Transcripts For CNBC Squawk On The Street 20170925

Road map begins. Stocks still on the high despite hiccups. Donald trump blast the nfl. Its having huge ripple effects and could have a large corporate impact. Facebook settling a lawsuit with investors but its trouble far from over. Revelations about what the company did and did not know when it comes to russian interference in the u. S. Election. Futures are moving lower have a positive week for stocks despite the dow being in the midst of a two session losing streak. Global markets reacting to developments out of germany. Merkel wins. The far right party will Enter Parliament for the first time, one of the cofounders says she will not sit in the caucus in the boon to stocks. Theyve got internal politics to work out over there. What a weekend of news, jim . Yeah, this european news i felt is collaring our markets much more than people realize. Why are these markets not reacting negatively . I think the more nationalists win, the more the parties in power feel like they have to spend, which means that theres going to be more growth and that has been the story of what i believe is the strength behind the euro, more growth, raise rates. If youre a historian, we can talk about history of politics and sports, but it is it takes your breath away that the social democrats have the worse result since prewar. So im sure germany is thinking what do we do . How much money do we have to spend to get this thing back and under control . Look, our markets, we are i just have to say that it is so odd to om in and whats winning . Its General Motors and the oils and whats losing . Its apple and amazon and facebook. When was the last time you saw gm breaking out, gm and vp are the two hottest stocks. Vp this is not right. Youre mentioning an upgrade of gm, oil at 51 as we said. Gm, there theyre talking about autonomous driving and why that companys autonomous driving unit is doing better than everybody elses. At the same time that a car mix drown grade and the sports utility shift in tennessee, theyre knocking out because of short warm demand. Its been a long time since ive seen that. The shortterm is typically just that and the general trend always seems to reassert itself dont spend too much time spig about gm or those companies connected to the oil market. True. It stay focused because if you have stay focused on amazon and or apple or amazon or facebook if you look at the parts of it, buys 1,800 new stores from a private equity company. Anybody who buys from private equity these days are exciting and i look at these things and i say to myself he, what did it fay remember those activists in gm and how they failed . The latest was David Einhorn with that plan that went nowhere. Green light, red light. I do think when i look at gm and autonomous driving, i still keep thinking about interstate 80 and the double trucks that i saw. Great commercial we have right now you see that truck industry. Do i want to look over and see that double target truck, i mention that because of the raise, with no driver and im still susceptible to thinking well, thats a good way to die. Maybe not. I think youll be more accepting of it. Maybe remember the blowup guy, auto, that will make you feel better. Deutsch is 60 of households in urban areas they think eventually prefer autonomous ride sharing to owning a car privately. I find that crazy. I think that guy he picked the wrong time to stop sniffing glue. I dont know. The vision people have of urban societies with Autonomous Vehicles is very powerful. Pleats all over being helped by 5 g, no traffic jams, no parking garages. No driving records. Give me amazon. To be continued. The president as you know by now sounded off over the weekend and again this morning about nfl players declining to stand during the National Anthem after calling on the league over the weekend to fire players who refused to do so. The president tweeted many people booed the players who kneeled yesterday. These are fans who demand respect for our flag. Before yesterdays games, many nfl players knelt during the anthem and locked arms. A number of team owners including the patriots bob kraft issuing statements criticizing the president s remarks. Last year Colin Kaepernick began taking a knee to protest Police Violence against minorities. Joining us this morning, mavericks owner mark cuban. Its always good to get your take on things, good morning to you. Good morning. Downtown to talk about Autonomous Vehicles and what were doing in dallas, right lets put that on the back end of this. What does the leagues response from all colors tell us about what the president said . I mean, it just begs the question of why did the president say anything at all. Literally, why whats the point i mean, its like just because you have a twitter account doesnt mean you have to use it. Just because you can Say Something doesnt mean you should. Hes the president of the United States, so were all wondering why he said anything. This is an issue that we have to address with our players and our fans and our communities, and i think he doesnt recognize that at least in the nfl and the nba, we have Huge Community relations departments, we make huge efforts to participate with the community and so were always involved with politics at some level. If i want to i just built a practice facility so were working to add Community Elements to that. I have a center that i built in south dallas to enable kids to get educated and to get trained in different sport and to get good study habit. I have the largest inner city baseball and one of the largest inner city basketball programs called little heros. We hired the former chief of Police David Brown to come work with us to build our Community Programs all through the Dallas Mavericks. So were working actively to connect with the community and he doesnt seem to recognize that there is so much more to what teams do in the community and we already involved in politics at some level just to get those things done. So why even comment without knowing what youre talking about . In the markets, david, its not just the nfl of course, it started in part with the disinviting of steph curry and the golden state warriors, lebron james and tweeting that the president s a bum and made it much clearer what he was really trying to get at in an Instagram Video that i watched where hes quite articulate. What are you hearing from your players and within the nba itself about what went on this weekend . Ill speak to him today, todays our media day. Were going i told our folks that i want to give everybody a chance, all of our players and management to go on camera and have the question asked of them, what does the United States of america mean to you . And is there a topic youd like to speak about on camera if we want if they would like to have as a team their feelings aired on our jumbo tron before a game then rather than trying to make a point through a secondary action, whether its taking knees, joining arms whatever it may be, lets just say whats on our mind and lets be clear to fans what we think. If we can take it from there and start a discussion in our community thats a good thing. Ive always tried to be open with our players about what their feelings are, how they want to participate in the community and we have a history of it. The Dallas Mavericks had the first nba player from china and the day he played for us, in 2001, the night before there had been an incident with china where a plane had been shot down and when we oent out on the court he got a standing ovation. Weve had players say they were against the iraqi war and got criticism. I had one player back ten plus years ago who was seen on a video saying the National Anthem doesnt represent him, it doesnt represent his people and that created a firestorm and i wrote a blog post about it. This isnt anything new. The only thing thats changed now is that the president decided to get involved. As an nba owner were always doing things that where we listen to our players, we try to help them with their community involvement, they all have foundations, they all have Community Programs and so again this is nothing new. We want to listen to our players, get their feedback and see how we can make our communities, our team, our foundations and our country stronger. Mark, jim cramer, always great that you call in. Thank you so much. Thanks, jim. The nba is really taking it i think an incredible view. They want the players to speak out so i was surprised the president would attack because the nba is probably the most free speech oriented league in the world, but tonight the cowboys play. Jerry jones is on record saying that this is not right. I know you know jerry very well. Do you think hell end up taking a bob kraft position and say the players absolutely have every right to do whatever they want i dont know. I dont want to speak for jerry. Were friends and he takes his own approach to things and ill just respect his sovereignty to say whats on his mind. Mark, we can debate back and forth the delicacies of protesting when youre on the field, were still left with the business angle, what happens to ratings, whether the president s right about these declines, whether theyre driven in part by politics. Whats your view of that and how much of a threat is it to at least the Football League . First of all, you dont know that the ratings arent down because so many nfl owners contributed to the president ial to donald trump . You cant connect and just pick sides, but look, you had bob johnson talking about the bigger issues with streaming and alternative ways of viewing content and the changes and content consumption. I think that impacted all sports. I think we have to work harder and have more choices to gain an audience, but as we know, television isnt the only way to consume conat any time and it hasnt been for the last 20 years, so that is definitely going to impact ratings. Ive sat down with adam silver the nba commissioner and tried to make a point to him that i think the nba and the nfl, the nhl and Major League Baseball we all need to start advertising the fact that watching a game on television is the best viewing experience. Watching it from a cable or satellite provider, on a regular television, is a better viewing experience than watching it streaming from any source on a phone, on an ipad or even on a television because it buffers, it impacts your broadband, your bandwidth to your home. Theres so many different elements that can impact a broadcast and your experience with it when you stream. With traditional television, youve got 99 reliability and its a better experience. Its on us to promote the fact that thats a better viewing experience and we failed miserably at that. So when it comes to rating, there are the bigger issues, the macro issues of people wanting different ways to consume content but it should be on us to really promote what the best way is and right now thats still television. Ratings are going to be down, but theyre still better than what other shows are experiencing. At the nba, were starting to do an index, where were saying, okay, our absolute number of viewers for our finals was up, some of our games during the season were flat, up a little bit, but when you compare those totowhat other shows are doing, were out performing on an index basis significantly. I think if you look at the nfl as well. They may be down from last year but when you compare them to other hits, it shows. Youll see that those other hit shows are probably down even more. So the nfl, the nba and sports as a destination for live events is outperforming other types of content. So while yes, on an absolute basis in terms of ratings, the nfl i still think that theyre outperforming in the nba and the nba is definitely outperforming other content competing for viewers. But, mark, we know that your stance on the f. A. N. G. Stocks. If youre disney, if youre cbs, its really hard to compete. If facebook, amazon and google now alphabet want the rights, say you do a china game or say next time the any of the contracts are up for major sports, no one can outbid those companies and they can built whole networks, youtube around pro sports so dont you think that in the end alphabet wins, that facebook wins, that apple wins the difference is the cultures are dimp. Its a good point, right. Companies with the largest cap values of any company in the world outbid traditional broadcasts who are seeing theyre market caps decline. Google is a Data Driven Organization that typically doesnt up it like that. Amazon and facebook are dipping their toes in the water not just here with nfl but with global sports. Because it makes sense to do so. And i think the cost of our rights for the nba in particular is going to go up because in a streaming world, it is so much harder to draw an audience because you have unlimited choices. Where on television, once you choose to watch on television youre one of 150 to 200 choices. Our right fees could go up significantly because of streaming but were not up for another ten years or nine years so so much can change and in the five years before the nfl is up, so much can change until then and so, im not ready to make a prediction but i dont think i know some people predicted that thing rights fees for sports will go down. I dont see that happening at all. I think theyll go up significantly. Before we let you go, mark, Chris Collinsworth over the weekend, a bunch of high profile figures in sports, says the president should apologize should he . The president s not going to apologize. The president should read a book. Are you kidding me just read a book. Just chill. I know its crazy to say about our president , but look, these topics, hes been talking you can search on twitter from real donald trump just put in nfl and youll see over the years hes been bringing up these same topics about too many flags and not enough hits for years. Its not new to him because hes president. Hes picked on me. I cant even count how many times on twitter. Look, if hes going to dish it out, hes got to be able to take it. I dont expect him to apologize, but, you know, if this is the new presidency where our president wants to mix it up and obviously he does, whether its north korea, god help us or sports or me or public figures or anybody, then this is the new world, this is the new reality we live in and that makes him fair game. And i dont think anythings going to change one way or the other. This is who he is and if youre on team trump i dont think youre going to turn your back on him. I think youre going to support him like youve got some folks there in the morning come hell or high water theyre team trump thats just the world we live in and we just have to accept it. Hes not going to change. Thats just the way it is. Tribal politics, mark, thank you so much for your time. I call it trump politics not tribal. Next time, Autonomous Cars, mark. You got it guys. All right. Mark cuban. Still to come this morning. The well explore what it takes for investors to embrace some of the companys new products. Take another look at the premarket. Dow have almost 1,000 points exactly for the quarter, 999. 96. Back in a moment. I count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. Livestreat the airport. E sport binge dvrd shows while painting your toes. On demand laughs during long bubble baths. Tv on every screen is awesome. The Xfinity Stream app. All your tv at home. The most on demand your entire dvr. Top networks. And live sports on the go. Included with xfinity tv. Xfinity, the future of awesome. Apple shares down in the premarket after falling 5. 5 last week. The dow component now down more than 7 . It is the worst dow stock for the month. Jim . I really like his work. Talking about lowering the estimates to the iphone, the 10, the x and a lot of it is just kind of what i regard as being because youve got a november launch for a second phone and i think that whatever apples doing should be viewed as being a 2018 store. If you can just shuffle numbers and take numbers before and numbers after and the reason i say that is because there is no change in where receive va thinks the stock can go i understand that people are confused and its going to be flected on all the part suppliers. This is last weeks story and its got some legs for maybe a couple more days and people are going to say, wait a second, why am i selling a company that for its own fiscal year, its going to earn 11. 19 theres a notion that all the f. A. N. G. Is too expensive, but i still prefer this to owning some of these cyclicals and to the oils. And a lot of people would want to x out 250 billion in cash, where are we roughly there to get your tumult what can i say . Talking about 530 million market cap, thats cash. I dont want to sell a company, my we be send out a newsletter we upgraded it. Dont sell a company that next years going to have a really good number just because its got some problems with the next 30 days but thats very wall street oriented. Wall street has wanted to trade this thing endlessly. What a great reason to get people to sell it at 148 and buy back 156. This is a traditional time honored trade that the analysts have given you. Its tough to tell you where youre going to buy it back and no offense to jim, because jim did the right thing. He kept the price target and he correctly gives you the narrative but i am not going to want there are two companies that are lower multiple than apple, gm and ford and if you want to swap out apple for gm because of Autonomous Cars i think the apple phones are going to happen before we see people sitting to the right where you going to sit with autonomous. You sit in the back . You going to watch make phone calls . Yes. Its going to be the fourth screen, youre doing to be sitting back there with your giant screen doing all sorts of stuff, youll probably do a show from the back of a car. We got to go. I feel like we should go. Thats someone in myar e saying go. Were back in just a minute. Is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Lets get to a delayed mad dash but always worth waiting for. I want to talk a little target. Yeah, david, this is one theyre raising the minimum hourly rage to 11 bucks. Now remember when walmart did it they went to 9. This is 49 states. This is going to happen in october. They intend to increase the minimum wage to 2020. They reaffirm guidance because everyones so worried about retail sales, but no, People Center on the fact that targets going to pay up. Remember what happens at these retailers whether be target or walmart. They have a hard time retaining people. Onethird costco has always told me that onethird of walmarts cost go to training which is dead weight loss so i think this was good news but i understand the market still hates retail. The market hates retail, still digesting the costs of that. Walmart, though, is benefited from their decision a few years back, when you went down and originally did an interview about their decision to raise wages. Took their lumps early. They did. And now theyre stock got hit and now its doing well. People are shortterm oriented. Despite target reaffirming what really happens here, what really happens here, they retain more people and you know what ford motor, henry ford paid his people more and were rebounded positively. I spent a lot of time in a walmart this weekend. I know my wife is furious. I went aisle by aisle by aisle. A lot of time were you looking for something or just doing research the place was packed. I bought things that i had absolutely no use for because they were so cheap, and i found a thing of cheese balls that was this big, i think they paid me. At least youll eat those. Its a lot of stuff that ends up in a landfill thats unfortunate but those youll consume. We did get two upgraze of under armour today. I still consider this group to be two too many players, too many people trying to get you know what . I bought albergs this weekend. This is one of those direct to cooper, they just had a really big financing. They made it really easy to get through. I bought them because they looked great. A buddy of mine owns a pair. Direct to consumer is bad for these stocks and its happening. Whats going to turn under armour around . Its below 7 billion in market value. I mean, he was celebrated as a hero for quite some time. Because he was a renegade and adidas came out of nowhere and brought back stan smith and most people dont know who he is. Having grown up in forest hills imaware of who he is too. Yeah. Yeah. Exactly. Good point. Thank you. Wood racket, by the way. Remember don bunch . Thats going back a ways. Bunch is before my time. He was a great hedge fund manager. Lets get to the opening bell. S p at the bottom of your screen, asset manager and the nasdaq, a race Water Purification based in china celebrating its recent ipo. You guys are talking proctor and this new letter now from nelson pelts. Look its a big story, obviously, because its a major consumer products. Theres a lot of analysis and reanalysis of data. I felt it. Nelson peltss critique of the mistakes of the proctor or the lets say the assertions of the proctor rye post made a lost sense. Particularly to share holder returns and comparesons. Thats what we put in front of pelts when he was with us. I feel like i ambushed him. The people who calculated the plus 4 are adamant that that was a rigorous way they do. Three out of 50 things they will say, maybe they were a little bit incorrect but the other 47 were just fine, every point p g made. They admitted they made mistakes and heres nelson pelts, i throw him this document, youre up four. Well, no. I get the document 20 minutes before. This is not going away and this is the biggest proxy fight that ive ever seen in my career. Really . Even though its over one guy . But it is a really important company, no doubt and theres such a battle going on in terms of how its run whether it can be run in a different way. Win or lose, that battle may continue. Well, you know, david look at what paul pullman did today for unilever. He bought a company thats a cosmetic company in korea. If you look at fra freda has done, with cosmetics, you know. Right. If this is the hottest area to be in, so i think that estake lauder and unilever buying small brands. Peltss biggest theater and just goes after the young ones. I spoke to clay dowdy last week who was adamant that there was a strategy to grow. They scrapped that strategy. They got a new strategy. They scrapped this and that. They do a lot of scrapping. Its funny. We spent a lot of time on p g for good reasons. Nestle we havent spent as much time on. Dan lobes owns as much as nestle and trying to pressure nestle to do some things and tomorrow the company has a big investor day. Its the ceos First Investor seminar, so to speak, that hes done. Will they announce a merge in target is a question for nestle . Will they talk specifically about a return to midsingle digit organic sales growth within the next few years and will they address the stake in lorial, the 94 loreal. Owns about 33 but nestle owns a good large stake and of course has been under pressure by mr. Lobe to sell it, to dispose of it, to reallocate the capital from that and to what they believe would be more productive means. Tomorrow well get a decent snapshot from nestle. Since you brought it up, between toshiba and Western Digital and nestle, we have im not saying weve abdicated, but theres the giant giant Companies Overseas Largest Company in europe, right there, nestle and we got a u. S. Investor going after them. It is an important story. Like samsung. Another one. We had a lot of packaged Goods Company that stocks fell badly last week on the heels of general mills. Cereal worldwide partners. Thats right. With nestle, correct. I think that europe is just doing terrifically, theres a stimulus package that was very small out of japan. We have to continue to focus on these markets because when we hear our earnings, i think our earnings are going to be heavily driven by currency in a positive way so a lot of stocks being sold right now, international stocks, when you go over apples conference call, three calls ago it was about currency and it was about how much theyre being heard. Guess what these numbers could prove to be low even with an apple change of phone. Thats why weve seen at least on the price targets increases because of what currencies have done this quarter. Its been fantastic. No longer will you have to say if you back out currency no. Currencys fine. Constant currency. Cc. Now cc is ca morz. The focus of many of these activists in the case of mr. Lobe and mr. Ackman and to a certain extent with adp, improve margins by cutting cost and the like but they make a case for far higher margins with all of these companies i just mentioned. Whether or not theyll be successful, who knows in terms of their attempt to either get board seats or pressure management. What do you think about ge . Ge flanry corporate jet, sells the division that i had always thought it was important, industrial solutions, not supposed to do anything until november. Hes not waiting around. Hes not waiting and he cant wait. No, no. Ge cant wait. Ge had a lot of others. I do think that this guy flanry, i mean, he may seem like a real nice guy but im getting the sense that he understands that these analysts he wants to make them look bad. I think he has the fire power to do it. Hes moving on all fronts is what i hear as well. Still the key question again back to try anne whether theyll get a board seat there. Did you notice the calculation of the ingersol performance . No, i didnt. So what alls fair in love and mistakes. Thankfully we only have couple more few more weeks of the p g battle. Are you going to switch to some unilevers products like kensington mustard i didnt even know they had a mustard. No kidding. Yeah. What do you use in shampoo shampoo i dont know what the name of it is. Do you know what the wife signed up for . What. Dollar shave company. Thats unilever. Hes iconic. Ive used it for years, actually. Who curses more, dubin or the president . Son of a i remember growing up that if you used that word it better be a dog. You saw what kaepernicks mom tweeted, i guess that makes me a yeah. Thats not nice. I had him in my fantasy a couple years ago. Sorry. Mentioning anything in the context of football. Outside the lines is some where important. Sorry espn. You guys mentioned ge, facebook, though, guys along with the rest of f. A. N. G. Is under pressure yet again. This the Washington Post story long piece about how they essentially discovered russian interference in june of 2016. Theyre getting people from the Obama White House saying we tried to warn them and it sounds like from the piece youre getting old facebook executives saying fbi never came to us with their information and a lot of mixed signals. And in a change of heart on a different class of stock. Reclassification. F. A. N. G. Is under fire from everywhere. Not since soupy sales. Facebook is under fire more than f. A. N. G. Facebook is theyve got capitol hill on them. Theyre europe is focused on them to a certain extent. Thats what happens when you do really well. People out of facebook into gm. Its hard to imagine you do that for a long period of time maybe until the next earnings and everybody realizes that its not effecting cash flow. They are going to have to spend more money one would think on these various efforts to make sure they actually know whose buying advertising. Proctor and gamble. You dont think advertisers have concerned about brand safety. When you look at one of these fights again, 125 million that proctor took out of online spend. They have a board member who worked at goog who was involved in that business and if they tell you offline, they didnt want to be next to some of this content that some people would describe not them as cripto nazi. For the first time perhaps people are really recognizing the power of this platform in the sense of beyond what we talk about, but in all aspects of peoples lives and that theres starting to be a conversation about that. She starts writing about this stuff thats getting more look, i had the greatest time in the world but my step kids were like incredibly worried because there i was, admittedly i wasnt overserved and everyones taking pictures of me and youre just thinking, i got to be like the best guy in the world because, man, everything you do is being recorded. And it didnt happen. If no one has a cell phone, it didnt happen. If you have a cell phone, youre dead. It happens to Airline Pilots and flight attendants. Thank heavens i sank browns. Real quickly on the reclassification of facebook. We should point out zuckerberg will still have control of this can. The stocks getting killed, david. Thats true. Keeps going down. Hes got more of a problem because he cant make the contributions that he wanted to its not a nonprofit. Its time to be in sherwinwilliams and sell netflix. One watches paint dry and the other one is exciting but who cares. Narcos 70. Apples a lag guard today but the dow is essentially flat. Lets get to bob pisani. So lets take a look at the sectors, energy is the Leadership Group right now and this is got some legs here this Little Energy rally when i pointed it out at the beginning of last week, a lot of people said we had our head handed to us all year twice trying to buy oil at the bottom. That high negativity and the rally keeps going. Thats a strong argument right now. Consumer staples a little better. Remember how awful it was last week. Materials which is a Leadership Group not doing much and tech another Leadership Group so were getting a little bit of this rotation that weve been talking about. One of the reasons the markets been so strong all year so if you look at the dow stocks, the lagerds all year, they have been theLeadership Group. General electric which has been on a slow dis sent all year down 25 or so, it too is one of its periodic upswings and United Health has had a great year but down 3 . Apple had a great year but down 7 so far in the month. Its down another 1 here today. If you look at tech today, this rotation idea with the sector leadership, all to the downside so facebook, nvidia, broadcom, advanced microand theres apple down 1 . If you take a look over in taiwan, i dont often bring up the apple links trading in taiwan. Thats down and Catcher Technology and pegga tron as well. Im not sure that is the right one for foxconn but take a look at some of these stocks. Down almost 10 for the month now. This is where the month to date that you see as you see moving through the downside there. Catcher is another one. They make Computer Components as well. They also list over in taiwan. Theyre moving down more than 20 so far this month. Peg atron, theyre also down 16, 17, 18 this month as well. Of course when concerns about the apple products theres a report in diggi times, to slow down with the delivery of the iphone ten. Weve been trying to figure out the economic effects of the storms. Car mac said they closed six stores in houston. They cut their fiscal guidance on the hurricane. I think importantly they dont expect storm damage will affect the preliminary fiscal year 2018 guidance. Thats good news. I think thats one of the reasons the stock isonly down fractionally. The Home Builders have had a great run just off the highs for the year. Look at kb homes sometime later this week. The dow, down nine points. David back to you. Okay. Thank you very much. I want to come back to the story we brought you last week, those continued talks between sprint and tmobile designed to create what would be the Third Largest wireless carrier in the country. They continue pace. Theres some reporting out on friday thats worth revisiting. Not my own. Involving where things stand in terms of the conversations between the company as they try to settle on an exchange ratio. What i can tell you is this, the intention was and continues to be that this would be essentially an at market deal. The two Companies Stock prices have adjusted a bit as a result of our reporting of vigorous talks between the two. Sprint went up more percentage wise than tmobile did but they entered this discussion with the expectation of an at market deal that would refleck that and that continues to be the case. What do you end up with, mostly sprint minority ownership along with soft Bank Ownership of sprint representing lets call it mid30 to perhaps high 30 of the overall competition of tmobile and sprint. The germans which controls tmobile wouldnt be a majority of the shares outstanding but it would be essentially a control position. They would still consolidate that on their Balance Sheet and it would be an all stock deal, no separate deal for the minorities. Theres no cash involved. The synergies are thought to be enormous but theyll get a better idea of that because theyre now beginning Due Diligence and in the couple of weeks ahead that is what the key is going to be then they may come back and final the exchange ratio, get it all essentially done at least seems to be the plan by lets call it the third week of october is where they are focused in terms of being able to make an announcement and as we told you last week, john ledger would be the ceo of the combined company. The question then will be, if they do get to the finish line, as seems likely at this point. Wow. Yeah, likely. Really . Yeah, yeah. Then jim and carl the question of course becomes ante trust which is one that you and i batted around for years, we all have in terms of what the approach will be. I think the two sides will become more communicative in terms of why they feel fairly positive about their ability to actually get this buy regulators, both the federal Communications Commission and perhaps more important the department of justice and its staff. And ill be all ears to hear what their thoughts are when it comes to that. There is no doubt the synergies are enormous, the costs that can be taken out when you bring two networks together. Ledger of course we know would potentially benefit from a far larger footprint. But whether or not the regulators will allow it to happen if and when they get to this deal for the all stock merger well be talking about will be the question. Tmobile will be for sale no matter what, though. What do you mean . Tmobiles in play. Im saying that theres going to be some sort of combination some where. Lets say that google and alphabet want to get in this. I think the germans have made it clear that they would continue to like to have a significant exposure to the u. S. Wireless market and the way they do that is through tmobile. So theyre now interested in selling. This has been the best performing asset they have. Absolutely. Im just trying to figure out if not sprint then who . Im saying theres going to be a deal some where. Possibly. What weve weve already talked about, not charter and this is the likely deal, again, at least to get papered as we say where they all sign on to it. Whether or not the regulators sign off on it i think will be the question we may be talking about lets call it a few weeks now and hopefully well have john ledger on, maybe marcelo will join us. Well ask them all about it. They still got Due Diligence and a bit more to go. This is another reason why its so hard to bet against this market. I thought that thing was going to die on the vine. Its not dying on the vine. F. A. N. G. s week although apple seems to be stabilizing. We got an all time high on the russell and we havent done that since the end of july. At t and verizon have started going at it. Thanks for the support. Take it from four to three. Exactly. This is really important. I wonder why antitrust looks at that and say why is that good for the consumer. We got to stop there on this and lets get a check in on the bond peets. Rick santelli. Reporter good morning. It just changed. If you looked up at the boards about five seconds ago, twos and tens at 225 and 30s were at 278. That 279 represents the only maturity that is an unchanged on the day, completely unchanged. Weve talked about many could argue whether technical are important but it certainly looks like weve completed a cycle in treasuries which means its kind of happy right here and the market certainly looks like that. The other thing thats most note worthy, you see that big rise that we had, that of course was fed wednesday and were still within that established gap range, 23 to 28. Thats important. Sometimes we go back and trade those thin areas, but maybe the other part thats important is we havent traded at all above it. We want to Pay Attention to that. As you look at boonz, effected potentially german election. Theyre below theyre gap higher opening and closed at the time of our fed meeting. Ill tell you its hard to pick on that chart they had an election but if you do look at the currency issues, whether its one week of the euro versus the dollar, euro versus the yen or the pound, there is a bit of weakness on all three but once again its pretty hard to peg the channel exactly but it may have been effected a bit by the election and finally, how does all that translate dollar index looking okay. Up about a third of a cent today. Awfully close to the lows but is trying to put a little distance there. Back to you. Well have john clark at 10 40. Sounds good, rick. Still to come a different perspective on the nelson pelts p g proxy fit. Gh dows down 23 points. Dont go away. Already clarif hi, im the internet you know whats difficult . Armless bowling. You got this, jimmy you know whats easy . Building your website with godaddy. Pick a domain name. Choose a design. You can build a website in under an hour. Now thats a strike get your domain today and get a free trial of gocentral. Build a better website in under an hour. I love you in addition to the dow and the nasdaq and the s p, keep your eye on the russell. The 2000 hits a new all time high today for the First Time Since july 25th of 1452. 89. Back in a moment. whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. thank you. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise basically saying, look, lets not forget this all priced business and why do i like this so much because all price is the winner as you close stores. All that merchandise goes to them so dont give up on retail, please. Retails okay. Well see you tonight, jim. Thank you, guys. Mad money at 6 00 p. M. Eastern time. When we return William Johnson on this proxy battle between nelson peltz and p g. Dow is down 12. Another day at the office. Why do you put up with it . Believe it or not you actually like what you do. Even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. Every year we take a girls trip. Blockchain to help remember nashville . Kimchi bbq. Kimchi bbq. Amazing honky tonk . . I cant believe you got us tickets. I did. I didnt pay for anything. You never do. Send me what i owe. Ive got it. I mean, you did find money to buy those boots. Are you serious . Is that why you dont like them . Those boots could make a unicorn cry. Yeah, tears of joy. The bank of america mobile banking app. The fast, secure and simple way to send money. [he has a new business teaching lessons. Rodney wanted to know how his business was doing. So he got quickbooks. It organizes all his accounts, so he can see his bottom line. Ahhh. Thats a profit. Know where you stand instantly. Visit quickbooksdotcom. Of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Good monday morning. Welcome back to squawk on the street. Take a look at the markets here. Some muted action on the overall indices which we havent done since the end of july. Our road map for the hour begins with wall street preparing for a busy week. Taxes and health care both on the agenda. Well take you live to washington straight ahead. And the president taking on professional sports calling for a football boycott going after nba champion steph curry. And china issues a new letter as that push to get peltz on the board continues. Well speak with the former ceo heinz who did engage with a nasty proxy battle before they all made up. This morning, the dow opening lower for its third consecutive day. The last three day losing streak hitting back in early august, still stocks arent too far from record highs. Apple the worst performing dow component this month. Now down over 7 . Were joined by toe buy as the russell 2000 index set a record high. The dow, s p and nasdaq are close to record highs. With the small its highly tied to whats going on in the dollar. The dollar tends to strengthen where it can have a real impact. Large caps being more global exposed. The german election, weakness in the euro and disappointment about merkels margin of winning and the far right party entering parliament for the first time. We have a japanese snap election. So clearly the Political Uncertainty abroad is still there. Does it impact u. S. Stocks it does and that Currency Movement on the small caps. There are still other issues in europe. The italian elections that are likely to come will be potentially much more disruptive as you see coalition of the parties trying to move away from europe and those are more important right now. Im not going to, you know, say im an expert on german elections and im learning all about the Jamaican Coalition all of a sudden. New zealand also over the weekend. New zealand had a non if you want to call it nonconclusive election in terms of minority governments. But theyve done it before. Its not the end of the world. Its more about a Interest Rates and common trends. Youre seeing bond yields edging up a little bit, shift in the rotations which are very normal. Value beats growth and thats very typical. The market is ahead of itself right now. Possibly on tax legislation and what it could do to earnings. What degree is it ahead of itself and what do you mean when you say that very little, 1 , 2 . Theres no reason for earnings are relatively good. Well get something messy a little bit with the hurricanes in terms of some of the data but i think markets typically look through that because they know unfortunately theres going to be a rebuild effort for a lot of people who lost a lot. We had a discussion last hour to the degree that which people fretted about currency a few quarters ago, are they now going to appreciate currency in a reasonable amount . We thought at the beginning, the people who had gotten a little bit too excited about the dollar, primarily because theyre looking at bond yields going up but they werent looking at it relative to something else. Go back last summer, when the yield is 1. 3 . Now its around 4. 5 and the u. S. Yield 2 or and that explained why the euro was doing better than the dollar. People have gotten too negative on the dollar now. The reverse of that trend we saw at the beginning of the year. I just hear it when i talk to experts. I was in europe two weeks ago. Thats all i heard dollar, dollar, dollar questions and its a concern for european stocks particularly if they translate back their earnings into their currency. It hurts their numbers. And europe is avery export sensitive economy. We are very import sensitive economy. Is earning season being underpriced because of what currencies have done we had a 24, 25 target for the s p this year. We said theres a 1 to 2 higher number if the earnings are positively effected bit currency. We still think thats plausible because of the currency but it is like 1, 2 . Which brings us to the bigger question about the status and the health of the trump trade, part of it was that strong dollar which is completely reversed. Were expected to get another framework for tax reform on wednesday. So a lot of the trump trades that we saw surge from november started to rollover back in february and thats out of the market and thats why i think most recently some of the news about a potential tax deal is creating some new excitement about what this could mean for earnings for 2018. To give you context. We have 129 earnings this year being helped along by energy, materials showing better numbers. Exenergy have been growing about 5 . Next year if we dont get tax benefit, youre only looking at 4 or 5 earnings growth. What do you mean if youre getting Corporate Tax . If each 1 is about 2 a share in earnings. So if you can get another 5 Percentage Points versus 25 in theory it would be another 10. 30 , is that really the average rate that most corporations pay right now no, nobody pays 30. Nobody pays that. Some do, but the average im not going to bring up the leo leona hemsly thing. 25 to 27 range. Getting it down to 25 only gives you one or two Percentage Points on tax benefit if you get it to 20, that would be much more significant. Let me ask you something else, this continued escalation of tensions between the north koreans and our country. As a strategist, im sure you get asked, is there a strategy to play Something Like this or you best off ignoring it hide under your desk. There really isnt. Nothing ever happens. I talked to an investor once thats consistently bearish, what would make you bullish . And he said peace in the middle east. So worrying about a geopolitical event is fine. You can hedge it if you want. You can buy gold and you can do things but it costs you to do thosekinds of things and i dont say it never happens, it rarely happens that a geopolitical event becomes that and usually its not the things were worried about, its the things we werent paying attention to. Not the things were constantly focused on. How significant is oil above 51 so energys one of the areas weve argued is benefiting from that bond yield movement and bond yield seasonally go up so you get that benefit without necessarily saying, i have a clear view of the gdp view, i have a clear view of currency moves or anything like that. I think Oil Moving Higher is more also function of the industry starting to pull back. We did a cap exstudy weve already seeing the companies pullback a little bit this year. Now its in the mid40s given that oil isnt where they thought it would be. Its certainly helping the stocks today. Always good to check in with you. Chief u. S. Equity strategist at citigroup. Thank you. When we come back, the president versus the nfl calling for a football boycott as more players take a knee, plus stry and issuing another letter. Well talk to the former ceo of heinz bill johnson. Dows down ten. Dont go away. Hey youve gotta see this. Cmon. No. 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. The president taking on the nfl blasting the league for allowing the players to protest the National Anthem. Our erik joins us this morning with all the latest. President trump on friday night said nfl players who do not stand for anthems are sobs and they should be fired. Nba champion steph curry was no longer welcome at the white house. That started all kinds of reaction from sports. Statements against trump came from team owners, players, coaches, the League Office and the players union. Nearly every game on sunday saw some version of anthem protests. A mix of kneeling, looking arms, sitting on the bench or some teams stayed in the locker room all together. Nfl owners donated millions of dollars to Trumps Campaign and several of them sided with their players this weekend, including redskins owner dan snyder, also the patriots robert kraft and Chris Johnson who is now running the jets because his brother woody is the brandnew uk ambassador. It went way beyond football. Many nba players responded. The protest spread to baseball we also saw responses in hockey, nascar, College Basketball and the w nba on both sides of the issue. The president has responded on twitter almost 20 times since yesterday, even as much as recently this morning. No word, though, from Major Corporate sponsors. Weve reached out to several but we have not heard back. You can look to ceos quitting the White House Councils after charlottesville as an indication for how quickly companies will react if the heat gets turned on them. Back to you, carl. Weve been down that road before. Thanks. The nfl is struggling of course to right the rating ships and overnights shows viewership reportedly down about 4 across the networks. Nbc said its night broadcast was the primetime. The president now saying the nfl fans could boycott the league because of player protest. Billionaire investor and dallas maverick owner joined us last hour to weigh in. Heres what he said. Were working actively to connect with the community and he doesnt seem to recognize that theres so much more to what teams do in the community and we are involved in politics at some level just to get those things done. So why even comment without knowing what youre talking about . Joining us this morning, michael zani and its good to have you back. Good morning. Thank you for having me. Just to clarify the ratings picture, sunday looks down but if you include certain days of the week, theyre actually up year on year. How would you describe it to someone whose not watching them closely . After peaking the ratings have dipped the last two years, the declines are modest. I would surmise them to be in the high single digits, the networks are paying over 5 billion for the rights to broadcast these games, last season they had to make make goods, this year theyre estimated to probably cost the broadcasters 200 million. So the trend is not good for the nfl. Tv is its bread and butter and the trend in that area is bad. Cubans point to us in the last hour was that owners and the league have not been good at advertising, at least cubans view that watching a game on television is the best viewing experience. Would that pitch work at this point or have we already crossed over to an era in which amazons about to show us how it can be done definitely more is going toward streaming no question about it particularly with the younger demographic. Still nfl owners know that free tv and the networks are the most important area. These contracts with the broadcasters with the espn run to 2021 and with nbc, cbs and fox to 2022 so they still have a few more years left which are very important. What youre going to see within the next couple of months is a new thursday night package. Itll be very interesting to see how much of an increase the nfl gets versus the previous deal. Mike, this is such an unusual and probably very uncomfortable spot for some of these executives within the nfl. A lot of statements yesterday. This morning, they come in into the pr war room, any sense of what those discussions are with regard to the owners and broadcasters and the members of the league i can tell you what a few team owners have told me over the past week. Now this is prior to president trumps comments this weekend, but even before this weekend, they were concerned about the ratings and theyre concerned about the impact the protests are having on those ratings. Im not here to tell you whether players have a right or do not have the right to protest, i am telling you that the protests are definitely hurting tv ratings and this is something that the nfl owners are definitely concerned about. So do you think its going to get worse now that the president has pretty much called for a boycott of the nfl does not crackdown on some of these bending the knee protests . Ironically they may have come up to what may be a solution to the problem, which is i think what really ticks off a lot of viewers is when the players take a knee or lets say when they raise their fist after scoring. I dont think linking arms, which we saw a lot of this weekend standing there during the anthem is something that disturbs fans certainly not to the degree that kneeling does during the National Anthem. So in a response, in a response to the president s comments, the linking of the arms may actually help the situation. We did get some comment from an nfl spokesman this morning. When it comes to the president s mocking of the safety initiatives, joe lockhart said these remarks represent someone who is out of touch and really does a great disservice and then they went on to say, one thing the league will not do is discontinuing the anthem before games. Are you surprised at how direct the nfls language is back at the white house . Not, not really because the nfl has been in defensive mode about this and, in fact, they havent really come out with very strong stances in terms of what they would do as a league and just prior to this weekend, we actually heard the commissioner come out and say, you know what . We actually perhaps want to see more social activism by the players. Ironically, thats the wrong message in my opinion in terms of tv viewership. A lot of people watch football because they want to get away from politics, no matter what the message is. They dont go there to watch politics. They go there to be entertained so when you throw politics into the mix, youre going to lose more viewers than youre going to gain. Were going to find out what the what the path out of this is, if there is one, whether or not maybe, mike, maybe all teams become the steelers this weekend and try to avoid this confrontation all together. The steelers were booed when they came out of the locker room. I think anything that goes that is viewed or per received to go against the National Anthem will hurt them. Analysts on wall street are now saying if the trend in viewership continues, theyre going to trim the earnings of the networks in aggregate by 200 million. Thats going to send a very powerful message to the league. Mike, with forbes, good to see you again. Thanks. Thank you. When we come back, passing the trump agenda. Tax reform and health care both in focus as washington gets ready to a busy week. Taking a look at stocks this hour. Its down a third of a percent. The dow just pops into positive territory less than a point higher led bhoy me depot. Squawk on the street will be right back. Whoooo. Youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if. There was a single site. Where you could find the. Right hotel for you at the best price . There is. Because tripadvisor now compares. Prices from over 200 booking. Sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. Investors have to get ready to digest a busy week in washington. Gop senators are focused on health care and of course the highly anticipated tax reform plan or at least parts of it expected to be unveiled this week. Iman javers is live in d. C. Good morning, david. The president s facing a narrow window on health care and a slightly broader window on tax reform as he looks to advance two of the key priorities of his administration. Start with health care. The president s already lost two votes on that proposed new Health Care Measure that would repeal and replace obamacare. Hes lost the vote of senator john mccain and rand paul of ken both saying they are knows on the bill. Thats the number that the white house can afford to lose. Any more and that bill is dead. Were expecting to see the cbo report on the bill come out and tell us how many people might Lose Health Care under the bill and exactly how much it will cost. That effect the debate. That could come as early as today. No guarantees that we do see it today and on tax reform, a myriad, a flurry of events here early in the week leading up to wednesday when with were expecting the president to roll this out with a major speech. The house ways and Means Committee is holding a discussion today. That tax reform speech is going to be on wednesday as well. We believe that the top individual rate under the new proposal will be about 35 , the lowest individual rate will be about 12 and on the corporate side we think the white house is going to go with a 20 Corporate Tax rate, thats higher than the 15 that the president said he wants but seems to be a nod to the mathematical difficulty of lowering that rate any lower without exploding the deficit. So it looks like the white house is on track to roll that out on wednesday and well wait for more details on all the deductions and all the changes inside the tax code that of course are still key to the political maneuvering that helps get that deal done or not done later this week, david. Real quick on this Graham Cassidy effort. Susan collins is likely no. Ted cruz also potentially but changes to the bill itself. Any updates for us this morning . Susan collins is the one to watch here because shes the likeliest no vote. If she became the third no vote that would doom the health care every. She might be waiting for that cbo report that i was talking about to give a sense of what the costs are here before she declares whether shes going to support the bill or not. She has said a lot of things over the past weekend that make a lot of people put her in the noish camp for now. Well see where she lands ultimately. Thank you in washington, d. C. You bet. Joining us now former economic chairs and lonny chen director of domestic policy studies and former policy adviser to the romney campaign. Thanks to both of you. Austin, ill start with you on tax reform. Any expectations this week in terms of what well see . You just heard the reporting. 20 on the corporate size. Going to have legs i dont think its going to really it depends how you define legs but i think the basic problem that the trump folks have had so far on health care and now on taxes is they seem to feel like if they just issue some Details Congress should just do what they say, and what theyve described thus far will cost 2 to 3 trillion and i dont think they have the money to pay for that and anybodys whose taxes would go up topay for it is going to scream bloody murder. I think this specific plan probably does not have legs but its going to open a dialogue. Right. A dialogue, the key. Lonny, what are your expectations things in terms of this week that we should Pay Attention to i think well learn first of all if the Health Care Debate is going to continue or not. Theres been some discussion about whether september 30th is really the deadline that republicans will need to abide by on reconciliation. To use that vehicle, that fast track vehicle to get health care across the finish line, some republicans, like ron johnson of wisconsin are saying, why dont we take another crack at this in the next fiscal year. Why dont we come back to health care i think the challenge with that is its going to pa lieutenant the well on tax reform. Republicans may have to make a choice this week, about whether they come back to health care again or whether they really devote all of next year to working on tax reform. Well get resolution on that question this week. Weve been focused, austin, on the Corporate Tax rate coming down and where that level settles at, the individual tax rate, where are they offsets going to come from what do you think is real estatisticly in terms of trying to balance that. Nothing is realistic. When you say how are they going to pay for these, that cost 2, 3 trillion, just the things that theyve outlined so far. Any time youre going to go raise 1, 2 or 3 trillion of taxes on anybody, theyre going to notice and theyre going to really object and the problem here is, we havent set the stage the way we did in say 1986 where it was two years of laying the ground work for what the choices would be and building up momentum for making some tradeoffs. We havent done anything like that. So i actually think whats likely to happen is like what happened with the border adjustment tax where they float some trial balloons, well get rid of the state and local deduction, well maybe we could tax health care as if it were income and theres going to be as soon as anybody hears about it, theyre going to be really upset and back away from those and try to float some different ones. In terms of trying to influence public opinion, im struck by how consistent the message is in interviews, in advertisingments of its 30 years old the tax code, 30 years old, like its a lawn that hasnt been mowed in 30 years, is that effective . Well, i think its effective with the Republican Base. I think the Republican Base looks at the tax reform effort as something thats long overdue certainly on simplification. I think Many Americans are frustrated by the tax code. I think it appeals more broadly potentially but the challenge really here tax is a difficult issue to message. Fundamentally its a difficult issue to message, its a complicated issue. Well have to see what the white house ends up doing and they will go straight up to tax cuts because at the end of the day thats a lot easier to explain than lower the rates and broaden the base and all the stuff around tax reform that economists love but people may not be able to relate to. Speaking of that, though, austin, are we going to be left with that age old debate at this point . Theyre doing to talk about dynamic scoring and 3 gdp growth. Therefore being used obviously to offset the declines in revenue otherwise. Arent we going to get back to that basic argument that weve been having for the last 25 years . Yeah, at least 25 years. Probably more than that. Yeah, since reagan. I think the only issue is, if they could rein in their ambition such that it added up to say less than 1 trillion, then they could use accounting gimmickry, arguments about dynamic scoring and say no, no it wont cost money. But what theyve described thus far is so big that theres no way, even if you assumed unrealistic growth, even if you assumed massive they cant pay for it and i think theyre going to discover that. Theyre going to be frustrated by it. All right. Well be watching closely to see what details we really get as this week unfolds. Thanks to you both. Thank you. Thank you. Lets get to sue herera this morning and get an update. Morning, sue. Good morning everyone. Turkish president in erdogan in response to the iraq on independence from baghdad. He says kurdish independence is unacceptable to his country and that say matter of survival. Angela merkel wing a fourth term. The nationalist party that surged will not have any influence on the countrys foreign, european and refugee policies. One inmate is dead and at least nine injured after a large scale riot broke out in a prison. Multiple inmates sustained stab wounds and were taken to outside hospitals for treatment. No prison staff were injured during the riot and no deadly force was used. And take a look at these pictures. The European Space agency has released these images of the aurora borealis. The phenom nop occurs when protons and electrons collide with atoms in the upper atmosphere. Beautiful. Youre up to date. Thats the news update. Thank you. When we come back the former ceo of heinz bill johnsons with us. Well get his thoughts on the proxy battle. The latest episode of bing is on cnbc binge. We should just be what weve always been. A sad middle aged lady. And grace. How about Jared Kushner yeah, yeah, id like Jared Kushner to be sitting in a gay bar with jack and will. 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. Proxy battle. Reiterating its calls for nelson peltz to join the depends board. It has a plan and it doesnt need the distraction of adding pelz to the board. Were joined now in a cnbc exclusive interview by the former ceo of heinz bill johnson who had his own proxy fight about nelson peltz just about a decade ago and is also now a try ann advisory partner. It was a nasty fight, proxy fight between you as heinz ceo and nelson peltz and what you learned in the process that could apply to whats going on with p g just an overall observation, to quote yogi berra, im watching this, our fight in my view was certainly much nastier. Try ann wanted five directors, ended up with two. What im learned in the process, was as nelson joined the board he became a value added wellliked good director. I think in context there are things that that both sides can learn. Im very empathetic with what proctors going through having been to it myself 12 or 13 years ago. It is amazing to me that as somebody who went through the first one, much more difficult i think than this one, that no one ever reaches out and asks me about advice about how one might respond to these things. I think nelson became a really good director. I asked him several times to stay on our board and he stayed for the seven years until we sold the company. Proctor said it reached out to former Board Members that were on boards of companies with peltz and they said the positive reviews were not forthcoming. Thats been one of the key arguments. Management and sort of takes control and occupies a lot of time. Trian pushes back hard and says nobody they spoke to was actually contacted. Talk about what it was like working with nelson on a board like you did it was fairly simple. Once you get by the sort of personal angst of the attack and recognize that its not personal, its about the performance of the business and the performance of the shares, then i think you quickly move forward. Ive always been built to look forward never backwards. I really didnt spend much time agonizing about what had transpired. I spent most of my time trying to determine how we could Work Together and how we could integrate him into the board and make him a productive board member and what we could do to improve the company. That process went much faster than i expected it to. It was a facilitated process whereby we provided lots of information to nelson and his team. They absorbed it. He came to the board meetings, prepared, asked very good questions. I think the process itself is much worse than the actual result certainly in my experience it is. Just for transparency sake, you were the representative for trian but youre not involved in this p g situation in any way, are you . Not in the least. Not in the least. Just as an observer watching the president and tv and smiling to myself as i said about deja vu all over again. For me, too. David faber having covered that battle pretty closely all those years ago. In this case, p g seems concern thatding mr. Peltz to the board will force a relitigation of their business plan, a new conversation about their capital allocations, things the board is unified on and made decisions on. What do you think . Is he voicegoing to be louder than everybody elses . No nelson makes himself clearly heard but if nelson buys into the culture of the board and the Strategic Plan makes sense and seems to be headed in the right direction, our experience was there were very few changes to where we were headed. He was very pleased with the results we generated and our overall performance and certainly the share price responded over the 7 years he was on the board, so no, i dont think thats fair. Having said that, again, i understand where the proctor people are coming from, but one director on a board is not going to result in a complete makeover of that board. Nelson asks very good questions, informed questions, sometimes very difficult questions but i spent a fair amount of time with nelson on the phone as an adviser asking him how he would handle certain situations and how i could move the board in a certain direction or so and i found him to be very valuable in that process. Not every situation is suited to an activist, certainly p g would say that. Do you think in this case, i dont know how much you know or dont know, that it is suited to an activist . Im not going to comment on that, david. Thats really for proctor and trian to adjudicate. Nelson would be a value added director. I dont think he would be a problem in the boardroom. He has to operate by the same rules everybody else does. My experience is that most activism is instigated by shareholders who voice an opinion about a concern either about the companys performance, the direction its headed in, the culture, or the share price performance. As a consequence thats how these battles come about. Its not just activists sitting in the back dreaming these things up. You have to keep that in context as you evaluate this whole process. Bill, is there a difference between peltz issuing recommendations that are centered on packaged goods in a sector he knows well and issuing recommendations about big, broad management structure, the kinds of things that get studied at Harvard Business school . No, i dont think theres any disconnect at all. I think nelson has been around a long time. Hes been on a lot of very successful boards so i think as hes absorbed how those board structures and how the management structures evolved over time hes learned some things that may be applicable. Im not close to this situation it might warrant at least the discussion. He had certain opinions in our management structure, some we agreed with, some we didnt, but i think that hes absorbed a fair amount over time and so do i think hes relevant in terms of that discussion, absolutely. And i would all due respect to the Harvard Business school, i would take nelsons perspective often times over theirs. And im wondering, if you could just do a little storytelling for us. Once he came on, do you remember the first big broad change that happened because he was there and how that went into practice . Its interesting because its not what youre going to expect. The firstest biggest broadest change that the directors came fully informed to the meeting and were very responsive to our discussions and our presentations with their own questions and theyre own sort of opinions. And so, i think he created a factual environment for the board to have discussions and he certainly engendered better discussions about the category because he had some expertise in it as did Mike Winestein so i dont remember anything specifically beyond that, but he really did create an environment that improved the overall dialogue among the members of the board. Not to get into too much of the nittygritty but p g did bring up mr. Peltz track record at heinz on the board. They pointed to this idea that the tax rate went down sharply during peltz estenure and that was the big driver of the growth and stock price at the time. Trian says the time frame is totally picked selectively and its not even true. Can you just set the record straight for us on that point and whether it does speak at all to mr. Peltzs tenure on the board and the outperformance of heinz during that time sure. Ill give you a couple of overall observations. One is that both sides tend to massage the fact to fit their narrative and theres a pit of revisionist history going on here. The tax rate did decline intentionally. We worked very hard and aggressively as we internationalized our business to bring that tax rate down. One of the misca charizations is our shares outstanding actually increased. So we did not manipulate earnings by driving lower shares. In fact, our shares increased by 4 or 5 million during his tenure on the board and while the tax rate did come down, operating profits grew nicely. The roic grew exponentially and we still generated 4 organic top line growth generating 32 consecutive quarters of organic growth which was extremely unique. So did the tax rate contribute certainly. Did better operating performance contribute absolutely. Did higher marketing spend contribute yes. You can take these characterizations and these facts out of sync and out of context and present anything you want but the reality was performed much better over the seven years when ultimately we ended up seg the company to warren buffet and capital. Thats where i wanted to pick up. Whats happening across food and beverage i know youre involved in some smaller faster growing companies. Youre on the board at pepsico. It seems like no matter how many small faster growing brands, some of these Companies Buy and we got another one at unilever today, nestle buying blue bottle, growth is just very hard to come by for these big conglomerat conglomerates, why is that its a combination of things. The innovation is focused primarily on extending brands and businesses that companies have as opposed to looking at it through unique lens of the millennials. I think secondly, theres been a historic tendency to focus on the trade, the retail environment as we know it as opposed to the changing environment we see whether its amazon or whether its ald did i or whatever it may be and i think the Small Companies have not been encumbered with a historical culture and traditional focus on what they do. Im chairman of a Yogurt Company where we are driving significant growth, averaging 50 analyzed growth over the last three or four years. We have a unique position and what happens is, a big company tends to buy these brands and the first thing they do is integrate them into their own culture and structure in an effort to generate synergies but without thinking about the knewances of how these businesses are run and the environments in which theyre run which tend to be more focused on entrepreneurs and tend to be more focused on the changes that are occurring in the environment. And so i think those are the kinds of differences. I observed this quite a bit now on the outside as chairman of two small food businesses. Well have to have you back on to talk about some of these big trends that we hit all the time. Thank you for now. Thank you, sarah. I thought the bengals were going to win yesterday. Bill johnson, the former ceo just cant stop talking football now. Yeah. When we come back i just know so much about it. Dows down 33. He number one dairy and apple producers in the eastern United States. Supported by innovative packaging that extends the shelf life of foods. And infrastructure upgrades that help us share our produce with the world. Here and all across new york state, were building the new new york. To grow your business with us in the finger lakes, visit esd. Ny. Gov. To grow your business with us in the finger lakes, im vern, the orange money retirement rabbit, from voya. Im the money you save for retirement. Whos he . Hes green money, for spending today. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Can i kick it . Yes you can can i kick it . Yes you can can i kick it . Yes you can well im gone one of this years best et performance etf tracks chinese internet stocks. Find out at trading nation or squawk on the street coming up. I count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. Welcome back to squawk on the street. Breaking headlines involving former congressman from the new york Anthony Weiner has now been sentenced to 21 months in prison for sending sending explicit messages to an underaged female all of this following the plea deal that he said he pled guilty back in may to these charges, but 21 to 27 months was what federal prosecutors were looking to get in terms of a sentence and we now learned its 21 months, so breaking headlines here, carl back to you guys dom, thank you very much for that lets get to the cme group in chicago this morning and check in with Rick Santelli and get the santelli exchange. Rick good morning, thank you, carl id like to welcome former ecb president johnclaude trichet. Thank you for showing up, i know you had travel issues and we have a time delay. Angela merkel, of course, looks to be have won a fourth term i was wondering if you would give us your thoughts, being youre on the french side, the second largest economy, what you think of that victory under the context of the last victory, strong euro, Monetary Policy changes ahead, and the whole notion maybe better shared growth among some of the Member States versus germany in the future well, first of all, its a pleasure to be with you, rick. On the election in germany, i would say first it is a victory. We should not forget that. Even if the parties of government are losing a lot of ground, and thats obvious its also obvious for the spd, so we have the shift that we have observed in many other countries, that being at the helm of the country today is certainly difficult and there is some kind of, again, punishment by the people. To which the extreme right and the right, which is visible also in many other countries, so we see a general tendency that is confirmed. That being said, the country won, and for the fourth time, so its remarkable, and again, the parties of government have seen the maturity of course, yet doesnt want to be part of the new coalition, so it creates a very, very potent change and we have to follow very carefully now what will happen for the new coalition, which is a concern that she doesnt want a big government, necessarily seems to me a coalition what they call the coalition. Well, mr. Trichet, were almost out of time and i thank you for your thoughts. Very quickly we see weakness against the euro, in a very short answer, were out of time, do you think there are any currency issues that can be gleamed at all from Angela Merkels victory . No, frankly speaking, i think that we have also to be aware of a limited reaction from the market in any case, the coalition, the negotiation of the coalition and the new program, we think, weeks, weeks, weeks, perhaps even months as it did in the past excellent much too early to have any judgment thank you, mr. Trichet. Yes, much different system than the u. S. , but one thing isnt different, its getting harder to get along, especially in the upper echelons of government thank you for your thoughts today, sir david faber, back to you thank you, mr. Santelli now its time to send it over to john ford for a look at whats coming up on squawk alley. John david, facebook forced to backtrack on plans for its stock structure, even as pressure intensifies. More details coming up how facebook learned about political meddling on its platform during the econelti well dig into that coming up on squawk alley is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Stocks stumbling here. Dow is quickly down 63 points on comments from the foreign minister of north korea, saying that the president s comments over the weekend were clearly a declaration of war, saying north korea has the right to shoot down strategic u. S. Bombers, even if they are not in north korea air space. Well watch that squawk alley is back in a minute good morning, it is 11 00 a. M. At nfl headquarters in midtown manhattan, 11 00 a. M. On wall street, and squawk alley is live