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How about the euro, sitting at 1. 20 right now there is the yen at 108. 58 the pound, just watching that one as well. How about treasury yields. Incredible low levels for all that we are talking about in terms of the u. S. Economic impact we are going to get jobless claims thursday and we have the jobs claim friday. That is nowhere near where you would expect it to be. The dollar hit the lowest level. Gold has been on a run. Of course, the yen thats your barometer right there. The german tenure is down to 33 basis points again you had been pushing above. 4 people thought that was an important level. Now, we are back in that world where our yield is getting dragged down the gold price, 1,325 after the launch, people in japan were told to take shelter before it passed over. People got Text Messages and were broadcast i dont know if it is part of their automatic system i would be a little terrified, thats for sure. We showed the Energy Charts in there as well. Not a ton of movement in that. In spite of Everything Else happening. North korea as we have been talking about, fired a Ballistic Missile that passed over japan early this morning local time. Japanese Prime Minister, shinzo abe, said it was unprecedented, serious and a grave threat to japan. This was the scene in hokkaido at 6 00 a. M. Local time. An emergency sire rn launched they are going to meet later today to discuss the launch with the Emergency Security council eamon javers joins us from washington are you going to be able to look into the camera or keep looking down thats a good point we dont know what format we are going to get a response from the white house. We thought we might get one late last night we have seen some communication from the japanese side saying that the president and the Prime Minister of japan have spoken. Typically, we will get a readout after the president talks to a foreign leader we will wait for that tweet or official documents from the White House Press office take a look at the map you will see the trajectory. It is launched from near pyongyang. It flies over the Northern Island of hokkaido and then splashes down in three pieces in the Pacific Ocean. The Prime Minister of japan, shinzo abe, issued a statement translator this missile which flew over japan poses an unprecedented, serious and grave threat and it greatly damages Regional Peace and stability so although we dont have any statement from the white house yet, we did have a statement yesterday from the pentagon which confirmed the Missile Launch and the u. S. Intelligence official told nbc news there are two reasons why north korea would do this, testing their technological capability and to show continued defiance. In a week we had thought the tensions were ratcheting down between the United States and north korea, now they are ratcheting back up again the president had used very tough rhetoric about fire and fury interms of response we will see whether or not he responds in kind he is going down to Corpus Christi to visit some of the hardhit areas in texas and talk to First Responders and back at the white house tonight. We roar by aboworry how somee this finally starts and we hope there is restraint on both sides. We worry about the United States reaction japan could decide this is just too dangerous for us or could be allies together. I dont know how this finally works. If the guy actually ever fires something at people, at that point i dont know what happens at that point. The United States has obligations to defend japan, and south korean allies. How about conventional weapons. I have seen some articles written today that say that bannon had some valid points that conventional weapons, until you can get past losing millions of people with conventional weapons, there is no military option that is one of the things that steve bannon was criticized for before he was pushed out of the white house for saying that. It seemed to imply the United States didnt have the deterrent effect that the United States wants to suggest it has. If you hit us, we will hit you back the reality is a very grim reality. North and south korea is so close. Seoul is so close to the Demilitarized Zone if anything were to touch off with conventional artillery let alone the nukes, you could be talking about hundreds of thousands, if not millions of deaths, in a very,vy qui very q period of time you saw the emphasis of the missiles firing to the east and what that could mean for tokyo and japan and other u. S. Allies. Crazy we have this other huge story. How many plonts untmonths untile olympics i have no idea. Four. If it starts in january or february thanks, eamon we are continuing to follow the latest development ns ts ine wake of Hurricane Harvey still, a Tropical Storm with sustained winds of 45 Miles Per Hour flash Flood Warnings remain in effect throughout houston. Some 300,000 people are without power in texas the president is headed to the region today to survey the damage we have full Team Coverage of this developing story. Brian sullivan is standing by in galveston, texas lets begin with Contessa Brewer, live in houston. Reporter right now, we have just seen a garbage truck pull up there are evacuees getting out, pulled out a stepladder to help people out sir, how far did you have to come from the northeast side. Reporter how did you end up in the garbage truck, dump truck. Thats the way they came to pick us up it was deep out there. Reporter they go inside. There are dry clothes inside people are coming in soaking wet. It is not the first time we have seen that. This morning, we saw a family with little kids coming into the Convention Center. Here is what they told me about this ordeal. How did you get here through a truck from a family friend reporter can you tell me about the water and how you lasted this long we basically traveled from house to house until we couldnt stay there, because of low food supply so we asked for help from people that were going through the water. Reporter the Salazar Family came from sheldon, texas, to the northeast of houston they came in with these little kids, changed out into clothes that were illfitting. They finally had to come to the Convention Center, because there was no food left when they were moving house to house. This was a box truck they were in, no windows, no air that was the way they could get to the Convention Center back out here live you are seeing some of the people coming off of this Big Industrial dump truck making their way into the Convention Center this was prepared to handle 5,000. This is a shelter of last report others have closed them down because of safety and access ability. We are expecting Southern Baptist kitchens coming in typically, they can offer as much as 20,000 meals and will be serving the Convention Center and the surrounding areas. All the people that dropped off donations, it turns out those were desperately needed. People coming in soaking wet from head to toe, they need to put on dry clothes those donations came in very handy. We are keeping our eye on a developing situation real quickly, contessa, is it kind of a cold and windy how does it feel to you . What is everybody experiencing is it chilly and windy with the rain or hot and humid and sticky what does it feel like it is not hot you would expect that being in houston. It is about 70 degrees with the wind blowing and the rain coming down, once you are chilled, it doesnt take very long for me. Im well outfitted for the rain, to get cold. People are sitting in there shivering. It takes people a while. They are also experiencing anything else you would experience in a small city atmosphere lost children, family members separated. They can touch base here if they havent reached loved ones thank you, Contessa Brewer. Brian sullivan is in galveston, texas, where he has been getting poured on all morning as well. Reporter i confirm it is cold i think your question, kelly, was a good one it has been hot. Later in the day i dont know if it will be today. When you have a lot of heat an standing water and other stuff, the medical implications of that are not so good. Lets move on from that. As you can see here, guys, galveston is getting crushed again. We had a Tropical Cyclone statement. I dont know if it is a warning. An alert came across the phone it will not stop raining and wind now, this is going to go north, which is exacerbating the problems that contessa and everybody else have been talking about. The schools and Everything Else here are going to be closed for a week everybody we talked to said no school this week, maybe not next week the damage implications, you are going to see noittes. Kelly, were you asking about notes and jpmorgan saying 20 l billion and Goldman Sachs saying 30 billion i dont know where they are getting their estimates. When you are dealing with 6. 6 Million People in houston, a 500 billion per an number Gross Domestic Product and 155 publicly traded and 20 fortune 500 companies, just pegging estimates of 20 billion or 30 billion, most refineries do seem shut but everything that is related to the infrastructure. The port is still closed when it is raining like this, guys, when are they going to reopen if things are closed because they are flooded or the roads are closed, when are they supposed to reopen there are some reports that exxon, there may be some flooding at the bay down facility out there as well i dont know how they are going to reopen anything when the roads are already bad and as you can see they are going to get worse because there is no place for the water to run off galveston, there is. Any place between here and houston, there is not. Everything remains shut. It is still remaining. Brian, even you and contessa, i complain every morning about getting up at 3 00 im not going out in a cold rain at 2 00 in the morning thank you. Thats rough duty. Its duty that i am sure you relish and we have to do, obviously, to bring the story here we appreciate it know that. We are going to talk more now. This is called rescue and recovery this isnt recovery. This is still rescue we are right in the middle of it more about the official response to the storm from the government and other organizations. Joining us now, former fema deputy administrator, you made the point and made it earlier on cnbc, rich it is very difficult to do rescue while it is still raining. I was just alluding to that. Brian, obviously, is in a hotel room getting up. There are still people that are into waisthigh water that need to be rescued. We are right in the middle of this we are still very much in the middle of the rescue portion of this one thing thats happening is to see how neighbors are helping neighbors, the last couple of reports. Listening how neighbors brought neighbors there. Others came to help out others this needs the whole community it does start with the neighbors helping neighbors. At this point in time, it is really not us and them it is all just us and how do people help out. At the same time, the government at the federal, state, local level, are mobilizing resources to help assist as well we have seen great work by the faithbased community. The Southern Baptists can come in and feed 20,000 people. Private businesses that are impacted in the area, how they can help out through charities or air b b that helps out others opening up their rooms also, looking at impacting the businesses that are there. Thats going to be a long, evolving effort. Once they get passed the rescue, those are the workers that their homes are flooded out and they need to go to work going forward. You have been your former fema deputy administrator. So you have firsthand knowledge and experience of how the agency works. You have been impressed with the coordination between fema and local state. That has been impressive. You look at the emergency manager for the state of texas, somebody else who has a lot of experience they are communicating back and forth. Right now, everybody has that unity of mission, saving lives this is going to go on for not just days, months, but this is going to be years in recovery. All the effort is focused in saving lives people get tired too. You make that point. The First Responders are tired, wet, cold. That is probably not as bad as it is going to get on wednesday, thursday, friday plus, when the cameras leave, it is hard too. You are just you have done the first 2 of the work you have 98 left. This is some of the most important work is life safety. The First Responders can only go so far it is time sometimes we have to stop and realize the work that all the First Responders both in the local area in houston, galveston, Corpus Christi, rockport, all the areas, plus the state from as far away as boston and new york, those people are going to be exhausted. A simple thank you when you see them really goes a long way. We have to remember that the First Responders, neighbors helping neighbors. The emergency managers, paramedics, nurses, doctors, people working in the shelters and the volunteers that are coming down that are going to continue to come down. Those are the real heart and soul of the disaster that are going to get people through this let me ask you. Now that we see how many people need help and are still only just arriving to the Convention Center how can we avoid an outcome as bad as we saw in katrina what kind of federal and private resources need to be right now sound like they are running out of space at a lot of the venues. That feels like an oppressing need how can we make sure all that is getting put in place as quickly as possible . The communications between the federal, state, local governments along with the red cross, the Salvation Army and people that are working and running the shelters and ensuring that the right materials can get to people. The water and food, basic Life Essentials that people are going to need. A lot of clothes and local donations that people have had are great. Donations of materials from further away are helpful thats when cash is helpful to give to your Favorite Charity that you know of or reputable charity, red cross, Salvation Army team. Lots of the Southern Baptists, ones that have been mention. They are going to need cash to continue this longterm. The initial socks and clothes that people have in the houston area are necessary as we see but not to ship a lot of those in. Thats going to overwhelm people 75 of that actually never gets to people later on there is just so much that cant be sorted. Right now, it is really for people who arent in the immediate area cash is really whats needed i appreciate it thanks former fema deputy administrator. Thanks for getting up early today as well. Thank you. Coming up, Global Markets under some pressure after the north Korean Missile flew over japan. The dollar under pressure. We are going to talk strategy after a break. Tomorrow, Warren Buffett will join becky quick live in new york at 11 00 a. M. Eastern on squawk alley. Squawk box will be right back. Are you ok . What happened . Dad kinda walked into my swing. Huh . Dont you mean dad kind of ruined our hawaii fund . I thud go to the thothpital. There goes the airfair. I dont think Health Insurance will cover all. Of that. Buth my fathe without that cash from aflac we might have to choose between hawaii or your face. Hawaii what . Haha. Hawaii you might have less coverage than you think. Visit aflac. Com and keep your lifestyle healthy. Aflac or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost, so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Welcome back lets get a check on the broader markets. Join us, samantha azarelo and david bianco, chief strategists. Thanks for being here. This hasnt been a market looking for excuses to get nervous or sell off. We have a lot of things coming together thats making it hard to avoid the market getting a little bit uneasy. What do you make of it we have the message of treasury yields going down towards 2. 1, weak dollar and equity futures on the defensive it has been a very good market year to date. I do think the autumn is going to be more challenging where we are valuationwise makes for more demanding valuations. Even though real growth has been okay, because inflation is disappointed and because there are some near term concerns, i think what you see with yields is creating a challenge with banks. There is going to be an on going challenge for value stocks, particularly cyclical. It is best to stick with Growth Stocks i think they are going to be more resilient i think the market consolidates and i do believe we are going to get a Corporate Tax cut and i believe the fed is going to hike in december. I think thats an important positive catalyst. We need that hike for banks to move materially higher the Global Growth has been the back drop as well. Is that something that we have to question right now . Not because of anything significant going on in terms of slowdown you have the rallying euro and the markets starting to doubt whether it can go on it is hard, because the market moves day to day. We only get the gdp growth quarterly. It is easy to question this story. We look at pmis, which are forward looking. All of those are strong. 95 of the world is expansioning the u. S. , while we dont think they are going to pick up substantially with respect to growth, we do think Third Quarter u. S. Growth could come in north of 3 , which we havent seen in a while. We think the global synchronized growth story is in for play. This is not a market event. It does seem like this is the kind of thing that can make Economic Data noisy. Everyone puts an asterisk next to everything. It can make the Economic Data noisy and make policy making noisy. There has to be a government response to this disaster. Our thoughts are with our friends in houston again, the autumn is a time when things have to get done. I think investors will get more nervous about it arguably, this is one of those things where if the market has a 5 dip, maybe it lights a fire against those that have to get things done. What is most vulnerable are cyclical value stocks. We find ourselves looking at european banks and emerging market tech stocks we dont think the strength of the euro, which is partly related to the debate about whether the fed hikes it it is an incremental negative for european nonfinancials i think you also like noneuropean financials as well we do coming up, Tropical Storm harvey expected to dump more rain in the houston area bringing the total up to 50 inches by the end of the week. We will talk about what it takes for communities and homeowners to recover from catastrophic flooding thats next. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Welcome back you are watching squawk box. Live from the nasdaq marketsite in times square. Good morning lets check the u. S. He can quet futures futures at this hour the dow down 1. 15. Uri europe down close to 2 that has to do with the 1. 20 euro as the dollar continues to weaken against the euro. That makes exports for the continent harder than you can see. Gold, over 1300 yesterday. The tenyear was under 210 earlier today. A lot of news moving in the markets. This is the time when we can do that obviously, we can still stick with our mandate to cover the financial. It is a pretty good gauge with the european markets down 1. 5 im telling you it isnt all about panic over north korea it is always weird to me the reaction in the korean and japanese market. You read about this. He fires it from the middle of the city the markets sort of shrug. I dont know what to make of it. It is weird how we could argue that european markets are a better barometer if you are living in guam, still headed to the beach. Were here it doesnt make new york and we are still scattered here in guam, there is just no question then there is Hurricane Harvey putting more pressure on an already tight market. Diana olick joins us from washington with that angle tens of thousands are misplaced now. Fema director, brock lodng, said this would be one of the largest Recovery Housing missions the nation has seen. The department of housing and urban development has granted a 90day moratorium on closures. President trump slashed a program in his budget proposal, both fannie mae and freddie mac have issued Disaster Relief guidelines saying they can temporarily suspend or reduce mortgage payments for floodstricken homeowners for up to 90 days where do homeowners go now there are 47,000 vacant apartments in houston as won struction has been very a construction has been very aggressive they are very pricey, well over 1,000 a month Insurance Companies will step in they may be able to step in and assist air b bs are waving fees and enlisting support. Manufactured homes and travel trailers would only be brought in as a last resort and he said that would not happen soon diana, thank you. Lets talk about what it takes to recover we are joined by mary okkay wegner thank you for joining us this morning. Good morning. Thanks for having me the fema director says we are not going to bring in manufactured homes and that sort of thing at least at this point as of now. What do you think the best way is to support the population that may need resources down there. At Service Master, restore, we are focused on helping Business Owners recover. There will be many that we will work with as they recover their businesses and homes the flooding is at least the first floor, liar than that. We are prepared to help the people of the houston areas. There is a way to safely recover homes or businesses when it is impacted by flood or fire. Thats what we do. I imagine mold is a huge concern and not knowing if na is the case there are a number of business clients that we worked with in advance of the storm, helping them board up properties and were preparing now to go in with drying equipment and help them safely pull up debris that is in their homes or businesses. We also have special techniques and help them rebuild. In terms of staging this response, the focus is on rescuing people that need it after that, are we going to be in a mode of waiting for the water to recede before people like you can get in there. We activated our mobilization efforts last wednesday before Hurricane Harvey had hit a category 4 anticipating it was a possibility. We have 55 we actually have 18 businesses within the houston area who will work to help recover the homes and businesses we have those that are capable of helps large catastrophic areas. What does the cost of that look like . If im a homeowner and could do that beforehand, are you on a retainer or am i paying you to help me get Disaster Ready if i realize im in a peckle, a are you doing it pro bono for now . We work with businesses that we already had agreements in place or clients of our Insurance Companies or other businesses or homeowners that call us and need some help the rain hasnt stopped. The flooding hasnt receded. Whether there is two feet or eight feet of water in the home. The cost is really unknown at this point we are working on the safety of our own employees. We are working with the employees in the area and will be mobilizing as soon as the flo floodwaters start to recede. Do you feel as if there is going to be enough workers, material, everything getting into this very large greographi area that will be the challenge. I spent my career working in logistics. This will be a huge logistical challenge for all working to help texas recover because of the roads and the ports. If you wanted to use train tracks it is how quickly all of those things are in line all of those different entities that would normally be bringing product into the area will be impacted to some de gri. Our mobilizeerrs, the 50 or so that will come in have to bring their own food, water, power oftentimes, they have to be selfsufficient for a number of weeks. We have dealt with catastrophes like this before this is certainly unprecedented. I lived in the houston area for four years to see friends and communities that i used to live in fully devastated by this is just heartbreaking. Mary kay, thank you for joining us and for all that you are doing. Mary kay wegner of Service Master a former dallas fed present, Richard Fisher, will join us on the recovery nefrts texefforts s autonation ceo mike jackson will join us the company has 18 dealerships in houston all shut down we will get an update at 7 50 eastern. Nicholas burns served as u. S. Ambassador to nato. He with il joll join us to talkt the latest north korean Missile Launch as a newly minted contributor at cnbc. We will be right back. And the wolf huffed and puffed. Like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. Developing story this morning. To the military officers in the u. S. And south korea have pledged a strong response to north koreas latest ballistic launch including possible military measures. Joining us is cnbc chery kang. Reporter very different from their reaction to what we had from the weekend because of the shorter range of missiles that were fired on saturday, the south korean government was saying just yesterday how north korea seems to be taking a wait and see approach without worsening the situation but certainly thats not what we got this morning so the president of south korea ordering a strong show of force. The military dropped some eight multipurpose bombs near the korean border. Lots of phone calls as well. You were talking about earlier between defense officials and top diplomats between south korea and the United States talking about what kind of Counter Measures they can take in response to this. Although we did not get a lot of details on that front at this point. A little bit more about this missile that was launched this morning. It has been tested back in may with success it is believed to be an intermediate range a little shorter range compared to icbms it did certainly show 2700 kilometers, which is very close to the distance between north korea and guam it did fly over japan. It was certainly getting some kind of angry response from the japanese government too. Japans Prime Minister, shinzo abe, calls this the most serious and grave ever threat to his country. The south korean government says it remains in a vigilant posture. The joint drills are still going on between south korea and the u. S. South koreas Intelligence Agency says yesterday that there have been signs for some kind of preparations for another nuclear test in north korea. Back to you. Oh, boy, chery, thank you so much coming up, the impact of Hurricane Harvey could mean elevated gasoline prices for the next few weeks more on the Refinery Operations that are shut down straight ahead. As we head to break, a quick check on whats happening in the european markets right now right across the board fairly significant pullback on the boards this morning. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Im vern, the orange money retirement rabbit, from voya. Im the money you save for retirement. Whos he . Hes green money, for spending today. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Hurricane harvey taking its toll on the u. S. Gulf, economy disrupting operations, mostly to areas with oil refineries. Joining us for more is director of energy and utilities for Nasdaq Corporate Solutions and even before it hit, we knew the difference between something on the coast of louisiana, something on the coast of houston and Corpus Christi we know its refineries more than Oil Production and that is basically the thrust of what you say will be the effect higher gasoline prices, not necessarily any effect on oil prices, per se yes and, joe, just before i answer your question, just want to say that on behalf of all of nasdaq our thoughts and prayers are with the communities in texas. We have a lot of clients and longstanding partnerships in the houston region our thoughts are certainly with them today and youre right, the thesis of the market from yesterday remains intact and this is very much a story about the impact to Refining Capacity in the u. S much more so than it is, at least for now, on the impact of disruptions to u. S. Crude production capacity. And thats sort of shows how the Energy Landscape in the u. S. Has changed over the past few years. So this is the first major storm that weve had since the shale boom in the u. S. And so weve diversified our crude production outside of gulf of mexico. As shale has taken market share, thats a bigger component. Gulf of mexico production is Less Materials in the broader u. S. Production landscape. And the size of the increase in prices at the pump depends on how long the refineries are shut down, and we have no idea. Exactly so it remains a fluid situation. Unfortunately the storm continues to linger. Its moving now eastward where some of the bigger refineries are. That will really determine if you look at Hurricane Katrina, 30 of u. S. Refining capacity was taken offline but margins bounced back within a matter of two months so that gives somewhat of an indication but here its really too early to tell. Doesnt seem like theres too much damage so far to the refiners, but it might take them a long time to get restarted if people cant get to work as a result of all the flooding if you look at the crude price right now, wti, just under 47 a barrel is the market kind of playing it as if its going to be a relatively quick process in other words would crude be much lower if you were to say, look, productions going to be, you know, incapacitated for three months i think its more of a story on the gasoline side and theres a lot going on to offset whats happening here for the crude side if you look at the dollar, its under severe pressure due to geopolitical circumstances going on right now so there are other things that are occurring on the crude side. You have talk from the opec members about potentially extending the production cuts past march into june right so there are other things that could be potentially more of an uplift for crude, even though broadly this remains a bearish story. For crude. And to the extent that u. S. Crude production is impacted, that would be over time a bullish ingredient for the crude market, if we started to see some curtailment in u. S. Output. You make the point that 12 of the Refining Capacity is 2 of the demand for crude to refine so, need i see stock piles building of crude which could be bearish for prices correct thats weird. Yeah. Its a little bit its a little bit counterintuitive. But i think one of the interesting things going on is that the u. S. Has emerged as a power center in terms of the global market. So certainly its a domestic tragedy, but the ripple effects will be felt throughout the world. As u. S. Exports from the gulf of mexico account for about 6 of Global Energy demand on a total basis. A huge part of the country not driving right now. I mean, there have been in the past, i think, youve had gasoline demand actually slip. Absolutely. And this is a seasonally not good time of year for Something Like this to happen. For the crude market obviously its never a good time of year, but were heading into the end of summer driving season, so end of peak demand. This is a typically softer time, and there are other things going on in the crude market that made it such that demand would be slower at this time of year anyway and the refined product, i guess you transport it somehow by the time the refiners reopen the ports are usually reopened by then. And the roads are its really just reopening refiners. Its not the whole infrastructure that needs to be running. Im sure that comes up quicker than the refineries, doesnt it . Well, the refiners have a lot of issues when it comes to safety so it could take a long time to get those up and running from the flooding. But yeah, but obviously the artery system for transport is very important just because we have the product in place, if we cant get it to where it needs to be, you can have regional spreads in prices. You need to know all these things because youre with this big job at the nasdaq. Do you know about like specialty chemicals, too everything that we use comes from oil drives,refined products how much of that business is chemicals at this point . So about 40 of the u. S. Pep chem market right now is taken offline. The bigger market on Petro Chemicals right now than Refining Capacity where were about 15 to 20, some estimates we could be up to 30 . But certainly, as it does that mean like plastic bottles. Correct, plastic, fertilizers, chemicals anything used in paints. Things like that all that, i mean, thats an important part of the economy, and very much so. And a beneficiary of the shale boom, because those things have been the beneficiary of having lower feed stock prices from oil and natural gas, which are used to develop those, and those end products earlier we talked about they could knock 0. 2 off gdp when does it add back . Eventually may add back more than two but thats six months, a year down the road or spread out over a couple of years yeah, probably because of all the rebuilding exactly and unfortunately, because this storm is lingering, its still too early to tell. Its not like one and done and then you kind of step in thanks for having me youre welcome. Coming up retailer best buy is set to report were going to bring you the earnings and the reaction on wall street. Then were going to talk more about the Recovery Efforts in texas and the economic effect of harvey with Richard Fisher the former dallas fed president. When we come back right. Er 100 e the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . I enjoy the fresher things in life. O. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest. Prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices. From over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. Breaking news, north korea launching a Ballistic Missile over japan, sparking global alarm in the markets, and everywhere else. Details on the growing geopolitical threat is straight ahead. Market alert the dow is on track to open down triple digits. The euro markets are down, or european markets and the euro rose to 1. 20. European stocks hitting sixmonth lows all down more than a percentage point. Plus devastated by Hurricane Harvey, homes and businesses under water. Tens of billions of dollars in damage more rain on the way wellvil have a live report from the ground as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Good morning, welcome back to squawk box here on cnbc were live from the nasdaq marketsite in times square im kelly evans along with joe kernen and Michael Santoli this morning. Futures are lower. They moved massively lower in the wake of north korea launching a missile last night that passed over japan before landing in the Pacific Ocean dow set to open lower 105 points a little bit better from the last check s p down 14. Nasdaq down 44 as for currencies, weve been watching the impact to the japanese yen and the u. S. Dollar interestingly enough the euro is up against the dollar by half a percent, over 1. 20. Theres the yen, 108. 53. And the pound against the dollar mostly unchanged elsewhere in the headlines this morning, Goldman Sachs is estimating Hurricane Harvey could do 30 billion worth of damage harvey continues to pound texas with relentless rain well have much more from our team in just a moment. In other news shares of finish line are taking a huge hit premarket. The company slashed its profit forecast over what it calls a challenging retail environment and adapted a shareholder rights plan that will kick in if any party takes a 12. 5 stake. 26 drop in finish line. Its even impacting shares of nike at least it was when it first happened last night. On todays Economic Calendar well get a fresh read on home prices at 9 00 eastern Analysts Expect the s p caseshiller report to show a 5. 7 year on year increase for the month of june. Were continuing to follow the latest developments along the gulf coast in the wake of Hurricane Harvey harvey is now a Tropical Storm with sustained winds of about 45 Miles Per Hour flash Flood Warnings remain in effect throughout houston today. Some 300,000 people are without power in texas President Trump is headed to the region today to survey the damage we have full Team Coverage on this developing story. Cnbcs Brian Sullivan standing by in galveston, texas lets begin with Contessa Brewer, live in houston. Good morning good morning, im outside on the Convention Center where they were prepared for 5,000 evacuees instead theyre sheltering more than 9,000 they said this has become a shelter of last resort they wont turn anyone away. And as other shelters are closing because of accessibility issues and safety issues, the Convention Center remains open we saw so many people yesterday trying to crowd in through the entrance now look, theyve put out these barriers to make a line so that people can get in in orderly fashion. They go inside, where there is a big Houston Police presence. Everyone gets patted down to make sure that there are no weapons. And i just wanted to show you over here some of the things that get left outside. Can you see this pull toy . We have no way of knowing what the story is behind this but youve seen the video of the way that so many families are trying to escape, and inside there are so many babies, its an incredible scene indoors. I just wanted to give you a sense of whats happening outside the Convention Center. Were seeing video now of a flooded omni hotel they had to evacuate 100 dwess from the omni near the galleria area of houston. We saw video posted on twitter from another evacuee, up on a 22nd story apartment, looking down at this, before she had to evacuate, as well. And we have some sad news to report from the omni the omni hotel says we regret to say that one of our employees is missing. They have searched the property. They were assisting guests amid the rising floodwaters the associate went missing unaccounted for. They say they will continue to search for this employee through every part of the property thats accessible. But considering how much floodwater is there we have no way of knowing whats even accessible back out here live what were seeing is that the other hotels in the area, who can be open, are seeing their own challenges. The hilton right now, will only accept reservations for First Responders theyre not accepting reservations from the public some of our team members are staying at a doubletree nearby and what were seeing there is that they were told the kitchen is closed. Theyve run out of food. Here inside, feeding 10,000 people, Southern Baptist kitchens is going to bring in those meals today. They say that feeding these people will not be a problem, guys i mean, at what point does it all run out . Well, with the roads the way they are, the supply chain is definitely going to be an issue. Mcdonalds is making a huge push to say were open and weve seen massive lines going through their drivethrus. How long they can keep feeding people, if theres no supply chain, its a question were going to try to get answered today. I dont know how it works. Wow well good for mcdonalds hope they can keep that going. Contessa, thank you. Lets get to Brian Sullivan now who is tracking the storms impact on the oil industry brian . Oh, yeah, kelly thank you. Were talking about the macro issues listen, think about contessa and the whole team in houston. Weve got it very good compared to them. I know things have been very, very difficult were thinking about you, contessa and your team stay safe. If you need a place to stay some down here, galveston has been largely spared so far. Although its been raining for about 24 hours we just got a cyclone warning and a small Flood Warning although were up high were fine the economy, though, i know its tough to talk about given everything thats going on in houston but thats what well focus on lets move past oil if we can. Thats a huge impact guys, think about the macro story in the United States i mean, the human toll thats one thing. When you look at the airports, for example, closed until thursday one of the Busiest Airport hubs in the United States houston is a 40 to 45 billion a month economy. It has 3. 3 million workers how many of those are going to work in the last couple of days its unknown and its probably very small given the conditions of the roads around houston Goldman Sachs out with a note this morning saying we could see 30 billion in Economic Impact shaving perhaps 0. 2 off gdp one wonders if Hurricane Harvey ultimately will impact the national economy, the data, and what the Federal Reserve does. Youve obviously got the oil story, right well call it 15 to 25 of the Refining Capacity offline. We dont know for sure could be higher if this thing continues to move east and goes towards port arthur and beaumont where there are four more big refineries youve got that. Youve got a massive amount of rail tonnage, freight. The trucks cant move. Trains cant move. Obviously many, many stories here but from a Macro Economic angle youve got trains, boats, the port is still closed the airport. And if youre an hourly worker think about this if youre a salaried worker, youre going to get paid if youre an hourly worker, if you work at the airport or you work at the mcdonalds, youre not getting paid so youre dealing with this, your home may be under water, you may not have insurance, and youre not making any money because youre not going to get to your job and you may not be able to get to your job for a couple days or weeks and thats going to trickle through here obviously just the beginning more rain as you can see is coming and that is not what this area needs a lot of story angles here well try to hit as many as we can. All right okay Brian Sullivan, thank you. Miserable, but thanks for what youre doing down there. And brian actually thinks hes got it made to compared to contessa probably does, yeah. For more on Hurricane Harveys Economic Impact, Richard Fisher, former president of the u. S. Federal reserve bank of dallas, also a cnbc contributor and a barclays senior adviser. Richard, dont want to start out with what happens with the fed, obviously. You heard brian, though, connect a few dots to, you know, overall gdp, and we had yellen last week, so well talk about that in a second. But, youre a texas native just your thoughts on watching this play out over the past couple of days well, first, joe, thank you for paying attention to whats going on down here, and the compassionate reporting thats taking place i want to put this in context. Houston, with its metropolitan area, produces the same, actually a little bit more than sweden does in terms of output within a state, that produces has a gdp higher than that of canada, greater than that of mexico this is a huge economy we have 26. 8 Million People here in texas the area thats affected is the houston area, up to Central Texas all the way down to south as youve reported, southeast. And that last report shows the potential in terms of the blockages that might occur, in terms of transportation, the port of houston, by tonnage, is the largest port or the second largest port in the United States and we have an awful lot that moves through this massive state economic machine of texas. So, i think the Economic Impact is very difficult to judge the Federal Reserve is not just making Monetary Policy i ran the fed here in texas, the dallas fed, which has branches in houston and san antonio, el paso, for ten years. And one of the key issues that no one has talked about, which i think is very, very important, is what will happen in terms of supplying the life blood of the economy. You talk about people going to mcdonalds, et cetera, with cash the two faults, the biggest faults in the system here are in dallas and in houston. Houston has the largest above ground vault in the United States between the two of them, theyre two of the largest vaults in the Federal Reserve system 127 billion pass through those two vaults last year, about 7 billion bank notes and right now, as happened in katrina, as happened in former disasters, the fed stands ready and is fully working to supply whatever cash needs will be there. This is leading up to the labor day holiday. Usually we have a greater demand for cash and a very cash intensive society here in texas. Particularly in south texas where we have a heavy hispanic population so, the fed is open in houston its open here in dallas where we have the largest vault supplying as much as it can to the system the way it works is the banks send their Armored Vehicles to the fed, either bringing currency back or taking currency out, and circulate it through the system i think it will be very interesting to see what happens. The rain is supposed to occur in houston all the way through thursday its raining heavily as was reported earlier presently and its just getting that lifeblood of cash into the economy so you can fill atms so people can get to them, so that they have it. As i understand it this week, what theyve done is theyve instructed the banks, in the region, in that particular affected region, to withhold as much cash as possible to get it out so they can get their trucks eventually into the houston fed vaults, take that money out, or use the dallas vaults if they need to. Thats an aspect of the fed that most people dont think about. During 9 11 you may remember we stayed open, we kept working and theyre continuing to do that in houston. As far as the Economic Impact is concerned, it will be temporary. There will be a snapback i dont think it will affect Monetary Policy significantly. Because Monetary Policy is geared to the longerterm. And right now, its really a question of the devastation thats taking place, it will have a negative mark but remember this thing roars back at some point and hopefully that will occur within the next several months, and this massive economic machine of texas, which by the way has been growing at 2. 7 until the storm hit, thats Pretty Healthy with the lowest Unemployment Rate weve had in the state since before 2008. You know, this is a moving dynamic that i think you have to keep in mind its devastating presently but wellville a snapback, and you have to measure that in that context to how it will affect policy for years youve been saying yeah, oil, energy is important but theres a lot of things in texas that contribute to that story, and even with oil at 45, 50, texas is still been, as you say at 2. 7 . That was great summary of something that we havent discussed at all and that is the ability to get cash out of an atm at this point. Richard, thanks. So has anyone ever done a study, an academic study on netnet if you lose 2 do you get back exactly 2 down the road when it comes back . Is it more is it netnet . Is it less do you know . Does the rebuilding, is it a net positive to gdp down the road . Or is it just you get back what you lost well, i dont know if its a real Academic Studies on this front but i can tell you from experience with previous storms in the state when i was president of the Federal Reserve back in dallas is you do have a snapback effect. And you have often the opportunity to build newer structures enormous, think about all the construction thats going to take place from destroyed buildings here or flooded buildings, replacement of whats going to take place. On the shoorn front by the way its mostly the federal government thats going to bear the brunt on this thing. It will be interesting to see if congress will be willing and you dont need, you know, with other infrastructures like these guys can twiddle their thumbs, yeah, well, wed like to, but with this you got to rebuild. Its like theres no question with the infrastructure that you know, you cant sit there, you know, playing violin while, you know, while rome burns while houston floods. Yeah, exactly what was i going to overall economy at 2. 6 atlanta fed is about 3 i think even liesman does that survey i think its like 2. 7, 2. 8. Can we ratchet it up to 2. 5 now from 2 it, in your view, overall . Yeah, i think so, joe, because we have the benefit of low energy costs remember that. And thats not going to change wti will probably continue to trade in the 45, 46, 47 dollar range. As we reported earlier, gasoline prices will go up. But remember youre ending the summer so the season demands go down we are the beneficiary in this country of an enormous revolution in shale as you and i talked about over the years. And we have a very good cost dynamic. We dont have any serious inflation. Its running at about 1. 5 to 1. 7. Thats good. And people are comfortable were fully employed so the economy continues to move forward. Again, this machine here in texas, which as you know has led private sector growth in the economy for a very long time, when it snaps back, and when all the new activity takes place and all the new material demands take place and all the new construction takes place, as a result of this storm, it should continue along that path that you just cited which is 2. 5 growth so its a slight bump upward were entering the ninth year of an Economic Cycle here we just started on that. And we hope that this will be extended to the longest Economic Cycle weve ever had i wish we had more time so at this point, you think i mean yellen she was kind of dovish last week thats why the dollar, you know, and euro, i mean are they behind the curve again or will they head higher you think on schedule whether theyve been behind the curve or not ive felt that way. The nice thing is i think theres no doubt in september theyll start the Balance Sheet reduction. It takes forever to take place theyre going to start it. It wont be a full impact for about twelve months. And whether they raise or not thats up to their december do you know where you are on the short list for replacing yell be and ha what . I love the fact they had a full economist and the lowest ranked were me and jamie dimon but i outrank jamie my friend. You got that going for you. Which is nice. I dont think thats going to be the case. Time will tell. If were alive given the other big story. Anyway we will be alive. Lets hope so anyway okay. Thanks for having me on this morning. Spiraling, you know anyway thank you. Appreciate it. Thank you coming up, Hurricane Harvey devastating texas and more rain is still to come among the industrys most impacted is the auto sector, as cars move through texas ports. Auto nation ceo mike jackson will join us next. They have 17 auto dealerships in houston. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Welcome back to squawk box. Hurricane harvey having an impact on auto sales especially in the used car market phil lebeau joins us with that side of the story. Mike, when were looking at the houston area, its about 40 of the texas auto sales overall. And thats on the new side of the equation the used market is roughly about the same take a look at the impact that the storm is having in terms of whats happening at the end of august, and remember, this is when you see so many of these sales for the month, its the big push for the automakers. You see a number of dealerships, where the cars are completely under water. More than 500 dealerships. The majority remain closed some because of the water damage but most of them, the roads are impassable theres no way for anybody, or very few people to get to work some of the dealerships i talked to yesterday when i called down there, the owners have said look, we were fortunate enough to drive some of our models out of the flood zone. The impact, according to wall street, in terms of how much this will hurt the overall sales rate for the month of august, citi says it will probably take 200 off the annual sales rate calculated on friday Barclays Says it will probably be about 100,000 vehicles. When youre looking at the estimate that will come out later today, or later this week, before the final sales reported for august on friday, most have lowered down their sales estimate to the low 16 million range. Thats not total sales but the sales rate down to the low 16 million most were in the mid 16 million range. Sonic automotive, it has 25 of its sales coming from the state of texas now, thats the entire state but obviously houston is a big part of that the bottom line is this, guys, for the automakers, when you go back and you look at sandy, or when you look at katrina, its a boomerang effect they lose sales immediately afterwards maybe 200,000 or 300,000 depending on the size of the storm for a particular region, for the month or two after that. But then, a couple of months down the road, you start to see the replacement come in. Both on the new, as well as on the used side of the equation. Back to you guys all right, phil, thank you so much phil lebeau. Joining us now on the squawk news line is autonation chairman and ceo mike jackson that company has 17 auto dealerships, seven Collision Centers in houston and 1800 employees. Mike, thank you for joining us what can you tell us, first of all, about the state of your operation theres on the ground and the people working there well, kelly, good morning looking at the images from harvey your heart just aches for what the people of houston are going through. But you also see so many inspiring stories. But not only the professionals who are working around the clock, but volunteers coming out on their boats to rescue people. It really is a demonstration of the american spirit. And theres no question in my mind about the resiliency of the texas people, and those in houston who will rebuild now as far as the state of the business, its at a standstill we had our Crisis Management team prepositioned in texas with the mandate to carry for the wellbeing of our Associates First and foremost, and then our facilities, and inventories. And they had the full authority to close the stores in time for the associates to take care, and we are paying all associates through this disruptive period now, its interesting, Corpus Christi we thought would be worse. But only got 7 inches of rain and as of monday we reopened in Corpus Christi wow houston is still closed and i really dont know when were going to reopen, because even though we have some stores that we could, our employees simply cant get back and forth to the stores in a safe manner yeah. So it will remain closed, and i agree with what phil said just a few minutes ago, whether its 100, 200, 300,000 units will come out of the selling rate for the month of august. Houston is a big market. Overall big part of this texas economy. I think the other thing thats interesting, joe, is, you know, you were talking about the snapback with richard, so houstons vehicle sales are already down at retail 25 yeartodate so houstons been struggling i think there will be a substantial snapback either in the Fourth Quarter or the First Quarter of next year because, you know, thats the american way. We rebuild and thousands upon thousands of vehicles have been destroyed. That are going to have to be scrapped any time you get a flood level in a vehicle above a foot or two, you really should scrap the vehicle. The damage thats done to the Electrical Systems in these high tech cars. I mean just forget about it. Scrap the vehicles, and theyre all going to have to be replaced so i expect a significant snapback in houston, which is both attributed to the spirit, and resiliency of the people there. And thats the american way. We rebuild we take the step back, we take the punch and go on from there mike, thats a good point because every shot that you see all the cars are every one you see is ruined, probably. So, the pnc insurers got to replace those cars, dont they i mean, thats not they cant get around that with the difference between wind and flood, right those are all insured by the insurers, no yes, youre absolutely right, joe. Were always nervous going into a storm like this, as to what the Insurance Companies are going to say, between the difference between the wind policies and the flood policies. But they have declared very early that this is a flood incident and all you have to do is look at the tv and look at whats going on in houston. It is not wind damage. This is unprecedented rain, 40 inches so far. And it hasnt stopped yet. Its on its way to 50 inches theyre getting it in a few days as much rain as they get in a year and its simply overwhelming and its a flood, and the Insurance Companies have declared it a flood situation, and they are going to pay mike, the only last question i have is about the logistics, you know, real quickly, you mentioned you gave people the authority to move vehicles out of there, you thought Corpus Christi might have been worse hit but it looks like texas. Are you guys going to have to take losses on those vehicles in the dealerships that might have been destroyed yes there are areas in houston that are flooded at the moment that never flooded before, where we ironically put vehicles, and now theyre totally destroyed. Theyre going to have to be scrapped and theyre going to have to be hauled out of the market, scrapped, and were going to have to make a logistics plan once we can reopen to resupply houston from other markets the factories will not be able to respond immediately to this situation and the sudden loss of vehicles we will look at our supply chain and divert vehicles into houston as quickly as we can once we know when were going to be able to reopen in an orderly, safe fashion. Mike, thank you so much for joining us this morning. Good to be with you thank you for asking me. Good luck with the recovery and perhaps dealing with that pentup demand down the road thats mike jackson. Coming up this mornings top stories, including north koreas firing of Ballistic Missiles through japanese air space were going to talk about the geopolitical risks with former undersecretary of state for Political Affairs nicolas burns. Take a look at u. S. Equity futures which went down on that launch the dow now is down less than 100 points the governor has declared a Winter Weather emergency. Extreme risk of burst pipes and water damage. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Good morning and welcome back to squawk box here on cnbc live from the nasdaq marketsite in times square. Among the stories front and center, shares of best buy rallying in premarket trading. The Electronics Retailer Beat Estimates on both the top and bottom lines also, samestore sales increased by more than twice as much as those expected best buys results were helped by Strong Demand for wearable fitness devices, smartphones, and connected home devices i cant let you move on before we point out best buy is not only at 4 on that news they are up 66 over the past year. Best buy you know amazing to be able to ek cute that consistently in this kind of environment. Finish line is down 26 this morning. I dont see apples to apples but it goes to show you cant paint everybody with the same brush. Markets are also saying each category is going to be one survivor thats going to get its way through the amazon threat and best buy is weve watched this company for awhile theyve gone through some great managers and crappy ceos and they brought the new guys back in and the wrap was, they were a show room right for tvs to be bought on amazon you go in there, you look around, you pick out the one you want, you order it on amazon and obviously thats not the case they got the geek squad. They got people that when you go in, you can find out about all the like, you know. I go in i bought a computer at best buy. I bought a printer there i didnt see everything on pc magazine for the features. I have no idea a gigabyte from my only question is can they remain if amazon looks at them longterm and says wait a minute we can do a geek squad, too. Now we have whole foods. Look what theyre doing today in the stores theyre already putting their devices in there with all of that happening, the shares still at 4 on Earnings Report hearing from the white house now. North korea firing a missile over northern japan sparking outrage from tokyo to the white house, and were finally now getting a statement from the white house. The president saying, all options are on the table for fleerk north korea he said north korea has signaled its contempt for its neighbors, for all members of the United Nations, and for minimum standards of Acceptable International behavior, ambassador nicolas burns, former undersecretary of state for Political Affairs and a Harvard Kennedy School Professor joins us now hes also, mentioned earlier, mr. Ambassador, had a phenomenal career now youre a newly minted cnbc contributor. So congratulations i dont know where that probably i had that up at the top maybe different for you as to where that ranks in your illustrious career but welcome. Im pleased to be with you. Its good to have you you know, the more i read, the more disturbed i got, mr. Ambassador ill tell you why. It went over japan, and then reportedly broke up into three pieces, as many of their missiles do, on the other side couldnt that have happened over japan, and couldnt there have been casualties, which would take this to a whole new level because as long as he hasnt you know, these are still tests. No ones been hurt or killed but that shows a lot of either recklessness or impunity it just brings it to a new level. Or does it well, it does its one of the most provocative and dangerous moves the North Koreans have made in decades because they flew this missile, they directed it over hokkaido in northern japan. And the reason the japanese sounded the alarm to their population is because they knew the flight trajectory was going to take the missile well past japan but they worried about falling debris that could have injured people or killed people. And so, it seems like the North Koreans are trying to demonstrate that they have an intermediate range missile that can reach guam where the United States has Major Military bases they didnt fire it at zbaum they dont want to provoke the United States. But in firing it in this direction, for that length, 1700 miles, theyre demonstrating they have that reach just as over the weekend, they fired three missiles to show that they have the ability to hit American Forces and south Korean Forces in south korea so this is kim jongun trying to demonstrate to the United States and china and other countries, japan, and south korea, that he has the capacity to hit them it might be a prelude to negotiations as strange as that may seem but that appears to be why he did this three out of four didnt work supposedly, if its the missile were talking about. And then the one worked in may but just to have just to take the chance of sending it over a populated area like that, just seems like it ratchets upthe recklessness of kim jongun. Because i thought to this point hes, you know, its been tests. He still has not done the ultimate, where someone, you know, loses their life where there has to be an answer that way and thats when we get into the possibility of a horrific war. And so thats very concerning at this point i mean it just, to trust this missile where three out of the first four broke up in the air this is getting a little bit crazy. Well, it is its dangerous, and it is provocative. And thats why he needs to understand, im sure the Trump Administration is reminding him of that fact this morning that we have a defense treaty with japan and should japan call upon the assistance of the United States in the future to help defend the japanese home islands we would have to do that we would be ready to do that so, he has tested far more missiles than his father ever did. And his fathers long range in power. As you know hes a ruthless young man. He appears to be rational. And so this is a real challenge for the Trump Administration, the statement you just read out by President Trump seems to me to be the right thing to say this is uncivilized behavior and of course the United States should keep all options on the table, and remind the North Koreans of that fact what youll see today is an emergency meeting of the u. N. Security council to condemn this the North Koreans wont pay much attention to that. I think the better route the United States right now would be a private warning to the North Koreans that if any of these missile tests do hit territory of japan, or south korea, or guam, there would be a response, obviously by the United States, and its allies, to protect our interests. Thats the kind of warning that might have a greater impact. Mr. Ambassador, you know, steve bannon, just to reference it in terms of in very stark terms, you know, it made the point that conventional weapons, from north korea, would kill hundreds at least hundreds of thousands of people if there was a shooting were to break out which leaves the military options, you know, slim to zero, really could it ever come down to the United States accepts casualties from somewhere else to protect the homeland here . I mean thats a stark choice. But, i mean, could that ever come down to that . Where thousands of lives are lost but theyre not american lives and that somehow becomes acceptable well, i dont think so in the sense that we have an obligation to defend our allies these are treaty allies. Japan and south korea. And deterrents, our ability to deter the North Koreans, ultimately other aggressive powers like russia and china depends on the ability of the United States to demonstrate that were a serious country that protects its friends, and backs up its commitment. And so thats the best way to keep the peace with north korea. To convince kim jongun that the United States would protect south korea and japan. Its a solemn obligation its what has prevented a nuclear exchange, most people believe, since the dawn of of the nuclear age. Deterrence and the strength and commitment of the United States. So i dont think any responsible american politician could ignore an attack on south korea or japan. Now, in that instance, in that hypothetical instance, japan and south korea would have to decide how to respond and whether or not to call on the United States to protect them. But they ought to be able to count on our support right may not have to be the decision of the United States, which is and its got to be made by all the parties involved, i would think. Ambassador burns, thank you. Weve got to leave all right, thank you. Coming up, devastated by harvey, catastrophic flooding swamping the houston area. 0,0 albuneesof the impact 1000sml siss down there, next. Catastrophic flooding swamping the houston area, which is home to more than 100,000 Small Businesses in addition to 6 Million People or so for more on the Economic Impact of harvey, lets bring in the ceo of paychex we should mention paychexs Small Business report found job growth in august slowed for the sixth consecutive month. Marty, thank you for joining us this morning good to be here draw for us, if you could, the scale of the impact on Small Business obviously houston is actually one of the leaders in Small Business creation and growth and what are you seeing out there in terms of your client base well, first, mike id like to say on behalf of paychex, our thoughts go out to everyone in houston and our Employee Team there and the residents in general. I think what youll see from a Small Business impact, certainly there will be some devastation to start here, as businesses will close, and not be able to reopen for a little while. Then youll see as you heard earlier a real bounceback, because youll see a lot of building, a lot of construction, a lot of Small Businesses do in the houston area to help people recover and comeback out of this difficult time i imagine many Small Businesses run the scale from Sole Proprietorship to basically somebodys home is their business as well to something of a greater scale. Do you have any sense out there, lessons from what happened with katrina or anything else, of how this is all going to proceed, and what you might be able to do to help things along yeah, sure. I think, as i mentioned, i think it will be tough obviously theyve got to get back into their location so theyve got to get back in to being able to get in touch with their clients, many of who will move out of the area for a short period of time so there will be a hurt there for a short period of time and then there will be many businesses that come in to the area, frankly, when you look at home reconstruction, home repair, many of the things you guys have talked about this morning. Youll see a bounceback there. And paychex can help when katrina hit we helped the red cross deliver checks out to those who were hurt because there was a lot of fraud, a lot of difficulty in getting cash or payment cards to those who were devastated, and paychex kind of came in with the red cross and made payments to people. So we can help in a number of different ways and were ready to do just that. As we get in to the recovery process, obviously the availability of people to do the work is going to be really key what have you found in the latest employment survey, and do you have any specific information based on the houston area not specifically in houston at this early stage. What we are seeing is the other service category, in the industry sector, is still the strongest, so youre going to see, you know we still see the strongest job growth in those other services, and leisure and hospitality, and some in construction i think youre going to see, obviously, a big snapback in construction in that area. Dallas has been number one, by the way, so youll continue to see texas do overall i think okay, as things come back. And overall were seeing the job level, you know, in the National Index for paychex Small Business employment watch is pretty leveled out right now. Good news is wages are up 3 across the country, and that those areas in those other services and Leisure Hospitality are up about 3. 4 , and accelerating a lot of minimum wage impacts there across the country all right well well continue to watch all of that. Marty mucci, president and ceo of paychex, thanks very much coming up, congress will face multiple financial challenges following the hurricane, including shoring up the heavily indebted federal Flood Insurance program. Were going to speak to one of the progras ggmbiest critics when we come right back. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back, the devastating impact from heavy rain and floods in texas from Hurricane Harvey will likely add to the mounting debt owed to the u. S. Treasury by the national Flood Insurance program. The nfip is up for reauthorization in september its been criticized for being overwhelmed, outdated and out of touch. Craig pouten is ceo of powellton associates, and thank you so much for joining us this morning. Thank you for allowing me to be here, kelly so the main issue with the national Flood Insurance program is, as i understand it, before the storm hit, you have 30,000 homes that account for the bulk of the repeated claims drawing on the system. So how much of the problems that are caused by homeowners along the florida coast or whatever it is, you know, repeatedly filing these claims, and how much from the increased size and severity of storms like katrina and harvey well, the storms are outlying events and the fip has designed its rate structure to capture average loss years only. Hence the massive deficit to the federal government currently at about 25 billion after harvey, difficult to say, but probably will approach or exceed 40 billion and the program is hampered by the repetitive loss issue, which you reference. But thats the biggest problem the nfip has is the rate structure, and the rating methodologies. Yeah. Essentially are inaccurate and guarantee that about half the people will be overcharged half will be undercharged. And it makes no difference whether you are an exposed risk, or an unexposed risk, youve got a 50 50 chance of being overcharged or undercharged no matter where you live. Or what the characteristics of your flood plain are let me ask you, because there will be a lot of calls, obviously, to improve the program, especially after this but should it just be done away with altogether . I mean is there a way that you basically just go to every homeowner and say, you have to have an allperil policy and yes that covers floods and yes that covers earthquakes and yes its going to be a little bit more expensive for everybody, but everybody is paying anyway if this all keeps going back on the hook, if taxpayers keep going back on the hook, right . Well, yes i mean, thats true enough the problem is that one of the issues we got with the nfip and if it goes away, i dont think it should go away, weve got a lot of really wonderful people working at the nfip who are trying to do the best job they possibly can but structurally the nfip is essentially fatally nowed because it concentrates flood risk on the back of the taxpayer and policy holders, instead of spreading it globally. Right so that the volatility curve is decreased so, doing away with the nfip probably is not a viable solution, and mandating that everyone buy a certain type of coverage would come with its own set of difficulties. Yeah, were learning that in the Health Market right now, as well exactly but look, i guess the point is, these things come at a cost, and its probably too much to ask homeowners, especially if youre in an area thats prone to flooding, to take on that pure cost all by themselves. Nobodys going to have this coverage it sounds like not a lot of people have it anyway and its not even that expensive relative to what it could be. Why pretend like people are going to make a choice thats very expensive and thats somehow going to thought they didnt have any risk when you could spread that around the entire homeowner population . Well, the reason is, because when you do that, you begin to incentivize building in the wrong places which is what the nfip has done for the last 40, 50 years. Harvey would not be as devastating as it is going to be if, in years past, people had been disincentivized by the high cost of Flood Insurance to build in places where they shouldnt build. But, in fact, the nfip is essentially, you know, when you do the math and you look at it honestly, nfip has incentivized the building of structures where they shouldnt be built. Now, ostensibly theyve tried to discourage that. But in practical, actual occurrence yeah. That has not happened just real quickly, though, you could still have people who are more prone, you know, living in these areas pay more, obviously. Were not saying all homeowners in the country should pay the same rate. But just why not have you make a contribution because youre going to end up paying to bail everybody out when this happens again. Yeah. I mean, you can make a case for that but if you allow the invisible hand to operate, and you get away from a monopoly like the nfip is, people in earthquake prone areas will buy earthquake insurance, and people in flood prone areas will buy Flood Insurance, although they will need to be a kind of a mandate that they do so. Yeah, no, exactly its going to be costly. Still a lot to figure out. Craig, thank you for joining us. Thank you when we come back this mornings stocks to watch, and then tomorrow warren bufferate w ll join becky quick live in neyork at 11 00 a. M. Eastern on squawk alley. Squawk box will be right back. Straight ahead this mornings top stories, including north korea firing a Ballistic Missile through japanese air space. Plus, harvey is gaining strength and threatening to make landfall again. A live report from the ground is straight ahead and as we head to break a check on the currencies moving this morning. The euro still stronger against the dollar stay tuned youre watching squawk box on cnbc you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with youâ„¢ Liberty Mutual insurance. The north korean threat. Stocks take a hit after the country fires a Ballistic Missile over japan texas braces for more rain harveys physical damage could top 20 billion. A live report from houston straight ahead plus silicon valleys Disaster Response. Airbnb stepping up to help evacuees find shelter. Well talk to the head of relief as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc, live from the nasdaq marketsite in times square im joe kernen along with mike santoli and kelly evans. Becky and andrew are off today stocks around the globe are lower. But recovering here a bit after north korea launched a missile that passed over japan before landing in the Pacific Ocean the white house just out with a statement. The world has received north koreas latest message loud and clear. This regime has signaled its contempt for its neighbors, for all members of the United Nations, and for minimum standards of Acceptable International behavior threatening and destabilizing actions only increase the north korean regimes isolation in the region, and among all nations of the world. All options are on the table u. S. Equity futures, well take a quick look, had been down. What was the worst 1 50 they go down and up you know what i didnt see fair value so maybe it was already down. Okay so then it was down at least 1 50 at one point, so now, down just 88 on the dow. The s p indicated down 11, the nasdaq now indicated down 38 well see if europe has improved at all greater than 1 across the board. Slightly actually was weaker we had 180 on 1. 8 on germany. And i think s p futures were looking down almost 20 now just down 11 so obviously, in the last two or three hours theyve come back. Yeah. Meanwhile Tropical Storm harvey continues to pummel texas. The region still bracing for more water heres what we know right now. Houston police rescued more than 3,000 people during the storm. 1,000 last night alone flash Flood Warnings remain in effect throughout houston today. Another 20 inches of rainfall is expected and some 300,000 people are without power in texas President Trump will travel to the region today to survey those relief efforts cnbc reporters are on the ground in texas, as you have probably seen. Contess to brewer is live in houston. Lets begin with Brian Sullivan who is, as you probably know by now, in galveston, texas good morning, bri. Galveston which was the scene of the worst disaster in American History in 1900 has been largely spared although its been getting whacked now. You can see its been raining hard for about 12 hours. Of course all this is just going to go north to where the areas are already flooded out. A city just north of here, 18,000 people dickinson, texas, got a mandatory Evacuation Order yesterday. Those people trying to figure out where theyre going. Some of them are going to where contessa is in houston at the Convention Center. Some of them may come here we were talking with Emergency Responders last night at the hotel where were staying and theyre trying to figure out where to put these people. How to get them to where they need to go you cant take people somewhere when the roads are closed. Lets get back to the big story on the economic angle, as well, weve been talking about the notes are starting to pour out as you imagine theres 100 angles and stories here. But on the oil and gas side, rbc notes something pretty interesting that this is the first storm in the gulf coast to materially impact the Energy Infrastructure in more than a decade, or about a decade. The last one was ike in 2008 so weve gone nearly ten years without sort of a Material Impact here. The good news is that energy stockpiles were higher than they were back in 2005, and 2008. Thats the good news the bad news, i guess, for oil is that the world relies more on american crude than ever before. Now, the flip side of that is the export market for crude oil from here is all but stopped according to some statistics, you can sort of, statistics here, statistics there, about 56 of all crude oil in america is somehow touched by this area. Whether thats shipped in, shipped out, refined, produced around here and brought back in, thats just one angle. Theres rails, trucks arent running, the port is still closed you can see its still raining so, if it just keeps raining like this, everything thats bad is just going to get worse from an infrastructure and a roads perspective. A lot more to do by the way, reached out to every oil company out there. Exxon confirms their beaumont facility which is 100 miles east of here is running at reduced rates the big one youve got to watch is motiva, the saudi aramco 600,000 barrel a day facility in port arthur, texas its running but if it keeps doing this, and the workers get there, thats the one that could move the oil and gas market even more all right, brian, thank you lets get over to Contessa Brewer who is in houston good morning again, contessa hi, joe were inside the Convention Center now where people continue to stream in were at more than 9,000 people where yesterday they had said they expected some 5,000 they say they have the supplies to deal with this and were seeing that definitely now i just wanted to mention, we are watching closely the reservoir which at 4 00 a. M. Eastern time this morning was six inches from its Maximum Capacity were watching to see if that overtops theyve been released 10,000 cubic feet per second at the buffalo bayou. Normally theyre releasing somewhere in the neighborhood of 150 cubic feet of water per second and still its not enough. Still it cant keep up with the rain at the Convention Center, as the flooding has continued theyve seen more and more people coming in on the buses. I wanted to show you out here some of the donations that have come in now. Do you see the stacks of diapers on this table over here . They need all of these supplies for infants because there are so many babies here i just met a mother this way, alex, follow me now. I want to introduce you to a mom who was rescued by helicopter in a basket how old is the baby . Hes 7 months old [ inaudible ] well, we felt it really wouldnt happen, and then everybody in the house is waiting outside, and they rushed inside saying hurry up get the babies ready so we got all the kids ready and we rushed outside with the bags that we had packed, previously packed to go, and we just see helicopter, and then the string comes down with the basket, and the man puts me inside the basket, which was which the water was already in with how many kids . Four. I want you to see, okay, this little baby right here, and this these babies who are sleeping [ inaudible a 2yearold with a heart defect and shes 3 years old. And thank goodness theyre getting some sleep now how about you . How are you holding up i havent slept for two days, honestly, because i was too scared because of the way the rain was coming in i didnt want to sleep, and over fear i was really afraid for my family thats still in the house, in the attic, trying to get rescued at the moment. Have you heard from them . Last thing i heard was from last night and they were just in the attic and the water was already coming in. Why did they go to the attic . Because we only have a one story. So thats like [ inaudible they could have but they would have been sitting there for hours and hours for no reason. You have not theyre in the attic with floodwaters rising and you dont know if theyre okay not at the moment they dont answer the phone. But they do have a plan. They have electric saw to cut through they have a hole, so theyll cut through the hole and get out as best as they can or get down before the water rises too much to get to the roof. But thats just the safest place to be. The driest place to be i cant i have twin, i cant imagine juggling four little babies in a helicopter basket here. Its one of thousands of stories that are similar to this and the staff here, the volunteers, the First Responders are doing an amazing job keeping everyone safe, and making sure everyone here is dry and theyre thankful for that. Joe . Unbelievable contessa thanks thanks for that. Lets get to Walter Isaacson who hopefully could hear and see most of this the ceo of the aspen institute, also vice chair of the Louisiana Recovery Authority after Hurricane Katrina, and seems like yesterday, walter, doesnt it but its been awhile but some similar actually, it was this is the anniversary. Thats amazing. I didnt realize that. Is that true absolutely. The 29th of august is burned into my mind this, unfortunately, the similarities, some differences, too. Whats your in watching it play out, walter, what are your thoughts and feelings . Well, the major difference is, but its got to remind us, that every storm is different. Thats why its called a hurricane. In new orleans our problem was that the levees broke. Not that we had a lot of rain. These were the federal levees built years ago by the corps of engineers. They collapsed so you had walls of water that killed more than 1,800 people this is a different storm. This is an enormous amount of rain the swaurt rising, in many places, not a wall of water killing people but youve got onethird of the nations Refining Capacity in this area, between Corpus Christi and lake charles with houston at the center. So every storm is different. And unfortunately our policy response is well lets close the barn door of the last storm we had as opposed to figuring out what are we going to do in general to improve our countrys infrastructure to deal with this problem. But, you would say that the the federal, and the fema response, and the way the agencies are working with local, state and federal authorities, would you say we learned a few things, that its better this time yes oh, its absolutely better i mean it couldnt have been worse than the fema response right after Hurricane Katrina, and you know, that guy brownie, they were totally, totally clueless now you see fema doing a very good job what were going to have to face, though, is a series of questions. I think our rescue capacity and recovery capacity is pretty good better than it was before. And youre going to see it even in this devastating storm. Refining capacity will come back i mean, you know, its a third of the Refining Capacity, and about a third of that is out i think our political capacity is not as good as it was 12 years ago when katrina hit because youre going to have to do very tough things like figure out, do you reauthorize the national Flood Insurance program . Do you pay for the rebuilding of houston . Those are the type of things that used to be easier to work out in our political process, but, you know, 12 years ago, most of the texas delegation voted against paying for Recovery Efforts on katrina and rita now i hope that doesnt happen again. I hope everybody says were going to have to pay for some of this recovery, because thats what we do as a nation on the other hand, we have to have a pretty clear policy of dont build in dangerous areas, and lets try to have a sensible Flood Insurance program, a sensible federal Emergency Recovery Program walter, do you have any idea how many people left, fled insurance, really, and went to houston after that storm oh, i was with them back and forth from houston to new orleans. And houston was the city that most helped and took in people from new orleans there are about 400,000 people, i think, that left and i would guess that a third of them ended up either in houston or like my family, places like Corpus Christi, austin, places in texas. The astrodome in houston, we had a school that we set up, including a School Called new orleans west because it was new orleans kids, but they were based in the superdome thats why youre seeing a lot of people from louisiana the past couple of days, im here in new orleans, doing what they call the cajun navy. Getting out their boats, moving to houston trying to help rescue people, and saying how can we set up funds and donations to pay it forward what do you think, i know its pure speculation walter, do you think that lets say theres people who came from new orleans, went to houston, or just people in houston now with however long this recovery effort is going to take, where do you think theyre going to go is there a place people are coalescing right now no. I think what you have is a diaspora because you dont really have, and shouldnt, and couldnt have had an organized evacuation plan that everybody should move here in the city of new orleans we had about 450,000 residents before katrina twelve years ago. There are about 400,000 now. So the population of the city itself is almost recovered the metropolitan area is actually much bigger now so people do come home eventually as i say, theres some longrun issues youre going to have to pace, including what type of infrastructure do you have, even whether its i mean im talking about all the things that the federal government does that sometimes we disparage. Starting with satellites you know, were cutting the Satellite Program to nasa and to the weather service. What type of roads do you have, rail that helps get people out of places like houston, or the coast . Do you have Coastal Restoration . These are big political issues i have my own opinion, which is, you know, make America Great again means having some good new infrastructure but its a political debate we should have of how much should we invest in infrastructure that gets pipelines, rails, roads, electricity grids to be resilient, because we are going to have more events like this and theyre not going to be like, you know, harvey is not going to be like katrina, and the next one is not going to be like harvey. So we have to have a resilience built into the system. I guess we got to go, walter, but you know, since you have so much experience, last time when we point out when the cameras gone, things are you know you probably got the lions share still ahead of you on what you need to do what was the biggest thing that maybe didnt go well last time that we should remember and fix this time for the next six months or year that this is going to need to be, you know, in the forefront of what were doing . I think you got to realize its going to take it took us five years to recover. I think the moment we recovered was when the saints won the super bowl and we said okay, were going to actually survive as a city. Im going to be more optimistic than your question, which is we asked ourselves in new orleans how can we rebuild a city that was better than the one before the storm. So we went to an allparental choice charter system of schools. Houstons well positioned to do that because kip aacademies, and others that started in houston helped form the education in new orleans. Likewise we changed our medical centers and medical practice we still have things that havent worked here. Public safety is still bad and for that matter we still havent gotten the infrastructure right on drainage that said, you shouldnt just say, how bad will the recovery be you have to say, we have a clean slate in some areas, lets not waste the opportunity to build a new type of school system, to build a new type of medical system that might serve the city better and im kind of proud that new orleans did that, and i know we did it with help from houston. So it reminds us, were all in the same boat. All right walter, thank you hey, joe, its good to be with you again its good to be with you. North korea, you know, weve got to delegate. Oh, man what a what a period were living through, joe. Youve got to be busy. Exactly wish it was busy in a good way i guess it is. But weve got to cover what happens, right, walter anyway, we appreciate it thanks yeah. Coming up, Hurricane Harvey displacing tens s of thousands people from their homes. Airbnb is stepping up. Its helping evacuees find shelter. Were going to speak to the head of global Disaster Response and relief at schwab. Oh really . Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. Thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. Welcome back to squawk box. Lets get the check on the markets for you here a little more than an hour before wall street opens you see the s p indicated for about 11 point loss. Its about half what it was looking like for a loss a couple of hours ago it has continued to kind of narrow those losses. The dow indicated for about 87 point loss at the open it was, again, off twice that before as we got the news of the nearen missile test. The nasdaq does look like it will be the outperformer indicated down 38 points fema estimates Hurricane Harvey displaced 30,000 people in texas airbnb has a Disaster Response plan in place for those affected by the storm joining us now is kellie bentz, airbnbs head of global Disaster Response and relief. A position i didnt know existed. What was your experience prior to harvey and how does this storm compare to what youve seen already sure. I started in the disaster space about twelve years ago, actually, in Hurricane Katrina so listening to Walter Isaacson took me back quite a few years but definitely this is reminiscent of that. Since ive been with airbnb weve been responding to over 75 disasters and been able to activate hosts all around the world. What were seeing in texas right now is quite devastating and were activated in cities where many are evacuated, san antonio, austin, and dallas. And then surrounding areas of houston, as we know there are many impacted in those areas kellie, i dont know if you know off the top of your head how far san antonio and austin and dallas are from houston. Are these texas is such a big state. It just makes it a little more complicated, right, for people to get to where they need to be, where its safe or they might know somebody. What do these listings look like on airbnb . Are people still paying . No. So our hosts are offering for zero dollars they waive their fees, we waive our fees this is a voluntary program where our hosts in our community have decided to open their homes for survivors displaced, evacuees, responders deploying to support sure, san antonio, austin and dallas are all quite a distance from the coastal communities but those are the areas that Emergency Management has sent evacuees out of harms way and in safe zones. So its interesting you say you wave your fees, they wave theirs so if im leaving houston, maybe now im just beginning to realize how bad, you know, how long i might be displaced from my home. How long might i be able to go i can go on airbnb is there a specific page or search i look for . And how do i sort of say i am one of these people, you know, take me on and kind of how long can i stay with somebody sure. Its very simple this is a temporary accommodation platform and program where we ask hosts to open their homes for anywhere from a few nights to a few weeks. We know that often the need is greater than that. But as you can imagine many of our hosts have had or will have in the future other bookings so this is a program that theyre doing voluntarily for a few nights to a few weeks to get people back on their feet while they identify the next steps on their path so far we have over 400 listings its very simple process you go to airbnb disasterresponse. Click on Hurricane Harvey, and click on i need a place to say stay and that will lead you to all the listings go through the very simple search process identify the dates that you need, and then click the box that says i am a survivor thats displaced, and go back and forth messaging with the host. Its very simple very easy for people to find a place. Its brilliant. You know, i hope that plenty of supply comes up to meet which sounds like its going to be a huge need. We have a reporter in houston who told us the hotel is only accepting First Responders its not accepting anybody else who might need to stay for other people who sim ply might need to stay are they going to get squeezed out of this market broadly speaking right now . Because the effort is kind of on those who really need shelter . Absolutely not. This is for evacuees and survivors displaced. Our hosts want to open their homes and make sure they feel welcome and comforted in this very difficult time. Anyone thats in need we encourage you to go to airbnb disasterresponse. For those that are watching that know people in the area or across texas that might be able to open their homes we highly encourage you to do so and also those that need a place to stay, let them know that this program is out there more and more hosts are coming on every day good stuff. Kellie bentz from airbnb coming up, the north korea threat escalating. And this morning the white house is responding. Congli rorfr whito mi up next coming up, north korea carrying out a provocative missile test that passed overjapan. And President Trump saying all options are on the table a live update from washington is next whats happening right no . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong insurance company. With Liberty Mutual new car replacementâ„¢, you wont have to worry about replacing your car because youll get the full value back including depreciation. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with youâ„¢. Liberty mutual insurance. It good morning welcome back to squawk box here on cnbc. Among the stories front and center, shares of acorda their pewters plunging this morning. The fda rejecting the companys new drug application for parkinsons treatment. And thats plunging all right. Over 30 drop in the shares meanwhile, the shares of hain celestial are jumping. The food and Beverage Company Beat Estimates by three cents with quarterly profit of 43 cents a share. Also, issued upbeat guidance for the full year. And lets check the price of gold this morning. It hit its highest level since last september in todays trading. Helped by a weaker dollar. 1329 finally got above 1300 again and it only took incredible missile provocations by north korea. More the dollar gelling with gellen. Up 1 reescalation of those tensions with north korea the nation fired a Ballistic Missile that passed over northern japan this morning. The white house is responding. Lets get straight to eamon javers with more in washington semen . Good morning. The white house issuing a Statement Today from prumz saying the world has heard north koreas intentions loud and clear saying that north korea has demonstrated contempt for its neighbors and contempt for the United Nations the president going on to say in that statement that threatening and destabilizing actions only increase the north korean regimes isolation in the region and among all nations of the world. All options are on the table take a look at the map here and you see where that missile was launched from, right here pyongyang, the capital of north korea. Real shot across the bow there of the country of japan, going over the northern hokkaido island, and northern host of the japanese main islands and then splashing down in three parts in the Pacific Ocean. A very provocative launch by the North Koreans. But a measured response here in terms of the language of the statement from the president of the United States this morning, who had been talking about fire and fury in some of his on camera remarks about north korea a week or so ago today, a much more measured, on paper statement from the white house. White house also issuing a readout of the president s conversation with japanese Prime Minister shinzo abe confirming the japanese account that the two leaders had spoken yesterday in the wake of the missile attack eamon, thank you very much. President trump today will make his way to Corpus Christi the president pledging to give the people of texas the full support of the federal government to help overcome the storm. Lets talk more about the dpofts response to harvey joining us now david wessel, brookings senior fellow and director of the hutchings center on fiscal policy good morning good morning. Obviously the president has said we will get this done there will be relief package, whatever the federal government can do to aid the people in that region that comes at a time when, of course, we have to get a new budget, a debt ceiling going on and there has been this back burnerdy bait about infrastructure more generally. How do you think it all fits together as we get into this mode of responding to the storm . Well, we cant be sure exactly how its going to start out. As you know the fiscal year ends september 30th the debt ceiling is coming due about the same time. It would seem likely that the leadership of congress would attach a big texas relief project spending to those one of those bills to get them through. There might be some fiscal conservatives, the Freedom Caucus in the house, that will try and argue that if we spend more money on helping the people of houston and environs, that we should offset it elsewhere my expectation is that that will fail, and theyll get enough democratic votes to get the thing through. It might actually make it easier to avoid a shutdown and avoid a debt ceiling crisis. Yeah,ing that is one interpretation of how this could play out, obviously. That basically everybody wants to help out. And maybe that smooths the way what do you think it might mean further down the road for changing priorities when it does come to infrastructure which of course a lot of monday morning quarterbacks saying that should have been something that could have been front burner awhile ago and you might have had broader support. Right i dont think infrastructure will come to the fore any time soon i think one really interestissu watch, those of in washington, the national Flood Insurance program, thats also expiring and jeb hensarling, the head of the House Financial Services committee has been pressing for reforms of the program as you may know the program doesnt charge enough premiums to cover the cost. It borrows 25 billion from the treasury its going to need more money. So that may become a vector reforming that i think infrastructure for now will continue to be a talking point. I dont think theres any way to pull together anything in time to get it part of this package hi, david i thought it wasinteresting what you said, as well, about you know, the back and forth between some of these congressmen over whether, you know, there was aid approved for Hurricane Sandy for the new York New Jersey area several years ago. Sounds like most of the people from this area are saying we will support whatever funds need to be sent to texas. Thats right. So youve had a number of congressmen from the new england area, from new york, new jersey, including peter king, the republican, who made a point of saying, a lot of the Texas Republicans voted against sandy aid. But im not going to take revenge. The people of new york and new jersey will stand with the people of texas. Texas is a big delegation, three dozen members of congress, of the house. Its really hard for me to believe that when forced with a choice between voting for aid for their constituents, and standing on principle about federal spending, that they will stand on principle so, i think its likely that something will go through. Its obviously a horrible event. It exceeds any kind of reserves that the government has. Theyre going to need a lot of money. Sandy got 60 billion. And i think texas will be on that order of magnitude. You mentioned, david, that there could be some deficit hawks who are going to push back and say look were going to have to cover it somewhere else how does that play into the longerterm process of trying to get some kind of tax cut, tax reform package out there thats also the kind of calculus thats going to be in play there. Right on one hand i think this complicates everything you know, the leadership of congress had hoped to get the debt ceiling and the budget resolved so they could turn to tax reform this obviously will slow them down so, i think that the deficit hawks may fold, or be outvoted this time around that means they may come back stronger when longerterm budget or tax reform comes to the fore and they say, look, we cant keep spending, it was okay to do it in an emergency but we have a rising federal debt and weve got to get serious about it. Theres no unity in the Republican Party now in congress about how important fiscal constraints are, versus meeting the needs of their constituents. And i dont think this makes it any easier david, real quickly, on the Flood Insurance program im just curious, what would you do i suggested to a guest earlier, everyone should have an allperils policy. You spread that cost around basically, and you stop doing, you know, kind of one bailout or bill or funding effort after another. I mean, its effectively whats happening now. The biggest problem with the Flood Insurance program is that it encourages people to rebuild and rebuild. The National Wildlife federation did a report on the Flood Insurance program and they said they found one place in houston where the same homeowner had been flooded 16 times in 18 years. We need a Flood Insurance program that gives people good incentives to not build in places that are flood prone. Now thats not true of a lot of these people in houston. Where, you know, it flooded in places we didnt expect. But the program has really bad incentives, and the taxpayers are subsidizing people building beach houses in places where simply it isnt safe to build. Thats the debate were going to be having for awhile. David wessel from brookings. Thank you very much. Youre welcome. Up next the rebuilding process. Habitat for humanity is still on the ground helping communities recover after Hurricane Katrina. Well talk to the organizations e sns ites. Erceo about disast arhepon xa squawk box will be right back. Because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to squawk box. Futures right now have improved from the worst levels of the session. But back down triple digits again on the dow down about 150 or so earlier now down 110 the s p indicated down under 14. Nasdaq also lower. The euro above 1. 20 now. Twelve years after Hurricane Katrina hit new orleans, Recovery Efforts are still under way. Joining us now for more on what recovery will look like for texas, following harvey is ceo of habitat for humanity international. I guess we probably knew that katrina we were still in that rebuilding process, but i guess it hasnt been something in the front of our minds recently. But, is that normal, twelve years . Is that going to happen, i guess you would think so, as far as harvey goes . I think the reality is, when we have these large scale disasters, and katrina was the largest housing disaster in modern history and sadly harvey looks to be similarly large scale, theres an emergency phase, then a cleanup phase, and then a long recovery phase and the sad reality is, people need to think in terms of years, not months when we talk about these scale of disasters what happened last time, too . There were trailers moved in and a year later they werent they hadnt been deployed or something. Its been awhile now, jonathan do you remember that that that was another example of, i dont know what it was ineffectiveness or bureaucracy or red tape. What was the situation you know, i think its hard to for people who arent there to understand how bad the conditions were on the ground. And typically, and well see the same phases with harvey, the first phase is really the emergency phase. And we would actually encourage people not to try to come in and help unless theyre trained disaster professionals, until were through the emergency phase. Then theres a huge cleanup effort and thats where, in the past, habitats been able to use volunteers to come in, clean up homes, and then we can get to the rebuilding and that rebuilding phase is really contingent on resources, which i know your prior guests have been talking about, and getting through the insurance issues, figuring out whos got what coverage, and then rebuild. Habitat for humanity has been doing the Disaster Work for now over 20 years and weve helped over 230,000 families recover after disasters. So weve got experience not just in the u. S. , but in over 50 countries doing this different situation on the ground it might not take as long for the waters to subside, but you figure people are going to move, number one i guess, and then habitat for humanity doesnt just build. You actually take stuff away, right . And actually take the houses that are destroyed and clear the debris and Everything Else so i guess that could start like nearterm, right yes so once the water goes away, were able to do the damage assessments. Habitat for humanity actually has 25 local affiliates in the flood impacted areas from harvey so well be working with our local chapters, doing the damage assessment, and understanding what the needs are then, if its similar to past disasters, there will be opportunities at that point to mobilize people for that huge cleanup effort thats necessary. If the water sits in these homes, it becomes really important actually to strip everything out, and sanitize and you get longterm health and other challenges, so theres an enormous cleanup effort, mucking and cleaning out these homes to get them ready for the rebuilding process joe, some officials have talked about, you know, the need for getting cash in there right away to help support the rebuilding efforts, and others have warned about past crises where they cant do a lot with that money its too much in a short period of time and it may go to waste, may not kind of be as targeted can you talk a little bit about what the best way is for people to support these efforts i would say that actually cash is more helpful than trying to send inkind materials unless theyre commercial partners who can do that at some scale. One of the things that happens in disasters is that 80 of cash goes to the relief effort and then only about 20 is available for the recovery which is actually the most expensive part of the whole process encourage people to be generous in the near term but think about the longterm and maybe consider giving both to relief organizations, but also thinking ahead to the longterm recovery. Do you need people, as well i mean, i know habitat for humanity is one of the biggest opportunities People Volunteer in their local communities does it help to get more down there helping right now . Are you able to figure all that out . I know the rain hasnt even stopped yet but for anyone who wants to try to help you guys. So right now, honestly the most helpful thing are resources. People can go to habitat. Org harvey or call 800habitat and learn more about what were trying to do. In the nearterm, cash is much more helpful and there will be a point where volunteers will be helpful in the emergency phase its not helpful for unskilled volunteers to come down they consume scarce resources. So we love the good heart of people who want to help, but the right time to help will be after the emergency phase when we start to clean up. So we all know that the insured loss is totally different than the Economic Loss but, for the people that you deal with, thats even greater, isnt it most of those people have no Flood Insurance that is it 100 . What is it how many have Flood Insurance . You know, so, well see a range. If theyre habitat homeowners in flood zones, they actually will have insurance because we mandate it okay. But we know a huge number of families are living out in areas that have never flooded before so we think theres going to be a large number of lowincome families that wont have insurance, and theres going to be enormous need to come alongside and try to help them in the rebuilding process. Jonathan recker, thank you. Its going to be a long process. Thank god youre part of it and well check back with you hopefully as you know, twelve years. I guess dont take your eye off the ball on this, and its easy to do, isnt it . It is you know and i think the cameras go away and the hard work is still there. So, for those, you know, dont forget about our friends in texas. But weve been there for 30plus years and well be there for the longterm. Okay. All right. Thanks for coming on this morning. Appreciate it. Thanks. When we return, jim cramers going to join us live from the New York Stock Exchange to talk about a lot of movement this morning in futures now down more p an 100 points on the dow, 113, s is down 14, nasdaq down 45 fo. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Fixodent plus adhesives. Theres a denture adhesive that holds strong until evening. Just one application gives you superior hold even at the end of the day fixodent. Strong more like natural teeth. Check out the shares of best buy. They were a much better buy yesterday, up sharply after earnings actually, they werent since have turned negative. Sevenpoint swing. Huge swing. Electronics retailer, 69 cents a share in the second quarter, six cents above expectations and revenue exceeded forecasts and comp sales were up 5. 4 versus expectations of. 2 . Dont know whether there was any jimbo knows jim cramer joins us now. Big swing in best buy. Do you know if theres anything different that came out . On the conference call, theyre saying they dont know that this is the new normal, spend more going into the holiday season, decisions to make q3 q4 investments, meaning theyre not going to make as much money to the bottom line and these numbers could be abnormal, which i think is causing the caution. Also, they have no read on whats going on in houston obviously, they dont. But they did bother to mention it in the call its one of those situations where you have to believe it was a onetime spike i think theyre just being conservative. Thats what i was going to say. Why not . You have a stock at 40, up 65. Lets not get too excited here lets temper things a little bit. Then if we outperform, we go back up. Its a good time to do it probably, jim. Bingo thats exactly what theyre doing. Fabulous management. They have the apple, september 12th introduction. The only weakness in electronics is tablet. They talked about across the board, including all these new home connect devices that are selling very well. So, i think this is a very good match. They do not want to get ahead of what they can do. We can see what bad management can do at best buy. Close it down. Bricks and mortar. Remember that yeah. People shop in best buy and buy on amazon. If you do need the geek squad or need questions answered when youre in there, theres a place for best buy to become multichannel and then you compete with amazon. Thats what they did, i think. I love them they showed me different ways to use the gopro. Pc, they steered me toward a pc that was more powerful, less expensive. I have found the place to be a terrific place to shop three different ones in the last year one all the way out in oregon. Theyre just terrific. You know, i cant say enough good about best buy, obviously. Remember there was brad, he was great. And then they got a guy that wasnt great do you remember . Yeah. And i called brad and spoke to him because remember what happened to me i bought it at best buy, right right. And then over the weekend it dropped like 30 and i went back and said, will you give me the 30 off . And they said no, we wont and i go, but i can buy it at best buy now why dont you just do it i took it back and bought it on amazon i called Brad Anderson guy and he was not he didnt pull punches on the guy that was and they replaced him with this guy. I have found the customer is always right at best buy. Now it is. I bought the wrong type of device, came back with it. It was over the weekend. They refunded it, gave me a new one, less money. All terrific that was in boston all over the country, i find best buys are good. Excellent what do we know about north korea . At least we can talk about best buy and have some hopefully, theres private negotiations if you pull that stuff again its not going to be as peaceful. I cant believe you take the chance look at map thats the only way he could that they can fire it and but assuming its not going to break up over japan i mean i dont know. I grew up we had fallout shelters and used to put our heads in the cubbyhole, cubbies. You never knew what they were suggesting in those days. All right, jim. Well see you in a couple of minutes. Tomorrow on sawk lequaly, becky quicks live interview with Warren Buffett at 11 00 a. M. Eastern time. Where to get in. Where to get out. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. That is air force one, as you can see, and President Trump on board, headed to Corpus Christi. Will sidestep houston for now. Maybe a second trip over the weekend to houston at this point, president headed to survey the damage in Corpus Christi. Lets take a final check on the market this is morning triple digits on the dow not triple digits. Were back at triple digits, down 111 on the dow. S p down 13, nasdaq down 34. Ten years it was under 210 and gold is over 1300. The euro is over 120. By the way, on the twoyear if its not warranted because of the u. S. Economy, think about how stimulative that is. Thats right. Instead of 2. 5 , its 2. 1 what we heard from Richard Fisher, 2. 5 gdp. Hopefully hopefully. Thanks, mike. Make sure you join us tomorrow squawk on the street is coming up right now. Good morning and welcome to squawk on the street. Im david faber, along with jim cramer we are live. If youre watching squawk box with joe, we are looking for a down open this morning. 4 00 a. M. , journey was down 2 . The man o

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