Transcripts For CNBC Squawk On The Street 20170906

Will join us on set and talk earnings, technology and perhaps future were watching Hurricane Irma. President talks tax reform today. Europe is relatively mixed our ten year yield below 207 this morning stocks set for a rebound futures point to a higher open big tech leading the premarket. Its one of the most powerful storms recorded. Puerto rico and the florida coast bracing for land fall by this weekend. Meg whitman on set. The ceo joins us live at post 9 in just a few minutes. Futures are in the green following tuesdays sell off in which financials suffered the worst day since may. Treasury yields hit the lowest level of the year. We talked about banks yesterday getting hit by not just the lower rate environment but the prospect of insurance pay outs. They were pressured across the board. Plus all the dovish fed speak is getting people to say maybe the banks wont be helped by a regular tightening path next year and that all came to pass youre not seeing any real concern about Financial Action if you look at the Corporate Bond market its not saying that theres something bigger in terms of contagion going on here in the markets its whats going to get the stocks moving and help the earnings next year. Theres not a lot of days that have been eye opening though lets call it the beginning of this year where you looked up and you say that looks a little bit more painful is there anything that we can draw from yesterdays action that is perhaps a bit more concerning than has been previously i dont think so. We need a 5 pull back this market is shadowed by the fact that its been so long since we had a real pull back but what were seeing is that rotation didnt come to the rescue of the market you had both tech and financials down they balanced each other out only energy was helping you out. So i think that was one thing that youre losing a little bit of that magic rotation at least yesterday you did it was a global half step back from risk when you have the yen rallying 1 from the dollar. Everyone came back to work and said lets take a little bit off. We should be cautious saying maybe our rate hikes are actually doing real harm to the economy. I do think that having that ground swell of chatter at least billed up trying to justify no action by the fed. Hurricane irma is now the most powerful storm ever to form in the open atlantic making its way across the caribbean to florida good morning, caylee. This storm barrelled down on bermuda earlier and st. Martin and now its making its way to puerto rico. You can see the track here just off to the left and its going to continue to make its way toward puerto rico to the north of it. 185 Miles Per Hour winds have been consistent with that over the course of the last several hours. Take a look at the last 48 hours in regards to winds. It ramped up over the evening hours last night 150 Miles Per Hour and then up to 180 and then stayed at 185 but if you look behind me, the winds arent going to be the only things you have to watch out for as the storm barrels down on turks and caicos and puerto rico and florida a. Its going to be storm surge 15 to 20 foot. If we look at the highest elevation below in that smaller font there, highest elevation is 161 feet so when youre talking about 15 to 20 feet in regards to storm surge thats huge and can be devastating. Thank you very much well come back to you this morning for a look at how florida is now preparing for a potential land fall of irma. Lets get to jackie live in Fort Lauderdale this morning. Hi, jackie. Good morning to you, carl were waiting for the governor of florida to issue an update that will be coming out any my minute now and then another follow up around noontime but here at this home depot things are flying off the shelves as people are making preparations before irma hits the United States the hottest commodity here, generators take a listen to what the manager told us. Generators came in this morning. 36 genere to 36 generators and 10 minutes everything was gone. 10 minutes this morning people were grabbing them and running. We just got another shipment here behind me and stocks of other supplies continue to come in plywood sold out early on as people are preparing to board up their homes and businesses remember this is obviously challenging for the community but its challenges for stores like home depot as well. Theyre looking at this in two days the first way is safety first so in the u. S. Virgin islands and puerto rico they already closed 11 stores. For their stores that are open in other parts of florida theyre making sure that they have supplies coming in from different Distribution Centers and theyre watching what happened to harvey using the same precautions here. More than 1350 trucks were dispatched to bring supplies to people that needed them. You have the harvey clean up now and irma preparation so its a challenging time for these storms, guys. Indeed. Some reporting that fema may blow through their budget by the end of the week. Jackie thank you for that. When we come back, meg whitman will join us talking earnings and the aftermath of the ub uber ceo search where she was front and center take another look at the premarket. More squawk on the street omfr post 9 continues in a moment hey, im the internet i know a bunch of people who would love that. The internet loves what youre doing. So build a better website in under an hour with. Gocentral from godaddy. The internet is waiting. Start for free today at godaddy. A little over 2 what was an earnings beat after yesterday. The companys largest business segment the Enterprise Group while revenue fell just a little less than 1 from last year. Meg whitman joins us here. It is rare when you come down to new york. Happy to be here this morning. Its nice to have you too theres only one key business. And a new plan to cut another billion and a half over the last three years and there is that much fat to cut. I wouldnt actually call it fat because we have done a lot of cost production over the last five years but what we see now is we have perfect visibility into a much Smaller Company and more focused company it has our server storage networking business, our edge business and of Course Services business we are reengineering this. And its making the changes upstream it will drive simpler easy to run business we have 50,000 server configurations you can pick from 50,000 server configurations the old 80 20 rule applies 20 accounts for 80 of the volume and 100 of the profit. Lets get the skews down and options down so we have have a simpler business those are the kinds of processes were going after. Its not just take out the cost its redesign the cost to be a more efficient company. You continue to say price competition as well. Where is that coming from . Are people willing to cut right down to the bone sure. This is the most competitive market ive ever worked in. Why is that people want to get share in differ companies so that he can sell other maybe higher margin products so theres a land and expand motion but listen we see the big american competitors and chinese competitors in europe so we live in a world where we have to be fit for purpose have a fantastic cost structure and then a great cost structure for the more solution sale and where were driving business outcomes. We followed it now for six years if you have really become a very Different Company to a certain extent than what you took over six years ago but the question they ask is cloud displaceme displacement so many are going to the cloud but thats not a profitable part of the business for you. How do you deal with that on going trend . A couple of ways. Its a very real trend that people are moving to the cloud theres the public cloud and we have to make it simple for our custome customers, we have to help them decide where those workloads go and we want to have public cloud economics. A consumption based pricing model and athats where the business around the edge comes in and then of course our Services Business is an important component. Its a portfolio were managing. Think about hyper converged. Thats a great opportunity for cios today you can think about our newcomb posable infrastructure with one view which is a plane that can help you manage where all of those workloads are. One common look at all of your workloads is a great opportunity for companies. Given everything thats gone on and theres still stranded costs and certain compare shabl. When is it clean to decide heres our year over year. Heres where the growth is we no longer have the stranded costs or things spun off and the like since the fall of 2012 its almost a 200 return of the Tech Companies really only google and amazon has done better so were pleased that the value we have created for shareholders and four Industry Leading Companies we got rid of virtually all the stranded costs by the end of this year and well start to see the benefits of hpe next and then the pivot to the higher margin, higher growth parts of the portfolio will kick in do you believe youll start to see Significant Growth again. Theres the volume Business People want to buy 1,000 servers. That business is going to continue to be under pressure. Thats the cloud provierds. Cloud providers to more efficient workload. Thats a commodity business. Not entirely but it is and then theres what i call the Value Segment of the server business which is our server with security built in hyper converged and thats a business we need to continue to pivot to the higher margin, higher growth part of the business if we can stabilize the transaction business and grow the volume business, stabilize the transaction business and grow the value business thats the key. The shjournal this morning wonders how long running a slimmed down company is interesting to you. Yeah. Well i might be the only ceo in america that likes running something smaller than something bigger it gives me a chance to be indepth with customers so i like more Agile Company and i have no plans to leave hpe i have been six years here and theres more work to do. You told the board 5 can you imagine another 5 . Its hard to imagine another 5. We have work to do around the reengineering of the company and all that process redesign. Thats fun for me. I like doing that thing. Are you working to a particular end point r or are you going to get to a point where it will be growth through m a or some other phase. If you take just the enterprise we have slimmed down the company to now be a 28 billion company which isnt exactly a peanut but we have done six acquisitions. We bought sgi which puts us in the leadership position in High Performance compute and three innovation levers. One is organic one is acquisition and then one is of course our investments in the small start ups that can be integrated into our solutions so well do all of that and thats actually quite a bit of fun as well. Speaking of your future, of course, people are not unfamiliar with the reporting that went on a couple of weeks ago. Did you want to be the ceo of uber so i was not a candidate until that friday night before the board met in San Francisco and i got a call from a board member on friday night that said were not settled on a finalist here would you ever reconsider and what would it take and the reason i was interested is listen its a very familiar business to me two sided marketplace. Its disruptive and it has the characteristics of ebay in its early days so i sat down and said heres what its going to take for any ceo to be successful we have to settle the laws between various factions on the board. Things have to take place in the board meetingand certain governance in place and they were interested in that but it wasnt the right thing. If they had been would you have taken the job i dont know. I didnt get to that point i was interested. What changed . July 27th you put out a series of tweets basically saying normally i dont comment on rumors but ill fully committed to hpe and continue to be the ceo. This was a very leaky board and i was discomforted by that at that time which is why i was not a candidate and i had a set of issues that i thought needed to be addressed if it was going to be possible but it has nothing to do with hpe this company is a unique company in its own right. I spent six years of my life here creating four companies where there was just one four very competitive companies. So if im a board member of hp should i not be concerned that my long time ceo is looking at another job. You should not be concerned and ive had a discussion with the board. Wasnt a candidate until friday night but im here and im now here and going to continue to see this through we made a lot of progress and theres more progress to be made. Its a small point but theres been a lot of back and forth about what happened on that friday or saturday. Did you present to the board in a more formal way . We had a discussion about what it would take for a ceo to be successful there and as i said it was those kinds of issues we had a discussion a very serious discussion about what it would take. Do you think dara is a good choice i do. Youre a longterm investor in uber. Yes and i have helped the company out overtime before travis stepped down and i dont know dara but everything i heard about him is great and i think hes going to do a good job and im routing for him. Although some of the conditions that you said you wouldnt take the job under exists still that cannot be a particularly good environment. I didnt think it was helpful in terms of running that Company Going forward. He will sort it out. Hes a smart guy and experienced guy and hell figure out how to sort it out overtime. And you do believe the Growth Prospects remain significant. Ats a remarkable trajectory they have been on and i hope it continues. Finally, you have been outspoken in the past and willing to talk about immigration, what that means in this country, you have been pointed in your opposition to Certain Administration policies, what is your take on yesterdays decision to resend daca . I was really disappointed i am not in favor of rolling daca back. Think about who these individuals are. They were brought here as children through no fault of their own and they have gone to school here english is their first language. This maybe the only country they ever know. They made real contributions and i think as young smart speem have an opportunity to make future contributions. Any employees at hpe that may fall under this . Not that im aware of but im sure theres some. We all know people that have blended families three children in a family one came here with their parents, you know, illegally but the two others were born here. I just think its a shame and unnecessary and not the right thing for america. Speaking of employees, started with 350,000 and now youre down to about 56,000. Do you like running a spamaller Company Better i do. There was a time in our industry for a broad based market when industries are growing like crazy maybe thats the right strategy i dont think its the right strategy now four more focused companies on particular Market Segments and technologies have a much better chance than these Huge Companies that are offering everything because the market is so dynamic. Every day theres something new. Theres a new technology and focus is going to be the key to our success. As you have been saying for sometime thank you. Thank you great to see you. Carry man and ceo of hpe. Still to come, House Financial Services Committee Chair on the trump agenda and what is a busy time for congress more squawk on the street straight ahead im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. Becareally 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. I know when i hand them the its gonna be scary. Car but i also know that were gonna have usaa insurance for both my boys. Its something that theyre not even gonna have to think of. Its just gonna be in the family. Were the tenneys and were usaa members for life. Wherwhere we always welcome you, thats texas. Exas. Where we always find a way, thats texas. Theres the opening bell in the s p 500 at the bottom of your screen. Nasdaq pharmaceutical company. As we get this busy wednesday underway a lot of corporate stories and specifically cuts in guide from csx today on physical eps and ual lowering their margin guides its been a weak point in the market transports are well below two months ago its just one sector where youll have a lot of noisy reports based on the storms and other things in the company. And the cruise lines have been down the last two sessions and then insurance stocks for today going back to last june. It was more water than wind and now looks like a complete unknown in terms of the path of the new storm and florida is much more dense than it seems like and the pattern is you have no idea what the damage might be and then they usually get their footing after you have assessments and get new price increases down the road. Its going to be all the more important to watch the track the satellite imagery and track of irma. Even a turn, if it turns early its more of a north carolina, south carolina, georgia story but 20 or 30 miles difference in the eye wall is potentially billions of dollars of destruction either lost or made. Technologies are down rather dramatically thats a little strong but over 6 . 140 in cash and in utx shares down again today and doesnt seem to be a great deal of concern and did come out. And raising potential objections of having so much consolidated in one company meaning providing so much of a plane at one company. And particularly they seem to be interesting and theafter marke in some fashion. There is a perception that they were too eeg tore play this price for this particular business talking about this being a teal of december any and known it for decades past maybe it was considered to be theres another purpose it serves by bulking up in this way. Youll never have to worry about hon hon honeywell coming again were going to take a couple of years. Yeah. But youre right, particularly because there had been plenty of opportunity for investors. And the mind set of the deal happening. Even cloto whats agreed upon. And theres a very significant reaction in the marketplace. That matters, psychologically it matters when a deal is met with a negative redemption. And other deal making an ceos. Perhaps 14. 5 times is something some investors said its a little rich. Maybe a double premium because its still being integrated. Well, its going to have to have no matter what. Yeah. Although year to date, still down 12 from this point last year we get analyst calls this morning. And its the valuation and under appreciated. Its badly underperformed the s p 500 and bringing to a hold declared victory and its a blue chip name in the center of a massive sector to me its one of those types of calls. Go out and buy exxon as much as you can today. Its been punished plenty by now. Talk more about their business and incredible debate right now. Other minor issues to watch dave and busters. And they cut their full year comp guide and i see that e marketer has already some forecasts on the Holiday Season which they see rising in the mid threes not quite as robust as last years Holiday Season turned out to be. I dont think anyone is trading it today i would point out just banks are firming up without much help from the treasury market this set back from risk up. 5 right now. The other thing about the ten year treasury rating is its on par with the s p dividend yield and theres nothing too special about that relationship. On a risk reward basis you havent been hurt too badly if you were buying stocks when those r were roughly equivalent now. Its not the worst in the world. Down 2. 5 or 3 yesterday. Yeah. Just balancing here. And on the down side this year its down almost 9 . But goldman down 8 year to date is almost a surprise year to date its not been that bad with citi up. Has the world changed to the point where they havent been able to stay one step ahead of where the business is going and theyre going to make their case with the fixed income and Commodity Trading business that was the last quarter in particular where they seem to be catering to a hedge fund clientele that relied on a lot of structure products. And the demand is not there as much and a more aggressive way when it comes to the business didnt quite get to the 200 day. People were watching to see if it would but itself at 2434 thats around the high of 23s or so so well watch that. Breastingly, four week auction yesterday gives you a 130 yield. Its the highest since the crisis so are the banks responding to the process of tax reform and seems committed to 16 corporate. Sure. I dont think theyre trading daytoday on it it seems like the slate in congress got a lot more crowded and i dont think anyone is pricing in it. And theres nervousness filtering in and you have comments on whether theyre going to attach it thats going to take effect on that very short end of the tbill why do i want to bother with a delayed payment. When i would speak to ceos or those in the Deal Community that i often speak to there did seem to be a sense well lets hold off and see how things progressed on tax reform maybe as soon as the fall that we may have a very different play book. Nobody is saying that anymore. There doesnt seem to be widespread belief. Statement yesterday about daca telling congress to put daca fix ahead of tax reform and six month time pressure and then he goes on npr and goes on to say if the goovvernment moves to deport one of theirs theyll have to gou through them. Theyre number two. Number two, maybe google, i dont know after am. Google is less than microsoft. Thats a good point its not even there anymore. Row guardless of what we might hear it certainly doesnt seem to be 17. Meanwhile, the debate this morning about the president says were the highest taxed nation in the world if you look at total tax burden as a percentage of gdp were somewhere in the 28th, 31st around the world so that continues. The effective tax burden is the lowest its ever been in the u. S. Thats why we cant make the math work. Nobody says give us germanys personal income tax rates. They dont want that that would not fly. No, go back to those eisenhower era attacks where its at the highest level. 90 . Dow is up 69 points, home depot will not surprise you as the leader as were watching the track of irma. Good morning after th posting its 4th, 1 loss of 2017 the dow up on the day so markets rebounding here but stories still weighing on Investor Sentiment whether it be north korea, cautious fed speak, plus Economic Data this morning, the trade deficit widening less than estimated in july but more important that u. S. China trade deficit increasing to an 11 month high the treasury yield ticking higher some data on total Mortgage Applications volume increased 3. 3 but volume still down 23 from a year ago in terms of the real estate story there. Hurricane irma is still a few days away but provides property and casually Homeowners Insurance names have been weaker travellers one of the worst performing stocks but slightly higher cruise liners also under pressure now what tex is to the oil and Energy Sector is what florida is to the cruise industry cruises are being rerouted all the major cruise liners are headquatered in miami. Royal caribbean cancelling two sailings to the bahamas and well continue to monitor that situation. Trivago in focus this morning. Cut its 2017 outlook. That stock now down more than 28 . You can see price line and expedia in the broader online space also moving lower and some of those stocks are also in focus today. United continental down about 5 after cutting passenger revenue guidance for the Third Quarter blaming Hurricane Harvey, pricing problems and tensions in the Korean Peninsula now keep in mind united the stocks is down about 25 over the past 8 months. Fuel prices have been a part of that story agriculture in focus this morning. Florida is the worlds second largest orange juice producer after brazil and thats why orange juice futures are spiking. Back to you. Thank you lets get to the bond pitts. Yesterday was a big day right around 206 looks like were up today and indeed we are when you pair with the two day you could put it in better perspective lets not lose sight of the macro here two big double bottoms the last one around 140. A little lower the high yield for this year, 260. Average 2 its been drawing the market down its a very slow, very slow orderly move as these rates diminish patterns on the soft side as you see on the september start of last year and we can comp now to november for many maturities we all remember the wild ride many markets took before during and after the election of course im just using this to put in perspective how the long end of many marks around the country on the sovereign side are acting on the weak side with regard to yield and the strong side with respect to price this is 10s minus 2s currently at 78. Lowest yields since july of 16 and if we open up whats going on with the euro versus the dollar, the dollar index is unchanged. Hovering at the highest level since basically the early part of 2015. This particular charts in december of 14 and if you want to get a mirror image of this we could look at the dollar index hovering at the weakest levels in the same time horizon with very little activity carl back to you. When we come back, National Association of manufacturers jay timmons calling congress to step up on Immigration Reform and says daca is not the pblroem a lot to watch today were back in a minute dynamic performance, so you can own the road. Aggressive styling, so you can break away from everyone else. The bold lexus is. Experience amazing. If they knew just howers rich they were. Ed the average American Home value has increased 40,000 over the last 5 years. But many dont know you can access that money without refinancing or selling your home. With a home equity loan, you can pull cash out of your house for anything you need home improvement, college tuition, even finally getting out of credit card debt. Come to lendingtree. Com to shop and compare home equity loans right now. Because at lendingtree, when banks compete, you win. Looking for a hotel that fits. Whoooo. Your budget . Tripadvisor now searches over. 200 sites to find you the. Hotel you want at the lowest price. Grazi, gino find a price that fits. Tripadvisor. People dont invest in stocks and bonds. They dont invest in alternatives or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful can happen. Those people might just get what they want out of life. Or they could get even more. Mcdonalds announcing a new set of drinks. A new logo and cups that feature more design colors that will change based on the season and a new bottle line in Grocery Stores something that starbucks and duncan already do. Separately theyll initially cost 2 for a limited time which is less than starbucks and elevate and leverage the brand and made that announcement and partnership. So were going to watch that we have the starbucks news today. Getting more heat on this. A lot of the franchises complained that the company was too obsessed with the coffee service. It was logistically hard for them to do. Better margins on drinks. Those pastries looked good. We havent eaten and its almost 10 00. That maybe the reason why we did speak with meg whitman after that Company Reported earnings yesterday its actually down now and they continue to cut cost and competition on pricing and the move to the cloud by so many corporations that may mitigate their ability to sell advanced servers and the like to the main audience the news making presence has been in the uber search r for a new ceo and we did ask her whether she was a candidate for the job and whether she, in fact, wanted it. I was not a candidate until that friday night before the board met in San Francisco i got a call from a board member on friday night that said were not settled on a finalist here would you ever reconsider and what would it take. Its a very familiar business for me its two sided and it has the characteristics and ebay in its early days i sat down and said heres what its going to take for any ceo to be successful we have to settle the lawsuits between various factions on the board. And there has to be certain governance in place. Ultimately it wasnt the right thing. Meaning they did not receive her request and he was willing to deal with this continued battled between large holder benchmark and the founder on that board hard to know whether hes going to be able to navigate that appropria appropriately. Meg saying it was a leaky board. In late july she tweeted her not having interest and the reason she cited it and leading up to this weekend as well. One week until our delivering alpha conference dont miss the all star including j. P. Morgans jamie diamond at this coming tuesday at september 12th. Go to delivering alpha. Com dow is up 59 pntois. Xom is the leader out of ubs back in a minute when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. For more on todays movers lets get to bertha at the nasdaq site. The nasdaq higher today after a five day winning streak. This morning a little bit of strength and a couple of companies with some good news but one of the interesting stocks today hitting an all time high yet again is is monster beverage this used to be one of the big momentum names left for dead for awhile and today once again hitting an all time high on reports that cocacola could be considering acquiring the stock. This has been a story that comes back around every once in awhile later its giving monster a bit of momentum. Back in december hitting an all time low this morning and dragging expedia an priceline along with it. And among new lows today Spirit Airlines today as well as the Airlines Continue to suffer about 20,000 flights disrupted bihar have alone well see more this week back to you. One month after being convicted of securitys fraud former Drug Company Executive is selling the album he bought from a Hip Hop Group for 2,000,002 years ago. He put the only copy of the cd on ebay with a starting price of 1 bidding went up to 56,000 and now stands at 95,000 the cd is up for auction through september 15th he is hoping for better bits he really got a great deal on that. I dont know where the bidding is going to go. Price discovery and music and nba teams it is fascinating. The debt limit and chairman of high financial svis. Erce dow is up 60 points. Back in a minute 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. 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 you™ Liberty Mutual insurance. Welcome back to squawk on the street breaking news. We have nonmanufacturing for august, the Service Sector the u. S. Economy 55. 6 were a bit like 55. 3 is the number. Following an unrevised 53. 9. 55. 3 is the highest since june it was 57. 4 before a low here and considering whats going on and look at the internals. If you look at new orders move from 55. 1 to 57. 1 and that is an improvement and well continue to monitor Interest Rates. All the maturities hovering at low yields we havent seen since november of last year. Back to you. Good wednesday morning, Everyone Welcome back to squawk on the street sarah is off today take a look at the markets dow is up 73 points and then crude back above 49. Brent is seeing well, wti is seeing its fresh high the highest since august 10g9. Our road map starts with what youre looking at there. Stocks did open higher this morning. Attempting to stage a come back after the sell off yesterday big tech financials are leading the charge the most powerful atlantic hurricane in recorded history making land fall on the caribbean making it to florida washington getting back to work well hear from House Speaker paul ryan in a moment. Markets are in the green following yesterdays sell off its 4th, 1 loss of the year. And director of global macro at Fidelity Investments good to see you. Markets having a lot thrown at it. And pretty good efficiency what do you think . We had this unprecedented run or almost unprecedented run over the past six quarters of very large returns against very low volatility producing what we call a very high, sharp ratio and we get these headlines and we have hurricanes and a whole bunch of things and its scary but at the same time it forces us to look at what is driving this market, right and theres three things driving every bull market in my opinion. And valuation. And double digits. And growing at 11 after a 14 gain in q1 and liquidity positions since 2014 which is amazing considering that the fed has now hieked four times and conditions are easier than when they began and theyre in do no harm mode and thats a bullish backdrop. And 1 in 3 and maybe one of these headlines is what triggers it. Beyond that the fundamentals are still intact and is that the right way to think about uncertainty that theyll argue are larger now in number and scale. Its an interesting debate and the bottom line is that were getting to the point in the cycle and we think the risk award on stocks is as stocks continue to move higher. And takes a backseat at this point in the market. And prices are outstripping those fundamentals and the returns are good and if you go back to 2006 or 2007 or 1999, 2000, the returns were about 40 . So i think were going to continue to see this dynamic where i think the fundamental backdrop is not, youre paying a lot of money for a pretty mediocre fundamental backdrop and we continue to build up this on going checklist of sign posts that happen very r very late in bull markets and we continue to see more and more. Thats been the question for awhile now you mention valuation and a lot of good fundamental news and arent going to justify these evaluations and maybe a couple of years before it matters. Its interesting and the other guest does make a good point that the Economic Cycle which is now 8 years into an expansion. And heading into a cycle a year or two ago and maybe widening growth and slowing inflation is starting to come up a little bit and then then we have this global synchronized expansion and this bull market that is now returned since february of 2009 remains very much love odd but when i go out and speak to clients a lot of people still dont trust it and since the 2009 bottom, u. S. Equity funds and etfs have seen 240 billion and this is a very underlofed bull market and my sense is that every time you do get a direction theres a lot of people that will be looking to get in and my sense is that its not really over. What did you say to the idea. I know maybe even some people at this firm has been a pretty Battle Tested bull market. They were down 20 a year and a half ago it presents an interesting parallel because you did have the period where you have a sizable pull back in Global Growth after the Asian Financial crisis and russian debt crisis and lctm and you did have a test back then and extreme valuations so its important to point out valuations its the highest they have ever seen outside of that and in terms of what the other guests were saying sentiment is the main upside to the market but we have clearly inflected from that point of skepticism to optimism and youre seeing signs of it everywhere and theyre falling to below the past cycle and if you look at some of the Conference Call commentary some of the brokeers are noting that they are seeing the most gnaw counts being traded and accounts being opened since the tech bubble but theres signs were on the road there. Good stuff today. Thanks guys. Well see you next time. Thanks guys. It is one of the most powerful atlantic storms ever recorded Hurricane Irma make its first land fall early this morning before possibly make its way to florida this weekend and tracking it for us back at headquaters. You can see the storm behind me and its moving to the west northwest. And 400 miles wide in diameter and its going to scoot to the north of the island. Its several hundred models where this hurricane can go. We only chose a few of them in the different colors there but a lot of them shifted to the east coast of florida kind of a matthews situation so in the updates the cone has been just shifted slightly east why not all the way over to the east well because of the dramatic change from yesterday to today it could go back really we wont know when this storm is going to take that north turn until late tomorrow night or even friday before we have a better idea of that either way we talked about this earlier, east coast of florida, west coast of florida, carolinas, Everyone Needs to be preparing now because this storm is so big youre going to be impacted in one way or another youll have more undates throughout the day, carl. Okay. Thank you very much. When we come back, congress is getting back to work on capital hill the texas representative is going to join us plus one of the most prominent deal makers on wall street as well as the presiding wall street of the partner and big rn as out there inchuding time waernd at t. Squawk on the street will be right back where the heart beats warm and true, thats texas. Where we always welcome you, thats texas. Where we always find a way, thats texas. It is going to be an eventful few days on capitol hill good morning. Good morning, carl. Senator Chuck Schumer and Representative Nancy Pelosi said they were willing to support a deal that would raise the National Debt limit for three months and combine that with funding for Hurricane Harvey that is the offer from democrats and its unclear theyre looking to combine harvey relief, the debt ceiling and Government Spending bill all together so those negotiations will continue to dominate capitol hill and dominate the meeting that all of these leaders will be having with President Trump this morning. Back over to you. Thank you very much for that. For more on the legislative agenda we are joined by the chairman of Services Good to see you. Good morning. Good morning. Thanks for having me. What did we make of the Schumer Pelosi offer. Ill let the speaker speak to that right now we are still in the emergency phase and they have the health they need, the food and the shelter. But at the same time unfortunately we are a bankrupt nation and we have to Pay Attention to the debt ceiling. Its an awkward tool and inefficient tool and half of the time that we raised the debt ceiling in the modern era we atakd it attached it to something to bend the spending curve and your National Debt increased by 100 in the obama era its unsustainable so we need to do both. And we cant be cavalier about the passage of the debt ceiling. I would also say about the debt ceiling that we will never as a nation default on our sovereign debt it will not happen treasury has the legal capable and Technical Capability to make sure that interest payments, principle and interest always paying on our National Debt and i hope and believe that we can do something that will begin to bend the spending curve so we don wake up one day and be a second rate economic power and military power and lose our moral authority. Because of whats happening right now around the world and in the ocean, are those commitments to the offsets, can they be a little bit softer this time i dont know what you mean by softer the easiest thing unfortunately that is done in washington is to spend money today and send the bill to our children and grandchildren. Ultimately we know that that is unsustainable. So from time to time we have to ask very uncomfortable question that Ronald Reagan used to ask and that is if not us who, if not now when so the president in his budget submission indicated a number of different programs that could either be curtailed or eliminated we should pay some serious attention to that and then at the same time we need more revenues from Economic Growth which is fundamental tax reform which i know the president spent a fair amount of time over the last few weeks ensuring that we would have that plan i hope we will have that plan in fairly short order but two things we need to do we have to live within our means and we need more means through Economic Growth and fundamental tax reform. You called the debt ceiling an awkward and imperfect tool and said the government will never default on its debts and delay an interest payment. And handle the longterm priorities you set out there. We need to have fundamental reform of our budget proseproce so we could improve the budget process but its a little bit like a smoke alarm a smoke alarm is going off we could either take the batteries out of the smoke alarm or we can build with the fundamental problem and thats you cant have Government Programs go at 5, 6, and 7 a year and the company limp along at 1. 5 to 2 thanks to some of the steps the president has made recently we have seen better Economic Growth and i think we could see even greater Economic Growth and explosion of Economic Growth and we also need regulatory relief and thats what passes for budget discipline around here. That was attached to a debt ceiling increase it is a wake up call and smoke alarm. And will be it to us if we were to ignore it i would clearly think therefore you want there to be or would vote for Harvey Victims and rebuilding in the houston area are you saying that you want Something Else as well attached to it . Im trying to understand youre an influential member and run Financial Services and what you say is influences here. We are still in the emergency phase here we have homes that are flooded we have people, we have to be in temporary shelter so there is an emergency spending aspect to whats going on in harvey. There is a role to the federal government at the same time ive seen this tragic film before in katrina and sandy there will be further approach yagss and thats when its time to question for example the proper role of the federal government in rebuilding and reconstruction and where are we going with the National Flood Insurance Program which unfortunately helps encourage and subsidizes people to live in harms way. And represents a government monopoly well be faced with yet another taxpayer bailout of the National Flood Insurance Program. And helps fix the problem. And these storms arent getting less severe so its time to solve the problem with respect to the debt ceiling at a bare minimum we ought to ensure that never ever ever will there be a question about our ability and our commitment to pay, to make good on our sovereign debt and you its inefficient and cumbersome and treasury has the Legal Authority to do it and since 2011 treasury and the new york fed have been running table top exercises in case this would happen i dont advocate i advocate we pass a debt ceiling increase but at the same time we at least come up with some reforms and theres a menu of options to bend the spending curve so that we have physical sustainability at some point we dont want to wake up and become detroit, puerto rico or greece i dont think that will happen and i dont know it will happen. Lets look at the president s budget lets look at the options the president put forward. And nothing says Economic Growth like fundamental tax reform. Which will have to be a subject for another day. And Flood Insurance reform and i would assume potentially there would be damage for that as well. And taking a risk on themselves but in texas i can imagine people saying you cant tell me where i can or cant build anything. Im not trying to get the federal government into Land Use Planning and zoning but what i am trying to say is the federal government shouldnt be come poli complicit and encouraging people to live in these heavily flooded areas. 1 to 2 of all properties are accounting for 25 to 30 of the losses in a program thats 26 million in debt and runs a billion and a half a year. Thats an unsustainable program. Maybe the taxpayer pays for your home once or twice but at some point the good lord is probably telling you need to move its not safe. So wake up and get the message were going to take you to speaker ryan and his weekly press conference. Our Civil Society is still very very civil. An email went around to the various churches and schools and we wanted to fill up one semitrailer with a business name to send some aid down to the j. J. Watt foundation a local hero plays for the Houston Texans and the next day when we all collected stuff at our kids schools we didnt fill 1, we filled 9 thats just in wisconsin getting aid down to houston and so what is a good story out of all of this is in this country, citizens when they see other citizens in need they step up and they answer the call and so it is is something that we should take stock and encouragement from now we, government have a responsibility as well and as the majority leader said technology is a good thing and helping us but what its also doing is is moving money very fast through the system as it should and thats why we will not leave until we get this done to make sure that the response is there we have another hurricane right now, Hurricane Irma headed to our shores and its critical that we act immediately. So for now we have to make sure that we team up with our First Responders we are really encouraged and heartened by the people grabbing their boats and rescuing their citizens people all around america sending aid and with one more hurricane, one that 185 Miles Per Hour winds hitting our shores again, those people in that line are in our thoughts and our prayers so its really important that we take stock of the fkt that Civil Society in america is well alive and on display. We the president and Congress Take an oath to defend the constitution so President Trump was right in his decision he made the right call im also encouraged by the fact that he gave us time to workout a consensus to find a compromise because these kids dont, for the most part dont know any other home than the United States so i think the p was right to give us the time we need to find that compromise. Where does that exist . Thats what were going to spend the next months figuring out but its totally reasonable and appropriate that when you look at thedy dilemma it stems frome fact that its a symptom of a larger problem and the larger problem is that we do not have control of our borders so its only reasonable and fitting that we also address the root cause of the problem which is orders not sufficiently controlled while we address this very real and very human problem thats right in front of us so i think thats perfectly reasonable. As to the second part of your question, we will not be advancing legislation that does not have the support of President Trump because well work with the president on how to do this legislation and if we have legislation coming through here thats worked with and supported by the president im very confident that our members will support that. Thats ridiculous we have all of this devastation in texas and another hurricane about to hit florida and they want to play politic with the debt seal something that will strand the aid to bring to the victims. I think thats disgraceful that they want to play politic with the debt ceiling at this moment when we have fellow citizens in need to respond to these hurricanes so that we do not strand them. What the leaders you just described proposed is unworkable and it could put in jeopardy the kind of hurricane response we need to have look many of us got the calls from the administration who said fema is moving so fast that were running out of money as early as friday to tuesday so we have to make sure that we have the authority, Legal Authority to go out and be able to put money back into fema so we can respond to these hurricanes. Not to mention the fact that we have to start prepositioning for the fact that irma is is about to hit florida and to play politic with the debt ceiling i dont think is a good idea to that end though you say its disgraceful but why not then lift the debt ceiling on your own with your own side . The democrats have been critical of your side of not providing the votes on big things. You the majority why not provide that. This takes 60 votes in the senate what the president doesnt want to do is give more leverage where it shouldnt occur on the debt ceiling this takes 60 votes in the senate if it was majority only vote we could do what youre saying. Its a 60 vote bill in the senate you know that. Hundreds of thousands of dreamers are looking to you to see what comes next then can you guarantee them that you will hold a vote at some point in the next six moss. People should rest easy and the president made the right call and also gave us the time and space were going to need to find where the compromise is as i mentioned in my opening remarks this is a home that people know and dont know any other country as a home. Theres a serious humane issue that needs to be dealt with but its only reasonable that we also deal with the root causes of the problem because we dont want another dara problem ten years for now. We want to fix this issue for these kids and young people and address the root cause of the problem so we dont have the same thing ten years from now and thats proper. Theres a compromise to be had here and congress and well work with our members to find out what why the come prohipromise e can bring resolution to this legitimate problem thank you. That is speaker ryan talking about a couple of things there on daca. Arguing that the president made the right call in giving congress that six month window called it a very real and very human problem and that people should rest easy and then threw shade at pelosi and schumer saying its disgraceful to high harvey aid to the debt ceiling increase well have to wait. He said all sorts of things about the debt ceiling increase in the past and also pinned it on the senate that they oecouldt get it in the senate more on Hurricane Irma as it makes its way toward florida. Squawk on the street will be right back its not just a car, its your daily treat. Go ahead, spoil yourself. The es and es hybrid. Experience amazing. upbeat dance music bell ringing good morning, heres your cnbc news update streets are flooded in st. Maarten as Hurricane Irma approached the most powerful Atlantic Ocean hurricane in recorded history made its first land fall in the islands earlier today. It is churning on a path to puerto rico and cuba before possibly heading to south florida over the weekend with. South carolina senator Lindsey Graham apeerg pearing on the t show commenting on President Trumps decision to resend the daca program. The compassion agnat thiate d is give them legal status. They came here as Young Children they have lived their life in america and they would add great value to our country so thats the right thing to do regarding the kids. Former nba star Dennis Rodman telling the British Television show that he skied and some karaoke with his friend kim skrong jong un he said he would like to straighten things up the two never discussed politics during his visits to north korea. Well send it back downtown to you. One of the most powerful storms in a century churning its way across the caribbean. It could be a historic storm Florida National guards help in preparation for the storm and here at this home depot location we have been at all morning weve seen a steady stream of customers. It was very busy this morning especially getting ready for this storm things like generators, screws, big rubber containers to house sand and water as well and if they go away. We spoke to one consumer that told us under these circumstances its better to be safe than sorry. Thats one point of view and people are been urged to leave the voir dire t the vacinity and put their safety first you have a lot of people that say we have lived in florida for a long time and braced for storms like these and were going to do it again back to you. Thank you very much deal making in 2017 at least globally managed to outpace last year you wouldnt think that here in the u. S. Thing versus been slower 2. 2 trillion despite what has been a lackluster u. S. Market. Here to give us insight into what we can expect the last four moss of the year is one of the top lawyers on wall street and also the presiding partner thank you for being here. Thank you, david. Lets talk about m a as you see it coming for the rest of the year what are you hearing in terms of the willingness to consider doing the deal or the big deal or something strategic that they might not otherwise have been willing to earlier this year i think that overall they look at the Global Economy as growing and you look at whats happening in the u. S. And whats happening in western europe. Everybody is growing at about 2 china is growing at about 6 and even japan is growing so the fundamentals look pretty good. Its still hard to get organic growth so m a makes a lot of sense and theres more and more boards willing to allow ceos to pull the trigger and feel a little bit of a licensed to try to do something even deals that are a little bit of a reach. Does that seem to indicate things are going to pick up then because we had a pace. We had a fairly large deal the week prior a biotech deal but there hasnt been the same pace that there has been the last couple of years. If you look at it 2015 was a blockbuster year last year was very strong and this year is going to be on pace with last year thats at least how we feel. The last quarter is going to be strong. Why. Just in terms of the quality of the conversations and if you look at the broader environment were not getting a lot of help from washington right now. I dont think that people are banking on that. I have the sense that ceos have moved on from waiting to make a decision whether it was a sell r er or buyer for tax refom are you hearing that theyre viewing tax reform as potential upside but theyre not banking it into any of their expectations. Theyre more willing to do something now than earlier in the year as a result. Yes because the fundamentals are there. I say were not getting a lot of help out of washington and yet the market is holding up deal making is holding up and thats a sign of actual strength any particular areas that our Investor Base that watches us should be focused on i think bio tech and media are both ripe for deal making and both in media because theres a fair amount of disruption from technology and i think the view of cord cutting is a little bit overstated if you look at Linear Television it still has the market. Bio tech is really an exciting space. Pretty much decide theyre not going to take a lot of risk on rnd and theyre willing to pay up for products that have actual promise and you look at the kite deal last week that was pretty amazing. A company that had no revenues hadnt even gotten approval yet and to garner that kind of a price thats really strong. 12 billion for gilead. I want to move on to a different area which is your management of a law firm its a large important law firm that of course one of the reasons we have you does a lot in merger and acquisition work you have been presiding partner by the beginning of the year you mention disruption in terms of how their clients view them and the workload. Thats true. Its been interesting coming into this role i spent a lot of time doing work with Creative Companies and those are people driven companies. Assets walk out the door every day and its a comply katd ecosystem right now but its an exciting time. I think you have to figure out where you play well. What you actually provide to clients in our case we think its high value, high impact high risk. Situations and where clients are going to value advance i hear that often times, artificial intelligence. The ability to read vast amounts of documents something that a first year law associate might be doing are those jobs going to be replaced by ai ai is going to be a real factor in what we do and theres a lot of processing of information that you can do very effectively with ai and were very excited about it because we want to play in the space that relies more on advice and judgment so i think it holds a lot of promise for a firm like ours. Does it mean you higher fewer associates i dont think its going to turn out to be fewer associates. The challenge for us is how you train people because theres a passive learning element to them that ai is going to replace and so were going to have to figure out how you accomplish that with Younger Associates but im not sure its going to replace at least for a firm like us were a Lean Organization we are small with a light footprint and were excited about what ai can do for our business. You dont see it as a threat . Not at all. Many of these highTech Companies run by young people. Its just a commodity. I can get it from you or those guys down the street it doesnt matter. I have worked with companies out there is that clients will always value good advice because advice requirements. Its not a play book and theres really not, its not something that you can program somebody to give figuring out how to navigate a difficult situation really does require judgment and so i think well be okay on that. Have you enjoyed having managed a law firm. Its interesting. Theres some days that are great and its comply katd people are complicated and im very excited about it. Its a Great Institution were going to celebrate 20 years in 2019. Were the second oldest law firm in the country so its really a great honor to be in this. Its nice to finally have you after you have been in the job for awhile. Thank you. Thank you so much. Carl. Sure, david, watching the markets this morning not a lot of intraday moves. Index has been steady around 62 to the upside on the dow we watch financials after yesterdays tumble gaining a quarter of yesterdays loss did yesterday change anything big picture . It just did bring the s p back to where we were training last wednesday and its a little bit anxious people wondering if september is going to be choppy. Retail and oil industry. Were getting breaking news out of the fed. Carl, stan fisher will be resigning as vice chairman of the Federal Reserve effective on or around october 13th he cited personal reasons for stepping down and in a letter to President Trump he said it has been a great privilege to serve on the feds board and he also said that the economy has strengthened and that the fed has been able to build on the lessons of the financial rye sis. Clearly this means more turnover and perhaps another chance for President Trump to name someone to the feds board but stan fisher stepping down as vice chairman of the Federal Reserve board effective on or around october 13th back over to you. For those that dont know, fisher nominated by president obama to be vice chairman. Assumed that office in june of 2014 wellknown former economist for the world bank and of course served as the government in the bank of israel thank you very much its a big loss from the Federal Reserve in terms of the history that stan fisher has had in banking. You already mentioned first Deputy Director of the International Monetary fund. Also he taught a lot of essential bankers in the world today including mario draghi ben bernanke so he has been one of the professors hailing from mit and its just another opening on the central bank for President Trump. He has already named randy cross to be the first vice chairman, the vice chairman in charge of Bank Supervision but there were exiting two other openings and now theres this vice chairmans job open as well so that counts up to four openings on the Federal Reserve. He has been viewed as a strict parent when it comes to financial conditions if not a hawk someone vigilant about the potential risks out there. Do you think it changes the tone on the policy side right now a little bit Old Fashioned in terms of the relationship of low unemployment and leading to higher inflation he has been willing to let others unlearn the lessons of central banking so that has made him more hawkish as more general bankers are. Hes been a person who has the old doctrines in some ways and when people would say were not going to be raising raid raits its possible well raise rates and hes not necessarily been the Guiding Light but hes been sort of an anchor is a better way to put it. A little bit more in the older traditions and that some of the newer ones more puzzled by the absence of inflation today im trying to think back to prior administrations and prior president s that have had the opportunity to basically remake the fed wholesale in a way especially this early in their term you have to go back aways perhaps. I couldnt think of anyone that had that much before stan fisher announced his resignation which is a pretty quick turn around here. Its october 13th. His resignation is effective i believe bill dudly, i have to check on the rules at the fed. And fisher would design and im not sure if that would then go to the board of governors as well there has not been a president with this kind of opportunity than i can remember. Im sure we can come at this from many different angles in terms of what it might mean but the fact that theres going to have to be a vice chair opponented as well some are going to argue that the straightest path would be to keep her in her existing job and then deal with the vice chair. Really good point, mike i havent really considered that if you think about the idea that President Trump seems to value the level of markets above all, affirmation of his presidency and economic policies. And presents an opportunity for instability on the board and janet yell enwould offer offer that stability that markets covet. You can imagine that would be one leg up im not sure i would say its a decisive leg up in that regard, though i think it is also clear that the president will also like the opportunity to remake the board to include the fed chair thank you for talking to us, steve. The comment from yellen staying stands keen insights grounded in a lifetime of exemplary monetary service. Im personally grateful for his friendship and service well miss his wise counsel, good humor and dry whit. Rick santelli, what are your thoughts well qualified, intelligent, a steady edy in my opinion, all these things are quality that is are good to serve, especially with regard to a central bank, but i also think that theres a culture and its a Global Culture of kind of using all the same medicine, kind of using all the same mottos, in for a pence, in for a pound. Very difficult to change strategies with the kind of global respect in central banking. And im not saying it isnt warranted, but i think this is going to have little effect. I think all the dynamics are in place with regard to the exit that will transpire from, you know, potentially in september for our fed to continue could last for a decade. It could last longer and i do think that the notion of stan fischer, i just think that the sun rises every day we have a lot of smart people that dont seem to want to try anything new and im sure that replacements will be cut from the same cost and from the administration standpoint, comments from this administration, they like low rates. There was very little respect for the markets in our fed, really going back all the way to mr. Greenspan who did have respect for the markets. I think the administration has very little respect for the markets, but in my opinion, the only thing that is going to matter ultimately is we try to reverse this longtime central banking course its going to be how the markets respond to certainty and not going to change up giving any personnel coming or leaving for the most part in my opinion. Guys, in his letter, which the fed has now posted, fischer writes, informed by the lessons of the recent financial crisis we built upon earlier systems to make the Financial System stronger and more resilient and better able to provide credit so vital to the prosperity of the countrys households and businesses it sounds like what yellen said in wyoming not too long ago, steve. Thats a good point and well go back to his tenure as governor of the bank of israel as i understand it, he pretty much went in there and told the israeli real estate and mortg e mortgagerelated assets before the crisis, kind of mandated it, and it has always been, like i said before, very Old Fashioned when it comes to banking and hes been a big supporter of the dodd frank regime as it exists now some like the idea of the banks being strictly regulated its a big job of the Central Banks, and maybe they disagree of this, but its better to avoid the crisis and fix the rules put in place so at odds with the current administrationon that. And as you said, very much in line with janet yellen and other members who support strict regulations on banks because nobody wants to go through the crisis we went through in 2007 2008 steve, do you agree with rick that a replacement in his view would, from this administration, would be cut from the same cloth as prior administrations you know, probably so im trying to think of its kind a binarc choice everybody else are gold bums and federal bankers tend to be very much in line with each other. They sit around the table and nobody at that table ever wants to be at zero percent Interest Rates. Some are more likely to do it, but nobody is happy about it every central banker has a fear of inflation, doesnt like inflation, and they dont like inflation more than they dont like high unemployment and that is the way central bankers are cut from the cloth they are from. And there are various degrees in that, but not a whole lot of difference when it comes to those basic tenants. What we dont know is what President Trump wants from a new Federal Reserve. Does he want low Interest Rates, high Interest Rates, a less intrusive or more intrusive fed . He wants a fed that agrees with more regulation in terms of the banks. Thats on this current bed, although this current bed has stressed some flexibility in terms of the regulations. So say that you agree with me, steve. Its going to be status quo for the administration and with regard to Central Banks, i think most central bankers im aware of or have knowledge of have their hearts in the right place but just trying to make this work on regulation, that makes no sense to me we are given entities around the globe, more horsepower and monitoring and looking out for black swans, but never is a black swan being caught by a central bank believe me, i understand but if everybody is on the same page and the same low growth productivity globe and everybody running the rules of the road at the Central Banks are all kind of cut from the same cloth, that doesnt afford me a lot of optimism that were going to kick the tires on some of the models that dont seem to be working very well. But its the cover your butt mentality. You just cant sit in the meetings and come up with creative ways to come up with new growth and productivity. It has to go back to the academics, and thats where the separation between those that look at the market and those who look at the mottos, i dont think that is going to change. It comes down, rick, to this notion of either mankind or humankind controls the quantity and price of money at the short end of the curve or it doesnt because only Central Banks have the short end, there would be a lot more Smiling Faces in the world, but thats not the way its turned out. Gentlemen, as youre talking, if youre just joining us, by the way, vice chairman of the Federal Reserve, stan fischer, announces hell resign for personal reasons on or about october 8th, prior to when his term would end next june the markets are not moving much by this. The dow is near 60 points to the upside well bring in sara eisen to join us on the phone as well who interviewed fischer several times. I would argue, knows him pretty well your reaction . Thank you, carl yes, i have covered the vice chairman of the fed for many years. Remember before this job he was the governor of the bank of israel from 2005 to 2013 hes a central bankers banker and the professor of the central bankers. Im going to give you more color on his decision, which hes seen regarded as a personal one and wants to spend more time specifically with his wife hes 73 years old. He has been in the Public Sector as a regulator, a central banker, a number two of the imf for many, many years spirited economy through crises. And his term was up as vice chairman this year in june of next year. So this decision comes as a surprise and its coming early and was widely expected at least among those that know him well or in the middle of next year, especially if janet yellen was to be nominated as fed chairman again. So he is stepping down to spend more time with his family. And the two points i would add on fischers recent thinking and sort of what he would want communicated out there until we hear from him further is in our last interview, he made a very strong point that we should not move fast to regulate the Financial System he made that point in subsequent interviews as well, but theres a lot of good work done as a result of dodd frank we heard a similar message bijanette yellen at jackson hole and the second is lets move to the possibility of normalization in Interest Rates. Something hes been pretty firm on and his policy position on the Federal Reserve. So again, you know, i think there was a clue in that he did cancel his trip to jackson hole just in recent weeks hes been a staple as you all know of that Federal Reserve con fa fab and meeting. So he wants to spend more time in new york or in israel where they spend money of their time sara, what do you think it does to market uncertainty about the overall trajectory of the fed in general, of hikes in general, or the movement of rates overall . The collective group think of the fed . Reporter well, he certainly was a leader and was a leader in the Federal Reserve. Theres still a steady hand in janet yellen the two were considered aligned in terms of their policy thinking and she is still in charge of this fed until at least we know of next year when President Trump makes his position he gets a chance to completely reshape the fed. In a bigger way than he thought with this position open, but President Trump has been a below Interest Rate guy, hes a weaker