Transcripts For CNBC Squawk Box 20130917 : vimarsana.com

Buying program. And Steve Liesman is going to join on us in the next hour with an exclusive finding of the latest cnbc survey. Also on todays economic agenda, august cpi is coming at 8 30 eastern pim. Economists say the headline inflation number likely rose by 0. 2 . Also, here is a little bit of news for wall street. U. S. Grand jury has now indicted two former jpmorgan traders involved in the banks london Wales Trading scandal. They accused of hiding hundreds of millions of dollars of losses on market positions in a credit derivative portfolio. Kate kelly reports jpmorgan is close to paying about 800 million in fines related to the london whale losses. Get this part,. This may be the most important of all of it, jpm will admit to wrongdoing aus part of a settlement and that will be perhaps one of the first time weve seen that. It could be a key change for how these legal settlement. Son wall street are made. Joe. Thats interesting. Wrongdoing. Im trying to figure out what was the wrongdoing at that point. Its going to be about supervision. This is not about criminal wrongdoing. This is about supervision and how things were overseen and the lack of safety so the question is whether the bank made a bet, right, instead of hedged its portfolio. They were still allowed to do that if they wanted at that time, right . That they are. This is much more about control. Internal control. Internal control. I would think if you want to have crappy controls at your bank, you can have it . Not when youre regulated. All right. We can have but its 2 million in losses for the london whale trade and 800 million in fines and the attorney general ask others can still go after them and they have to admit wrong. Can i say one thing about this . Who gets hurt in this . The shareholders. It seems crazy that you pile up these fines. Its not like the people that youre and they lost 6 million. And now they have to pay themselves, anyway. The argument is do you pay that and if youre a shareholder, you potentially could have had the beneficiary of these trades. Thats the flip side of it. Thats at least the argument. All right. The dow didnt close on its highs yesterday b, but it was dealing with a lot on what happened with d. C. But it did manage to close up over 100 points. And were looking for some more upward move today. Were going to move away from the summers move to see what the taper brings. 75 billion now, 70 billion . Well see. Its a twoday meeting for the fed. Lets take a quick look at oil, which was interesting. Maybe not. That it went down yesterday, not on the weakness in the dollar. That would make it go up, obviously. But this after the syria situation, looks like it is now not imminent at this point in terms of military action. God now how this is going to play out now. Everybody has more time. The tenyear note, though, we figured that out, people arent thinking inflation comes back in the vigilantes come back. Theyre thinking that shes even more accommodative. So you keep buying the mortgage paper, keep buying the bond. So we stay low and well check out the dollar, which as we just alluded to was weak yesterday. Its mixed today. Gold at this point, it was the last week. It was going down because it was going to be summers. This week hasnt done much at this point. Still down in the 1300 area. Andrew, where are you now . Im Still Standing here. A few after the bell movers of note, pandora warning its businesses are declining and the company red box video operators average transaction size fell blow expectations. And Fertilizer Company mosaic lowering its production forecast. Potash slipped in extended hours. Back to you, becky. Its time for the Global Markets report. Ross westgate is standing by in london. Ross, good morning. I think were having some trouble trying to hear. Hopefully youve got me now. Can you hear me . He was just messing with us. Sorry about that. It happens. It happens. This is where we stand right now. European equities down on the stoxx 600. Around about 7 to 3, Something Like that, is the decliners being outpaced by advances. The ftse was up some 56 points. Down about 0. 25 at the moment. Had some data out today uk inflation saying dipping is expected, the annual rate in august. Sort of inline with what Market Expectations were. The cac 40 off 12 points, ftse mib off 27 points today. Markets are in focus and sectors, as well. We saw a new dip down in august registration falling in august, which it raids most of july again. It came to 7. 84 million vehicles. Thats the lowest ever recorded from the period since the series began in 1990 on. As a result, autos are the worst performers today, down 11. 3 . Banks off 0. 9 as you can see. Individual stocks were looking at today, philips, theyve got a Share Buyback coming up. Down 1. 8 because of the ceo fairly cautious in the near term and whats going on with the global economy. Nokia, down 2. 2 . They decided to reschedule the launch of some new phones which were scheduled for the end of the month despite the microsoft deal. Lloyds Banking Group down today at 2 . The government selling 6 of its stake in lloyds. They made about a 60 Million Pound profit. They sold that stake to institutional investors, a small profit for 73 pence which Gordon Browns government bought into or had to take over the stake, a 38 stake now down around about 32 the . Five years ago almost to the day that lloyds announced the takeover of hboss which is the reason eventually it had to be bailed out. We had a snapshot of german Investor Confidence today. That put a little more pressure on bund yields, a little below the 2 mark, as well. Spanish yields still below italy. Thats where we stand. Apologies for the battery malfunction. Now back to you. All right, ross, now back to todays top story, the deadly shooting at the Washington Navy yard. Ayman joins us with the latest. More than one shooter, that didnt turn out to be the case. At this point, where did he get the weapon . He brought a shotgun . Did he have this weapon . Did he pick it up . Are you up to speed on that, too . Thats right, joe. Were here at the Washington Navy yard and this is where the rampage began at about 8 15 yesterday morning. Aaron alexi, a 34yearold shooter entered building 197 just behind me. He bought a shotgun at a nearby shotgun store, brought that to the site, began shooting. At one point, he made his way to an atrium where he had access to be able to shoot down into a cafeteria area and thats where authorities believe he did most of the damage. And they also believe, joe, as you say, that he was able to pick up weapons onsite, one apparently from one of the Police Officers that he shot there been by tend of the rampage, alexis had a shotgun, he had a handgun, he had an ar15 military assault weapon on him at the time authorities were able to bring him down. Weve been able to obtain overnight some new photos of aaron alexis, these obtained from a friend or acquaintance of his showing him in his normal civilian life. This is a person who was in the navy reserves. He was discharged, other than honorably from the United States navy. But nonetheless, was able to get a critical to work as a civilian defense contractor here on the base. He had a critical in order to get into the building. Authorities believe he used that critical yesterday. One of the questions here, though, is here is a man who had a history of gun violence, several arrests, several incidents in his background. Nonetheless, he was able to pass a security clearance and get on to the base here yesterday morning and begin a day of tragedy here in washington, joe. Yeah. I heard yesterday it was an automatic weapon. Was it a are the military weapons actually automatic or was that they can trade those terms aut time or was it semi automatic, do you know . I believe what were talking about here is a semi automatic ar15 militarystyle weapon. Thats the civilian version of the m16. The ar15 is a weapon thats been used in other mass shootings. I believe and im not a weapons expert, but a semi automatic long gun like the ar15 could be able to do a lot of damage. You can fire that very quickly and from the elevation that he had right at 8 15 in the morning, people are getting their coffee, their bagels, going about their regular bifs, getting ready for the day, thats a packed, contained space and the people who came out of there told stories that were just horrific. Some of the injuries were from people having chest xwlants from run, people falling over, it sounds like a real scary scene inside in building here yesterday. And theyre going to look for motive now. I dont know, get someone that may have been medicated, maybe ptsd, whatever. And obviously, its hard to pick a motive with someone who might be just crazy. But is there theres no reason well, there seems to be a pattern here, joe. There seems to be a pattern here in the history of this man. He had several incidents of previous gun related violence. In one instance, he fired a gun into the tires of some vehicles at a construction site across the street. Apparently he was upset about parking. In another instance, he fired a weapon in his Apartment Building, fired it through the roof of the apartment into his neighbors apartment, through her roof. Apparently there was a dispute dispute with the neighbor there. He claimed to authorities had they showed up to investigate that he had simply been cleaning his weapon, oiling it and it accidentally discharged. So theres been a historic of incident here. The resident there at the apartment complex said she was terrified on this man and she actually moved out of the apartment complex because of the incident as saying that she was just afraid to be anywhere near him. So sh the a guy who had a history of incidence here and the question is how ekd have passed the clearance process to get the security clearance that you need to get on base here. All of these civilian contractor res going to go through a clearance process similar to what we go through to get on to the white house grounds as reporters. That process is managed by an outsourced private company. And i think theres going to be a lot of scrutiny now on that company and that process and who it is that theyre picking to be contractors on these military bases. Okay. All right, ayman, thank you. That will be a while as they have to you cant take anything for granted, i guess, or assume anything. Anyway, thanks. Joining us now with more on the shooting and the investigation is don clark. Hes a former fbi special agent. Don, again, this morning, there are a lot of questions that are still unanswered, but one thing were trying to figure out if there are lessons that we can take out of this about how we protect ourselves. What do you think . Serm. Anytime you have a situation such as what occurred yesterday, you have to look at it and see what happens and what could we have done to prevent this incident and what can we do in the future to try to make sure that this type of activity doesnt happen again . And no matter what it is, this incident or similar types one, we as a Government Agency or Law Enforcement agency or whomever may be in charge of this have to look at ways to see how does this happen and what can we do to prevent this in the future . Because solving it afterwards, yes, that works, but what we need to look at is how can they prevent it . The questions asked this morning, as ayman was suggesting, trying to figure out how alexis could get on to the naval grounds there, but maybe more importantly, how he could get access to a gun having those types of arrests that have been made in the past and having been discharged without owner from the military. What do you think about some of those issues . Well, i think when you hear that type of activity, i think we all get a bit of a chill to say, youre right, how did this person who had perhaps been involved into a number of other things get cleared to be able to come into the organization and do whatever . So what im really saying is that we need keep a better record. And we think through electronics and all the things that we supposedly are keeping today, but yet we let Something Like this pass by, knowing that this person had a different type of activities that he had been involved in, negative activities that he had been involved in, somebody should have checked that. Is the problem that there isnt enough cooperation between local and state agencies . I know that one of those arrests was in dallas, another was in seattle. Do you generally have some sort of cooperation between municipalities that are in different states . Yeah. You know, i wouldnt say that its a lack of communication with these organizations. I mean, clearly, each organization at every level have its job and its directions that it has to go and so forth. But i think in past years, that weve seen that decrease a lot in terms of one person saying its all mine. And yes, that does happen today. Occasionally, you will have something that becomes catastrophic because somebody didnt call and to some other agency and say, hey, i think ive seen this and lets work together. But in all, i do think that there have been huge steps made in the government in the last 15 or 20 years, actually, come up and even more so in the more recent times that the agencies are working together. Occasionally, theres a mistake there. Perhaps could have been here somewhere along the line. But i think youll see them working together a heck of a lot more than we have in previous years. Don, thank you very much for joining us today. My pleasure. Thank you. Coming up, researchers say theyre work on a new form of electricity with a battery. These are little bakhtiar kra. Do you understand the Technology Behind it . No. Ive read it. I dont know how were going to i thought you no, no. You were going to carry this segment. I dont know how were going to talk about it, either. I understand it. Theyve used similar things to make fabric for over a decade. And then theres another thing about Conference Calls. That i can help you with. People dont listen. Now youre giving away the whole segment. What was i oh, you were listening, though. First, shoppertrak says it expects sales growths is going to be slower this year during the crucial holiday season. Retail holiday sales should rise 2. 4 compared to a 3 increase last year after they saw a weak back to School Shopping period. First, as we head to break, lets check on the National Weather forecast from weather channels alex wallace. Good morning to you, guys. A chilly morning across the northeast. Feeling like fall. Weve got temperatures here that have dipped down into the 20s, thirds and 40s. 45 for us in and around boston. Thats tying a record low for us. This afternoon, were going to keep it cool wind our cold front that moved through yesterday. Temperatures will be 5 to 10 degrees below average. That means a lot of 60s and 70s. Not bad if you like the cool weather. If you like the warm weather, you may want to head into the middle of the country because weve got warmer air moving in here as we head on through the middle part of the week. Today, still fairly comfortable. 60s and 70s. Chicago, youll be at 72 degrees. Des moines, 69. Look what happens in des moines between today. Tomorrow. 90 degrees, big time warmup seconded there. If youre looking for rain in the southeast, its been a bit on the quiet side late in the week. Well see the chance for storms coming in. Thats your national forecast. More squawk box coming up in a bit. [ male announcer ] this store knows how to handle a saturday crowd. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Welcome back, everybody. Our first story has to do with the socalled living battery that generates electricity that comes from disdissolved organic matter, things found in sewage and wastewater, maybe the water that you flush doin the toilet. Researchers ats at stanford say its as efficient as the highest performing solar cells. This can generate as much energy is as needed to treat water. I dont understand this exactly, except to say that the one piece that was interesting news, it requires silver oxide, and that apparently is very expensive so its very hard to do that at scale. Yeah. Theyve got a pretty efficient battery, its just a very costly one. And i guess there are some questions. It works by these microbes that feed off the the wastewater and waste material and then when they excrete things, when they poop, they poop out electrons. For an electric current. So theyre as efficient as the highest performing solar cell. Is that a knock on solar cells . Not very efficient, right . I wondered if that was a big knock on solar cells when they said that. I think theyre trying to say its just as efficient as the highest performing solar cell, but i dont think thats necessarily solar is better than wind these days, right . Yeah, especially for birds. Thats true. And for humans. And for bats and the noise that drives people crazy. Did you read, separate and apart from this, in new York Magazine this week, a fascinating article about people who live near the turbines and theyre loogz it. They say theyre losing their minds. Its unclear if theres Scientific Evidence to prove it, but theres a lot of poem who say theres noise. You cant even hear it. Its almost like a dog whistle thats constantly in your ear and giving you oh, wait a minute. Oh, yeah, oh, yeah, wind power. Great. Great idea. Nice work 37 no, we were on a big old wind power wagon there. Exactly. It is that is one of the de its renewable. Theres no two ways about it. And as you get better and better, theres a great piece, actually, by wasnt it your guy . Who is my guide . Freedman. Did you read that over the weekend . We love tom freedman. We do, but the beginning of it irritated me, but if you want to look for innovation, this is the great this is what makes it exceptional. And a lot of it had to do with what ge is working on. I thought it was a pretty good piece. And youre a big supporter of innovation. Innovation in terms of things lining solar power and wind power and stuff like that. You do not know how much i want clean air and clean water for my children and my childrens children. Yes, i am. Whether its counterproductive to be so focused on carbon dioxide, i think it is counterproductive, i do. Anyway, today, its the nipcc, which is the nonintergovernmental panel on climate change. And then next week is the ipc. Which in and of itself is still being composed. Of in itself, theres going to be some at least a little bit of scaling back on maybe the climate sensitivity to co2. Well see. Although theyre still totally alarmist about our future. Anyway, go ahead, beck. Lets talk about another story thats asking how four years of Tuition Free College sounds. If youre somebody who is looking at college, four years tuition free sounds like a really good deal. Ben nelson ran the Photo Service snap fish until he sold it to hp in 2005. Now hes founded the ma nerve va project. Na nerve va schools dont yet have accreditation, they dont have a campus and is a full faculty roster, but it is trying to attract some of the most talented students. Students enrolled after the enrolling class will pay tuition of about 10,000 a year and classes that can be done with a lecture will be deny online. Students will spend their first year in San Francisco and rotate toer on cities in subsequent years. Among the advisers to minerva, you have legislatu Larry Summers. It sounds crazy, but youre going to get access to some heavy hive, highly connected people and that may make the difference. Theyre hoping they have accreditation before they start. Its a very interesting program. I think its more about the promise of what this suggests for education at large over the next, you know, 10, 20 years about how we learn and whether were learning by lecture with a feature in front of us or sort of Group Projects and then watching the best professors in the world. I think it will be hard for them to start it up and get the best students on day one. I thought about that first, but i thought if you can get access to ben kerry and Larry Summers, youre one of 19 students who is doing this, youre doing it for free, i think youll have a very unique learning experience. But it is a heck of an experiment. If you truly are one of the top students in the country, its a bit of a gamble to take. Those are smt of the people who might have been willing to roll the dice. Youre going to have to find some entrepreneurial students. Exactly. I thought it was better to go to harvard where once youre in, you dont really need to do anything, anyway, right . Thats what they say. They didnt let me in. I dont know about that. If youre looking at the entry level lecture classes, those will be taught online and they figure thats a waste of resources. If you want the most bang of for your buck as an undergraduate, you need to focus on oneonone relationships or small classrooms where youre sitting around and learning from somebody, not where youre sitting in a lecture hall. Too sxins he right now. There has to be a better way. Theres ways you could do it where it makes sense. But khan academy, all of these guys where were you last night . I was at the New York Times. They were doing an education thi thing there and i did a thing with him. But the question to me is how you actually incentivize people to watch these individual videos. And youre on another plane today . Going to chicago after the show today because we have lloyd blank fine coming to the show tomorrow. Youre doing so many Different Things at once. Will you test a different kind of underwear on the plane going out there . No. I want you to know and i think i can say this or with easy access . No, i am wearing my tommy johns today. But you should know senator chris dodd, he read the article and he wanted to see the undershirt. Wait a second. Youre showing his your undershirt during the commercial break . He wanted a peek on. Just like that . Bring the camera back. Hold on a second. You guys go ahead and do your thing. Hes in hollywood now. If you have a Conference Call on your calendar today, youre going to want to listen to this next story. A survey of professionals working in singapores Financial Services industries finds that more than half admit to not paying attention on calls. One in five respondents was dialed into a Conference Call while taking a second phone call or while laying in bed. About 25 dialed in while theyre commuting and one in ten individuals have participated while theyve been out shopping. Some of the more interesting locates that people have taken place on Conference Calls include the golf course, the toilet and the shower. Gentlemen, are you decent . What . No, youre not listening, i get it. Conference call. Were we still doing the yeah. Are we still on . Were still on. Say that again, then. Go. Its all about Conference Calls. No, i heard. I heard. Which clearly you get. I dont want to impugn all management. But you think this is what they do all the time . Pretty much, yes. Whether youre in the room or just on a Conference Call, i dont know how closely you need to listen to whats going on with most management types. Not here. I just hate all Conference Calls. Any when youre in the room . Any call that has to be scheduled i think is a problem. Who is in charge . Who is in charge there right now . Do you have to listen to them and they tell you what to do and stuff . Dont you do most of it yourself . Of course. Theres always somebody at the top. And they help you . They help you. I love them. I love them. I love them just like i love everybody here. Here, yes, but not here, no. No, not here. I love all of on them. I wasnt saying that. We dont have a lot of meetings here. At least were not invited to them. And now you know why. Intl maybe thats the problem. When we come whack, were going to talk about the stories lighting up the wires. And gasoline prices setting a record today. First, though, engineers believe that they have succeeded in pulling off one of the most complex salvage operations ever. A wrecked cruise ship Costa Concordia has been pulled off the rocks. It took months of preparations, hundreds of workers, and the in the end, 19 hours of pulling power. [ male announcer ] lets say you pay your guy around 2 to manage your money. Thats not much, you think. Except its 2 every year. Go to etrade and find out how much our advice and guidance costs. Spoiler alert its low. Its guidance on your terms, not ours. Etrade. Less for us. More for you. [ male announcer ] these days, a Small Business can save by sharing. Like carpools. Polly wants to know if we can pick her up. Yeah, we can make room. Yeah. [ male announcer ]. Office space. Yes, were loving this communal seating. Its great. [ male announcer ] the best thing to share . A data plan. At t mobile share for business. One bucket of data for everyone on the plan, unlimited talk and text on smart phones. Now, everyones in the spirit of sharing. Hey, can i borrow your boat this weekend . No. [ male announcer ] share more. Save more. At t mobile share for business. Hey lady noooo no [ tires screech ] nooo nooo nooo hey lady, thats diesel i know. Hey, buddy . Oh, hey, flo. You want to see something cool . Snapshot, from progressive. My Insurance Company told me not to talk to people like you. You always do what they tell you . No. Try it, and see what your good driving can save you. You dont even have to switch. Unless youre scared. Im not scared, its. You know we can still see you. No, you cant. Pretty sure we can. Try snapshot today no pressure. Welcome back. Aaa is reporting gas prices will set a streak of 3. 00 or more a gallon for 1,000 days today. And can you say Free Internet porn . I cant say Free Internet porn. I dont know where to find it, but ive heard about it. I know you dont. Get with me after the show. Incognito. The publisher of penthouse has filed for charter 11 bankruptcy. How many times has this business gone bankrupt . Well, i know, but now . Who pages through a you know, things dont even move. They dont have an online something . They may have an online something. But youre not sure sfp. Im not sure. Thats why too conservative . No. Friend Finder Networks needs to cut its debt load as it struggles to make certain loan payments. And General Motors is developing a car to rival tesla. Really . Good luck. The electric car will be able to go 200 miles on a charge and why are you laughing so hard . Youd like to say these things. You just dont yet. It sells for about 30,000. No word on when the car is going to be available. Gm executives says the technology is available, but the cost of the batteries remain too high to pull off the feat today. Its just how you said it. Its not just its what you were thinking, wasnt it . It was just the good luck part. We are serious news to get to. Yesterdays rampage at the navy yard in washington raising new questions about Workplace Violence and security. Joining us now to discuss it is robert. Hes a security expert. Good morning to you, sir. Good morning. Help us here a little bit. Best practices, i mean, its sort of a hard thing to avoid, i imagine. But if you were on a workplace, is there two or three things you can do to avoid this or does this just kind of happen . You know, this is not a Technology Problem that can be solved with bullet resistant glass or surveillance camera or bomb sniffing dogs. This is a people problem. And all of the active shooter incidents that have taken place, they all come down to one thing is that the shooters themselves, at some given point in time, consider themselves the victims. Either victims of their employers doings or fellow employees. They consider themselves victims of their classmates or teachers or even victims of their government. And they all speak out about their victimization at some given point in time. And what they plan on doing about it essentially to solve that problem. So the active shooter incidences that have been prevented all boil down to somebody seeing something and somebody saying something. Are you saying there has to be almost an active Surveillance Program going on in the workplace, reading emails, looking at peoples facebook pages, doing all sorts of things . I mean, people often think of that as that Law Enforcement does. But is that what the employer should be doing, too . Tease what thats what the employer should be doing, the husbands, the wives, the kids, the mom ones, the dads, the fellow coworkers. Again, this is a people problem. And when you see somebody coming undone, getting unhinged, you talk about it, you mention it to someone. You bring it to someones attention. You report it. You essentially drop that dime. You know, again, all of the incidents that have been prevented, somebody actually said, you know, i feel that this person may act out in a way that could hurt people. And they Law Enforcement intervened and they found stashes of guns. Thats usually what happens when it is prevented. And you cant rely on our government to protect us from this. You cant rely on technology to investigate this. It really does boil down to you, when you see something, you alert somebody about it. And its a if you think about how mad back in the day, you know, drinking and driving was actually okay. And then someone said, hey, this isnt good. We start add huge education campaign. Same thing with bullying. Bullying is on peoples minds. Its on our radar. And were doing something about it. Active shooters is something that we need to talk more about and do something about. But where is the line . And when i say the line, theres always been a cultural resistance to saying something for fear that were implicating the wrong person. So what . So what, you know . So we implicate the wrong person, we apologize, we move and learn from that mistake. Right now, were doing nothing or not enough. So what happens is we say, oh, charlie is just carly. Hes just acting out. He is a part of that Paramilitary Group and he loves guns. Big deal. Hes just a weirdo. Well, that weirdo may come into your place of business and shoot it up and kill a dozen people. And eventually, it will be such top of mind that anybody who has any intentions of doing Something Like that will go, well, wait a minute, maybe i really shouldnt. Maybe its not such a good idea because maybe i will get caught or maybe the consciousness of the shooter will evolve to the point where they begin to see that its not really how to solve the problem. Robert, were going to leave it there. Thank you for joining us this morning. Thank you. Thank you. Coming up, a top market story. The fed is set to begin a twoday policy meeting. Well have a preview and the possible market implications, next. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. The fed is convening a twoday meeting. Lou, ken, what do you think . Maybe 75, 70 billion . What are we going to find out when its all said and done . I think they would like to do as much as they can get away with. Saying 15 billion to 20 billion, which still puts you buying 70 billion or 65 billion a month. I think that in order to soften that blow, that me might stiffen up their Forward Guidance on when they would raise the fed funds in order to try and hold the curve down as they taper. In other words, make it more clear that the fed funds are not going up for a couple of years and that they would even risk, you know, some level of inflation in order to get the labor market and the economy in general back on track. And so that stiffer forward goois guidance in the feds mind might allow them to do more than some of the Market Participants are doing for. Do you think, mark, do you think 65 is possible . I think thats a little bit on the high side. I think that theyre probably not going to want to reduce the security purchases by 10 to 15 billion, and i think ten is more likely. I think its possible theyre just going to reduce treasury securities and not reduce the mortgages. I think the fed wants to back away as carefully as possible. And when you look at the economy overall, its doing a little bit better than the headline numbers. Much of the slowdown is coming from the government sector. The only exception is the housing industry, which is looking shaky. So they still need to be careful here. Yeah. So this is in the market, lou . What would make the market go up stock market, what would make it go down, do you think . Yeah, thats a good question. When qe1 ended and when qe2 ended, the stock market had trouble both times, very well coordinated with the end of that. That may have been also because europe was a problem both of those times. But, you know, thats the one aspect of the economy thats clearly been helped by each of the quantitative easing strategies. The rest of the economy, i think, you can question it and i think that the fed is questioning how much the qe is actually doing. You know, one of the facts that just keeps gnawing at me concerning the qe is that the normal gdp, that annualized rate is at 3. 1 and thats a level thats associated either with recession or a recovery from a recession. So if thats what youve got after this qe and we were over 4 when this qe started, i dont know, you know, how much you can say, oh, boy, which is really good, we better be careful with taking it away. So thats why i think they would rather take it away as quickly as is possible. You know, more aggressive than not and within a certain parameter. And then also try and soften that blow with a Forward Guidance on the fed fund. Mark, how do you think the tenyear basis as we start doing this . I think as long as they taper if they reduce securities purchases by at least 10 billion, i think we get a little bit of a rally, although getting the big rally after summers pulled his name out makes that a little bit of a tougher call because we really kind of rally an anticipation of no earlier exit from qe than we would have seen otherwise. Are we going to be gelling with yellen . Is it going to be her . Everybody says its her now, hes just going to you know, hes going to fold and say to all of his liberals, okay, you are right. It was really going to be her, by the way. The right thing to have done was to tell Larry Summers, hold the fort. Dont say anything. Im going to announce yellen in three days. Thats the nice thing to do, right . What about the bank of israel guy . Id do him now. Also, is ferguson still out there . You take fisher, ferguson, and i think don cohen is Tim Geithners guy. Stanley fischer was an adviser to greenspan, too. Stanley fischer is summers guy. What . And the board of governs what . Stein from the board of governors appointed by bernanke. I dont know. All right. You should mix greens tie with vitners suspenders. Maybe not. I think they may be the same brand. Oh, look at that. Are we ready to do what . Can you guys see that . That looks pretty good. Is this a cameo situation . This is a little busy, though. Its a lot like a little cameo. Camo in the office. Coming up, a disturbing warning from the cdc. 23,000 people have been killed by super bugs in the u. S. Each year. But first, take a look at whats going on in the green room. We have a legend in the Tech Industry in the house today. Former Sun Microsystems boss scott mcneally. Well talk to him about tech and much, much more. Squawk box is coming right back. Take deep breaths. Avoid bad weather. [ whispers ] get eight hours. [ shouts over music ] turn it down and, of course, talk to farmers. Hi. Hi. We are farmers bum pa dum, bum bum bum bum its been that way since the day you met. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than 4 hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. announcer at scottrade, our clto make their money do more. Re ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and investment companies. Welcome back, everybody. Were in chairs this morning. One of the things were focusing on is an alarm put out by the cdc, centers for Disease Control about whats been happening with super bugs. These are bugs that are resistant to antibiotics because weve used overused antibiotics. At this point, they say 2 Million People every year are infected by drugresistant germs and 23,000 people are dying. Theres a new bug at the top of the list, its call ed sedificile. Its something you have to worry about a lot when people are in causes horrible diarrhea. What is it . A bacteria you get. You can have people recovering from a stroke late in life and if you get cdiff, that might be it. And if youre there, someone who is healthy can get it, probably not, but cdiff is frightening. Mrsa, the good news on this report is that mrsa that had been out there, a super killer for years, that, actually, they said, 30,000 fewer cases in 2011 than they saw in 2005. Thats the scary skineating . Yeah and gets inside. If you have a surgery, it can get inside and be incredibly difficult to get rid of because you cant get the drugs to the location easily. What are you going to talk about . This is the story of the morning. Ronald pearlman, friend of the show. His daughter, 23yearold daughter, hes funding a lawsuit talk about all in the family, theres a the daughter who is suing her uncle who runs hudson media. You ever go to the airport and see the hudsons . Yeah. They spent 60 million on legal fees alone whats that guys name . Its an inheritance case. Yeah. Didnt vanity fair write about this . A little bit a while back. But now its heated up into this crazy i met whats his name, do you know . His name is the guy who had all the hudson. James kohn is her uncle, the wholesaler we all know. Its not an important story, its a dishy story, ill put it in that context. I think the problem i see is that this is in the journal, you always do the times. People are worrying that the party is over in new york for getting big names to social events because of bloomberg. Bloomberg according to these publicists, if you could get him, he was your number one guest and helped raise money for a lot of these philanthropic galas. He goes to every one. Theyre worried. Im sorry to say, but do you think that hey, joe loda might be coming to the gala tonight. People might stay away. But the mayor can go to all these things. He can. But theyre worried about and this is where theyve got a picture of bloomberg with gwyneth paltrow, maria josie. Hes with all of them and dashing and always going to these things. This is where i realize we may have missed out by not electing weiner. Because he could have been a huge draw at the party. Hes still tweeting . Hes headed to tv for sure. Weighing in on whats going to happen with the runoff. Yes or no, guest host for squawk box . 100 yes. Not even a question. No question. Okay. When we come back, well have more of this mornings top stories, including the investigation into the Washington Navy yard rampage yesterday and questions about Workplace Safety this morning. Squawk box will be right back. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. I put in the hourswhere todi am today by luck. Ing the internet of everything. And built a strong reputation in the industry. I set goals and worked hard to meet them. Ive made my success happen. So when it comes to my investments, im supposed to just hand it over to a broker and back away . Thats not gonna happen. Avo when you work with a schwab financial consultant, youll get the guidance you need with the control you want. Talk to us today. Tragedy in the beltway. How the events at the Washington Navy yard have businesses rethinking employee security. The fed in focus, bernanke and Company Meeting as the markets await a decision on Interest Rates. The cnbc fed survey is out and we have the results of what the nations Top Economists and experts think they will do. And a tech pioneer turns startup investor. Scott mcnealy joins us to talk apple, google and a world of disrupters. The second hour of squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernan and andrew ross sorkin. In studio, we have Scott Mcnealy, former chairman and ceo of Sun Microsystems. Hes also the chairman and founder of the startup weighin, and scott, its great to have you this morning. Great to be here. As soon as i wake up, california time, ill be a little more helpful. Its early. Well get you coffee between now and then. Thanks. In the meantime, take a look at the futures this morning. After some continued gains yesterday for the dow with it closing up by 120 points. You can see this morning, the futures up by about 18 points. At this point, the dow has moved back to just about 15,500. Many expect the fed to begin cutting back on the bond buying program. The feds statement will be out tomorrow followed by a news conference. Well have much more on the fed meeting and the markets in a few minutes. Also, holiday sales, theyre going to be rising 2. 4 this year. Thats according to a new forecast from shopper track. That compares to a an increase three years ago. And a notable if unwelcome bempbl mark at the gasoline pump. As of today, the average price of gasoline will be above 3 a gallon for the 1,000 consecutive day. Thats never happened before. That current streak began on december 23rd, of 2010. You all now have seen this deadly attack we had yesterday in the Nations Capital taking the lives of 12 people at the navy yard in d. C. Everythings close down there. How far was it from the capitol . Less than two miles. The motive from the mass shootings, the deadliest on a mill stair installation since ft. Hood in 2009. The president spoke about the incident yesterday. These are men and women who were going to work doing their job protecting all of us. Theyre patriots. And they know the dangers of serving abroad. But today they faced the unimaginable violence that they wouldnt have expected here at home. Cnbcs eamon javers joins us again outside the navy yard. What else have you got for us this morning, eamon . Reporter well, good morning, joe. This is the Washington Navy yard and this is building 197, the tall brick building just behind me. Thats where the shooting began at just about 8 15 a. M. Yesterday morning. 34yearold aaron alexis entered the building carrying a shotgun he bought in virginia last week. He then proceeded with his attack. He was able to pick up a couple of other weapons. At one point, he made his way to an upper level atrium area. Where the bulk of the killings happened, ultimately 12 dead, an additional dead person was the shooter himself. Bringing the total to 13. It was that shooting spree in the cafeteria that caused the bulk of those casualties. And Authorities Say they now believe he only had the shotgun when he entered the building but he was able to pick up a handgun and a civilian ar15 military style rifle. A rifle with incredible power and velocity to do a lot of damage in the attack yesterday. We also have pictures now of aaron alexis obtained from a friend of his showing him in his normalcivillian life. He was discharged for a pattern of misconduct. He also had a number of gun related incidents in his record in which he shot through the roof of his Apartment Building into the neighbors Apartment Building above threatening her. That person moved out of the apartment, said she was terrified. Also, another incident in which he fired his gun into the wheels of construction vehicles at a construction site near his house. Clearly, this is a person who had issues with rage over the years. And one of the Big Questions today, joe, is going to be how did he get the security clearance to be able to get work as a contractor, to be able to get access to this base here at the Washington Navy yard, joe. Yeah, with the shotgun. I dont know. All right, eamon, well stay tuned for that. Okay. Joining us now with more on the shooting, clint van zandt. Help us to find some lessons from this if there are any. Is this about gun control . Is this about psychological profiling . Is this about Workplace Safety . How do you think about all those issues . Well, you think about all of them, but it also tells us just how predictable and nonpredictable Human Behavior is. As youre reporter just suggested, there are longterm personal issues with the believed shooter. Both in the navy resulting in his discharge, the weapons violations that hes had over a period of 10 or 12 years. These have been long and ongoing that shouldve come up in his Background Investigation and that, perhaps, perhaps couldve precluded him for access to a government facility. But again, these can be explained away. I mean, when the Police Responded in texas when he fired a shot through the ceiling to because he was angry about his neighbors music, he said, no, no, i didnt do it on purpose, i was cleaning my gun and a round went off by accident. Well, so they believe that, they accepted that. And with the benefit of 20 20 hindsight, we say this guy has had anger Management Issues for a long time. Then that takes us to the issue of violence in the workplace. These people, everybody in this facility wouldve trained for this. They know theres at least three things you do when an active shooter starts. Number one, you run out of that building as fast as you can. You dont wait, you get out, you tell your coworkers get out, but you dont wait for them. Number two is you hunker down in place, turn off the lights, turn the ringer on your cell phone down, get under your desk and wait until the authorities come and tell you its okay to come out. And number three, just like those brave men and women did on 9 11 on that plane that went down in pennsylvania at the time, you find Anything Possible you can use as a weapon and you go after that person with a gun because you may not have any other chance. These are the lessons we take away every time from one of these situations. Clint, i hate to assign blame, but was this truly preventable . Thats sort of the question about this event and frankly our ability to prevent the next one. You look at how many ways along how many times along this route might we have stopped him. Could we have could the navy have dealt with him in a better way. Could Law Enforcement have prosecuted him for these violations . Could the Background Investigation have turned these offenses up and said, you know what, anger Management Issues, we dont want somebody with a security clearance. Was there a way to stop that rental car from driving on to facility with him carrying at least a shotgun. The first officers that he encountered. Is there a way they perhaps could have been better prepared so he wouldnt have caught them offguard. There are probably 5 or 6 check points along the way where maybe we couldve stopped this guy before. But, again, we werent able t to is this human error or chance and circumstance . There was a question we asked in the last hour, if youre an employer and thinking about how do you monitor your employees . This almost gets into the kind of nsa style things. But how much should you be monitoring the emails of your employees . Looking at their facebook pages . Looking at their twitter accounts, social media and other things out there about your employees. And then, of course, all the privacy concerns that raises. Yeah. Well, i think, you know, you get into the area of big brother, nsa type of considerations like that. And realize, in this guys case, the shooters case, his roommate tells us yesterday that the shooter spent hours and hours locked up in his bedroom playing violent video games where he shot people for points. Well, what that type of game allows somebody to do is develop shooting skills as well as desensitize themselves to the value of human life. But does that mean that everybody who plays violent video games is going to commit mass murder . Of course the answer is no. So were trying to separate it. Were trying to predict Human Behavior. And to this date, even though we can suggest these flags should be looked at, we still cant accurately predict Human Behavior every time, especially, in a case like this. Okay. Thank you, clinton, this morning, for helping us try to understand all this. Appreciate it. Okay. He was cofounder of sun, micro, and a pioneer in Silicon Valley. Hes now actively investing in more than a few startups, Scott Mcnealy is former chairman and c ceo of sun micro. You had a couple of lives already. Still a young, youthful, strapping young guy. Pretty amazing. How does it work for people who dont know . Its a social media company. What we do is we allow you to curate and present your social media conversations around your brand or around a sports team or a celebrity. Put it on your website, put it on mobile. You can put it up on air, tv screen or do it in venues. So a hockey game or football game, you can put it up on the big screen. We allow you to curate and bring only what you want out of the social conversation into a particular event. Nothing to do with being fat. Like i could do this, right . You could do this. Its called weigh in. Way in. Way. Way in. Where do you along the path of a startup, where are you with way in . Were early days. We started a couple years ago. Were about 25 employees or so. And were private. Its nice to be i was in the public pinata for a long time. Its kind of nice to be in the private world. And its social media. Social media. Thats where its at right now. Thats where its at. Whats your commentary on where tech is right now . Well, techs moved. We started off doing transistors and applications and computers, and services and moved into commerce and now were into social media. And its moved from like stuff you can hold to stuff thats virtual. Its a lot less head count. Its a lot better margins. But im not sure its as productive as it was. I dont like it. Whats next . Can there be something after social media . Do i have to be do i have to enter into this whole domain and be social and care about other people . You know, the beauty of it is you dont have to. I dont have to tweet every waking thought . I dont have to see their stupid pictures . I dont have to see their facebook and where they are and where theyve been . You dont have to subscribe to those people. I have to do twitter for business and, you know, thats bad enough. Im watching way in right now. They created a page. How does that look . Where it shows what were talking about. Social medias winning right now. Chairmanmcnealy. Com is the website. And you can see the social noise, youd call it noise, but social activity around different topics, big data, around the shooting and you can see the spike. This becomes a very when i give you heres what social media is for. There is value beside activity. Youd have a hard time finding it. What were doing what is real noise to me is advertising that i dont care about. I want to learn about soft spikes on golf shoes and what were allowing social media to do is tap into that data and match buyers with sellers and sellers with buyers. That is ultimately a huge win as well as making the game more interesting or the viewing experience. People watching squawk box can talk. They can be part of the conversation. You dont just yell at the tv, scott, youre nuts, they can tweet it started we mail. We would get email from people respond one on one. Used to get letters. Evolved into twitter and now where everybodys talking to each other. Its now realtime and were building the graphics and the actual visualization of all of that clutter out there and noise and turning it into real live information and people can now yell at the hockey game at the referee and they can see that theyre part of that conversation. Thats what were doing. Were not going to do it now because they gave me no time to talk to you, but if i get you to say that the fed should be abolished, which is something you believe, there shouldnt be a federal reserve, so you dont care who is the next fed chief and also get you to say our current president is almost criminally incompetent. I said almost. Hes not going to ask you that probably. And beckys too nice, probably, to get you to say that. But ill try and get that in later to ask you about your view. Thats going to spike. Because you dont want another fed chairman. You think its better to abolish the fed than get a new fed chairman. And i dont know do you want this is this is a tease for what youre going to talk about. This is probably not 140 character response. But i think theres a lot we could do and id love to we want to talk about you created how many jobs do you think . Sun microsystems gave out 235,000 employee that doesnt consider all of the accelerator effects of all of our partners, resellers. Think about what java did. Definitely more than we got from government programs, i was thinking and didnt cost 100,000. Well of the 1 million created in the last year 3 out of 4 have been parttime jobs. Scary. But its the Republicancontrolled Congress fault that jobs arent being created because they dont care about growing the economy. I thought it was bush. It was bush equal blame 50 50. Anyway, i wanted to get a little of that in before we got cut off. Weve got a big week for the fed. The latest results for the fed survey. Predictions from some of the smartest on the street that who may replace bernanke and the feds plan for tapering. Then can the summers rally carry into todays trading session . Well find out whats going to be moving the markets at the open. Take a look at futures right now. See how things are setting themselves up. We have a green arrow on the dow. About 1 poi7 points if things od up. Were back in a moment. Welcome back to squawk box. A u. S. Grand jury has indicted two former jpmorgan traders involved in the banks trading scandal. They are accused of hiding hundreds of millions of dollars of losses by marking positions in a Credit Derivatives portfolio at inflated prices. Meantime, kate kelly now reporting that jpmorgan close to agreeing to pay about 800 million in fines related to the trading loss. The bank will settle charges with regulators about shoddy supervision and the important part is that the wall street journal is reporting that jpmorgan will admit to wrong doing as part of that settlement and that is part of a first and maybe a sea change in how the sec pursues these types of cases. The latest cnbc fed survey is out. What are some of the Top Economists and experts looking for when it comes to taper talk . Steve liesman is here and has the details. Steve . Good morning, becky. We did the survey on thursday and friday, but big fed news over the weekend. We went back into the field yesterday after summers on sunday withdrew his nomination to ask people about who they thought president obama would choose to be the next fed chairman. I want to give you these results which we got yesterday afternoon. So the question is, whos it going to be . Don kohn 6 , roger ferguson, 2 , janet yellen, 88 . Thats the expectation now on wall street, 47 economists, Money Managers and strategists answering our survey this time around. 88 looking for yellen. Who should it be . Who do they want . Guess what, 57 say it should be yellen. John taylor coming in next, the stanford economist who has Monetary Policy rule named after him. Larry summers has support, don kohn who is thought to be one of the two guys that president obama is considering just 5 , and ben bernanke 5 . Now i want to get to what becky teased for you, the taper talk and this, folks, is one of the new metrics were going to have to watch. We ask people, what is the amount of taper thats going to happen . You can see it ticked up a little bit. We went back into the field after the september employment report and you could see it came down to 12. 6 billion. Ticked back up after a little bit of better economic news. The taper now seen at around 15 billion on average. Back in july, it was 22 billion. What about the timing . 48 believe the taper will begin in september, the average month is actually around november. The fed is maintaining this taper level for about 3 1 2 or 4 months. Qe is seen ending in august 2014. Thats the average. Another metric we have to watch, the taper amount and how about the mix of the taper . Its believed that 72 of the reduction in purchase by the fed will be in treasuries and just 28 will be in Mortgage Backed securities. Watch this when we get the announcement tomorrow, what is the mix of the taper . How much of this is priced in . The market says 81 of the taper is priced in for treasuries, 81 for mortgages. And as weve seen as time has gone on, only 70 . A little bit more movement well see in equities if we do, indeed, get that taper tomorrow. Some other commentary we got. We call it the taper talk. The taper is hands down the single most clearly tailor graphed move in history. Probably not too far from the truth. Rob morgan, fed chairman ben bear noipg sarnanke said jobles will continue up. Finally, we have starting the tapering is not beginning not being based on Economic Growth which is still not Strong Enough for the fed to declare victory. Well ask him about that at 8 30. We have all of this online at cnbc. Com. You can read about it. And also, guys, well be watching tomorrow taper amount, is there a taper . The taper amount and the mix is going to be key. Joe . Thanks. Im glad guy told us it was the single most important instead of the three or four most important things. When theres only one most important thing, i think its much better. Anyway, still to come this morning, can the summers rally continue . Were going to ask peter what hes expecting from the fed. Lets check the tenyear note right now which was just under 2. 844 . Starbuc well be right back. Helping business run ng uy build were investing big to keep our country in the lead. Load we keep moving to deliver what you need. And that means growth, lots of cargo going all around the globe. Cars and parts, fuel and steel, peas and rice, hey thats nice Norfolk Southern whats your function . Helping this big country move ahead as one Norfolk Southern hows that function . The world is changing faster than ever, creating new opportunities for those who stand ready to seize them. In a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, our flexible, collaborative approach helps forwardlooking companies not only run better, but run different. To give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because now more than ever, the future belongs to those who challenge the present. Coming up next, your morning business headlines and then were going to talk markets, the fed and much more, plus much more from our guest host Scott Mcnealy. Were back in a moment. Tomorrow on squawk box, doug yearly, gary stern. The cfo of home depot and the cfo of wells fargo. Housing, the fed and the state of financials it all leads up to our interview with Goldman Sachs chairman and Ceo Lloyd Blankfein. Ever ybody has different investment objectives, ever ideas, goals, appetite for risk. You cant say one size fits all. It doesnt. Thats crazy. Were all totally different. Ishares core. Etf Building Blocks for your personalized portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus, which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Dont tell mom. Dont tell mom. Dont tell mom dont tell mom. Okay. Dont tell mom. Dont tell mom. Dont tell mom . Yeah. The best stories youll ever tell start with, dont tell. Dont tell dad. Start yours in the new santa fe. From hyundai. Welcome back to squawk box. In the headlines this morning. The government set to issue Consumer Price index figures at 8 30 eastern time. Economists looking for a rise of. 2 which would match the july increase. Were also going to be getting the latest on home Builder Sentiment that comes at 10 00 eastern time. The monthly index from the National Association of Home Builders expected to be down slightly from last months reading. That number out at 10 00 eastern time. Also gms chevy silverado. Edging out the ram 1,500 fullsize pickup truck category is one of the more profitable auto segments generating profits of more than 12,000 per vehicle. Ive actually always i know you dont see me in one, but i always sort of thought about wanting to have a pickup truck. I know you found that laughable. But you cant even see straight. I feel like a computer, my hard drive went like from this squawkward moment has been brought to you by andrew ross sorkin. You want a pickup, you dont even have a car. If i were going to get one, i think a pickup truck would be cool. A big one . Im talking big, like at a rodeo. You would forego the gun rack and gun, right . You wouldnt have you know, they have those normally too. Moving to texas and do the whole thing. This is like this is great. This is progress, i think. Were trying. Scotts helping me. My wife wants an f150. Its not compensating for anything, right . Maybe it is, i dont know. The dow and s p 500 rallying on news of Larry Summers pulling out from the race for fed chair. The fed starting a twoday meeting today. Joining us now chief market analyst at the Lindsey Group and a cnbc contributor. Very helpful every week, peter, when you give me the week. The good things and bad things. How long does it take you to do that . Not everyone gets to see that. Well, i have to go through the whole week. And since ive written most of all of the positives and negatives as we got to friday, its a little easier to compile. But you have to differentiate whats value and whats not. Do you keep totals in where are we, do you think . Are things positive or negative right now . Are they positive enough to taper . Well, i think and ive been saying this for a while that Central Banks want everyone to think that things are positive. That it puts beer goggles on investors eyes. If you look at 2013, weve had pretty sluggish, mediocre growth, low single digit earnings growth, but another massive gain in the stock market and thats because of central bank not just with the fed, but bank of japan. Bank of england kept full speed ahead. Is it that simple that money being created flows downhill into risk assets . Yes. I think its that simple. Does that can at least once that happens doesnt that help us feel better and spend more and a selffulfilling element, at least, doesnt it do Something Like that with the wealth effect . Temporarily. But individuals respond more to permanency. They want to know their income is going to be a certain level for a long period of time. Someones not going to buy a house because their 401 k is up, especially after they saw what happened to it in 2008 and also 2001 and 2002. You know, maybe theres news i mean, this morning weve been talking about this new forecast that is looking for holiday sales this year of ju just a gain of 2. 3 or 3. 4 . Maybe thats a little bit telling of the whole thing. We know this is out here and consumers are getting more cautious. Right. It boils down from the consumer standpoint, its Income Growth and were seeing very little of it. At the same time, cost of living is at alltime record highs. You went into a walmart and say to people, raise your hand if your incomes are at record highs. But their cost of living is. And the government tells us inflation is low but incomes are not keeping up with the cost of living and that is whats challenging consumers. Scott, you made the same points. The whole point is if youre running deficits and printing money, youre devaluing the dollar and the buying power of everything denominated. And the consumers feeling that. Scott, isnt it compared to a currency somewhere else . Thats a race to the bottom and everybodys doing that. And the fed has become a marketing department. You said it just they shouldnt be in any business at all. They shouldnt be in the business of taxing people by devaluing the dollar and they shouldnt be in the business of setting expectations. We dont want you dont want them in business at all . No, the government shouldnt be in business, they shouldnt have a marketing department, and they shouldnt be doing taxes through spending and kw quantitative easing. But until you start seeing like hard assets reflect all of this printing, you would think were still stopping up the excess demand from the last financial crisis. You cant say everybody else is devaluing doesnt matter that we do. If we hadnt devalued, wed have stronger buying power and the consumer when they go to walmart would see their dollar go if you worry about deflation, which people were worried about, considering that was so if youre worried about deflation we have been for the last three or four years. Fix the problems causing deflation like overregulation, government too big, inefficient government, all of those sorts of things. And dont structural things. Dont try and fix it through but there are people who dont believe fixable. We heard yesterday those are you know with another speech. Those are the things that hurt growth, the things that you just talked about are things that actually hurt growth. Governments not doing enough now to give us growth. Well, depends on who you listen to and depends on whether oh, were back in that debate again, somehow. Depends on when you studied economics and basic supply and demand. Basic logic versus what people say. And you know, you cant go to the government and ask them. They call they call redistribution entitlements, they call unaffordable loans affordable. If they were affordable loans, private industry wouldve given them out. So we have to go create fannie mae and freddie mac. They misname everything out there. So theyre going to definitely to create the power and the energy and get the masses to believe in Government Solutions theyre going to misrepresent. I know just by asking the question im going to get killed for it. What is the role in your mind for government . Im not an anarchist. Right. And government prosecutes everything they do inaccurately, with corruption and all of it. But we still need a Defense Department, a justice department, we still need some basic fundamental government actions. But i dont think they should be in education. I dont think they should be in health care, i dont think they should be in finance. They shouldnt be out giving loans. No health care at all. That can all be done in the private sector. There should be a safety net. Lets have a discussion about how big the safety net should be. Should it be 1 of the population . 2 , 3 , or or 47 . 49 50 Million People on food stamps. Right. And it shouldnt be a velcro, it should be a trampoline. And right now we built a huge velcro safety net in the name of redistribution. Were going to come back to this in a second, but i have one question for you, peter. If its not yellen, who do you think itll be . I think right now its yellen. Impossible not to. But if it really was yellen, wouldnt have you said to Larry Summers when he calls and says i dont want in dont say anything and then two weeks later you come out and say ive chosen yellen. This way you leave yellen out there to hang out to dry. I think its all image. They dont want to be seen as rushing into another pick after summers pulls back. Why let why let larry even pull back . Why not let it look like its the president s decision . If, in fact, thats what youre trying to do. If everybodys really in ca h cahoots. Because i think you had people in the Banking Committee saying were not going to go for this and the Obama Administration didnt want this fight. Why not just tell everybody that larrys pulling himself out . I guess see where im going with that . I think that might have been the theyre both cut from the same cloth. To scotts point, its Central Planning, the fed is price fixing the cost of money. And is there going to be a difference between summers, yellen, kohn or these other people . I guess you were agreeing with what he was saying. All i have to do is nod. I agree with him. When we come back, were going to talk more with Scott Mcnealy. Hes got comments about the president of the United States. Hes got thoughts about the fed we just touched on. And were going to talk to him about whats happening in Silicon Valley right now. Also, in light of yesterdays tragedy in washington, we take a closer look at Workplace Security, the ceo of diligent innovation whose clients include Companies Like hp, bae systems and Lockheed Martin will be talking about what companies are doing at this point. What would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Nice car. Sure is. Make a deal with me, kid, and you can have the car and everything that goes along with it. [ thunder crashes, tires squeal ] so, what do you say . Thanks. But i think i got this. [ male announcer ] the allnew cla. Starting at 29,900. [ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. Welcome back, everyone. Former Sun Microsystems chairman and ceo Scott Mcnealy. No shortage of news out of Silicon Valley. And wed like to get your take on whats happening, whats the future of Silicon Valley. Why dont we start off with twitter and the ipo . You think this is a good idea for twitter to go public at this point . Yeah. Dick and i get a chance to chat and i sent him my condolences and congratulations at the same time. Theres nothing more constraining than having to deal with the daytoday, having to deal with the scrutiny and fasb and all of the other, you know, just crazy things we do to our public companies. But, you know, they want to grow, they want to grow internationally. They are really they figured it out, figured out the Second Screen, the 140 characters is perfect. You know, tv is kind of a lean back experience, but if you lean back too far, you fall asleep, so this allows people to engage but, you know, in achievable, bitesize 140character moments. So theyve really figured out the Second Screen thing. And its time to going ipo is a great pr opportunity. I think it makes sense for them but its not going to be itll be more satisfying, less fun as you go public. You know, zuckerberg made some comments recently where he said that hed been very afraid of going public. Now he wishes maybe hed gone public a little earlier. If you look at the time line for twitter, are they doing the right thing by going public now, you think . Im not on the inside of what the cash needs are and all the rest of it. In fact, id like to mention that we Just Announced today very, very big deal. This is a scoop for you guys, a partnership with them to be their partner to go on air and in venue as well as mobile and on the web. And we have an interesting partnership. And weve signed up to get full access to the twitter content and feed so that we can for our partners with way in. With way in. So its a Big Partnership and we think the onair and in venue thing is going to be a whole new killer category for twitter as they go forward. And so were heavily invested in their success and we think this is a good time. We want to go international with them and were moving into japan with them, going to south america with them. Im very excited about it. Do you think theyre going to be bigger than facebook . Do you think somebody else ultimately leapfrogs them . I asked everybody in the room, how many people use facebook . And i said how many people use facebook more today than they did a year ago . No hands were raised. Same question on twitter. It said to me not necessarily that twitter was better than facebook so much somebody new always comes along with remember aol you got mail . That was the end all, then myspace came along and facebook, each one had gimmicks. Facebook was relationship status, linkedin, every time theres the new next great thing, right now we think twitter plus wayin is an interesting combination. Lets talk about continuing innovation, apple has stumbled in the stock market recently. Do you think the run of innovation is over . Or is this just a temporary cooling off period . Im bias. I think its always hard to follow the culture and the whatever of a very successful ceo. And steve was incredible and probably the only guy who has done it many, many times as opposed to being, you know, an accidental empire or whatever that a lot of us were a part of. Well see whether wayin is a second act here or, you know, whether sun was just a magic moment. It was tough to follow the watsons at ibm, tough to follow hewlett and packard at hp and it was tough to follow at microsoft, and its going to be really tough to follow steve jobs at apple. He was special. So i think thats the bigger issue there is how do you follow really, really great ceos . Because the company molds around their personality and their expertise. You brought up microsoft and the struggles that its had. Ballmer is leaving. There have been several candidates that have been mentioned to step and take the reins. How does that strike you . You know, gersner was the best thing to happen to ibm. And if you can find that magic and the right combination of understanding the past and putting some discipline in, i dont think ballmers done a terrible job. The guy has very high integrity, the guy has been very straightforward. Hes managed an enormous amount of cash out of that system. And it is tough to compete as a big, established organization against a totally focused, private, startup in these areas. So, you know, i think the poor guy, you know, did a great job in a very tough, tough scenario. Another guy who took on a big company after an unbelievable 20year jack welch run. Its hard to fill those shoes. Its much better to start over or to come in as a turn around specialist or whatever. I dont think microsoft needs a turn around, but it could use its probably time would you break it up . Would you do something . When you look at them buying nokia, does that say theyre going in a whole different direction . Id probably do Different Things with it but thats me and id do like what . A buddy of mine once said that ceos remake companies in the image in which they know how to manage. And any new ceos going to go in and do that. I probably id probably move the company a little more open and start opening the apis and start sharing and getting the rest of the world to help me. Like google, if you look at what android is doing to the iphone, its going right by it because its mankind versus cupertino. The first thing id do, they havent called me and im not sure theres enough in the marketplace to get me to go back and get into the pinata. You just youve got these old zombie ideas. You actually think that a world full of people is better than 100 really smart people . That means you think the free market is better than the government government has 100 really smart people that have gone to Ivy League Schools. Just because they went there doesnt mean theyre smart. You go to an Ivy League School and you figure out we need solar, and suddenly fracking comes along and does it for 2 instead of 15. And you realize maybe the 100 smartest people arent the way to go. One of my frustrations and you figured me out already, am i that transparent, i think its a shame that we are talking all of these people into giving their money away or paying taxes when i would much rather have imagine you mean the buffett yeah. The last thing i want to do is tell bill gates and Warren Buffett how to spend their money. But imagine if theyd take their tens of billions of dollars and pledged it to a Business Plan sponsored by an mba graduating from an mba school with engineers and marketeers and they got 50 of the company keep it in the company. Instead of doing the 800 billion Stimulus Program and took all that money out of wealthy people. What do wealthy people do with their money . They invest it, spend it, save it or give it away. And i guarantee you, any wealthy person who created that value is going to do far better doing those four things than taxing it and giving it to pelosi and reid and obama and all of the oth other bureaucrats. Thank you. I almost got in trouble. Im going to have a hard enough time walking out of here safely already. Talked about a kevlar vest. Weve got to learn again and again and again that the billion people that just acting in their own selfinterests is probably better than the it is not greed when i take the wealth i accumulate and earned at sun and by the way, i had to borrow money from my dad how much was that you accumulated . Not very much, its a Hardware Company and ellison bought us at the bottom if you remember. Hes a smart man. But, you know, i took that money and im investing it back in wayin and other startups and in my. Org that is open sourcing k12 education, we spend 8 billion a year on curriculum. And we spend 130 on a math textbook. Lets open that up and make that free. Pendulum swing. How long the Central Planning pendulum that has swung back for the last however many years you want to count it. How long hillary could easily be elected. The problem was, it wasnt 47 , it was 49 when mitt romney made that comment. And what we have now is people who arent participating in the whole process dont have skin in the game. And we have moved from the safety net to the troller net in terms of just you really believe that . I do believe that. Absolutely. I do believe people feel so disenfranchised or enfranchised by the amount of money the governments handing out . I think its really hard when multiple generations of voters have been raised by government sector Union Teachers and ten e tenured professors who have no chance of explaining personal responsibility earned success. The capitalist environment of and i just think i think its getting very, very difficult. I dont want to be negative there is a point of no return where there are Tipping Points. There are Tipping Points, yeah. The thing that frustrates me most is feeling virtuous about providing a safety net for three times of the amount of people that needed a safety net. Now you its about providing a conversation about welfare queens and all sorts of other things. Were not talking about theres a larger issue about technology. The other thing is that technology has changed the employment picture in this country and frankly globally and then you get into all sorts of imbalances. How do you deal with it . Then youre saying its different this time. And things have changed. It has become a winner take all society. Im not saying thats a good thing or bad thing, someones got to deal with it. I dont believe that because if the winners reinvest and create jobs, all the rest 48 of births today are on medicare. That is a stunning number. Were going to continue this conversation. Squawk will be right back. Th coming up, the latest out of washington. More details about the horrific shooting at the navy yard. Plus, a check on inflation. The data will be out in just over 30 minutes. And well have the Market Reaction coming up. Tomorrow on squawk box, Toll Brothers ceo doug yearly, gary stern, the cfo of home depot and the cfo of wells fargo. Housing, the fed and state of financials. It all leads up to our interview with Goldman Sachs chairman and Ceo Lloyd Blankfein on squawk box starting at 6 00 a. M. Eastern time. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Bjorn earns unlimited rewards for his Small Business. Take these bags to room 12 please. [ garth ] bjorns Small Business earns double miles on every purchase every day. Produce delivery. [ bjorn ] just put it on my spark card. [ garth ] why settle for less . Ahh, oh [ garth ] great businesses deserve unlimited rewards. Heres your wake up call. [ male announcer ] get the spark Business Card from capital one and earn unlimited rewards. Choose double miles or 2 cash back on every purchase every day. Whats in your wallet . [ crows ] now wheres the Snooze Button . Welcome back to squawk box here on cnbc. First in business worldwide. Im becky quick along with joe kernan and andrew ross sorkin. Ahead this hour, much more from our guest host, Scott Mcnealy, the former chairman of Sun Microsystems. Were going to talk about his new startup, social media hub wayin. And an update on yesterdays shooting at the Washington Navy yard and well be talking to roger kressley. And later this morning, a look at security in the workplace, michael barrett. At 8 30 eastern this morning, well get a key read on inflation as the fed kicks off a twoday policy meeting. Cpi numbers are expected to show an increase of. 1 in august. The u. S. Equity futures at least at this hour are indicated higher. Dow futures up by about 31 points, s p futures up by just over a point. Right now, lets get over to andrew for your morning headlines. Among or top stories this morning, grand jury indicting two involved in the trading scandal. They are accused of hiding hundreds of millions of dollars of losses by marking positions in a Credit Derivatives portfolio at inflated prices. Meantime, kate kelly reporting that jpmorgan close to agreeing to pay about 800 million in fines related to its london whale trading loss. A lot of money. The bank will be settling charges about shoddy supervision, the wall street journal and New York Times reporting that jpmorgan will admit to wrong doing as part of the settlement. A sea change that could set a precedent for other banks. Also, gasoline prices setting a record aaa reporting average price of gasoline will be exceeding 3 per gallon today for the 1,000th consecutive day. That never happened before. The current streak began on december 24, 2010. The investigation continuing into that deadly attack in the Nations Capital yesterday. 12 people killed, 13 if you include the gunman. The motive for the mass shooting is still unknown. Eamon javers joins us with more. Good morning again, eamon. Reporter good morning again, joe. Well, it was almost exactly 24 hours ago yesterday that aaron alexis, the 34yearold shooter walked into this building, building 197 here at the Washington Navy yard. Yesterday morning, about 8 15, people gathering in the cafeteria area. Walked in with a shotgun. At some point he obtained two additional weapons and began shooting in that closely packed cafeteria area killing ultimately 12 people, 13 as you say including the shooter, setting off a day of chaos as Police Locked down this area, much of the surrounding neighborhood. Also the United States senate, an incident late last night, ultimately bizarre incident involving fire crackers at the white house last night. Chaos and confusion raining throughout the day. Several points authorities here said they were on the lookout for two additional people. They now say this shooter acted alone here. And weve got some pictures of aaron alexis we obtained through friends showing him in his normal civilian life. They said he had a pattern of misbehavior while he was in the naval reserves. So there were clearly red flags here. Authorities are beginning now to piece all of that together. Were told that the fbi has now visited his apartment where he was staying in some longterm housing at 333 e street southwest. So theyve also visited his mothers house. Trying to piece together who this guy was and what couldve prompted this horrific shooting yesterday, joe. All right, eamon, thank you. We do this every time. And i dont know the answers are never very satisfying. Joining us now to talk more about the shooting, former white house counterterrorism official, also a terrorism analyst and a partner at Liberty Group ventures. Ill tell you, it looks totally unrelated at this point, but the first thing i thought of navy yard, you know, the top guy at al qaeda, what was it, three days ago said start doing the lone wolf stuff again and based on syria and have to spend more on security and hurt our economy. At this point, theres absolutely no reason to think that there was anything involved in terms of that in this situation, right . Thats right, joe. I think when the reports were out that there may have been two or three other individuals involved, there was more concern about whether there might have been political motivations to this. Now we know there was a lone shooter, i think that has been put to the side. The challenge now becomes for the fbi and local Law Enforcement to really pull the string on alexis past. Who did he know . What were the motivations . Theyre going to go through his computer records, his cell phones, theyre going to talk to the network around him to say, all right, what was it that triggered it . Was he truly a lone wolf who decided to take this step. Buy the shotgun, go into the navy yard, begin the process of premeditated murder. Roger, it you know, one is too many, but it seems like the workplace shootings, i can remember ten years ago when people would even talk about, you know, a postal worker that became an acronym for someone satisfied with his job. The actual Workplace Violence, the incidents, i guess its always too high. But, i mean, thats what this looks like. Was he unhappy with what happened with his experience with the navy . Yeah, and became very disgruntled, had a grudge and decided to take it to the next level. And thats the issue here that we always grapple with post shooting, which is, what makes a person jump from being angry, from having a grudge to go about premeditated murder. Is there a Mental Health concern here . And thats going to be part of the investigation. But this is fitting a pattern right now where were seeing the type of multiple shooting deaths by an individual motivated for not political reasons but for other reasons triggered by Emotional Health issues or other things. And joe, we talk about this actor shooter phenomenon. And what we have seen in the workplace is far more attention paid to safety and security of employees in recent years where theyre being trained, they know what to do. Shelter in place or flee immediately or if they have no other options, find the closest thing that resembles a weapon and go after the shooter. That type of training is becoming part in parcel of the daily workforce right now. In your view, roger, there is some you can argue both sides about whether gunfree zones are effective or actually ineffective or actually, maybe, maybe hurt the i dont know, make it less likely youre going to be able to prevent things. Whats the current thinking on that . It seems like youve gotten one of the guns from someone there that had the gun, right . Right. So one of the security guards. There are legitimate arguments on both sides of the aisle here. And as the nation and a government, we havent figured it out yet. But the reality is, joe, were going to have more shootings like this and a higher body count until we take some action that seems to address this problem. The reality is, mr. Alexis went into virginia and in one day bought a shotgun. He couldve passed all the background checks because he wasnt convicted for any of those prior incidents where he discharged a gun in his Apartment Building where he shot out the tires of a vehicle in seattle. So there was nothing in the system that wouldve stopped him from buying that weapon. So this may have been one where we could not have stopped. But, again, once Law Enforcement builds the picture of his past, i think well be able to pass judgment then. Meanwhile, we have 12 dead people that we have to bury, unfortunately. All right. Its easier with a gun, obviously. But then you got the guy in venice beach, dries on to the if, you know, the Mental Health component of it is definitely something that needs to be paramount. Its a big part of it. Big part of this issue and part of the debate. So were just going to have to grapple with that as we deal with the gun policy issues associated with it. Again, its the training of the workplace that becomes one of the greatest measures of safety right now. We all got to recognize that regardless of what industry were in. That is the world we live in now. All right. And i just cant imagine trying to protect a government building or a or the president or anything without try to protect those guys without armed protection. Thats why, you know, its not a chicken or egg thing. You need to meet force with force, but that opens up the possibility of having the force present for someone to take. Its a tough one. Joe, youre on a military base even when Washington Navy yard, which has Strong Security but its also designed to ensure the free flow of badge to credited both civilians and military people. So multiple layers of security, armed guards to prevent unauthorized car and truck access. But if one individual is motivated enough and has legitimate access, an Insider Threat if you will and can buy a weapon, then they have the advantage at the beginning. The attacker always has the advantage. And so our defensive structure has to reflect and recognize that reality. Right. Roger, thanks. Appreciate all that from you today. Thank you. Absolutely. Coming up, much more from our guest host Scott Mcnealy. His startup wayin helps brands tap into social media conversations as they happen, they happen right at this moment. Wayin is expanding its partnership with twitter. Still ahead, key inflation data. Thats hitting the tape at 8 30 a. M. Eastern time as the fed begins a twoday policy meeting, were going to bring you the cpi numbers and the Market Reaction. As we head to a break, check out the market indicator. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. Welcome back to squawk box, the futures have been indicated higher. After the markets ended higher yesterday, the dow up by about 120 points yesterday. The futures indicated open up by about 30 points. Check out shares of aeropostal. Jumping on news an affiliate has taken a stake in the retailer. Its up by 15 this morning. And our guest host this morning is the chairman and founder of the new startup wayin. The Company Announced this morning a new partnership with twitter. Have we actually seen the results of what this Partnership Looks Like this morning a little bit in terms of how people are reacting to you . Yeah, we have. Ive been watching. Ive got a couple of people who lost money trading sun stock at the wrong moment and dont think my views are worthy because of that. Doesnt make them very unique, does it . No, most people did pretty well on sun stock. Most people made a lot of money. It bounced around a lot. Sort of looked like a bill clinton Lie Detector Test for a while. Wow. Different question. Speechless. Ive never seen him speechless. Because i look back at clinton now and think he was a god. Dont you . At this point . I dont know what i was thinking. At the bottom of the hour, we left it off right before we went to commercial and raised this issue about the American Dream. And joe would say i thought the American Dream was dead and i was suggesting i didnt actually think it was dead but i think its harder. More challenging today. You dont agree with me. I think its still there. I think the opportunity is there. I tell you, the regulations, how much paperwork you have to spend to go start a company. Obama cares going to make it very, very expensive to move past 35 people and start getting into that whole routine. I havent talked to a Small Business owner yet who has been happy with the amount of regulation and oncoming regulation. I think minimum wage makes it very hard to hire people to get stuff done and i think the do you think its those do you think its the regulatory challenge that makes the mobility issue hard or structurally, and this goes to you in the valley and technology. And this is where i was going with it. Whether it becomes a winner take all society. No, i think there are Network Effects in social media and there are some Network Effects in technology around api. We cant all at some point you have to choose which side of the road you want to drive on and technology tends to drive those Tipping Point things. But that doesnt mean winner takes all. If its proprietary and you o own i mean, id love to own vowels. You know, if i own all the vowels and if you used one, that would make and thats what i used to argue that windows used to be the kind of written and spoken. And if you can get past the industrial revolution, do you remember what needed to be done by hand long ago . At the time when all of these machines that came in and automated everything, people back then said this is over for the worker now. But through history, through creative constantly, you know, look at the record. Theres no Record Companies but the Technology Issue is something that has revolutionized globalization. Youre no longer talking about a fixed pie of 250 Million People, youre talking about billions of people. That changes the dynamic in terms of it changes what you have to do. There were 40,000 piano players playing in the silent movie era in the Movie Theater and we learned about the musical scores. We have two piano players in l. A. Who are very good. And everyone gets to hear good scores thats what were trying to do. Weve got 52,000 learning assets free and open source. And ten plus ten was is and will be twenty for a long time. So we dont have to spend 130 on everybody go and tell your local administrators to download for free. Did i mention free off of this website and we can get everybody all those piano players are doing something useful, like maybe they could 280 in california used to be the most highway. Now its a garbage pit. Get them out there picking that up, doing something, but weve got to get people applied to things shut down the u. S. Postal service. Not saturday, shut it down. Im buying some property in nevada. My plan is to move to nevada. I like the environment there. And we use docusign to sign the documents. We didnt have to fax, didnt have to do it. Theres no paperwork involved at all, its all done electronically. I love all sorts of technology, but ultimately doesnt that mean its harder to create jobs . Im not saying i dont want wasteful jobs, im suggesting this is the world we live in. Seems theres a lot we need to do. Stuff that needs to be done and minimum wage prevents some of the stuff from getting done getting done. Regulations make it too hard to hire people. Stuff is getting done outside of the United States because they arent basically putting these and you know what, the International Barriers to competition are falling big time in a whole bunch of ways. So if we dont become competitive internationally, the jobs are growing. When i went to china with boone pickens, we went to the great wall and boone looked at it and said this is what you can do without osha regulations. Youre talking about not adding additional no, what i do find fascinating is you have unions, they got created, i remember studying this a long time ago at an Ivy League School, unions to protect themselves from abusive, big bad bosses. Sure. The interesting statistic is there are 6. 6 of the private sector is unionized here in the u. S. 35. 9 of the government sector is unionized. We have decided that our government that we all love so much is so nasty that almost 36 of the population has to employees, have to be protected from our government. If theyre so bad i mean, its obviously corrupt for a whole bunch of reasons because theyre basically voting for their pay raises at the right. But the real thing is our government so nasty we need to protect . Theres no Civil Service laws. Is the Office Worker environment so dangerous that we need to have collective bargaining and therefore pay them more than they get paid in the private sector . Theres some really wrong things here. And all of that contributes to sand in the gears of the capitalist engine that creates jobs, allows personal responsibility and allows this dream. But heres the question. The question is, what is the dream . And i talked about it as there used to be the leave it to beaver dream, which was you check the box, went to school, went to college. If you went to college, you got a nice job. Two kids, a dog and a house, right . That dream, that sort of paint by numbers dream seems to be much harder to come by today. Part of the problem, the schools have gotten out of control. My son just got out of college, im not going to say which one. Heres some of the seminars to take. Selftheorys. The other and the other worldly in america. Im reading this, ill give this to you. Masters of disaster. This is mad women, women and Mental Illness in u. S. History. Imagining women. Writers in print and in person. Writing womens lives. This is what people are learning at college. And we have, you know, 50 of the College Graduates now are underemployed or unemployed. They are learning i have to say when i went to college, it was the same thing thats one of the good ones. Thats what i didnt say that. I challenge you to look at the introductory seminars and what are we learning there . Thats much more about learning logic than the topics themselves. I do not want to hire somebody who is imagining women or Something Like that. Or learning about i hate to say, when i went to college, there were a lot of courses like that, bugs and men, a bunch of classes that didnt qualify you to do anything when you got out of college. And we need to start. We need to have an Education System that teaches people the trades. Yeah. Right . Thats true. I was trained as an economist to be, you know, the president s counsel of economic advisers. But that doesnt. You have an economics degree . Yeah. Honors. And you started sun micro. On an mba. Im not a programmer. Im a golf major. That is amazing, though. Economics of all of this stuff i was captain of the harvard golf team which is like being the Florida State snow ski captain. Joes reassessing because of the dismal science, the economics. I think economics is a joke. I do. I dont think you can i wish youd learn just read adam smith, read, you know, read something that stands the test of time. Read milton friedman, but then when you give nobel prizes to paul stiglets on one hand and krugman on the other. I mean, obviously, theres no the science is in there. Theres no facts like chemistry or physics, no real facts. Its a pseudo science. Its a social science and thats why i enjoyed it. Humans are not always rational, but theres science around it. Social science. Instead of all of that stuff all that drivel, i think there should be chemistry, physics and biology should be the first things you learn. I think supply and demand, microeconomics is well, thats important. To learn that your own incentive to do something that benefits yourself is what sets prices. Its what allocates capital and what creates prosperity. And thats what you need to do. All right. Your own selfinterest. Doesnt make you greedy, doesnt make you selfish. And fairness isnt necessarily a good thing. Well have Inflation Numbers as the fed kicks off the anticipated twoday meeting. Cpi number hit the tape at 8 30. Forecasters expect an increase of. 1 . [ male announcer] surprise youre having triplets. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] surprise your car needs a new transmission. [ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the american people. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. [ male announcer ] and our priority is you. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Welcome back to squawk box, everyone. Engineers believed they succeeded in pulling off one of the most complex salvage operations ever. The wrecked cruise ship Costa Concordia has been pulled off the rocks and into an upright position. This took months of preparations, hundreds of workers, and it was is the ho19 pulling power. And you were thinking about it yesterday. How many pounds of fish were rotting on that ship . 24,000 pounds of ship. And a bunch of rotten cheese mixed in with all the eggs the first person that went in there was i mean, you need yeah. I was thinking people are eating breakfast right now. Come on. When we come back, we do have breaking economic numbers. A few minutes from the cpi numbers for august. Right now as we head for a break, take a look at the u. S. Futures. Welcome back to squawk box, were going to have august cpi out momentarily and the numbers up. 1 on cpi, strip out the all important food and energy also up. 1 . Dont see any revisions to our last look. These are about as expected. You could argue youre looking for. 2 on each, but no matter how you slice it, down here the biggest debate isnt on the Inflation Numbers, its on how they calculate them, what they mean and what they dont mean. Im looking at the marketplace, we see that tenyear note yields have come back up a bit from yesterdays exaggerated bottom. Remember, if you were short looking for higher Interest Rates whether it was the autumn summer story or, of course, what begins today in a two hi day meeting. Definitely put the market in the box in terms of position. If we look at europe, the guild is climbing close to 3 , the boon hovering close to 2 . So, of course, try to separate fact and fix from the sustainability of what has been higher Interest Rates, benchmarked against maybe some slightly weaker data and, of course, what the fed will do regarding the taper. Maybe the biggest story in the markets that ive witnessed in many years and, of course, the outcome in about, what, 28 hours from now. Back to you. Thats right. Rick, thank you. For more on the data, lets get to Steve Liesman. Steve, joe asked the right question. Joe doesnt think anything i do is interesting, so were going to have to ask im ready. Youre not objective. No, im ready to tell the government. Listen, next time, were going to skip your Inflation Numbers for a while. Right. When you have something tell us, let us know. There are a few things worth mentioning. Prescription drugs up. 08, and medical care up. 06. Pushes up the overall index. Im trying, airline fares down 3. 1 . That could interest people out there. And what else is there . Nothing else to talk about. Fuel housing fuels, down thats it, im done. Okay. All right. Now i want to bring in joel yes, because we want to talk about what rick just said is going to be the most interesting market story hes seen in a long time. Ive got a lot of things. Start with whats interests you. Well, i want to go back. Rick made the point, this is going to be one of the biggest stories hes seen in a long time. Whether the fed tapers tomorrow and if so, by how much. Whats your expectation . Well, you know, im hoping they actually dont. I dont think the economy is ready for it, necessarily. You know, i think we could have a soft third quarter. We have the government thats sitting out there and who knows whats going to happen with sequestration. I think the risks are particularly great on the downside not necessarily a whole lot on the upside. And with inflation really trending downward, im not sure why they need to bother. But i suspect because the markets are demanding it, theyll make some, you know, move tomorrow. So thats basically it. Markets are demanding it because the fed basically told them we were headed this direction. I think the markets are following what the fed told them. Yeah. Well, thats true, but i think the big mistake, mr. Bernanke made was by saying that it could come later in the year rather than late in the year. That magical letter r. If he had said late in the year, wed be looking at december and nothing else would have been changing. There was no reason. If were talking about 10 billion, 15 billion, what does that matter . But with all the uncertainty, i think he boxed himself in and youre right, he made the statement later, not late. Joe, i think theyre in a place they dont want to be. I think theyre doing 85 billion a month of these asset purchases. I think it makes them nervous. I think theres some discord on the board about this. And i think they did this with some sense they would be on a short leash here and that rolling this back now is part of an overall agreement thats been struck on the board between the hawks and the doves. You guys do this, do this for a while, see what kind of impact and now lets roll it back and do so in a measured way. Thats what i think is the story right now. But, joe, i want to turn to Something Else which you and i have been corresponding about over the last couple of weeks. Whats going on in the job market . And it shows people dropping out. And the Labor Force Participation rate is going down but youre not concerned about this and im concerned youre not concerned and i want to understand why youre not concerned. First of all, lets take a look at trends as far as the Labor Force Participation rate is concerned. The governments been doing this number for about 65 years and for 65 years the male Labor Force Participation rate has been declining. The female Labor Force Participation rate which really soared in the 70s and 80s peaked about 13, 14 years ago and has been slowly coming down. So weve been seeing a decline basically in the Labor Force Participation rate. Its picking up steam. But its really been coming down for over a decade. And when you have a trend thats over a decade long, you cant dismiss it. This is a demographic issue. The boomers are slowly getting out of the market and social changes are occurring. Rick, go ahead. Go ahead. Ive heard this argument, so i went back to 1970 and i looked at the employment to population, Labor Force Participation rate and, yes, there are some trends. But listen, if you cover up from 08 on and look at the chart, it would be like looking at a stock chart, right . And ive showed it to many people on the floor. And it could go rick, rick, if you look at the rick, if you look at the 70s, rick then you could rick, if you look at the 70s and 80s change the complexion dramatically, dramatically. In the 1970s during the carter administration, it went up by 2. 6 percentage points. So bring carter back. Had a great economy because carters a better president i want to give some other data here, joel. Theres two kinds of people leaving the workforce. Those who are leaving or two types of people out of the workforce. Those who are not looking for work, those who are. We have a chart up right now. Those who are not looking for work, thats gone up if theyre out of the labor force, those who are looking for work on the labor force, thats gone down or stayed steady. Thats exactly right. Joel, if im not mistaken, your point is the green line is retirees, the blue line is some progress, although still a high number of people who are out of the workforce but looking for work. Thats exactly right. I mean, theres a whole series of data thats out there that are indicative of a change in the trend as far as the labor force is concerned. I think thats one of the situations. Its also the same thing when we get into the discussion about parttime workers. If you take a look at whats happening to parttime workers, theyre going up but jobs are going to people who are wanting parttime jobs. Those are the baby boomers who are cutting back, theyre not retiring, theyre looking for parttime work, businesses see them as skilled workers and theyre actually getting the jobs that they want the increase in disability ranks. Thats a big deal. Yeah, it is a big deal. We cant dismiss this dynamic. I want to bring this home to policy here, which is it matters a lot because of whats happening in the society right now in terms of being able or notbeing able to get jobs. But theres a lot of slack in the labor force right now. And we dont risk an inflation problem if we should accelerate on employment. But joel, if youre right, it means the fed could be wrong here and there isnt as much slack out there because people are leaving the workforce and they aint coming back. Whats your take on that . That and thats exactly my view. I think what were looking at is a very longterm trend in a declined and Labor Force Participation rate. People are leaving, theyre either leaving it completely or theyre moving to parttime jobs. And what that implies is that maybe the full employment rates a little higher than the fed thinks it is now. Everybody thinks its 5 1 2, thats probably a reasonable, you know, level at this particular point. But what its really saying is slack is such that i think, you know, the feds 6. 5 target rate, that could start triggering some reasonable Wage Inflation because i dont think theres a whole lot of extra slack once you get to that particular too much financial engineering. Thats why people in the marketplace are sick of qe. Everywhere you look, theres financial and social engineering. The private sector knows how to do it. The governments got to clear the zone. And thats going to start 28 hours from now hopefully. Youre right. I thought that was interesting, joe. I dont care what you think. I thought that was interesting. I want to thank joel for joining us today. You dont care what anybody thinks, you should run for president. Wow, this park had a perfect game going into the seventh inning. Pretty interesting. Steve, rick, joel, gentlemen, thank you. What were you saying . This is the time when i pick a piece of paper up and i throw it at joe. Coming up, the Investigation Continues into the deadly shooting at the Washington Navy yard yesterday. Up next, a closer look at Workplace Security with mike barrett of a Consulting Firm that advises the white house and Defense Department on Homeland Security matters. Well have that when we return. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. With fidelitys options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Weve been watching the futures. The dow futures up by about 34 points above fair value. This comes after a strong day for the markets yesterday. The dow is now sitting back at just about 15,500, s p is back near 1700. Well continue to watch as we get closer to the opening bell. Shares of Huntsman Corporation are on the rise this morning, its buying two businesses from rival chemical maker for 1. 1 billion in cash. It will also assume 225 million in unfunded pension obligations. And the deadly shooting at theive navy yard. Good morning to you. Good morning. Is this avoidable . Truly preventable . And if so, what do you do . Well, nothing is fully 100 preventable. And thats an important baseline people have to understand. So what we do, and particularly, actually, the military does a good job of what we call defense indepth. A little bit like diversification, right . You reduce risk by having multiple layers of security. Some of that worked yesterday, but unfortunately, a determined adversary can always get through. Isnt that the issue . Isnt this always going to be the case . My understanding is your company suggests that you do random checks of employees on their way in, whether you have a badge or not. That helps, but as you just said, if youre actually determined, youre determined. Well, thats right. But the randomness of the inspections for everybody, meaning that everybody whether you work there or not, whether or not youve had a security clearance done, whether or not you park there every day, still occasionally checking cars. What that does is deflects the threat. So if somebodys determined to strike you but you make the workplace too hard of a target, then theyre going to strike somewhere else. So if you go into the hypothesis this is more Workplace Violence what it looks like, guy is upset with his boss, making a statement. He will go do that while the boss is commuting home as opposed to attacking the place of work. This is a question ive asked about every guest this morning. What is the role of the employer in terms of profiling and investigating their own employees . Obviously the role for Law Enforcement. But when it comes to reading emails, watching social networks, you know, looking looking through all sorts of telephone calls, that kind of thing. What do you think the employer should be doing . Yeah, its a great question and today and todays technology age, i think its ever more important. One of the weird things about the defense world is that for positions that require security clearances, for example, its the government that does the investigations. So we tend to just rely on the government to do the background. When youre talking about, you know, any other industry out there, the individuals that are in charge really need to build that into their plan. They need to have, you know, at least a third of their focus needs to be on hiring people that have clean backgrounds and records, you spend another third of your effort trying to make sure that the security protocols are reasonable. And as you see yesterday, when something does get through, you want to have another third spent on the response protocols. They did very well yesterday. They had a tremendous response, s. W. A. T. Teams got in there, people knew how to shelter in place. Shut the area down. So, mike, if i hired you right on the spot right now and said come on in here, i want you to do a full workup. And hopefully we theres nobody here who would come under the category of being a potential problem. What would you do . Well, one of the primary things is metric checks. Right now you have i. D. Cards, but often its just a picture. As long as it looks reasonably like you, security guards arent going to notice. So youd want to go to more secure Access Control points, go to biometrics. Thats one point. Second point, you want to run background checks on everybody, including current employees. Often times we find its the longterm employees who get upset if something changes and end up being the danger. How often are you supposed to do that . Well, we do periodic reinvestigations every five years for top secret and every ten years for secret. Frankly, as you pointed out in todays social media age, you can do it more often. Every couple of years if you use certain social Media Monitoring tools. Right. Mike, you raised some important issues and also raised some important questions. We appreciate your time this morning. Thank you. Thank you. Coming up, the fed starting its widely anticipated twoday meeting this morning. Will the central bank really do it and begin the taper . And what will it mean for the markets . Were going to check in with jim cramer at the New York Stock Exchange next. This week, we have a huge lineup on squawk box. Tomorrow, before we find out if the fed will begin the taper, we talk to Goldman Sachs chairman and Ceo Lloyd Blankfein and then thursday, jimmy dunne, and former wachovia ceo bob steele. And wait until you see who we have lined up for friday. Watch squawk box all this week starting at 6 00 a. M. Eastern. Welcome back to squawk box. Jim cramer, they go to 75 billion. Whats the market do . Probably nothing. I think were overbought. So there will be a quick selloff and then the buyers come right back in because the buyers cant be kept out. If we didnt go down yesterday with a lot of bad news later in the day, including a terrible shooting and the president coming out and basically saying im going to shut down the government, its very difficult for this market to stay down. What does the market do, jim, if they do nothing . If they do nothing, i think the market goes up again. They do nothing and maybe its yellen. Gees, i know theres a big political fight back and forth between you guys and rick santelli. In the end, doing nothing is good for the stock market. Ill take any fischer. How about you just put a fieschr in there. You have a great guest, Scott Mcnealy. Does he feel oracle has done a good job with sun micro . Larry has called me other than when he asked me to testify against google. You dont want to buy a hardware separate from your software, you are dont want to buy a car and then Download Software to run your vehicle, you want it all integrated. I followed scott since we were in college to believe. I want to congratulate you on being a Fabulous Business person. I appreciate it. He was an upper classmen when you were there . And scott was a great, great athlete. He doesnt talk about it but he was fabulous. On the golf team, right, scott . I finally started playing hockey three years ago. The older i got, the faster i was. At a lot of things. Thats personal. Now youre coaching hockey. Im coaching, yes. Someday ill be an owner. Im on the board of directors of the san jose sharks. Are you really . Wow. J. C. , well be watching. Coming up, our guest host this morning has been Scott Mcnealy. Were going to give him the last word when squawk box returns. A quick programming note, doesnt miss squawk box tomorrow. Well talk to goldman chairman and Ceo Lloyd Blankfein. You dont want to miss it. Stock of the day. I wanted to ask you earlier what happened there, mr. Underwear. What happened in august to aerpostale. I stopped buying. Do you think they ordered all the wrong stuff . You mean its like a jcpenney situation where they just missed the trends . Its so hard with teens. I have a hard time keeping up with it. They were killing it. Where did are you saying even me with two girls, im trying to figure out back to school. They change their minds. Sycamore partners has taken a nearly 8 stake in the company. Did you guy cargo shorts . I dont let my boy wear them. My wife doesnt let me wear them either. Too sloppy . People have problems with cargo shorts. Its what i used to see people wear to construction sit sites. I said youre dressing up. The real problem is just to get them to grab a clean tshirt. Scott, weve talked a lot about what youre doing with wayin and how social networking is out there right now. Were trying to figure out what the future is for Silicon Valley. Is there something beyond so long networking . If i knew, id be investing in this big time. There always is some new wave. But if you look at what is social media all about, its fundamentally taking what used to be drums and written letters and all the rest of it and weve just been evolving that. We moved from lots of barriers to access and entry to much fewer. And, in fact, thats one of the challenges government is having is their treasuries are no longer independent, separate things with electronic funds transfers and all the rest of it, you can pull the levers at one treasury department, its totally offset by another political maneuver. So what were continuing to do and what i think Silicon Valley will continue to do is disintermediate and theyre disintermediating all kinds of activities. Eventually the world i believe some of the big trends are big data. You see companies driving the big data activities big time and even the older Companies Like sap and hp are moving into big data. We have a segment on big data every week. We do. You cant get away from the network now, even on the airplane. That used to be my nap time. Now i find myself out here doing email the entire way out. Andrew, is it free and insidious . Its not. It is not free. Its free at cheaper hotels. If its a cheaper hotel, they give the wifi away for free. I was at doubletree last night and it was free. I was at the ritz carlton and i had to pay for the wifi. The company had to pay for your wifi. That is true. We want to thank you for coming in youre awesome. Next time tell you how we really feel. Im a patriot, i believe in this country but i believe in personal responsibility and we have to get back on the right track here. Follow me scottmcnealy at twitter and can go to chairmanmcnealy. Com. Join us for box bach tomorrow. Squawk on the street begins now. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with david faber. A fair amount of news this morning as we await the fed decision tomorrow. The 10year yield around 2. 84 this morning. Folks continue to guess about