is your thing this is what youre saying what donald trump just said. Bingo instead of reading the stupid lattice read, you should have said thats the whole thing. You were stealing my read. I didnt notice lattice the tweet was mine, right . I didnt notice lattice. He didnt know the point is the tweet is exactly what i said. The tweet is exactly what i said was happening. Right instead of worrying can i bring in the fafr right far right on this . Breitbart is calling him amnesty don. You can see how it will play out on the right sanders started it first, she started saying nothing was said about a wall but she wasnt there. So she pushed back, but again softly they didnt say theres no deal with these people. Were seeing it from the president. Youre right andrew is right in saying they put him in a box, thats unfortunate. Trump is not coming out and saying forget it, this wont happen but hes saying theres no done deal here at this point, which, honestly, is a better response than i might have anticipated. Yes given his history. Considering the hopes of daca coming through it is still a way of saying, look, youre dealing with this thinskinned child, do not say these things its not criticism of the democrats. Its warning that theyre dealing with this they came in and tried to say woo were putting a stake in the ground saying this happened. Andrew is saying they were playing politics if you cared about dreamers, and you cared about getting you wouldnt have said it. You would have never said that youre playing totally to your base im saying this about the democrats. But what were they doing . Theyre looking to capitalize on politics than theyre looking to box him in maybe they think its a grand negotiating bargaining tool. I dont know on a morning like this, after a dinner like that, its a mistake. If the goal truly is to get to that place to get a deal done. It messes up the negotiation, trumpeting things before you have anything done that really is a cynical view for the people that you love so much to say they really dont want a deal for dhaka i like to think they want a deal for dhaka actions belie that. I dont understand why they do it this way they made it less likely by doing that to the extent they probably made it by 10 00 last night it was a better chance, by 11 00, a worse chance. Thats cynical. I think schumer and pelosi i like to think they want a deal but how they get there is a different route. We dont know who leaked this what person in the room. They both said it, didnt they they put out a statement. They put out a statement, but was it in coordination, i dont know coming up, well talk about lattice again. I wont say a word about bacon a shoe company taking Silicon Valley by storm. The story of all birds next. What powers the digital world. Communication. Thats why a cutting Edge University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. Another tweet from President Trump. This time about the border wall directly the president tweeting the wall, which is already under construction in the form of new renovation of old and existing fences and walls will continue to be built. Now to the buzz story of the morning, Martin Shkreli is behind bars for a Facebook Post that was deeped threatening. Meg tirrell joins us this morning. When Martin Shkreli arrived at Brooklyn Federal court yesterday, it was expected that he would be walking back out by most people. This was a bail hearing ahead of his sentencing which has been set for january. Thats not what happened he was remanded into custody and ordered immediately to prison to await that sentencing. So it comes down to these Facebook Posts from last week about Hillary Clinton, just some bizarre posts reallyseemed to o followers 5,000 to bring some of hillarys hair while she was on her book tirour. He said it was satire, that he was joking prosecutors said it was a pattern of escalating threats and harassment since his conviction shkreli apologized to the court but the judge having none of that angrier in this bail hearing than she ever seemed during the trial calling those Facebook Posts a solicitation of assault that were not protected by the First Amendment despite his lawyer ben brafmans pleading and protesttations he spoke with reporters briefly after the hearing yesterday. We are obviously disappointed we believe the court arrived at the wrong decision but shes the judge. Right now we will have to live with this decision brafman taking no questions from reporters yesterday shkrelis sentencing is set for january 16th back to you. Meg, thank you for that. Well talk sneakers this morning. Googles larry page and ben horowitz have one thing in common, its on their feet were talling about all birds a sustainable shoe craze taking over Silicon Valley and new york the company Just Launched their Concept Store in new york city and announced a 17 17. 5 million series b funding round we are joined by the cofounder and coceo i see these on everyones feet barry diller had them on his feet its an incredible craze i see ads for it have a feel theyre nice. I see it on my insta fwram feinstagram feed we did something different. Put a ton of time and energy into developing a brandnew material its marino wool, right its merino wool. Its 17. 5 micron this is the same fiber that will go into a 5,000 suit, but we engineered it to be perfect for a shoe this is a legitimate craze, hopefully not a fad which we will talk about, but tell me how this started did you ever think this would happen this way . We have not been able to predict the success and how much people like it, which is often why were out of stock were trying to keep up. But the original concept started when my partner was a professional athlete, tim brown. He was playing in the australian league, sponsored by nike. They would pay him extra for wearing the yellow one or bright blue one so it got better visibility on cam was when thera playing a game it was a light bulb moment, he said theyretra fo their brand, theyre not engineering it to my feet and comfort. Stripping away the logos, focusing exclusively on comfort and enabling that with natural or Sustainable Materials was a big opportunity that we thought the industry missed. Effectively its like a walking shoe he didnt play tennis in this no, its more a casual shoe i take them when i travel and run in it. We see a lot of people with sneakers and suits those are not these do you have any yet. I have one pair all birds a green pair. My kids call me kermit the frog. Green goes with the suit those dont go with a suit either thank you those on the end, what size are the black ones 12. You did bring a large we got you guys hooked up thats cool normally you go in any shoe store, whatever theyre showing, theyre size 7 7s and 9s why do people do that they look better small. There is a sneaker craze going on there are sneakerheads out there. This is a price point thats not totally crazy. How much . The yeezy sneakers go for 1,000 bucks or more. What yes, e zshgsyeezies by kanye this is how much we designed the finers from a 5,000 suit and tried to make it as affordable as we can by selling directly to consumers. You wont tell us how much . Our store how much are those black ones 100 bucks 100 bucks we try to make it approachable how does merino wool hold up if youre running around in the weight really well. It holds about a third of its moisture without feeling damp. Its not perfectly water proof can we talk about amazon for a second yeah. You are going direct to customer others like warby have broken out as a brand without needing another platform longterm, now youre seeing the knicks of the world finally break down and decide theyll actually go on to another platform are there other Retail Outlet s where you think will you land . Like an amazon or a big box store. The most important thing for us is to have an interaction with every customer we sell and exchange a product for money for. They we want them to have a wonderful experience when they buy. We have a whole immersive experience in soho the website we hope is an enjoyable buying experience. We get data. We make sure we can own it i will never say never will we go to third baparty birtdistribn right now you feel like a tech company because most of your sales are online, but one thing about warby, theyre doing more business out of their retail stores, brick and mortar than online. How do you think that will help evaluations it. Its different by industry. People are more comfortable buying shoes online than eye wear i think its 5 of sales of eye wear online. About 17 in the u. S. For footwear theres a little more comfort. Its growing rapidly its the Fastest Growing footwear sector. We it feel like an Online Business 95 of our sales are online. We see that as a good experience we strip away the friction by offering a 30day trial for the shoes. You can send them back well take them back in whatever condition. How much stuff gets sent back decent amount, usually because of size exchanges. That still happens how do they run honestly . Big, small really true to size i wear 10 1 2 or 11 you didnt bring a 10 1 2 or 11 i have an 11 back there i have these vance, theyre really ugly, they dont have laces. Do you have anything like that. I have slipones, too well get you graphed. Well style you out after the segment. You have two models in terms of taking this business to the next level are you taking this idea into clothing will there be 12 models . How you are figuring this out . We dont know yet the lens for us, where we can when is where we focus on comfort. We used these beautiful materials which have never been used in shoes. We focus on that innovation with Sustainable Materials that can be something thats close to the skin, could be other shoe categories, other materials. Thank you yeah. I told a lot of people he would be on. People were psyched about it. I will give you back your tweet. I want to hear you say this with compassio compassion President Trump just tweeted out, does anybody really want to throw out good, educated and accomplished young people who have jobs, some serving in the milita military really, exclamation point. Coming up, the Senate Finance hearing on tax reform is set for today. Can anything get done . Well ask david walk and later this morning, dont miss budget director Mick Mulvaney hell join us live at 8 45 a. M. Eastern time she cant become a guitar legend just by playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. Dad molly, can you please take out the trash . sigh dad molly trash whoo mom hey, molly . Its time to go bell ringing class, lets turn to page 136, recessive traits skip generations. Who would like to read . molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. President Trump pushing for quick results on tax reform and has been reaching across the aisle on this and ovther issues. Joining us this morning is former u. S. Controller david walker great to see you great to be back. Lets talk about the timeline laid outchltthis you dont think its unrealistic to see tax reform come this year the framework will come out in september, is it supposed to be comprehensive, both business and individual will be only business . Standalone . Coupled with infrastructure . Theres a lot of details we dont know so i can understand them wanting to use budget reconciliation so you have a majority vote. But theres no time to do it i would agree with you until you start seeing some of the things donald trump is doing, reaching across the aisle. Maybe some of the expectations get scaled back. There is room for biparts san sh b bipartisanship donald trump is an independent. There may be an r behind his name, but he is an independent. I think the American People want to see some things done, whether its pro growth, job creating tax reform, reform to the Affordable Care act, Immigration Reform these things have been lingering for far too long nothing getting done, so when you hear the tweets that we have just seen from the president this morning where hes not saying forget it, what nancy pelosi and Chuck Schumer said happened last night is not true, thats not what hes doing hes saying a deal is not done but its crazy to kick the dreamers out were not going to kick the dreerms o dreamers out we are a country thats about rule of law. We need Border Security. We need a pathway for legal status, more temporary work permits. People who came here illegally, all right, they might be able to get a pathway to legal status, but they shouldnt jump the line for a pathway to citizenship thats just a basic farness argument which a significant majority of americans will deal with lets turn to taxes what would a passable tax reform package look like . I think you can get an agreement on Business Tax Reform thats not just ccorporations, but also businesses that may be taxed as individuals we need a simpler, fairer and more competitive tax system. Businesses create jobs in this country. Were not competitive internationally. When i went around in 2012 talks to the American People will tax reform, we agreed on a comprehensive tax reform that would take the top rate down to 25 . Both for individuals and corporations that would significantly limit deductio deductions, and that would tax on a territorial basis rather than on a global basis, if you will which would make us more competitive. And over 80 agreement. One of the questions is whats the fiscal test going to be . Thats what if they said, all right, theres going to be some dynamic scoring well assume we grow quicker, but ill give you infrastructure, too. Would any democrat sign on to that. I think the pathway forward is to couple tax reform and infrastructure but then youre pulling out money on infrastructure and the lets talk about that point this should kill you. Ive been a longtime advocate for something that donald trump came out for. The dell ceiling limit is dumb it has not worked. We should not focus on deficits or debt. We should focus on debt as a percentage of the economy. We need to repeal the debt ceiling limit. We need to go to a get to gdp limit which has targets, triggers and automatic Enforcement Mechanisms its pro growth. You grow the denominator faster than the numerator on the numerator, it forces the 1 1. 2 trillion in tax expenditures on the table. Try this in connecticut when you one things there, see if it works. The states are supposed to be a petri dish well experiment with tax reform, regulatory relief, healthcare reform and a variety of other things in order to create a Better Future the latest im hearing from democrats is theres not a mainstream economist in the world who believes cutting business taxes will help and that obamas economic record is better than reagans thats what im hearing now. Dont believe everything you hear i dont know what to do. Thats what you heard from one person a lot of them say that. Not a single mainstream economist, paul krugman. Joe stiglitz i see what these guys are up against. Its tough entitled to their opinions doesnt mean its right. President trump tweeting this morning that no deal was made with democrats last night on daca, iall t comes down to the border wall. Well hear from mexicos foreign minister after the break. House Minority Leader Nancy Pelosi had dinner with donald trump last night to discuss daca before that she met with mexicos foreign minister to discuss daca michelle morrschelle joins us w. Last night the foreign minister told cnbc he was meeting with pelosi to tell her how concerned he was about the individuals in this program. Mexico takes an interest in the issue because the vast majority of those in the program are mexican. Our cameras caught him as he was coming out of pelosis office, he told us u. S. Immigration policy is up to the u. S. However he knows most of the mexicans in the program want to stay this would be tremendous Human Capital going back into our country. Were talking doctors, engineers, accountants, talented, creative people. Therefore for every dreamer that goes to mexico, mexico wins and the United States would lose but what is important here is that these young people want to stay this is the country that theyve known. This is where their life is. This is where they want to be. If congress doesnt get something done, participants in the program could lose their work permits when it expires used to be the finance minister, now an economist he talks a lot about human capitol and about how important it would be in terms of losses for the u. S. Hes a smart guy. Good guy interesting to watch a lot going on in mexico in the meantime yeah. Next up are the nafta negotiations in october. Michelle, thank you. When we return, a company trying to disrupt hollywood it all comes down to technology and visual effects thats next. This bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Ways and means and finance and the administration. At the end of the day, my prediction is we will have the lowest rates for our businesses in modern history. Welcome back tosquawk box. Cloud services and the blockchains open Ledger Technology already transforming the way we look at finance but theyre affecting digital content, in particular hollywood visual effects could face the next disruption. Joining us is the cofounder and chairman and ceo of cloud Graphics Company otoy. Good morning, you were here a couple years ago, we were talking about augmented reality. Since then we were talking about westword at least the open created on your platform we were talking about trying to explain to people what the platform does because effectively ill take a stab, its a cloud so its a cloudbased platform allowing people to render graphics leveraging all sorts of other peoples computers and the Processing Power of all sorts of other computers. Thats what were building on top of the blockchain, today we have a centralized Cloud Service that renders films and games theres a lot of work that goes into those things. Also rendering is in our lives you have advertising and Motion Graphics and sports what is rendering cg graphics in film, for example. Making something that isnt real look real. Something inanimate become animate . Yes, pixar movies are a great example of rendering but youre seeing it being used in commercial spaces such as ikeas app on the iphone which puts the pieces of furniture in your room virtually. That takes a lot of computer power to generate the lighting and realistic imagery and our Service Currently uses things like the amazon cloud to deliver this compute power to our users. So when you say compute power youre using the Computing Power of amazon . Correct theyre one of our Fulfillment Centers for all of this work and whats interesting is the cloud has compute power but the entire world has more and by using the blockchain we can tap into millions of users graphic cards. Like the laptops im not using at home right now . Exactly. Explain to everybody, people use the word blockchain. I feel like people are perverting the word blockchain in some ways because, a, half the people dont understand what blockchain is and now i feel like lots of companies are talking about using the blockchain, if you will, without using in the a meaningful way. Well, its very much like the early days of the internet the internet is a meaningful part of our lives and infrastructure it wasnt used wisely during the dotcom era i feel like its going to be bigger than the internet because what . We had the ibm lady try to explain and i still didnt do a twominute tutorial on blockchain. The blockchain validates every single possible transaction across the entire internet and it is safer and you look at equifax, that breach, it means all the data and all of the access to data youre getting the validated . Blockchain would have prevented equifax . Yeah. It could prevent a lot of fraud. Its every single thing you do on the internet is validated by the entire internet. Thats what the blockchain is. Thats interesting. So transacting money or thats the first time somebodys explained it to me that i get it, thats really good. Thank you so if you use this right, its going to be bigger than the internet itself was or the web back in the days and when you look at a business like ours which is limited by the cloud, even amazon, google, they have huge amounts of power but thats nothing compared to the compute power in the world so we can build an extender business and not build off the cloud. Using the blockchain we can validate our businesses across millions of computers all around the world. Thats a scale weve never been to tap into business. Which you think puts aws out of business . They would have to change or compete differently because this was move from centralized Cloud Services to the entire blockchain. Youre doing it youre trying to do it for rendering right now in your business but do you think it has a much larger application i think rendering is a huge application because it touches on things like video and real estate and even selling objects virtually. Computer aided design exactly things like architecture, scientific research. The singularity and mortality is what im hoping for. We have to go but we need to hear from him. The governor has declared a Winter Weather emergency. Extreme risk of burst pipes and water damage. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. People dont invest in stocks and bonds. They dont invest in alternatives or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful can happen. Those people might just get what they want out of life. Or they could get even more. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box this morning here on cnbc, were live at the Nasdaq Market side im Andrew Ross Sorkin the bank of england leaving its key Interest Rate unchanged. Heres the initial reaction in the currency market right there youre looking at the s p dow and nasdaq marginally down unrelated those numbers were pretty much in the same place before the bank of england announced. Well try to show you the currency situation right now youre looking at things marginally up on the euro versus the dollar but not much there youre looking at the futures again. Well, now were looking at the currencies again lets show you whats making headlines at this hour a couple things to tell you about. President trump has blocked the 1. 3 million sale of chip Maker Lattice Semiconductor to a chinabased equity firm seeing as a clear sign that the white house will oppose technology with possible military applications the deal was first announced last november. A lot of folks watching that just in the military complex but more broadly in terms of what kind of money may or may not all the chinese money thats been trying to invest in the u. S. , whether this may pose more problems than other areas. Separately, amazon reportedly planning a one million square foot warehouse near mexico city. This according to sources quoted by reuters who says its part of amazon increasing its distribution capacity in mexico. I wont be cynical but i will mention last week they announced they were going to build a obviously a big second office. Headquarters. Big Second Headquarters better to announce youre doing a big Second Headquarters in the usa week before you build your 1 million square foot in mexico. Home builder lennar im not going to talk about you said you werent going to be cynical. Im just providing context, context for the viewer. Thats a lie, you are being cynical. He is learning at the foot of the master. Home build er lennar says its communities in hurricaneimpacted areas suffered no flood damage from harvey or irma about 40 of lennars homes are in that area the storms did impact about 120 new orders and deliveries during its justconcluded quarter quick stock to watch, tesla announcing plans to unveil its highly anticipated truck on october 26 the tesla semi was supposed to be revealed this september so the date is a setback. Elon musk expressing his excitement on twitter saying the batterypowered beast is worth seeing in person shares of the electric car maker will take a quick look are lower wherever you think about electric. And that it will never be able to be on trucks and that it wont be fast like the tesla s which is faster than anything so can you really use a battery for thats what i was wondering part of the plan was that you could never make a semi the big trucks. But can you go from new york to l. A. And how many times would you have to sit there and charge the battery. How far can it go . You dont know this, sorkin . About 250 miles. What good is that on a semi. And how long does it take to recharge. But this is going to be a much bigger battery. Youre talking about the battery in a tesla right now how far will this truck go with a bigger battery . Will it go coast to coast. No, no. I imagine first of all, the battery will have to be bigger just to haul this stuff. I imagine it will be similar to what the car is, maybe 250, 300 miles. Maybe they can do it more. I dont know. Doesnt seem like but if you get into a tesla and you put the map in and you say where youre going, the car if you said im going to california, the screen will show you not only the map, it will show you which where youre going to stop along the way, that theres a starbucks at this one, a Shopping Mall at this one, you can decide if this one has fast charging, this one has slow charging. Its pretty remarkable. Its amazing. And, by the way, this is not where i thought wed be five years ago to have a semi truck that can do these things but the idea of still saying, okay, heres where you can stop, but then you have to stop and wait. I would suggest some of these places can you imagine if you had to stop for a half hour to fill your tank with gas. Can you put in recharging station and taco bell . [ laughter ] thats exactly the point. So what happens is if you look on the screen if youre a tesla owner, you know this you see on the thing it will say theres a starbucks here, a taco bell here. Most people are charging while theyre going out for lunch or having dinner or, by the way, in the trucking world you might be going to a trucking area. But a lot of those truckers are driving 12 hours, theyre not supposed to drive incredibly long times but a lot of them are. How much does that cut in when youre actually doing it i have to imagine that they have figured out some of this. Its going to start with short haul stuff. Eight and a half years after the last bear market ended, most observers agree that the bull market is aging and the economic expansion is mature but how long can it stay late before the bull run comes to an end . Mike santoli joins us for why the bull market is just a state of mind. The older we get we think age is a state of mind. Seems like a birthday card cliche and happens to be true when it comes to market. You really had this theme out there it seems late, theres not a lot of value to be found, we have to be prepared for the next phase but if you look at this eight and a half year bull market by the way, thats dated from exactly the low of march, 2009 its not necessarily been all that great in terms of annual returns, yes its the second longest and strongest but you have about 15 a year out of the s p 500 which is nice except by the standards of major bull markets thats not usually where they peak and what i find interesting is the tenyear trailing return in the s p without dividends is 5 so normally at the end of one of these strong cycles you would have been up about 15 on that hard to find very broad, very serious excesses or stresses in the Capital Market its been two calm a lot of folks will say. But you would have expected eight and a half years after that low, you would be much closer to a recession by a lot of leading indicators, youre not as far as we can tell. Also hard to see any stress in the credit markets, thats often an indicator as well the profit cycle is probably most important and it think that could be a concern into 2018 after youve had one of these midcycle profit roe vooievival. But the age itself is not something i think thats going to bring this one down. When you Start Talking about leading indicators you would be watching, which are the most important . The leading indicators of recession, unemployment claims are not picking up, the ism numbers globally look healthy so all the checklists you would go through to say should we really be on recession watch are not flashing and, yes, you could say asset values are very high, maybe forward returns over coming years is not going to be great but that doesnt tell you a whole lot about what this phase is going to look like as it plays out. Mike, stay here, were going to continue this conversation. Joining us to talk more about the markets is Richard Bernstein, the ceo of Richard Bernstein advisers, they have 3 billion in assets under management rich is also a cnbc contributor. Also seth carpenter, the u. S. Chief economist at ubs gentlemen, welcome to both of you. Rich, why dont you talk about the age of the bull market first and what you think that means . I think mike brings up very good point we want to be careful not to mistake a late cycle environment for late in the cycle and i think thats something people have trouble with but to what mike said, people have to remember the Financial Market is a reflection of the real economy. And the lack of enthusiasm that youve seen for the eck we till market which i would argue has been true through the whole bull market youve seen that with ceos and cfos Capital Spending picks up as ceos and cfos get more confident. Think about how many you had on your show in 2015 talking about how energy was changing and there was going to be a whole new thing and they expanded dramatically only to find they overbilled, did too much and then in 2006 and 2017 Energy Prices fell. You dont see that in the overall economy. Right and you cant get to that eclectic build crescendo and then drop until you see that and to mikes point, if youre not seeing that in the overall economy its not like the Financial Markets work on their own. If youre not seeing in the the real economy, how can you say theyre so tremendous excesses in the economy that were on our way to recession those things dont make sense. Seth, what are you seeing in the real economic . I hope this isnt bad for ratings but im not going to be able to disagree with whats going on the economy is doing fine. If you look at the labor market which is a great indicator of an economy, a healthy economy creates a lot of jobs, a lot of jobs help to support consumption spending which is 70 of the economy so its the cause of and reflection of the healthy economy and that seems like its likely to continue for a while and back to Financial Markets we see low longterm yields ebsu is longterm yields will stay low for a long time so if you think about eck we the i prices, thats how youre discounting the valuation. Another reason things might be boring but theres no clear reason for there to be an abrupt end. Mike, you pointed out that people start looking around and they say weve come a long way in a short period of time and its hard to find values we heard that a lot. How do you match that . I think for professional investors they feel as if they cant just participate in the broad indexes so they are going far afield we heard it about distressed ned brazil and nonperforming spanish solar loans. Thats where you go if youre performance oriented but we have this Financial Market arrangement right now where you have 1 federal funds rate, 2 treasury yields on the ten year, 2 dividend yields, 3 Corporate Bond yields, 5. 5 junk bond yields so thats kind of the othr bit everybody is dealing with right now. Its not weird. We have been saying the indexes have performed so well and anybody who has invested in indexes has done incredibly well but we keep hearing that must be about to turn, that that cant last for forever what do you tell people . That the broad indexes continue . Theres a cyclical component if were talking about active versus passive theres always a cyclical component to whether active measures outperform active weve been in a perfect storm where passive is done well. For a long time. For a long time now and but part of that has been that active managers have been unwilling to take the risk that they needed to take to outperform right . And, again, this is at the peak of a cycle, people are completely risk takers and active managers are very concentrated at that point because its usually narrow leadership and theyre all into those stocks the fact that they have not been willing to take that risk says a lot about the emotions of the market and why were still in this bull market and thats my argument until you see look, a lot of the people you had, with all due respect to people you had on seeking alpha a lot of them have to take short positions. Whoa, whoa, whoa, whoa. Delivering alpha. Whatever its called. Whatever its called . Everybody else seeks alpha, pal, we deliver whats your problem, bernstein they have to be short, though delivering alpha. Delivering. At your esteemed conference that you had this week. In a box with a bow on. It it was the highlight of everybodys week im trying to make it up to you really quickly, joe. But a lot have to take short positi positions, theyre not 100 long so if you have to take a short position youre not going to say its not time to be levered wrong, youre going to say theres got to be something wrong. That would have a good time to disagree with him on the on at least the title of the conference. That was like when sean spicer used to get his instructions and just [ laughter ] when bernstein is on, you couldnt hurt the ratings. The ratings are so you could not hurt the ratings seth, are you at 3 for this quarter and next quarter no, not for q 3 and q 4 were below that. Does the atlanta fed know what theyre talking about where do they get those great numbers . I want what the atlanta fed says to come true why are they wrong they just have a statistical model. Statistical models are great and helpful. I dont think their statistical model, for example, knows anything about the fact that there was a hurricane so were seeing were looking for a small drag, Something Like a quarter percentage point for example. Prior to that were you at 3 , before the hurricane no, we were below statistical models, especially ones that are a bit agnostic, that are trying to be consistent and systematic, theyll be wrong a lot of the time. Theyll probably be wrong every single time. But whats the signal . Are they telling you about inflection points . The economy is good. The economy is strong. There are lots of reasons to be optimistic about it. Are you a mainstream economist . I think i thought about that. Ask if hes Mainstream Media. Are you fake news no, i said im not Mainstream Media so im not fake news the reason im asking, do you buy into any degree of benefit from supplyside, trick l down growth policies, do they work . People have been telling me theres no mainstream economists that think lower Corporate Tax rates actually help anything. And repatriation. Id pick apart a a lot of those words because jar ban helps. When i was at the treasury department, i wrote a lot of bullet points and talking points for supplyside economics. I think every single mainstream economist would say yes theres an important part of supplyside economics so if you look at i remember writing a speech for secretary lew when i was at treasury we looked at some of the objectives of the administration for the supplyside of the economy. You told me that doesnt work, either. This is where i think it matters with the nomenclature. So if you think about the bill the Senate Passed on immigration, increasing immigration, Immigration Reform, the cbo scored that as having a potential threetenths increase on potential gdp why . Bigger labor market, better skills in the labor market thats supplyside economics so i dont think any mainstream economist would object to the so thats supplyside, too. Can i add something i know what youre going to say krugman. I know you you send me stuff, bombard me with it. I do it to you on purpose i do it to ruin your day. Final word. I think theres nothing wrong with supplyside economics from my perspective the problem is when people think thats the solution, you can lead a horse to water but you cant make him drink. It would be nice to be more competitive globally. Fine, but that wont stimulate the economy in and of itself without demand. Read it and weep. Without demand, why would anybody build a new factory . Why would they hire a new people its a chicken egg thing. Thank you, guys stay long, bernstein. When we come back, we have so much more to talk about i actually wanted to talk about when you worked for jack lew who by the way i dont believe ever asked the government to go on a use a plane, did you see that well talk about Steve Mnuchin with the plane and the honeymoon in just a minute just how much will Hurricane Irma cost . We ask the chief meteorologist of a. I. R. The Firm Providing risk modeling for insurance. And reaction to new sanctions over its nuclear program, we will discuss that. And at 8 10 eastern time, Kevin Mccarthy joins us. So much to talk with him autbo stay tuned youre watching squawk box right here on cnbc ious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. What should i watch . Show me sports. Its so fluffy look at that fluffy unicorn hes so fluffy im gonna die your voice is awesome. The x1 voice remote. Xfinity. The future of awesome. Residents are starting to return to the devastated florida keys after Hurricane Irma. Contessa brewer joins us now with more. Where are you today, contessa . Joe, im back in miami. Of course were going to be watching for President Trumps visit today to naples on the west coast throughout south florida there is a lot of damage for him to tour. Governor rick scott went down through the florida keys to tour that damage yesterday. We got past that midpoint way all the way to key west and let me tell you what, the damage is extensive. Its pervasive we saw from key largo to islamorada but residents who are trying to get into the middle and lower keys like key west, they cant they get turned around as the convoys out there tackle infrastructure and there is so much to tackle they have to clear roads, get those power lines back up and running, water, fuel, communications theres almost no cell signal in much of the florida keys but verizon and at t have set up portable cell phone towers sprint phones were in high demand because it seemed to be the only carrier that had a consistent signal through the island chain marathons airport up and running for relief flights, thats the midway point in the florida keys Army Choppers were delivering pallets of bottled water and other relief supplies. In key west we saw massive trees toppled at the historic hemingway house but im told no damage inside. The damage we saw seemed to be wind damaged the streets were cleared thanks to neighbor and active ambitious public works guys but residents have Running Water for only two hours a day, they have limited access to electricity, cell service, cash, and their supplies are running low now medical teams from health and Human Services went out just starting yesterday its part of an army of 38,000 federal workers. Were seeing almost four million fema males delivered a massive effort i wanted to tell you, fancy restaurants in downtown miami filling up i see the cruise ships over here at port miami, the brewers marlins game has to move to milwaukee because of hurricane damage flight playoff season andrew thank you for that, contessa, we should say the total cost of Hurricane Irmas damage now still far from being determined. Catastrophe modeling firm a. I. R. Worldwide revised its estimates and is projecting insured losses of 20 billion to 40 billion dollars. Joining us is peter sousounis, hes the chief meteorologist at a. I. R. Worldwide how do you do the estimates and what changed, obviously, both in terms of the estimates and the weather patterns over the past couple days . Okay, well, its a very involved process we actually gave an estimate weve done several intermediate estimates, our most recent one, i heard the quote of 20 billion to 40 billion that was completed during the day on sunday. I was in berlin helping the team out the week before. We came up with an initial estimate and went into the office sunday. We worked all day to come up with that estimate its a very involved process one of the key unknowns at that time is that the storm has not completed its trajectory in fact, we were working off of the latest available information that we had from the National Hurricane center which was 5 00 p. M. Sunday. That was as late as we could go because we had promised our clients and everyone that we would post estimates first thing monday morning what we hasnt known is how close the storm was going to come to tampa. It didnt bypass tampa until 2 00 a. M thats why 20 billion to 40 billion might seem like a wide range of estimates but we have to do that because the storm hasnt completed its trajectory. So what has changed since then obviously the storm has completed and were working on a final estimate at this moment. Is there a breakdown in terms of when you look through the estimate of i mean, you have all sorts of clients who are trying to take this information in and trying to understand what their liabilities are ultimately going to look like but can you bask it for us, where those liabilities will land you mean in terms of geography or in terms of commercial versus industrial exposure exactly commercial versus industrial. Well, commercial versus industrial versus residential we actually partition our losses. We provide a very detailed view of the damage, again, for the benefit of our clients in terms of very wide range of what we call lines of business including residential, commercial, industrial properties. We also break it down in terms of content versus damage to the building we also look at a time element which is the business thats lost during the repair of the property. Peter, we want to thank you for our time this morning and these new estimates which i hate to say theres anything good about them with irma but its better that these numbers are lower than higher. We appreciate your perspective this morning thanks when we come back, we are following a developing story out of north korea that nation threatening to use Nuclear Weapons to sink japan. We will discuss the latest threats. Squawk box will be right back. Are you ok . What happened . Dad kinda walked into my swing. Huh . 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Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. Good morning everybody, welcome back to squawk box on cnbc we are live from the Nasdaq Market site in times square. Among the stories front and center the bank of england kept its key Interest Rates unchanged at its meeting this morning however the bank did say rate hikes are likely in the coming months. If pricing pressures rise, the british pound moved higher after that statement was made, you can see it right here. 133. 18 is where it stands right now we are just about an hour away from the labor departments look at initial jobless claims last weeks figure was swelled by the impact of Hurricane Harvey and this weeks number is expected to rise further, surpassing the 300,000 market. Well get august Consumer Price index figures at 8 30 eastern as well these will be the last inflation ratings before next weeks Federal Reserve meeting. Yesterdays Producer Price index, if you remember, those figured showed slowerthanexpected inflation at the wholesale level we are following a developing story out of north kor korea. That nation threatening to use Nuclear Weapons to in its words sink japan and reduce the United States to ashes and darkness the sharp rhetoric comes days after the u. N. Security Council Unanimously approved tougher sanctions on pyongyang, north korea. Also called for the breakup of the u. N. Security council saying its a tool of evil that moves at the order of the United States joining us now, new yorker magazine staff writer evan osnos, his piece on the brink awesome piece. Is featured on the magazine thanks for joining us. When you hear this rhetoric, what do they have to use when they really get angry . Isnt it silly is there anything left at that point . Ashes and darkness, i dont know how you get even madder to Say Something. Theyre sort of at the outer end of the rhetorical spectrum already. Theyve been talking about this for years, thats the way north korea communicates that ive been saying for years theyre going to drown seoul in a sea of blood and what i wanted to do, frankly, by going to pyongyang was to cut through some of that and figure out how much of this is theater and how much of this is real strategy. Ultimately, what do they want from us . We know what we want from them we can talk about it all day on this side. What did they make of our intentions what do they make of our resolve and what do they intend to do to get there . And you concluded what . Well, i came away with a clear sense of one thing. They are holding on to this Nuclear Arsenal no matter what this is talked about in National Security circles in washington right now. Its talked about quietly inside parts of the administration but officially our position remains we are seeking denuclearization. This is near unanimity among National Security specialists, theyre not going to give it up. What i came away with from pyongyang was the clear sense they made that decision themselves and now the question is what can we do. How do we deescalate the tensions at the moment and ultimately how do we set up a system that might contain and deter them from using these weapons much the way we were able to deter the soviets from using them during the cold war. Whats the solution, evan well, if we come up with this this morning i think well deserve a prize. Heres what i think honestly, andrew i think we are now in a moment when the opportunity to brush them back come policely is gone. James clapper, who is no softy in National Security, said to me we need some form of diplomatic contact. Were not getting good intelligence out of north korea. Even under the worst days of our relationship with cuba we had an intrasection in havana were not there yet, we cant open an intrasection tomorrow. But we need to figure out a way to get some form of communication going. And when i talk to members of the administration they say thats their longterm objective as well. What do you think the goal of these very public tests are . Theres an element of taunting going on and what do they expect is supposed to happen . They made a judgment. In 2011 when they saw Moammar Ghadafi fall they decided that if we give up our nukes and if we project any kind of weakness to the United States that Moammar Ghadafis fate may, in fact, be kim jonguns fate. So this is as much signaling to china as it is signaling to us because what they want to say to china is we are prepared to go to war so dont perress us. Dont push us too far. So this is about them telling the world that they are in a new phase now and thats true. They have an icbm capable of reaching the american mainland and so we have to deal with reali reality. Just to follow up on this point, we may have made a mistake with what we did with qaddafi after getting him to give up his Nuclear Ambitions and then going ahead and taking him out. If we then go down this path and say, okay, if you talk tough and you wont give up your nukes, that does get us to the bargaining table and you can continue to exist, what message does that send to any other regime down the road and what unintended consequences will we be dealing with as a result . Well, its an unhappy state of affairs none of us wanted to be where we are but we have to acknowledge the fact that we wont be able to force them back into a position they were in ten years ago. That moment has passed so what are we dealing with now . And this is the the broad consensus among people ive met in beijing, seoul, washington, and, of course, in pyongyang is eventually well get into a situation where we need to, in effect, try to prevent this thing from boiling over. And so what that means is managing the proliferation risk you just described thats where we signal to other countries that this is not an option available to them but really in the short term the most important thing is to figure out a way to reduce these tensions, to reduce the chances of miscalculation. The only way we do that is by introducing the second half of what the Trump Administration has talked about that. I a eftalked about maximum pressure and maximum engagement. Were doing maximum pressure and its moving along in the Security Council quite well but were not getting the maximum engagement thats the missing piece of the puzzle. Evan, kim jongun hold on there may come a day in your view where were okay with him having it and i dont think thats where nikki haley is. Its different from the cold war because they will use it to blackmail us for god knows what. So this push might come to shove. This is not going to be more containment at some point, it will get scary can south korea orchestrate some type of regime change or another country orchestrate Something Like that . Wont that be the end result of this no i think the chances are unlikely. We do not accept that theyre allowed to have nuclear ca capabilitie capabilities, what do we do short of a military option as you know, military options are grim general mattis said so, h. R. Mcmaster when he talked about this project, when i talked to him about north korea what he said was we recognize the serious risks of deterrence. We know they cheat on deals, we know they might try to blackmail the United States. But thats, frankly, what needs to be said at this stage of the process. Hes saying the right thing on behalf of the United States. Nikki haley is saying what shes suppose to be saying. But they dont mean it . Theres an element of this that goes on behind the scenes and one thats in front of the cameras. The truth is their longterm objective is to build a box around north korea that will prevent them from being the most immediate risk we can deal with the other countries down the road. So just speaking totally frankly, evan, you think eventually the United States is going to have to live with a Nuclear Armed north korea that can hit any city in the United States with a Hydrogen Bomb . I think were going to live with the reality of some form of Nuclear Capability in north korea. Its an unhappy fact but thats the destination were moving towards because the table has been laid. Steve bannon before he left the white house i know, yeah. Gave a comment where he said military options are not realistic. Theyve got us and i think we can pretend there may be a whole range of options we like to have pursued but we have to deal with where we are now and where we are is lets set up as we did successfully during the cold war a system of arms control, deterrence and serious Missile Defense that can protect the United States and signal the north korea this is not an option they can take. They cant use these weapons without their own annihilation. Give us a taste of what it was like to be there and what the people there think of kim jongun. Do they think hes a rational actor . Are they proud of whats going on whats the feeling ill tell you, ive been in a number of countries over the years that are cut off from the rest of the world in the way north korea is i was in cuba a couple years ago. Ive been in burma and lived in china for a long time which is no longer cut off. I can tell you this is the most secluded and isolated place ive ever been. It does exist in another era if you go down the street, there is no advertising for cars or household products, theres no advertising of any kind. What there is is advertisements for the wisdom and leadership of their Supreme Leader kim jng un. Thats what they are telling their people so there is i worked in iraq for a while and it reminds me of the way in this the years of authoritarianism distorted the experience and impressions and the minds of the ordinary iraqis. The north Korean People today are living in a world unto themselves and we need to be honest about the fact that these are not folks who are going to casually make a deal they think could jeopardize their future. Evan go ahead. I was just going to say, bucky, i thibuck becky, you cant talk honestly about kim jongun they wont give you an honest answer but when you talk to defectors, which ive done, they will tell you hes not as popular as his grandfather kim ill su ilsung. Having gone there and come back and written these things and said these things would you go back again . Do you feel like theres any risk to you for doing Something Like that . I would go back theres always a risk. You have to balance it against the public interest. This is a National Security interest we cant afford to be blinded to we have to get as much visibility as we can its a place you can go if you manage the risks carefully as a journalist god almighty. I cant imagine. I said im afraid to go to south korea because i might get kidnapped and taken to north korea. You had sweaty palms and butterflies and anxiety . I did theres no question. If you dont that reaction, youre not paying attention. We thought hard about it i really did at the last minute we decided we have to do this because this is an important story and if we dont go now were not going to go. Did you think you were being tracked . I was being monitored everywhere i went. Would you go, sorkin . I would out of curiosity. Oh. I would because because youre curious. You just said youre curious you know what curiosity did. I dont know. Evan, thank you for doing that when you phrase it that way, that is a really highminded reason for someone has to do it and youre the guy to do it. Thank god. Thank god its you. Glad to do it. Great to see you, evan. Coming up when we return, stocks you need to watch ahead of the opening bell. Check out the futures at this hour dow looks like it would open up higher, about five points higher but the s p 500 and nasdaq open off just slightly. Check out also the price of oil. Wti crude trading at 49. 81 a big guest lineup on cnbc today. You dont want to miss this, cbs president and ceo Leslie Moonves later plus verizon ceo Lowell Mcadam will be hanging out with the gang at 10 30 eastern time squawk box returns after this. . sigh dad molly trash whoo mom hey, molly . Its time to go bell ringing class, lets turn to page 136, recessive traits skip generations. Who would like to read . molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. thank you. Im vern, the orange money retirement rabbit, from voya. Im the money you save for retirement. Whos he . Hes green money, for spending today. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Can we at least analyze can we push the offer online . Legacy technology can handcuff any company. But yes is here. The new app will go live monday . Yeah. With hewlettpackard enterprise, were transforming the way we work. With the right mix of hybrid it, everything computes. Not rebalancing your portfolio. Pursuing your passion, not reacting to market downturns. Focused on what you love, not how your money will last through retirement. Let us help you with those decisions, and get on with your life. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Lets look at a couple stocks to watch. United Natural Foods reported a quarterly profit of 72 cents a share. Two cents above estimates. Also gave an upbeat forecast for the full year. United natural is the primary distributor for whole foods, which is now owned by amazon dow transportation component rider system was upgraded to overweight from sect overweight at key bank. Key bank says its seeing indications of strongerthanexpected rentals at ryder and ebay was rated buy, a new coverage at d. A. Davidson with a 48 price target, the firm says it Sees Opportunities for improved operating performance and it points to more Google Search results that point users to ebay. Coming up, pharma bro fraudster Martin Shkreli jailed after soliciting a lock of Hillary Clintons hair that story is next check out the futures which are most of the session have been flat, still are dow jones up a little, s p and nasdaq down a little a programming note, the founder and ceo of social capital, Chamath Palihapitiya is on the half time report on ipo day. Thats an exclusive interview starting at noon squawk box will be right back. Its not just a donation. Its a warm blanket. Its a bottle of clean water. Its a roof and a bed. Its knowing someone cares. Its feeling safe. Its a today thats better than yesterday. Every dollar you can spare helps so much more than you can imagine. Please donate now to help people affected by Hurricane Harvey. Your help is urgently needed. Its not just a donation. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. If you thought the pharma bro saga was over, think again Martin Shkreli is behind bars for a Facebook Post that was deemed threatening meg terrell joins us. Martin shkreli was ordered to prison, his bail revoked this was the surprise outcome of a bail hearing after bizarre Facebook Posts that he had put out last week about Hillary Clinton. Of course Martin Shkreli no stranger, really a lover of social media, now it getting the better of him. In these posts about Hillary Clinton he seemed to offer his followers 5,000 for anyone who could bring him one of Hillary Clintons hairs. He later updated that post to say it was satirical, that it was a joke but prosecutors in this case really not agreeing with that saying its evidence of an escalating pattern of threats and harassments since his august 4 conviction, also noting that the secret service had to get involved here now shkreli later apologized in a letter to the judge on monday of this week, but that not going far enough the judge yesterday calling those posts a solicitation of assault and she did remand him into custody his attorney protesting, begging her not to do it she said it was too late he talked briefly with reporters outside the courthouse last night. We are obviously disappoi disappointed we believe the court arrived at the wrong decision but shes the judge and right now we will have to live with this decision. Shkrelis sentencing date has been set for january 16. Hell be in prison until then, andrew back to you. Thank you, meg. We have other stories to tell you about this morning. Sean spicer back in the hot seat the former White House Press secretary stopped by Jimmy Kimmel Live last night to discuss trumps twitter habits, fake news and Melissa Mccarthys famous snl impression of him kimmel questioned spicer about his statements surrounding trumps inauguration crowd size. Its the day after the inaugurationing right . Yes. And you are charged with the job of going in front of the press and saying that the inauguration crowd has the biggest crowd [ laughter ] i think ever the biggest audience ever. Yes, im aware of that. [ laughter ] your job as press secretary is to represent the president s voice and make sure you are articulating what he believes his vision is on policy, on issues of and other areas that he wants to articulate. Whether or not you agree or not isnt your job kind of interesting its not your job. I think thats probably right. I think hes probably right. Its like bannon said you side with your man, you side with your man, but then theres spicer comes from the military perspective as a guy who has served and i think is still in the reserves. The parts about the truth part which, joe, we were talking about earlier. The truth meaning do you just accept that do you not tell the truth . Like, you know, that theres weapons of mass destruction or you can keep your plan if you like it or all of it. Or it was a video that caused the im just saying when youre asked to Say Something that isnt truthful, what do you do. Were back to when in rome. How much of what you hear out of washington i dont think we should accept that. On either end, by the way. On either end. If you are going to look for absolute veracity in President Trumps exaggerations about i mean, ive known him a long time and ive you know, understand youre going to hear things are the best, things are the best, things are the best, the best, its a great deal, its going to be great take it with a grain of salt as far as those crowds that day, you remember there was another time that it was a faux shot of how people were there. There were some extenuating circumstances as to how many people were in the crowds that day, right im going to get out my salt shaker. Well, also, i think there was you maybe need a horse lick for a grain of salt but and then you also heard i think spicy came up with that if you take all social media as people viewing the inauguration that it was the largest crowd ever, right . That was a pretty good answer. Sure. But as far as lies go, lies that come after people have lost their lives i think are more serious than lies about crowd size at an inauguration. I mean, i wouldnt lose sleep over that as opposed to some of the lies weve had in previous situations it seemed more serious, right . Wendys whos wendy oh, the restaurant chain wendys twitter square burger. You remember wendy, wendy, wendy, from the shining. Wendys twitter account has the internet buzzing once again after someone tweeted at wendys how do you compare to carls jr. . And the wendys rival replied lol, they dont. A few hours wendys fired back if we were going to disanother restaurant wed have more than zero likes and retweets after 13 hours. [ laughter ] this is that wendys tweet has more than 12,000 retweets, nearly 50,000 likes. End of civil society. We are all sniping at each other all the time. Theres trolling going on everywhere i like them both. If real life was twitter, man, would it be a bad place. Please be nice to each other, people. Cant we all just get along exactly. Coming up, two big interviews in the next half hour House Majority leader Kevin Mccarthy will be with us in just a couple of minutes. So much to talk to him about then later omb director Mick Mulvaney is going to join us as well another big hour of quk xsawbo straight ahead stick around, squawk returns in a moment. The governor has declared a Winter Weather emergency. Extreme risk of burst pipes and water damage. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. From godaddy in fact, 68 of people who have built their. Website using gocentral, did it in under an hour, and you can too. Build a better website in under an hour. With gocentral from godaddy. Its Life Insurance and wharetirement solutions toic . Help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. Deal or no deal . President trump tweets about the latenight dinner with democrats and denies coming to an agreement on dreamers squawk box news maker, House Majority leader Kevin Mccarthy on the state of the gop agenda and the prospects for bipartisan tax reform. That interview straight ahead plus, reigning reining in. San francisco wages war on automated delivery were going to tell you how the tech hub is trying to prevent a robotakeover as the final hour of squawk box begins right now. Mr. Roboto, domo announcer live from the most powerful city in the world this is squawk box. Good morning, welcome back to squawk box here on cnbc live from the nasdaq bill kernan along with becky quick and Andrew Ross Sorkin the dow is up just a little. Same kind of thing for the dow the nasdaq down eight and what just happened . The bank of england one of these days, if it ever does happen where they dont leave rates unchanged, theyre going to have sirens . Yeah, sirens and alerts and every possible thing in the world. The central bank did say that rate hikes are likely in the coming months and maybe it will happen if pricing pressure rises. You can see the pound, checking the euro, too, which, you know, was suppose dlid dly on its way 130, its 118 right now. Well see what happens european markets mixed, france and italy up a little bit but nothing moving too much at this point on the boards. Lets tell you about some of todays other top stories. President trump blocking a chinabacked investor from buying American Semiconductor lattice over National Security concerns the white house saying the National Security risks posed by the transaction relates to, among other things, the chinese governments role in supporting this transaction this is just the fourth time in the past 27 years that a u. S. President has blocked a deal like this but it comes as a time when security concerns about state actors involving Cyber Security attacks are at heightened risk not only with china but also with russia shares of lattice came down sharply on this news this morning theyre up about five cents to 5. 77 home builder lennar says its communities in hurricane impacted areas suffered no damage from harvey or irma however the company says the storms did impact about 120 new orders and deliveries during its justconcluded quarter equifax says that a web server flaw in its open Source Software led to the breach that compromised data for up to 143 million u. S. Consumers ceo Richard Smith is expected to testify before a house panel next month that comes on 30october 3. Nearly 40 states have joined a probe into how equifax handled that breach. The stock down again, you can see it dropping off a cliff. Its down about 1. 2 this morning a couple stocks to watch, shares of Tenet Health Care are jumping on a report that the company hired advisers to explore options that would include the sale of the company. Last month the hospital operator said it would replace its ceo and Board Members in response to pressure from its largest shareholder activist investor Glenview Capital tenet has declined to comment on those reports thus far but the stock moving on that news up about 7 in the premarket today. Also, tesla announcing plans to unveil its highly anticipated truck on october 26. The tesla semi is what its going to be called it was supposed to be revealed this september so the date a bit of a setback but thats not holding back elon musk, expressing his own excitement on twitter saying the Battery Powered beast is worth seeing in person. Hmm someone looked up on the web site, it can go 600 miles. Its a huge battery. Massive battery. Expensive. How much . Over 100,000 or something. Wow samsung has created a 300 million fund to invest in automotive startups and selfdriving technology. The companys First Investment is 89 million in tt tech, an Austrian Firm that provides technology for Auto Networks and safety controls out of audi cars and to others. Lets get back to the broader markets. Joining us to talk about it, the managing director at Tjm Institutional Services also a cnbc contributor. Good morning, jim. Good morning, andrew. What is going to move or not move this market right now well, heres whats going to move in the the short term we are pricing in a 46 chance the fed is going tighten a month and a half ago it was as high as 70 . To me it seems like the interesting part is they are not comfortable tightening until they can ascertain what the actual Economic Impact is of the two hurricanes we all know probably in the medium and long term those impacts are economic positive not negative but right now theyre forced with no choice, really so that to me is the biggest thing. The b. O. E, thats the story overnight. They kept rates unchanged but they said i swear to god, were going to tighten some time in the future weve heard that story before, weve heard it from our own fed. It seems like yeah, were going to tighten but a few months until we figure things out. Is that officially a change of a bet for you if we had had this conversation before irma and harvey, did off different view yes, i believe they were going to tighten one time. I think things were looking good then as far as the last two earnings cycles. Earnings were good thats not that big a story. Any idiot can have good earnings if they slash things but revenues were good, too. So i genuinely believed there was something happening that was very, very positive and i thought they were going to tighten once but this thing has to change. The change is very interesting for asset prices because probably, overwhelmingly, probably the story is going to be fine but were going to get low rates for longer in minute. You want to own banks right now or no . I just asked jamie dimon this question straight up im curious what you think. If you think the yield curve is going to steepen, you should own banks. I think the yield curve is going to flatten, now, over the last five days, the tenyear yield has gone from 2. 04 to 2. 20 and the banks have done quite well i have some banks but its a medium and longerterm position. I think the yield curve is probably going to flatten first so i dont think its the right time for other people to buy banks now. Is there any gamble to be made yet on washington we talk every morning about tax taxes. Were going to have a number Mick Mulvaney is going to be on, Kevin Mccarthy is going to be on whats the upside downside there for you right now . I think its a 5050 that something is going to happen in the short term i think its an 8020 that something is going to happen in the next, lets say, three quarters, and i think the market likes that i think the fact that we have an administration thats not talking about additional regulation and additional taxes is an absolute positive so even if nothing happens, thats a removal from where we could have been and i think the market feels thats very positive obviously were flirting with the alltime highs right now. Jim, great to see you, sir. Thank you. Thanks. A big hour still ahead on squawk box. Up next, President Trump leaning in to bipartisanship we will talk to two key players about what it means for the president s agenda first, House Majority leader, as we just mentioned, Kevin Mccarthy, will join us then white house budget chief Mick Mulvaney will be here at 8 45 a. M. Eastern time. Hes a freedom guy Freedom Caucus guy well see whether hes still one or whether hes walking the line now. Its going to be interesting stayun ted youre watching squawk box on cnbc s. They dont invest in alternatives or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful n happen. Those people might just get what they want out of life. Or they could get even more. Welcome back, everybody. Nelson pelts is getting reports in being elected to Procter Gambles board he said it would vote its shares in favor of pelts election. It issued a statement saying p g shareholders deserve a highly engaged shareholder focused voice in the board room. Procter gamble has opposed pelts election President Trump hosting a dinner with Democratic Leaders Chuck Schumer and nancy pelosi last night at the white house. The Congressional Democrats have said that the president agreed not to push for a border wall as part of the deal to protect socalled dreamers but this morning President Trump is tweeting and denying that the president saying no deal was made on daca massive Border Security would have to be agreed to in exchange for consent. It would be subject to a vote. But he also tweeted the wall which is already under construction in the form of new invasion of old and existing fences and walls will continue to be built and then you had another important tweet that we shouldnt leave out. Where he said does anyone basically paraphrasing, does anyone think that we should throw these people out, they are in the military, i dont know why we wouldnt put that tweet in, too, but that was another tweet. Look, i know Kevin Mccarthy probably saw that one, too joining us now, House Majority leader Kevin Mccarthy. Its great to see you. You had the debt ceiling deal and now another dinner last nig night. Just opine what are you thinking, leader mccarthy these are good things or bad things ts always good when the president is talking to both sides. One thing i found the first part of his presidency, the democrats would vote for nothing so to engage them and have them able to move over, and as long as the senate with Mitch Mcconnell continues to hold to 60 votes in the senate that gives schumer more power so i think the president is frustrated with that point but daca has to be fixed as we go forward the president gave us a timetable. Im not going to sit here and believe theres a deal if one says there is and one says theres not. At the end of the day we know our boarders are not secure, we have to secure our borders and we have to solve the daca issue at the same time so i believe congress can solve this problem. What do you think the fix looks like what would you like to see well, i would like to see Border Security in this question i would like to see immigration overhauled completely because i think its crazy that we have individuals come to america, become engineers and you tell them to ship them someplace else i come from an Agricultural Community and i know you need a guest workers program. So you would like to see the d. R. E. A. M. Ers stay id like to see that solved i dont think this country is going to move this individual out. This is the only country they have known many people within my community have lived there almost their entire life, they dont find out they were a d. R. E. A. M. Er until they graduate high school and trying to move into college. I think theres a place to solve this problem theres a real world and then theres the world that some of these farright guys that you know well live in that think youre going to can you imagine . Really rounding up people, you, you, you and just dump them on the other side of the border and say go fend it was never really but you have to remember our boarder is not secure. I know. You dont want another 8,000 five years from now. I understand that. You each got to let me ask you this, leader, so we talk about tax reform, this latest dynamic with schumer, pelosi and the president , what does it mean about what tax reform finally looks like in your view. What are you thinking . What im thinking from a basis of heres the principles we know our corporate rate is the highest in the world so we have to lower that we know weve got to be in the range somewhere 25 or lower down to 15, they have to pay for that so lets see how low we can go the lower we go the more competitive we are around the world. We know the seven rates are very confusing. Why dont you just have three . Lower those rates, you have to deal with pass throughs with the Small Businesses, you have to equalize that as you go forward and this idea that companies are successful around the world but cant bring that money back home you have to go to territorial rate so repatriation bring the trillions of dollars back to america. Invest in america. Its not difficult. What will this relationship with pelosi and schumer mean i understand what we want but what does this dynamic mean . Would you ever see schumer or pelosi going for dynamic scoring, for example does it mean that you guys offer up infrastructure as a carrot and stick to get some dynamic scoring accepted by the damage do you need the democrats at all or is it going to be reconciliation with only 51 and its a moot point anyway what do you think. We can do it from reconciliation thats the way to move it but i dont think its pelosi and schumer are the democrats who are going to vote for this but when you look at the senate over there and you look to West Virginia and north dakota, indiana, i think those senators are very serious about voting for it because ive watched the president travel into those states ive watched those senators ask to ride on to the plane into missouri and others. The country wants growth i mean, ive said this many times before but if you take the lowest growth year under bill clinton, the very worst year, that was higher than the very best year under the last eight years under barack obama we used to average more than 3 growth were down 1. 4 . Is mcconnell miffed whos mad that the president is dealing with the opposite side. I dont think people are miffed if were able to get something done. I dont believe you i have an economic question which you made an argument about the growth which i will not dispute. But its so remarkably low if you believe the numbers. Well, you have millions of people out of the workplace. You have 62. 7 . Thats the lowest Participation Rate going into this year if i look back to january since 1979 so you have to create an incentive to help those individuals come off that, especially ablebodied back into the work force we need them in the work force so you have to get more into the work force i think when you look at welfare reform and others. So you dont look and go, wow, thats pre2007 numbers people thought we were living in alice in wonderland. We have to feel it not look at the numbers when i walk across my istrict, are people feeling the income coming back . There are challenges out there so theres a lot of places to go. Thats a wage growth story, right . Yeah. Its also the price of housing and others whether youre able to achieve and a lot of that has to do with regulations the success that we have had, remember the Congressional Review Act only used one time in the history of america but we have now signed 14 of those into law that allows you to get common sense in regulations because a little fact that no one looks at, when these agencies propose new rests on to business, if it cost more than 100 million its called major do you realize for the last five years weve averaged 82 every single year for the last five years. Constant. So that fundamental change is felt now we have to do tax reform. Whats already happening . Youre already seeing a lot of animal spirits, consumer confidence, business confidence, its already happening just from the regulations. But i will say this we dont need new ones much less get rid of the old ones i asked jamie dimon very specifically, i said have you felt any of the deregulatory effects on your business. That doesnt matter that doesnt matter. No, no. His answer was no. Thats like looking his answer was absolutely not. It doesnt matter how does it not matter. They havent done dodd frank. Its not just financial deregulation, its environmental. I will tell you this. Let me give you one point here. Thats like up is not down, white is not black and actually i want to go on to this other thing where im having this is the problem. Off third of the democrats signing on to single payer with Bernie Sanders so thats where that party is right now and i also have democrat after democrat come and tell me that tax reform and lower corporate rates and deregulation, none of this actually works because its supplyside voodoo economics, trickle down, its been proven not to work. Theyre not going to be on with you. Theyre never coming on with you on this. Thats all right. At this point, with the president dealing with their leadership, he may have made so many republicans mad that they dont go along with him on this anymore. The true believers in supplyside economics might now be listen go ahead. It will be in the policy why people vote on what they vote for. But you are correct that the Democratic Party is moving so far to the left. Remember, Bernie Sanders is not a democrat, he was very honest with himself, he is a socialist. But Bernie Sanders is the leader of the Democratic Party today. Single payer does not even work in the process to be able to pay for it in the system look what California Legislature did. They actually moved it there the senate i want to see the cbo score democrats love cbo scores i want to see the single payer cbo score. Were going to do this through reconciliation the one thing that i think does happen here as the president sits down and the president is the president of the United States he should talk and listen to everybody, but hes also having these lunches with moderate democrats who feel they have been moved outside of their own party. Remember, he doesnt have to have the leadership of the Democratic Party, he just has to have the ability that some democrats are able to vote for him. But we can do this without him but i think the American People would like to see especially their tax code fairer, simpler and let them keep more of what they earn. Last question do you think the president he is a deal maker but do you think he was sticking it to republicans that failed him on Obamacare Repeal or do you really think he is ive heard today hes not a republican, hes an independent, hes ready to deal with them. Do you think there was a threat to republicans to get him into line or will he start working with democrats consistently over the next couple years. I think hes exactly who he says hes going to be. Hes a disrupter you have to put in the perspective. If youre talking about the debt ceiling agreement, he is a president thats watching a Hurricane Harvey just hit texas, one of the economic drivers in this state overwhelmingly texas get hammered and then irma coming into florida. He didnt want to see politics played out so he made an executive decision sitting inside a room to make an agreement so he would havent chaos during that time thats his choice and it probably played out very well for him. Okay. All right, youre in california, though you know, i dont republican in california, thats i dont know a stranger in a strange land anyway, thank you, leader mccarthy appreciate it. Thank you. When we return, the ro robotechs. We will tell you why San Francisco officials might be trying to kick delivery robots to the curb. We have that story next right here on squawk box. I count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Im val. The orange money retirement squirrel from voya. I represent the money you save for the future. Whos he . Hes the green money you can spend now. Whats up . Gonna pay some bills, maybe buy a new tennis racket. Hes got a killer backhand. When its time to get organized for retirement, its time to get voya. For tech advice. Dell Small Business advisor with one phone call, i get products that suit my needs and i get back to business. Welcome back, everybody. Officials in San Francisco are trying to rein in the robots and theyre doing it with taxes. Were joined right now with that story with adidi roy. Im hear and we want to introduce you to a very important member of the team here this is botler and he helps make deliveries here at the hotel he is actually run by the people at the front desk here and makes things easier for them so were going to do a quick little demo and you can see botler coming towards me here. A lot of people say that robots like botler really help but other people say the idea of argue that robots like botler make things tougher for the u. S. Economy. By taking away human jobs. The city supervisor jane kim is embracing the idea of a robot tax, its juan of the things shes looking at as an initiative around robots or automation she wants to put it on the ballot so statewide voters can vote on it on the next big election in california she was in part inspired by bill gates who, in an interview with a magazine earlier this year said that he thinks that a robot tax would make sense, that robots could be tax it had same way human beings are, things like income or social security, but makers of robots and other critics, including the maker of the robot here says that that idea is inherently flawed because its hard to determine exactly what a robot is because theres so much automation out there and they also say that robots here can do menial tasks while humans can focus on the higher level tax at hand so well do a demo ill put this water bottle here and andy, the general manager, is manning botler. Hes going to make a room delivery its pretty seamless botler will wait here at the elevator he can call the elevator and take the delivery up to the rooms. Cool how it works, guys. Aditi, these robots are novel at this point but this is being inspired by concerns that robots will get much better in the coming years and that they could replace people who are doing things were not just talking about robots that are going to be hitting the buttons in the elevator to take you to a certain floor. Youre talking about robots taking over things like pizza delivery, things beyond that, too. Were seeing that here even in San Francisco were in the broader bay area, mountain view, for instance, theres a pizza place where they have robots helping make the pizza. Were hearing in sacramento theyre going to have robots flipping burger there is so its closer than we think. Aditi, i want to thank you very much. Aditi roy. In our headlines, more than half of the citrus grown in the southern part of florida has been lost to Hurricane Irma. Thats according to the Florida Fruit and vegetable association, a trade Group Representing growers. Right now, the group says that up to 70 could be lost but that field assessments are still in progress also, germanys munich ri saying it may miss its profit warning this year. We know they are still trying to assess all of this, however munich re said its too early to quantify an exact Financial Impact and thats what were hearing again and again the british pound in the meantime has extended earlier gains after this mornings bank of england meeting we want to tell you right now, this is sound coming from President Trump on his way to florida and he was making comments leaving the white house today. Were working on a plan for daca people want to see that happen, you have 800,000 young people brought here no fault of their own so were working on a plan, well see how it works out but were going to get Border Security as part of that and i think something can happen well see what happens. Reporter [ inaudible question ] theyre doing a great job on power. Historically theres never been anything like this but the United States towards fema, working along with governor scott. Theyve done and amazing job and power is being turned on rapidly we have the largest assemblage of human beings in one area and its being turned on so were happy with that. Reporter [ inaudible question ] the wall will come later. Were right now renovating large sections of wall, massive sections, making it brand new, were doing a lot of renovations. Were Building Four different samples of the wall to see which one were going to use and the wall is going to be built a little bit later. We want to get massive Border Security and i think that both nancy pelosi and Chuck Schumer, i think they agree with it so we met last night as you know schumer and pelosi and a whole group and i think were fairly close but we have to get massive Border Security paul ryan is on board, smich on boa look, 92 of the people agree on daca but we want very, very powerful Border Security, o. K. Were going down to florida. Well see you in florida reporter [ inaudible question ] ryan and mcconnell agree with us on daca were very much on board i spoke to them, yes. Just moments ago, were going to go. The sound was tough, he wasnt micced up there eamon, but you got him rebutting to some degree the statements that pelosi brought them theyre getting close. The sound can be hard to hear on the south lawn because of the marine one prop wash as theyre getting ready to take off. But the president saying they are fairly close to a deal now, remember last night after the dinner here with schumer and pelosi the democrats put out a statement saying that they had a deal with the president on daca. Thats the deferred action for Childhood Arrivals Program in which those children who were brought into the United States by their parents would be allowed to stay now that theyre young adults the president this morning tweeting, no, in fact, no deal but then 17 minutes later going out with a tweet saying that the basis of the deal is a sound one, more Border Security in exchange for something on daca there you heard the president say they are close to a deal and also saying that mcconnell and ryan, the Republican Leaders on capitol hill agree with him on daca and said that hes spoken to them since this dinner last night which they were not invited to so theres been an uproar overnight in the president s base a lot of conservatives frustrated with the president saying this is amnesty ultimately by allowing these now grown children to stay in the United States. The president walking a very narrow path here politically trying to reach out to democrats, also trying to keep his base happy and on board and also trying to cut a deal which he says theyre fairly close to. That doesnt square exactly with what the democrats said last night. In just a few minutes, well have Mick Mulvaney, the director of the office and management and budget here with me on the white house lawn he was at that dinner last night and we can ask him what, if anything, they actually agreed to last night. Okay. Eamon, we look forward to hearing more about that. We will talk to you very, very soon coming up, class in section. Well talk to aei president Arthur Brooks about tackling idea diversity on College Campuses if therever eis any again he joins us on set, next because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. People dont invest in stocks and bonds. They dont invest in alternatives or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful can happen. Those people might just get what they want out of life. Or they could get even more. Some economic data, the august cpi rising 0. 4 , the consensus was 0. 3 so hotter than expected. Core cpi was in line with estimates. Weekly jobless claims were down to 284,000, wed been expecting a slight increase. Look at the ten year leading 2. 215 President Trump speaking out on the lawn, as you saw, Arthur Brooks, president of the American Enterprise institute. Arthur, your thoughts today are going to be in a is it a piece in the New York Times . You write for the New York Times now, dont you . You figure youve got those are the people you need to try to help, i guess, is what youre thinking, right . Oh, stop. It doesnt help to be in the wall street journal oped pages, you might as well thats preaching to the choir. You might as well try to educate the other side to some extent. Well, you go with what you think is the truth and there are a lot of people lurking who read the New York Times. If you read the comment section, its depressing. I could write a column called i love puppies and it would be denounced because im some sort of stooge of the right wing but people reading that and not commenting on it are interested in idea and view point diversity i think. I think recently who did i see was going to speak out in berkeley and i was like, wow, that may be the has the corner been i mean, it got to the point of almost so sublime it was ridiculous. Have we turned the corner . It couldnt go much further. Well, i write about this. Go ahead. For sure. Ive been writing about this at universities to kick off the year one of the things were finding in american universities is that capitalism is catching up with universities that are not teaching people very well because they have theyre kind of a mono culture too much and parents are reluctant to send their kids to places so university of missouri which had terrible trouble with these backlash kind of protests last year, the matriculation is down 35 among freshman class. Its nonsense parents dont want to put up with so universities are struggling to figure out how to fix this and im trying to talk to universities about how to do it and the way is basically to say in the same way you care about diversity with gender identification and Sexual Orientation and race and religion you have to do that with respect to how people th k think. That means hiring conservatives. They dont even they talk fascism a lot, auntifascism an they dont understand theyre practicing one of the basic tenets of fascism with the no idea diversity its like they cant they wont hear any ideas that are different than them. Thats almost the definition well, thats a problem with mono cultures in general you can find this in media, you can find in the entertainment, you can find in the small towns and cities across the United States where everybody thinks alike and the result of that is that you tend to make mistakes, you dont get alternative view points that can help you to enrich your view of how the world works and on campuses just over the past 30 years, particularly on elite private campuss theres been this tendency the good news is when i talk to people these days at harvard and stanford and princeton and chicago, now with the new chancellor at berkeley theyre seeing this is something they want to redress. That they believe in the competition of ideas as opposed to having a mono culture they want to change that and theyre looking for ways to do it. I think we can pitch in on this and we might see progress. You, arthur many times as conservatives you cant just talk about prosperity is increased. You need to talk about the you cant just keep saying that over and over. You have to talk about the compassionate side of how the end result is that large groups of people, that their standard of living is raised and the dignity of work and getting off the government you talk about it that way but i can tell you that the narrative right now is kind of interesting. The narrative, you need to go back to talking about the private sector growth can bring wealth because right now i have people on constantly telling me that the whole notion of growing the overall pie hoping that it gets shared, that that has been refuted by the Reagan Administration the gains made then were not real it was because deficits went up. And redistribution is the only different game in town that trickle down has been refuted. It historically doesnt work and theres no mainstream economists that believe that helping the private sector with growth actually will eventually help people down the income scale you need to go back to you need to go back to defending capitalism. Absolutely. And you have to defend capitalism because its the most humanistic system that can wipe out poverty ever created in Human History and to lift up a prosperous middleclass. I dont care what the marginal tax rate is for rich people per se, i care about the fact that rich people and prosperous people take their business elsewhere when it becomes cost ineffective to operate in the United States. What shocks me today by the way is that were trying to figure out whats the marginal tax rate supposed to be when we have tax reform and Everybody Knows that we dont have enough money unless we have a fix cal policy thats sensible. The president of the United States is committed to not reforming entitlements and the Democratic Party is running towards Single Payer Health care which is a 32 trillion entitlement over ten years its completely insane if we want 50 , 60 , 70 tax rates at the top, people moving jobs overseas and kind of a permanent malaise like Great Britain in the 1970s, i have to tell you, both parties are taking us in exactly that direction right now. And thats going to hurt the poor its not going hurt me, its not going to hurt joe, its going to hurt people and who are on the poor side of the American Economy. Always has, always will. Well, the revisionist history is pretty thick and i dont know how it goes back the other way well see. Yeah. Its a fight everyday weve got to get on. We have Nick Mulvaney coming up but we hope to see you in studio again. We need to talk more about this. But please come in. Absolutely. Thanks. Thanks, guys. Thank you up next, well get to another news maker budget chief Mick Mulvaney is going to be joining us after President Trumps dinner with the decrs. Moat stick around, squawk box will be right back. Blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for enterprise. Yours. The ibm cloud is the cloud for enterprise. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. If this deal is as described does the reaction of the Political Base here affect whats going to happen in the white house. Did we get close to a deal and now were pulling away because of that . I dont think so. I dont think the criticism is fair i think the criticism is assuming the president is giving up on something. Hes not i think if you do end up seeing, if you do end up seeing some type of agreement with daca and not this wall Border Security, technology, people, all things we need to stop drugs and illegals from coming across the border f that becomes a framework for an adwreement that does not mean the president is giving up on his priority. Hes made clear the wall is a top priority and will continue to be. I think the criticism is probably premature the president has not given up on this. Were looking at this in bits and pieces. What was the deal discussed on taxes last night . That was a big priority of this administration youve been involved in it nearly 24 7. Was there a framework of a deal with democrats yesterday yousaid you werent sure if democrats could agree to give anything donald trump a win. Was there some wiggle room last night . I got a chance to ask a couple questions last night but the question i mentioned to you you yesterday, the question i wanted to ask is could democrats ever support a 15 corpse tax rate . Deal t be had on taxes. We didnt get nearly as deep down into the tax discussion as we did on the immigration issue. We met for an hour and a half and you cant fix the worlds problems in that short period of time. I know ouranchors want to get a couple questions in but before we do that, let me go with this one for you. Give me a sense of the mood in the room last night. This is a subjective question. But what was your impression weve seen an openness to a bipartisan by the Trump Administration that we hadnt seen earlier in the year democrats have been very, very critical of the president so now you gather to break bread in the blue room at the white house whats the mood there . I think what you saw last night was a group of professional deal makers i saw the president do this a couple times, when the conversation started to move to inge this is we disagreed on, he moved it back to the things we could agree on you and i might disagree 80 of the time but that gives us 20 opportunity to try and work something out. Thats how i worked on the house when i was there i saw the president do it again last night the mood was cordial there was a lot of there was pushback on issues, it was very polite, gentlemenly and lady like push back issues on both sides. Mr. Schumer continue this is push this idea of this 30 billion tunnel under the hudson river but the president politely pushed back on that. It was cordial and productive. From becky quick go ahead. Director mulvaney, what happened last night, you described it as being very cordial, what have you heard from the house Freedom Caucus members . We have seen quite a bit more pushback and its hard to imagine they would be as happy with the compromise. What have you heard . I havent heard from them this morning i imagine i will and look forward to that conversation if they called me after this interview and said, what the heck happened . I would say, its too premature to be upset about it the suspect not giving up on the wall or Border Security. Part and parcel of the president s proposal from the beginning has been greater use of technology. Technology in terms of cameras and drones and helicopters use of technology in preventing drugs from coming across the border we have the ability to detect fentanyl coming across the border, more people on the border, more i. C. E. Agents on the border thats been part and parcel of Border Security from the beginning. Director mulvaney, yet the president said taxes could easily go up on high income earners. Thats supposedly not what well see from kevin brady on september 23rd what are we going to see whos wrong . Nobodys wrong. I love it when you do that, if i say x, you say y, we are disagreeing. I know what the president said and i know what the president said for a while is his priorities in this tax bill are getting lower Corporate Tax rate and reform so its easier for you to pay less taxes. I mentioned on the show yesterday that more than 90 of people, ordinary americans, have to hire somebody else to do their taxes. Thats just wrong. If he wants to fix that. Those are his priorities because those are the things that give relief to folks who need it the most and give us that Economic Growth if he has to give and take as part of a negotiation to get that, hes willing to do that. Director mulvaney, thanks for being here we appreciate your time this morning. Guys, back up to you in new jersey. Thanks, director mulvaney lets get down to the New York Stock Exchange where jim cramer joins us now what are you seeing the markets, not a whole lot of movement today, jim. Other than washington, whats on your radar screen. I think washington is back in focus. The walls back in focus i think im looking at some good news, amazon going to pick up some Customers Research on whole foods. Some very positive notes about semiconductors, semiconductor equipment. I think people want to be in industrial emerson had good numbers last night. They are fluctuating on what to do with consumer product, but im seeing a lot of positive notes about best buy i continue to believe that the Retail Stocks got oversold and the industrials have more wind at their back because of the dollar what do you make of wow. Thats one of your wow let me do this. Im curious, jim, how are we supposed to think about tenet and what is happening there with the backdrop of not knowing what happens with obamacare or single payer. Why did someone decide thats worth a lot more than it is right now . I dont know. I was listening to a call in on the morning show on Worldwide Exchange she was just saying basically i dont know who can swallow this thing. Ill come down that way because shes been negative on it and positive on hca. Ill take my cue from wilf and say, dont chase this one. Its not worth it. Really . It has it was up 14 , wasnt it . Yeah. Im looking for a buyer. Cant find one. Do you still Call National medical enterprises, jim how many people know that . Oh, nne, oh, geez lets read that one. I love it when companies its like things went so badly that no one even remembers, whats that other one . Whats value jet thats something else, too, isnt it oh, geez. I remember these days. Weve got them all i got them all in my head. National semi. What about io mechmega greenberg thanks, jim two exclusive interviews coming up on squawk on the street, cbs ceo you know how many times we just say letters les moonves and Lowell Mcadam at 10 30 a. M. Eastern time. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. We cthen we are toldrld its braver to go it alone. That independence is the way to accomplish. But there is another way to live. A way that sees the only path to fulfillment is through others. That our time here can be deep beyond measure. No one who chose interdependence ever found despair. Because what the world taught as weakness, is in fact our greatest virtue. Senator al franken is now taking on apple for security and safeguards it has in place for the face i. D. Feature on the new iphone x. He sent a letter concerned they could sell the biometric data. This is a really interesting issue, guys, because the way the law works right now, they cant ask you for your password necessarily. Thats very difficult. But these days theyre telling people like if the police get you, theyre saying, put your finger on it or just put it on your face and then they can open it and start to look at it we can talk about the legal issues revofling around it in the meantime, join us tomorrow squawk on the street begins right now. Good thursday morning. Welcome to squawk on the street. Two big interviews coming up from the Goldman Sachs conference in new york verizons Lowell Mcadam, cbss Leslie Moonves two days of record closes for major indices. Europe is mixed,
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