Transcripts For CNBC Squawk Box 20140818

General Family Dollar tieup goes through, the combined company would have 20,000 stores in 46 states, a total of about 28 billion in revenue. Now, heres the important part the synergies on this transaction, which contrast to the other one and i know were talking about dollar tree and Dollar General and Family Dollar, its confusing. Dollar, dollar, dollar. Dollar, dollar, dollar. Heres whats happening. On the Dollar General Dollar General tree. On the Dollar General proposal, they would have 550 million to 600 million in synergies annually. That would happen three years after the close. That is in contrast to what was 300 million in synergies on the other dollar tree deal. Now, the dollar tree is a much Smaller Company than Dollar General, and thats one of the reasons theyre not able to have the type of synergies. A lot of analysts had wanted Dollar General to come forward with this deal. Were surprised that they havent. Apparently, if you look through some of the filings on the original transaction with dollar tree and i apologize, the dollar tree, Dollar General thing can confuse the heck out of you, wha happened is Family Dollar went to Dollar General and said lets have a deal. They said no repeatedly, according to filings, and now have emerged with something here. Two other quick points to make. Rick dreeling, who is the ceo of Dollar General, joe, announced he was going to retire. This fellow here. Richard dreiling said he would retire and as part of the transaction would stay on through 2016. That is actually something, one of the reasons people thought maybe he wasnt going to make an offer. Then one last piece, because its always a social issue. Howard levine runs Family Dollar. He was going to take a role in the transaction with dollar tree, and i know its hard to remember all of the names here. People had thought, well, that explains a little bit of it. If the Dollar General is not necessarily, at least in this proposal, offering him a role. So, theres always these issues, the social issues. Does the ceo, the old ceo get a new job in this . Are they going to close headquarters . Are they going to close stores . In this particular transaction, a lot more stores could be closed because theres a lot more overlap and who knows what would happen to Howard Levine. Anyway, that is the transaction thats on the table that sources are telling us has been made and we do expect that that will cross the tape a little later and well have more details for you as they come. Joseph, have i confused you to no end . No, i had already studied up on the whole deal, because didnt you break it first in the New York Times . No, it was right here. No right here on cnbc. But it will still be i imagine theyll be citing cnbc in just a minute. These guys go to graduate school, they get an mba from harvard, these investment bankers. Right. So, some guy thought, dollar tree. He looked around for another dollar he brought this to management and they said, you know, we hadnt thats a pretty good how do you think they figured this one out . How did they come up with this . Doesnt this seem kind of theyre all named dollar, right . Theres a lot of bankers in here. Im sure. Citigroup. But its so you know, did someone really have to think about this and come up with this . Werent you thinking maybe they would happen, that the other dollar store would come in here and people thought they might, but actually, the expectation was they wouldnt. Nelson peltz is the one who actually bought into Family Dollar. He was the smart guy. Wheres icahn . Hes somewhere Family Dollar as well. That levine guys been on, because when i saw him, i remembered him because of the head. Yes. There he is. No, thats not him. Im sorry. Theres nelson peltz. But you said did anyone else think of this. It actually started to some degree with john paulsens firm, actually had gone to Family Dollar and said you need to sell yourself and they hired some bankers and there you have it. We will see where this goes. When you were by the way, i dont think well leave from vacation. I totally agree. I hadnt shaved, i was great. You hadnt shaved. Actually, my wife whether i could come back with the sort of pseudo scruffy beard, but we thought that would be three hours youre going to need that beard for when billions gets closer to premiering. You will feel very hollywood. I mean, youre going to need the coolness of the will i wear my tie like that . A little open . Also, when you get seniority like that . See, when i got back, you werent here. Right. Because i couldnt come back after two weeks vacation and get right into the redistribution, the buzz saw that we go through every day. You dont have the seniority to ask for me not in fact, beckys gone today. But its just the two of us. I mean, thats like, talk about back into the frying pan, into the fire. Are we going to be were going to have to hug it out. Youre right. Two weeks without becky, i think. Yeah, yeah. All right. There you go. So, its just two of us. Weve got to play that song at some point. Just the two of us. I missed you. I did. I really did. After a week . I did. I was telling my wife this on wednesday. See, after two weeks, i think you initially miss someone, then you dont miss them. No, its good to see you. Im kidding. Were going to have you know, its august. Thats the only thing. Its tough in august. Yep. You know, not a whole lot of people around good stuff in the papers. I love the junk bond story, because once again, i feel bad for retail investors. Theyre selling the junk bonds just as all the smart money is in there grabbing the yield again. So i dont know. Did you see the 10year when you were gone . Did you see this 10year . Ive seen where the 10year its like 2. 30 or something. And then the german 10year is under 1 right now. Were the same as these horrific european country theyre never going to pay their money back. Were the same as they are. Youre complaining . No. I saw mark grant had something out today. Marks been saying its going to go under 2 . He says heres why treasury yields will keep on falling. Dont bet against the u. S. Bond market rally. Conflicts in the ukraine and middle east, recordlow bonds in europe have unleashed the stampede into treasuries. We dont even have to have him on. I can just read this. Knocking benchmark yields to 2. 40 . They ended at 2. 34 on friday. This ukraine stuff, we talked about it a lot last week and you missed some of my literary jokes. You know that convoy they were sending in, all just aid . I said and they had this beautiful, big sculpture of a horse that they also had given. Putin had it made and given to the ukraine to put in like the square in one of the main cities, just as a gift of theres nothing in it or anything. Just a beautiful but then, lo and behold yeah. You know, treasury and yield, its totally different. Meanwhile, they destroyed the entire convoy were up 80 points on friday or something. Next thing you know, we hear from ukraine that they any idea that maybe ukraine still had harbored some feelings for russia that maybe we do want to go back . I mean, i dont think ukraine likes russia at all. To destroy a convoy . People were driving the convoy. I mean, there were casualties and everything, right . I mean, this is a bad situation, getting worse. Thats probably right. The other ones theres a lot of other flash points, things going on in this country. What do you make of this ferguson situation . I dont even know what to make of it. I think we need theres been a push for cameras on, like mounted somewhere on like policemen or something. That way, policemen are on their best behavior, other people that are there see the camera, theyre on their best behavior. We know exactly what happened. So. I think wed be in much better shape. We might be. But i read a reason not to do that. I cant remember police dont want all i know is, you know, the president s handicap has been i mean, hes getting it i think it went from a 14 down to an 11 or so. Short game getting going back to work for a couple days, right . A low blow. Im sorry. Its okay. President s need vacations, especially in a world like this. Anyway, this retail deal is any indication there will be no shortage of market excitement this week. U. S. Equity futures. This to me looks like, you know, a snapback from what we saw on friday where we were up nicely, 50 or 60 points. Next i know, i look, we were down 180. It wasnt on the wires right away what had happened. The dows coming off its best weekly gain in more than a month. Investors are likely set to focus on the fed in the coming days because the annual gathering of Central Bank Leaders in jackson hole, wyoming. And jackson hole in august, you wouldnt have to offer too many invitations to too many people to get out there. Have you been there in the summer . I have been there in the summer. Its fantastic. Its spectacular, right . And its no humidity. Although, how great what a week for weather. I know, weather was great. You know, this whole Global Warming world. It was like 50 in the morning, wasnt it . And it got up to like 75 was the max . What happened to the 80s and 90s and i dont know. Theyre on hold . Im happy. You know why its been so cool . Global warming. Anyway, both fed chair janet yellen and ecb president mario draghi are going to speak there, and yellen is expected to focus on unemployment and wage growth. Draghis address is likely to be interesting in the wake of last weeks poor european data. Weve been discussing, geopolitics is very important to the markets right now and ukraine, kiev says its Army Advanced into an eastern city yesterday that had been controlled by rebel forces. Meantime, a russian aid convoy bound for Eastern Europe continues to be held with that big horse at the border awaiting clearance. Its a sculpture. Its a gift. Well have a live report from ukraine in just a couple minutes. And in iraq, trying to take back that big dam. Did you see that theyre worried . Did you see your people, the left, theyre worried about were going to go beyond just helping, humanitarian things, and that its going to be, i dont know, involve ourselves in iraq again . But we can say that getting this dam back in friendly hands is important. Yeah. If they blew up this dam, it would, like, there would be 8 feet of water in mosul, and it would reach baghdad. So, its seen as it could be used as a weapon of mass destruction just by blowing up the dam. So, thats the way were getting around. In iraq, more than a dozen u. S. Air strikes carried out in the last 24 hours. Whats happening in europe with this friendly action were seeing today, i figure its pretty good, and it is. Wow thats a pretty big move in germany. Well take a 1. 4 , over 4 in france, where theyre down to 22 right now. If you want an espresso, its going to be a 40 bill. We should go over there. Well, its a little cheaper. You saw that the euro 1. 33 , better than 1. 39 . Then theres the asian markets. Not much happening at this point. Youre doing this again . Youre not doing this again. Oh, we have corporate news, but we should tell you, we give you the news first and then the news crosses the wire. Cnbc, squawk box breaks news and then let me see. We give you the news so you know what that is. Dollar general with that proposal to buy Family Dollar, the transaction, the proposal worth at least 78. 50 per share. Thats 99. 7 billion in total, as we discussed just in the past couple months. Lets get you through some corporate news. Credit suisse reportedly played a role in the Espirito Santo collapse. The wall street journal reports they helped put together billions in securities issued by offshore Investment Vehicles of banco espirito. They were then sold to the portuguese banks retail customers. Also, u. S. Banks are reportedly thinking about moving some operations to ireland. Did you see this story . If the uk exits the eu. The ft says bank of america, citigroup and Morgan Stanley all are preparing preliminary plans. Ireland said to be an attractive location for some european businesses because the banks can move out of the uk because the tax issues, also some other things. So, there you have it. By the way, did you see, this is actually the story i wanted to talk about. Did you see this . Fed blow to global banks over living wills . I remember about a week and a half ago, all the banks found out that their living wills were not good enough, and one of the reasons was because all of them expected to be able to get to whats called the discount window, which we know so well in the last financial crisis was so important. Now the fed is saying no discount window, you cant touch it, and a lot of people suggesting that is an unrealistic thing in the context of a financial crisis. What normally happens, you go to the discount window. My eyes are glazing over i can see that. Its a little like clockwork orange i was watching tennis im starved for content but it was in cincinnati. The sponsor of the tournament is a mutual i think its a mutual but theyve got cris collinsworth, our great nbc announcer on sunday night football. So, there are people talking, like, about something you were just saying, and he walks in and says, listen, this financial gobbledygook, i can explain what hes saying. Come into my office. And theres an office set up behind and he explains it simply. I want you know, hes an nbc guy. I want him maybe next time you do another discount window living will discount window, Family Dollar, dollar tree, Dollar General you said you think its discussing that corporations are seen as people with that Horrible Supreme Court decision that you what is that, Citizens United that you have written about and tried to so, but living wills, corporations have living wills like people . In the post financial crisis world, they now have living wills. Do you think its okay if these corporations are seen as people, they can contribute to financial campaigns and everything . You want to go back on vacation . Not yet. Not yet. Its only 15 minutes in. Lets talk here. Heightened tension oh, you know whos coming up . Half of the pair of boris and natasha. Just boris. Heightened tension in ukraine and iraq pressuring the dollar, sending investors to other safe haven currencies. Like the swiss, the franc and the yen. Boris is managing director. Hes been back ten minutes. Youre torturing him already. Because i have so much trouble saying boris. It sounds like i introduced you with more importance. I cant say boris schlasberg very well. Youve had a lot of practice. I just think because, i just think your first name, boris, gives you credibility on all these russian and ukrainian issues, boris. Do you understand whats going on . I mean, i think putin at this point sort of is afraid to go too far. Its very strange, this up three, back two, up three. Is eventually he just moving in . I mean, is that what we should be afraid of . Actually, i think you have it dead right. He is afraid to just kind of go all in at this point. Hed love to be able to move in, but he knows that the economic repercussions are kind of very severe, and theyre already teetering on the edge of recession here and i think hes getting a lot of pressure from the oligarchs to really not accelerate extensions between ukraine and russia. Youre right, i think ultimately hed love to be able to have full geopolitical control over ukraine, but he cant do it with full military force at this point, because obviously, the recoil is going to be horrible. Meantime, all of this i think is creating a pretty negative over the european economy, especially with the germans who are just have had a lot of Economic Activity frozen with russia as a result of this, and thats going to be a big problem for the second half of the year. Yeah, i keep seeing this brought up, that even with our consumers here, that theres just a general unease, a feeling of uneasiness given mostly about russia in the ukraine. I mean, i guess thats i mean, we are talking about for the last, if youre looking for one other superpower, its called russia, right . I guess china, too, but it gets dangerous. We get in dangerous ground here, and its important, because it eventually will affect our economy here. If europe slows and if, you know, emerging markets and everything else. So, its something that weve been a little bit complacent about as the market has continued to trade higher with the troops amassing right on, you know, right on the border. And some people think that his longterm goal is mother russia growing and getting bolder on the world stage. Right . Thats down the road, right . If you just think of him as a czar, youll get a very good idea of where i think he wants to go. He clearly wants to build an empire. And yes, long term, i think those are all big issues. But in the short term, youre right, the markets are basically assuming that reason will prevail, that economic interest is going to trump Political Considerations for the time being and that theyre somehow going to have a cold peace going into the wintertime and that will keep everything afloat for the time being. Yeah, it is just its like a scab, you know, on the Global Economic scene and we keep pulling it all the time, but so far, it hasnt turned into a major wound. You probably didnt watch that much i dont watch that much when im out either, but do you know how tall putin is, andrew and boris . Hes a tall man. Hes 57. Yeah, hes short. I always thought he was taller. Like tom cruise . Did you see my tweets where i treated shirtless shots of me i did see that. Not where its safe, either. Is that what you said . No, last week we were showing sidebysides you and putin. Me and putin. Wow. Because i say that hes people that do that are compensating for something. Hes compensating for his height. How do your abs compare . I photoshopped those a little bit. You can do no, hes much better. Hes much better. I thought you looked great, by the way. Thank you. I thought you i was trying to get you to do you know. You didnt decide that was something did you share anything with anyone on twitter about your vacation at all . I sent one picture out. One . One, me and henry. Henry and i. What did mack say about that . I dont know. Did you think about that . Youve got twins. You send a picture out is that your favorite . No. It was a good shot. I think it would have sent i would have quickly taken another. I mean, i have what about the wife . She doesnt get any we didnt discuss. Ill get a shot boris, thank you. Thanks, guys. Have a good week. Does he eventually do it . Does he eventually do it . And how long does he wait, or i think, like i said, i think the market is betting there will be a cold peace and its probably essentially where were going to be right now. As the week progresses, theyre probably going to start focusing on janet yellen, although i very much agree with the consensus view that shell do nothing to signal anything going forward. Part of this is maybe shes looking at the geopolitical issues, but it all goes back to the fact that, like you said, the u. S. Consumer, even though were all manufacturing jobs, still remains very cautious, and thats going to keep the fed on hold. Okay. Boris, thank you, sir. Thanks, guys. Have a great week. Coming up next, the als ice bucket challenge. Have you taken this yet, joe . Are you going to do it . Nobodys challenged me. Showing no signs of fading. In fact, its made its way all the way to china. Well show you that after the break. Plus, the battle of the bulge. Joes not having that problem anymore after those pictures. A little bit. Today a third of americans are overweight, but big pharmas not jumping into the water against obesity. Why . Stick around to figure out. And as we head to break, check out the futures. We have some green arrows across the board. 78 points up. Were back in a moment. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. The headline here was, a balding drug, which i would not take, because i dont youve got gray hair. Well, who wants to go bald . Welcome back to squawk box. In science news this morning, a study finds its not a balding drug, its the reverse balding. Oh, okay a study finds a drug that successfully reverses some balding. The drug was tested on patients with an autoimmune disease that causes hair loss that inflicts about 10 of men and women. The drug suppresses immune system activity by blocking certain enzymes and helps bald patients grow hair. Its important to note that the drug was only tested for those with the disease. Theres no evidence it would even work on people suffering. See, this is what liesman hates, suffering. Suffering from hair loss. If you lose hair, are you really suffering . Suffering from hair loss such as male people who do you ever see people with male pattern baldness, letters are forming, it looks like a map what are you talking about . Im just kidding. I think that means here, in the back in the corners. So, its not a drug that causes who would take a drug, unless you wanted to look like, you know, bruce willis or Howard Levine . Back to the Family Dollar always bring it back to the mergers on monday. Lets tell you about the ice bucket challenge, because it is showing no signs of slowing down. Since july 29th, the social mediadriven craze has raised more than 13 million for the als association. Among the business celebrities accepting the challenge this weekend no ice there. No ice there. Jeff bezos and bill gates. Did you see the bill gates video . No. That is a hilarious video. Its not just about here it is. He actually created this himself, or at least thats the joke. And it was its a pretty funny video. Its like a rude goldberg scheme you knew he would do that. Thats on the deck right outside of his home along the water there outside of seattle wow, he looks even nerdier soaking wet than he does were also getting word this morning that the Ice Bucket Campaign has hit china. Our colleagues in beijing tell us that chinese i. T. Entrepreneurs have been dousing themselves with cold water since weekend as well. Warren buffett has challenged and is yet to take the challenge. I think we should just keep that out there. Obesity is one of the Biggest Health problems in america and around the world. So, why is big pharma not spending big money to try to create medicines that fight the fat . Cnbcs meg tirrell is here with some details this morning. Good morning. Good morning. Thats right, big pharma has kind of shied away from this area. First, lets talk about the opportunity and why its surprising that theyre not in it. More than a third of u. S. Adults are obese, according to the centers for Disease Control and prevention. And also, that can lead to Heart Disease and diabetes. So, obviously, theres some big problems associated with obesity. The American Medical Association did declare it a disease last year. Now lets talk about how you define obesity. Thats actually by a body mass index of 30plus, according to the cdc. And what that actually means, and it might surprise some people, is that for somebody whos 59, thats somebody who weighs 203 pounds or more. So, that is how the cdc says obesity is defined. I know some people take issue with bmi as a measure of obesity, because if youre very muscular, that can kind of skew your weight. So, that is an issue, but thats the way it gets constantly dealing with that. I can imagine. You know, so, there are a couple Companies Still working in this space, but theyre very small companies. Two years ago, two new drugs were approved. That was in 2012. From arena and vevis, and sales have really kind of disappointed there. A Third Company is working the space, under fda review right now for its obesity drug. Some of the reasons why the sales havent met expectations, theres a lot of safety concerns about these drugs. We all remember fenphen, which was pulled from the market, a couple other drugs, abbotts meridia, sanofis kpleea. A lot of safety concerns around these medicines, but those arent the only reasons sales havent med expectations. In 2012 when the drugs were appro approved, analysts had billion dollar revenues that that could take in and they have fallen short. Also, these are Smaller Companies and while they have partners in japanese companies, their sale forces have been small. You really need to be reaching a lot of general practitioners to get them to prescribe the drugs, so thats an issue. Cost is another issue with the drugs. They dont have a lot of reimbursement yet. They can cost 4 a day, 2,000 a year. That can be a problem if youre not reimbursed for that. And finally, there is a bias against prescribing drugs for obesity and considering it a disease for which you should prescribe drugs. So, there are a lot of moving parts in this space. Later today, well talk with the ceo of a fourth obesity company that has a new mechanism of action, the drug still in testing. Z zapgen is a small market cap company, under 500 million, but another one in the space. What would have to change among Insurance Companies to decide to pay for drugs like this . A lot of folks say we need outcome studies. These drugs were approved under the understanding that they would run these bigger studies to see their effect on cardiovascular. So, whether they have safety issues or whether, you know, they help extend life or prevent heart attacks, prevent diabetes, that kind of thing. So, if we saw those kinds of studies have those positive effects, maybe youd see better reimbursement, but those are years off. You would think that if you do anything cosmetically, maybe thats not covered, but people do all of these procedures for cosmetic and obesity is much more serious and much more important than, like, fixing your wrinkles or whatever. In the past, the diet drugs were from a similar mechanism, where in the fenphen, i mean, if youre going to have a heart problem or some type of valve problem that you dont want to so, we needed a different mode of action. Right. And some of them do have different modes of action although, the ones that hit the market in 2012 work on the similar mechanisms in the brain. Will you do me a favor . I couldnt figure out if im fat or not from that. Will you do it for someone whos 6 foot or 61 . Can you get the numbers . I will. I cant off the top of my head, but ill send them to you later in the show. And you saw the controversy. Some guy on fox said that the first lady could lose a few. Then brian stelter, who used to have this stupid website, hes now a big muckedy muck at cnn, he got mad that anyone could question whether so, i dont know. So, joe, here, im on the bmi calculator at the center for Disease Control and prevention. Im putting in 61. Goewz for 61. What weight . Im not telling you. Just my age. Well determine whether hes obese weve got to throw in a weight. Right at id go above and below okay, hold on, ill just tell you. I wont do you think people saw that . Im sure nobody noticed. Whispered to me, but okay, 61, 190. Whats it say . Overweight. 61, 190, yes. Your bmis 25. 1 oh, thats just barely overweight if you could just get to 24. 9. For your height, a normal weight range would be 140 to 189 pounds see, 140 . 189 pounds. Theres a big divide. Theres 50 pounds but i wont even be able to eat a cheeseburger . Thank you. Still to come, are we losing our interest in apps . The answer is yes, according to a new study. The impact this could have on the tech sector when we return. Plus, more on the breaking news that Dollar General is 25. 1 . Making a bid for Family Dollar to the tune of nearly 10 billion. First as we head to break, a look at last weeks winners and losers. So close. Just direct your feet to the sunny side of the street like a fella once said, aint that a kick in the head just the two of us good morning, and welcome back to squawk box here on cnbc. Im joe kernen. We requested that song. Along with Andrew Ross Sorkin. Becky is off today. Shes doing the vacation, the full on, twoweek vacation. Yes. Where you can actually finally, when you finish, youre good. Youre good with coming back. Youre good with you mean one weeks just not enough . One weeks just not enough. I think youre just getting into the swing of things. All right. U. S. Equity futures are you know, you were out for the last week. We did i was worried. Things came back the week i was out, that 300, 400point day tough week. And then there was stabilization. And you know, weve got soros putting a big bet on negative and shiller again saying stocks have been because weve been soros has had that trade for over a year. Was that trading a hedge against Something Else or a true view of the world officially coming in august of 2013. Its been a 20 move already for soros, but you know, we try to you know, whatever we have on any given day, we try to make a big deal of it, and i was just saying, look, hes had this position, and i look back at where the s p was. Its moved 20 since he had a big bet. So, you know, well see. Sooner or later he could be right, but. Markets looking ahead to Economic Data on inflation and housing this week. Plus, to the big fed gathering in jackson hole. Here to set the table for our busy week ahead is mark lieu sene, Danny Montgomery scott chief investment strategist and dean zayad. Do either one of you, mark or dean, think that were at early 2015 mark for the first move up or are we mid to late at this point . Joe, i think were still in the camp of mid to late. As much as i concur with the viewpoints of Richard Fisher and Charles Plosser and jeffrey lacker, who are, you know, members of the federal open Market Committee meeting, who are i think offering a persuasive argument for why it is the fed should move forward its liftoff date for the fed funds rate through the First Quarter of 2015, i dont think theres enough sympathy among janet yellen and others who carry more currency in the fed to suggest theyre more likely to be successful do you agree with that, mark . There are people who say until the rates go up, the economys going to stay its counterintuitive, but they say its hurting savers, its causing people just, you know, theres a lack of volatility. When we stay at zero with an economy thats going pretty well, its so disconnected that its actually counter productive to what were trying to do. I totally agree with your viewpoint on that, joe. I think it is. Its certainly hurting savers, no doubt about that. Thats been the case now for five years. But in addition to that, its deferring the kinds of things that i think would become a byproduct of the normalization of Interest Rates, including buying power that has no incentive to move forward those purchases due to the fact that they know were going to have a low carry for an extended period of time among other distortions that i think are immeasurable at this point in time, simply because theyre being covered under the auspices of zero bound Interest Rates. But dean, youve got below 1 on a 10year german bund, so how could the fed possibly break with the rest of the world at this point . Should they . Well, theyre probably not going to, but i would focus more on global liquidity. We look at that at brookstone as one of the bigger indicators on trends, even oftentimes more important than technicals or earnings. At this point, global macro liquidity is very, very strong. Bank lending is on the rise in the u. S. The ecb and the bank of japan are further committed to their qe. In fact, money supplys showing a recent positive turn in china as well. So, global liquidity is very important to us and we dont see that turning any bearish signs any time soon. Wow. So, and you think, when is the first rate hike . Id probably say mid2015. You know, going back to the whole idea about savers, i mean, i find it interesting, because there are ways to earn more income than just focusing on the 10year treasury, for example. Weve focused on Asset Classes like the mlps, the energy renaissance. Munis have been a really great play over the last year. So, of course, theres risk in everything. We always like to build in Risk Management with all of our investing strategies, but the 10year treasury or the german rates are really not in our opinion the only way to measure the amount of income that savers can now get on their cash. So we shouldnt be focused on this issue or we should be . No, i mean, we should be, of course. You know, oftentimes, by the way, low Interest Rates could be a symptom of what the markets going to do, not necessarily the cause, right . I mean, if rates start rising, and its really more of a reflection on the qualitative Forward Guidance that the fed gives us, that could be a good thing, right . That could mean the economys strengthening, unemployment, of course, is going down and earnings are on the rise. So, i wouldnt just focus on rates alone as the cause of a potential correction or bear market. Do either of you gentlemen think that because it does move people out to risk i mean, weve seen now the smart moneys going back into junk bonds. Everybodys forcing out the risk curve to try and get yield. Is that building another bubble, mark, dean . Either one of you. Mark . Well, certainly i think there is a cause for concern there that investors are being chased out of lowyielding, traditional sources of income to other areas. And it begs the question are we in a bubble in the bond market . Like the other guest has said, im not sure that we are, given the fact that we have 2. 4 on the 10year treasury when the german bond yields 1 . I think there is something that makes treasuries attractive, but its also chasing investors into dividendpaying stocks, which i dont think is necessary lay a bad thing, but it alters their risk profile differently than owning a money market fund. All right. Dean, can you get me a deal on a nose hair clipper . Whats the name of your company, brookstone . Brookstone capital management, but its the other brookstone, of course. And i look at how well groomed your facial hair is. Do you have like Something Like that . Because andrew, didnt you have one a beard . I had a little scruff going on. Well, youve got there is, brookstone does sell something that allows you to stream that so that its neat, right, dean . Or thats a different bookstone, you said. But this is the reflection of years of experience, my friend. So, trial and error, but we believe we got it. All right. Did you just hear in your ear . The new supervising producer is moving us along. With the show . Mark and dean, thank you. Thanks, joe. Weve got to run and i have to listen this time. Coming up, what happens in vegas apparently still stays in vegas, unless it hits facebook. Weve got the details on an app that wants to change that when squawk box returns. E financial noise financial noise financial noise financial noise [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Welcome back to squawk box this morning. Our top corporate story of the morning, Dollar General making a bid for Family Dollar. Its offering 78. 50 a share in cash. Thats about 9. 7 billion in total. Youll remember, dollar tree made a 74. 50 in a cash and stock offer back on july 28th. Dollar general will be holding a Conference Call at 8 00 eastern. Of course, well be monitoring that, and we broke that story earlier in the broadcast around 6 00. Theyve now come out with that news and we will see what happens next. Carl icahn, though, very happy, you have to imagine, and mr. Pelts pretty happy as well. You think carl still gets happy when he makes a couple more Million Dollars . Yes. Really . Because he keeps score. Its a scorecard. I dont think he actually cares about the dollar itself, just no. He could send some our way. Our next story, did you read this . Its for anyone whos ever had a drunken night in vegas and then lived to tell about it on facebook. Recode reports that theres a new social media app called i would pronounce it sober, although it could be sober, that deletes everything posted to it within a day. Thats good. It was produced by bruce yang after he had a raucous vegas bachelor party. The catch phrase life in the moment. There have been certain times where i mean, i dont tweet a lot, but people can be so annoying that sometimes, we shouldnt lower ourselves, right . After a drunken evening in vegas . No, not after a drunken evening in vegas, but maybe after something on a friday night im reading, and then ill say, you know what, i wouldnt say that in a normal i heard about a guy building an app. You know these doctors in vegas will come to your hotel room the next day and intravenous you up so you wont get a hangover . Give you liquids, yeah. And it will be like uber. You press the thing and then they come. Anyway. The other question is whether this app could be a tough sell, because our next story is true. The Financial Times reporting that smartphone owners appetite for new apps is waning. Joe, when is the last time you downloaded a new app, do you remember . Im going to think about that. Might be a while, because it has been. According to a report, it finds almost a third of users dont download any new apps in a typical month. As a result, the firm is predicting that the volume of App Store Sales is potentially hitting a ceiling. Something i saw that i wanted to do or was thinking about doing but then i didnt do it, anyway, but i did download a song. I know how to do that. El dorado. Ill play it for you. Maybe youll get out of here. Coming up, lifestyles of the super rich. Sales from a weekend car auction in california headed toward 500 million. Robert frank brings us the details when squawk box returns. She inspires you. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back to squawk box. Record setting auction in california this weekend. Robert frank was there. Youre back. Yes, im back. The numbers, im still just dizzy from these numbers. Style compiling numbers so we dont have the full weekend total. So far 352 million of sales, thats as of saturday afternoon. Theyre on track for 450 million or 500 million. The average price so far this year over half a Million Dollars up 40 over last year. Were actually selling fewer cars this year, but 40 up on the total value. Now of the top ten cars, you guessed it, theyre all ferraris. In fact, all top five cars, ferraris we showed you last week on friday thursday night this 1962 gto sold for 38 million. That made it the most expensive car ever sold at auction. That beat the 30 million record that was sold that was set last summer. Now the number two car was the 275 speciale, 26. 4. Proving that not all great ferraris have to be red. That was a gray one. Number three was a 1961 250 gt i got to sit in that car, a 15 million car. And of the top ten cars there were two cars that actually were not ferraris. One was the 1964 ford gt 40. Those are still setting records. That was a 6 million ford. And then another car in the top ten that was not a ferrari was a 1955 aston martin db3s 5. 5 million. The thing that struck me after being here for two days talking to wealthy collectors looking at these cars, look, great ferraris are always going to set great prices. Not like that, though. But you look at whats happening with the porsches, the mercedes. They made thousands of these cars, the mercedes 300 sl gull wing doubled in price. Did you actually was janet yellen actually there shopping looking for a car for herself . She is the greatest patron saint of ferrari owners. Right. Since endo ferrari. You didnt see any fed members there . Because they got plenty of dough. Ferrari should make a special yellen edition. It should. Because of all the money you talk to the wealthy collectors and they say look theres nowhere else to put your money right now. Given where Interest Rates are. And its the art market. Its the diamond market. Its the wine market. Its the car market. Whats the cheapest car that was for sale there . We saw there was only if the average is 500,000. We found a couple way in the back of the mecum oukz that were 300,000. The American Market hasnt come back. Its really the top european cars, the porsches, mercedes, ferraris. Those three marks are leading this entire market. But, the one last thing ill leave you with, toyotas, mazdas, nissans, these are now Million Dollar collector cars. You were joking on friday about the kia or something. Yeah. Jay leno said the frias, the First Edition prius in 20 years will be a huge director car. Its now all these there it is. That toyota. Thats going to be a Million Dollar toyota. The Japanese Cars are now becoming what the european thats what makes me nervous about how bubbly this market is. You know we all watched Robin Williams videos. He had some joke about a prius, i dont know volkswagen had sex with i cant remember what it was. It was yeah, no, really . A prius . Yeah. Thats what leno said. I stand by what i say. Give me one 2014 top of the line ferrari, instead of the i dont want an old one that doesnt have any of the new technology. Its got a wooden like steering wheel. More than one. You could by 1,000 of them. More than 100. More than 100 brand new ferraris. Im with you. I like the new cars. Its a generational thing. The guys in their 50s. They got money. Any car youre in is a muscle car. Coming up a deal worth a dollar or two. The details on the fight for discount retailer Family Dollar at the top of the hour. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. What does it mean to have an unlimited Mileage Warranty on a certified preowned mercedesbenz . What does it mean to drive as far as you want. For up to three years. And be covered . It means your odometer. Is there to record. The memories. During the mercedesbenz certified preowned sales event now through september 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. E financial noise financial noise financial noise financial noise thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Breaking news this morning. Dollar general offering to buy Family Dollar for nearly 10 billion outbidding rival dollar tree. The worlds Central Banks are on center stage. Leaders gathering for the annual fed confab in jackson hole. Will janet yellen and the company give the markets any hints to future policy moves. And the ice bucket challenge showing no signs of slowing down among business celebrities accepting the challenge this weekend jeff bezos, and bill gates. Now its hitting china. As entrepreneurs there join the cause. The second hour of squawk box begins right now. Good morning and welcome to squawk box on cnbc im Andrew Ross Sorkin along with joe kernen. Becky is enjoying some time off today. Lets get you caught up on some of the headlines this morning. The big breaking news of the morning as we told you first at the top of the last hour, dollar tree now offering to buy Family Dollar for 78. 50 per share. Thats an allcash offer. The total transaction value about 9. 7 billion. That could potentially trump the deal that Family Dollar had already put in place. It had been it had solidified a deal with dollar tree for 74. 50 per share. Joining us now on the squawk news line to make some sense out of all of these companies with dollar in their name is joe feldman, the assistant director of research at telsey advisory group. Walk us through this. This transaction, Dollar General it is, does look to be a better deal than dollar tree. The question is why didnt they show up earlier if they were coming at this point . Yeah, im a little surprised that it took them this long to get involved publicly. It does seem like its a better deal. It does seem a little more accretive when we run it through our models, didnt seem like Dollar General could top the deal and make a more accretive deal. The big issue to me is that theres a much bigger overlap in terms of the store bases. The synergy number that they were providing on this transaction this morning, 55 million to 600 million. The other deal, synergy is only 300 million. Thats right. I think part of that is more overlap here with Dollar General and Family Dollar. I wonder what the government will make them do. Now, in terms of closing stores. Today Dollar General says they would close around 700 stores versus dollar tree saying they would close around 500. So you would think that there would be even more need than that. I mean when the combined base would be 20,000 stores or so. So the real question is does dollar tree come back and if so what can they afford to pay and what can Dollar General afford to pay if we do, in fact, get into a real bidding war here . When we stress both versions of the offers, certainly the dollar tree offers in the current structure that they have, could probably get up close to 90. And we thought Dollar General could be around the same, a little bit higher, low 90s, probably. But, again, here you have a situation where this is an allcash offer, versus dollar tree offering stock and cash. So, the structure of the two are a little different. You know dollar tree has less debt on its books so in theory they could take on a little dealt, it would just be less accretive of a deal if they wanted to get it that badly. One social issue in all of this the ceo of Family Dollar was going to stay on in a dollar tree transaction. Wes clearweather he would stay on in a Dollar General transaction. Does that matter . I think it does matter, to Howard Levine. I think he wants to be involved. The thought process was that even if he stayed at with dollar tree, that, you know, maybe a year or two he would start to step aside anyway. Whats interesting is, many of the issues that the companys facing has been under his watch, and i think that the Investor Community had wanted to see him removed from the plan in the first place to help effect out change. But its unclear. There will be a call at 8 00 this morning from Dollar General and im sure that will be addressed at that point. Joe feldman, thank you for helping us through this breaking news this morning. Sure well be talking to you in the coming days. Thanks. In other headlines, the situation in ukraine remains volatile and violent. An undetermined number of people were killed when rocket fire hit a convoy of buses carrying refugees from an area controlled by prorussian separatists. Ukraines military and the separatists are each blaming the other side for the strike. The other big market story the annual gathering of Central Bank Leaders in jackson hole, wyoming, begins thursday. Fed chair janet yellen and ecb president mario draghi will speak there. Yellen is expected to focus on unemployment and wage growth while draghis address is likely to be interesting in the wake of last weeks poor european data. Our guest host this morning, chairman and ceo of international paper. John, its great to see you. Well start with people dont know this, thanks for coming in. Great to have you here. And that is that out of all the stuff thats shipped in the u. S. , 95 is in corrugated boxes. 95. A third of them ip makes. Thats right, 55 million a day. So that on any given day, in the past week, you can point to really a pretty good indicator of whether the economy is accelerating or decelerating. Doesnt feel like 4 gdp growth. Corrugated shipments for the industry up 1 year over year. If the economy is truly growing sustainably at four wed be at 2. 5 growth. The good news is that all this is highly recyclable. 66 , 45 million tons of all paper in the u. S. Is recycled. Right. Thats obviously why we do it. Thats why we put our garbage out you do that in new york . We put our garbage out in new york. Yes. Ive seen what happens if its not collected. With that city. It just becomes, you know yeah. Were the biggest user of that recycled fiber. We have a big stake in that. Its not to say that youre not good custodians of Paper Companies when you do own timber, because the tragedy of the commons is when you own it you replace every tree its a sustainable, renewable resource. Are we using less . I mean, is have the forests benefited from all the recycling . The forests . Oh, absolutely. I mean we replace it when we were growing planting more than 3 Million Trees on average per day. 3 million per day. 3348 per day. Thats amazing. Heres the next thing that i want to get to because i dont understand what you mean. As far as the economy goes and whats causing it to get better you say its not confidence, its demand. Because where you have demand, you will invest absolutely. But, if we get back to the chicken and demand thing. Say its not confidence. Weve seen recent data that Shows Consumers are once again, you know, not confident. Well whos not confident . Corporations thats not confident . Im talking about corporations. 70 of the economy i should point out is Consumer Spending driven. And you know, consumers not only feel unconfident but i think if you look at their income statements, medium wages are still 8 below prerecession levels. The quality of jobs that were adding jobs its not high. So there are a lot of reasons that consumers thats my point. If you say that its not a problem with confidence with corporate america, its not a its a problem with demand, not confidence, the reason that the corporations arent seeing the demand is because theres a lack of confidence somewhere else. Right . Isnt it just a chicken egg one step removed. I think you know the two are related. But its really not confidence thats driving this. Its consumers dont feel like theyve got better balance sheets. Their housing prices stop going down. Their 401 k s are better. But their Income Growth is stagnant. Then you go on to argue about inversions, and about Corporate Tax reform from the viewpoint that weve got serious issues that need to be addressed. Which would also at least indicate to me that corporations are not operating in the greatest environment that we could have in this country if wed get our act together there and therefore its not just demand. There are things in our way, washington generated, that are holding us back from 4 growth. The biggest thing in the way is consumer demand. I do believe comprehensive tax reform corporate and individual tax reform will go a long way to making the tax system one to support growth but weve got to put more money in peoples pockets. If we had 4 growth and people were expanding and creep eighting more jobs consumers would feel im not going to lose my job, my house isnt going to go down in value. Its just one step removed. Its a chicken and egg thing. There was a survey the other day that said more than half of the people interviewed, they had an emergency exspend your of 400, would have to borrow or sell something. I mean thats not a confidence issue, thats living daytoday. The average american feels that way thats in a crappy economy that hasnt grown for five years. Why . Because Consumer Spending is stagnant. Youre back to its circular. I think what weve got to do is get more money into peoples pockets. Can i ask a cardboard question for a second . Yeah. Im looking at this screen over here and it has all the different brands of customers, amazon, cocacola, tyson, costco, whole foods. When you look at those brands and you think to yourself how theyre all doing i assume amazon is shipping more and more through you than ever before, right . So anything ecommerce. Ee commerce is up double digits. Okay. On the other stuff, though, when you think about costco you think about cocacola or even think about whole foods, its a different story. Think of the production of nondurables in the u. S. Driving packaging demand and a lot of those food companies, i mean, in the Food Industry is looking at flat, organic growth. So and that really is, again comes back and ecommerce is not making up for the other guys. No. Because if you look at the weighting of the segments ecommerce is small but growing at double digits. So weight it for us. What does amazon or ecommerce represent for your business in total . Less than 5 . So it really is its really not doing much. But if its growing at 15 or 20 a year its going to be a significant segment. And if you were to look at that screen and say whats the biggest loser, your biggest loser as a client but in terms of segment . I think processed foods is probably on a year over year basis, and thats the biggest segment, is showing the most weakness. And thats a function of . Consumer spending. You know, consumers we talk to our customers and they say peoples habits in terms of what theyre buying are changing but all that stuff at some point in time in the supply chain is traveling in a corrugated package. I wouldnt think processed foods would be the im surprised that thats the loser. Where does tyson come out . You dont put that in the processed foods category. Tyson is an important customer. Generally speaking, beef is down, and poultry, protein is up. Right. All over the place in terms of international operations. 24 different countries. Why is your tax rate so high . Your effective tax rate is still so high . 32 . In the Second Quarter of 2014. Yeah, thats cash taxes. Our cash tax rate would be a little lower than that, but probably 25plus percent. 32 effective tax rate. And i want to talk to you about russia, too. I mean you have huge on rations there, right . Youve been there for a long time. We do. Weve been there since 1998. Russia our biggest business is a joint venture in the private sector probably the biggest producer of pulp in russia. Russian economy is slowing. It was slowing before the, you know, the crisis in the ukraine emerged. But thats not helping. And the flow are affecting the europe is probably most significant. Thats part of what were seeing. Yeah. All right well talk more well continue this conversation in just a moment. Coming up when we return, though, Oil Prices Falling this morning, as things on the geopolitical front looking relatively calm. The price from the trading pits. Well bring you that when we return. Plus walmart and target going to a whole new level in the fight for the consumer. The battle lines are drawn for a retail war. Well talk about that when squawk returns. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. Could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Go to comcastbusiness. Com checkyourspeed if we cant offer faster speeds or save you money well give you 150. Comcast business. Built for business. Welcome back to squawk box. Target has unveiled plans to keep many of its stores open later. More than 900 of its stores are going to extend their hours to as late as 11 00 p. M. On sundays and midnight on other days. Target is trying to rebuild its Customer Base in the wake of last years data breach and an ongoing drop in samestore sales. Last week somebody else had a big data breach. Some supermarket. Did you see that . Afraid to say i did not. You didnt read any of the supervalue . And walmart is promising shorter waits in checkout lines during the Holiday Shopping season. According to the journal the Worlds Largest retailer is promising the staff all cash registers during peak shopping hours. Long waits in checkout lines are among the most frequent complaints that walmart gets. You dont get New York Times stuff while youre when im on vacation i try to avoid the news. Do you find yourself moving to the center when youre not inundated on a daily basis by all your colleagues im sitting right in the middle. Im on the line in the middle of the center. For the middle of manhattan, you probably are right in the middle. Lets talk about trading this morning. Unrest in ukraine and iraq sparking jitters in the equity and energy markets. Joining us now to talk oil prices, dan vickry, senior contributor to street. Com and independent oil trader and on the markets, jim iuorio is here the director of tjm Institution Services and a cnbc contributor. Dan, youre here at the desk. Tell us what should we make of oil prices . Ive been shocked. I mean they should be higher, right . Absolutely. I mean, if we had these kind of geopolitical problems in 2011, wed be 15 higher than now. Does that mean they should be lower then . They are lower, in fact. Thats what i mean. If all this cant move them, if it was pure supply and demand maybe theyd be even lower. Whats happening is that there still is a big financial interest in oil. And thats really what drives the price. And the truth is everybody is long right now. They are. And thats the point. The point is when everybodys long, everybody cant be right at once. And all the traders right now are really, theyre in the hamptons. Theyre sunning it till the end of summer. And therefore and therefore prices look like despite the fact that they should be much higher, and the risks are seriously to the upside, theyre still going to swoon a little bit and stay under 100 a barrel at least until labor day. Even some of the worst headlines postlabor day world what happens . When people are paying attention, since i think youre arguing that people arent. Whats happened over the last few years is fascinating, because, most of the drive of the speculative bid that i spoken so much about for the last few years is gone. It was driven by the investment banks. Theyve sold their proprietary interest in the oil trade and in fact have not been doing the marketing to bring in new speculative organizations into oil for the last two years. And right now, theres really nothing to drive the price higher except for some really bad geopolitical incident or, in fact, if you could drive some of these longterm hedge funds out of the trade, that would give you a new impetus to bring fresh longs in. Right now i think its really a very, very flat kind of market, at least for the next several months. Jim, help us on the equity side, though, real quick . Well, this is interesting to me. Heres what were supposed to believe today. One is that the weak retail sales number, weak labor data assures the fed isnt going away more quickly than we thought they would. Were also supposed to believe theres a deescalation in russia and ukraine. Weve seen that go up and down. To me it just seems like, and this goes for junk bonds and for stocks, the first move down that happened last week is met with dip buyers. Thats normal in a cycle where i think theres going to be an adjustment. At the end of the day, risk is priced too low in my opinion. And there needs to be an adjustment in the stock market. Granted i did think there was going to be a little more followthrough on the down side but i think weve got to get that first wave of dip buyers and flesh them out and i think that will come this week. You think the next two weeks are actually going to be a little complicated . I do everyones in the hamptons, theyre going to have to rush back . Yeah, but remember that people that people being in the hamptons, that sometimes can increase volatility when theres not the same sort of volume going through. You know, orders can move the market in a bigger way. So that worries me a little bit over these two weeks. And thats why i think, if it starts to the downside, it could accelerate rather quickly. Im not predicting the end of the world sort of thing. I dont think theres a bubble but i think theres needed of a recalculation of risk. John, you got a question . What do you make of this disconnect weve got between natural gas and oil, and you think thats find more and more natural gas is that going to bring down the price of oil longerterm . Well, what we havent done is we havent made the transition at this country from an oilbased economy into a Natural Gas Based economy which should have happened obviously several years ago. Thats the real domestic resource that we havent really jumped on. The problem is that, as the Companies Continue to find fresh sources of shale gas, they continue to drive the price lower. Because natural gas is a local market. And in fact, if you have a lot of supply here in the United States, that will drive the local United States price lower. Whereas oil, despite the fact theres been an amazing increase in shale oil here in the United States, as well, thats more globally based. And because there is i shortage outside the United States, we still tend to see much higher prices in oil here domestically than we do in natural gas. Jim on equities real quick, given that youre sort of calling for at least a little bit of a swoon, for those folks who are waking up this morning listening to you who are thinking maybe i should put some money in the market or take money out of the market, what are they supposed to do . Heres what theyre supposed to do, people arent necessarily traders, theyre investors. Theyve been sitting on this stock market for years and its tripled. At that point of time youre supposed to assess what amount of risk you had. When you began this journey if you were 60 stocks and 40 bonds. That stock portion of it has screamed higher. Youre supposed to rebalance and not leave yourself susceptible to to bonds which is not exactly what people think theyre supposed to be doing. Bonds is the same as putting it in your mattress. When you look at everything available to you putting it in your mattress is better than facing a 10 to 12 correction. I did that in my longerterm money about two weeks ago. And im comfortable with that. Im making zero money on that retirement money thats in the stable fund or whatever the heck they call it. Its like putting it in a mattress. Its all about what kind of risk you want to take. You can ride this if you want but thats not ended great in the past. Okay. Were going to leave the conversation there on that sort of darkish note. Dan tepper and jim iuorio thank you for joining us this morning. Thank you. Coming up a video you have to see to believe, including a summer swim gone wrong. Plus, the end of an era for a famous roller coaster. The details when squawk box comes right back. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Were changing the way we do business, with startup ny. Weve created tax free zones throughout the state. And startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. Thanks to startup ny, businesses can operate tax free for 10 years. No property tax. No business tax. And no sales tax. Which means more growth for your business, and more jobs. Its not just business as usual. See how new york can help your business grow, at startup. Ny. Gov a video that will make you look twice this year. This comes from the los angeles area. An elderly man drove right into a backyard pool over the weekend. The driver told authorities that his flipflops got tangled in the pedals, apparently caused him to lose control of his car, he was able to get out of the car unharmed. I shouldnt laugh. But this is one of those unbleachable stories. No one else was in the car or the pool at the time. The end of an era for roller coaster enthusiasts. The colossus the Six Flags Magic Mountain in california was once of the tallest and fastest roller coaster in the world now its retired after taking its final passengers for a ride on saturday. Which was world roller coaster day. The wooden coaster was built in 1978. It goes more than 60 miles an hour. The tallest coaster in the world now is the kingdaka at six flags Great Adventures in new jersey. Have you been . I think i have. I think i have. You think you have . Ive been going to be right down there again this week, though. Right out in new jersey. Our wonderful German Shepherd has been at boot camp. Happens to be down there. Trying to get her so that she doesnt hate every other dog and you know. Its funny when a little yapper barks at another dog as youre going by. When a 100 pound shepherd barks you think they learn that from the owner . German shepherds pretty much i think start like that. You think im missing it . Really . More on the corporate deal of the morning. Dollar tree offering to buy with 10 billion. Plus, four star general Stan Mcchrystal, his take on the major geopolitical stories of the day. Perhaps more importantly his plan to get americans serving their country again. Were going to talk to him in just a little bit, as well. [ woman ] the cadillac summer collection is here. [ male announcer ] during the cadillac summers best event, lease this allnew 2014 cts for around 459 a month or purchase with 0 apr. Hurry in this exceptional offer ends soon. Welcome back to squawk box and the headlines this morning, dollar tree is offering to buy Family Dollar for 78. 50 a share in cash about 9. 7 billion and that could potentially trump the deal that Family Dollar already has in place to be bought by dollar tree for 4 less at 74. 50 a share. Breakup fee. Online Home Furnishing retailer wayfair wants to go public. Its seeking 350 million in an ipo. And Credit Suisse is reportedly played a role in the spirit desanto collapse. They put together billions of dollars in securities that were issued by offshore Investment Vehicles of banco espirito. They were sold to portuguese to the banks retail customers. And i dont know just sounds like it might have been part of the unraveling. Looks like a little bit of a mess. Lets talk about a story, a feelgood story and an important story. Millennials are volunteering at rates over 50 , which is a testament to their willingness to serve. Over the demand for service exceeds the supply of existing opportunities, franklin project is an initiative that intends to bridge that divide and envisions a year of fulltime National Service for every Young American. Four star general Stan Mcchrystal is chair of the Leadership Council of the franklin project. And we are thrilled to have him on the broadcast this morning. To talk about this. And other things. Stan, before we get to that let me just ask you a little bit on just the geopolitical issues of the morning because were all trying to make sense of where things are. But the question i wanted to ask you is actually about president obama. President obama has been criticized over the past week or more now for all of the various problems in the world. Whether it be whats happening in iraq, in the middle east, or whether its whats happening in russia, in ukraine, and i wanted to get your just view on how we should think about that. Well, i think if you try to blame all the problems in the world on one person you oversimplify things absurdly. We live in a complex world that moves really quickly right now. So what weve got to do is try to make sense of things in a holistic way. And i think that president obamas trying to do that. But its a tough its a tough task ahead of him. And i think weve also got to articulate to ourselves, to americans, what were trying to do. Because i think theres some confusion on our end. General, just walk us through the permutations both the middle east and iraq and the israeli picture and the extent you can in russia, sort of where does this go in your mind over the next couple of weeks and months . Well, in the nearterm i think iraq is suffering from some of the things that happened to it and some of the things its done to itself. Particularly its sectarian leadership under maliki and his regime. And so, i think this isis is taking the opportunity of a very weak government to create an existential threat to the state. Now were going to see whether the iraqis can stand up to that. I think in the next weeks and months youre going to see an increasing resistance to isis. I think that there will be likely different groups, not just the kurds, but the government of iraq forces, but it remains to be seen whether things like the tribes in al anbar are going to rise up as they did back starting in 2006. Its not anything for sure there. And on russia . Well, i think russia is trying to do whatever it can in the ukraine. And i think they are pushing, testing the west. I think that the west has got to decide just how firm were going to be. And how firm should we be. I think we need to be very firm. I think that we dont need to pick a fight or a war but i think that if you start to give, particularly to someone like putin, that youre going to have a very bad outcome. Finally israel and then i want to talk about National Service. Since were going around the horn, what happens there at this point . Yeah, i think theres a long road ahead to try to get a political solution. Which is where it must go. I think were almost distracted by the fact that hamas used their ability to shoot rockets and dig tunnels to cause israel to react. That was a cynical way to get israel to operate inside gaza, and i think that it really causes people somewhat to forget the fact that the wider issue of palestine is the one thats got to be dealt with. Its got to be a political solution. Okay. General mcchrystal, thank you for that. Lets talk about the issue we wanted to have you on this morning about which is National Service. You have a big idea. Which is that we should create a year of National Service in this country. Are we ready for that . Well, i think we certainly have the need to be ready for it. If you go back in history to america, there was a sense of citizenship where people had a pretty wide concept of their responsibility. Not just to the nation, but to fellow americans. And i think thats weakened. And you see it in our rates of voting. You see it in some of the schisms politically and economically and i think weve got to get back to it. And one way we can do that is to give every Young American an opportunity to serve. Because the opportunity to serve and the experience of it changes a person fundamentally. You vote at higher rates. Youre involved in your community at higher rates. Theres a lower Unemployment Rate for people whove done some kind of service, and so if were not ready for the big idea then i think we are saying were ready to live with some of the deterioration that weve seen. And im not. Most of our viewers think about business and economics. Whats the cost of doing this . Well, up front, if youre talking about a million opportunities a year for young people, its about 23 billion a year in direct costs. But studies have shown that you get about a two for one return on that investment. And there are lots of other indirect returns. So in reality, i think its an investment that would pay off many times over. General, i have a question going back to the middle east. The seeds of the turmoil were seeing know were sown a number of years ago, maybe 100 years ago after the first world war. Whats, practically speaking, given where were at, whats the longerterm solution . And how does this play out . Well, youre right. The seeds of some of what were seeing go back more than 100 years but certainly to the psychs pico agreement. I think one of the problems we have in the mideast right now is its like a piece of ground thats eroding and theres very little in the way of a narrative to cause that erosion to stop. And so you see the movements everywhere from libya, across to iraq. Even afghanistan. There doesnt seem to be something that the people can grab onto. And so theyre looking for things like extremist islam. Groups like isis, and in some cases hypernationalism. I think were going to have to find some statesmen to arise. I think some boundaries are going to change. I think some National Boundaries are likely to adjust. But i dont think theres any central narrative that people believe in right now. Theres no pan arab nationalism, theres nothing else that seems to unify different groups. I want to go back to the unify issue. Not to bop around but to go back to the National Service issue just for a second which is to understand this. How are these Million People going to be selected . Are they going to volunteer . How would it work . In the nearterm the idea is because we have such demand, we had 580,000 applicants for americorps and only 80,000 slots, the demand is there. We would use existing programs, everything from the peace corps, americorps, city year and others as places to start to both offer current opportunities and to expand those. We could have city and state, things like fema corps and individuals would join those and theyd have a year, of service year of paid National Service of modest compensation, and then those organizations would operate in concert with local governments, and in some cases with nonprofits to provide meaningful work. General, very first question about i mean when you ask a question like do you think the president is responsible for everything thats happening in the world, i dont know, obviously there was no other way to answer that other than no. Obviously. And the New York Times peter baker already had a huge sort of a piece to counteract some of the criticism from Hillary Clinton and others. But in peter bakers piece, he talks about what both democrats and republicans have said. Number one, in the view of his critics, the president s critics, he failed to staunch the rise of isis when he rejected a proposal to arm more moderate elements. He left a vacuum in iraq by not leaving a more residual force behind in 2011. He signaled a weakness to Vladimir Putin of russia encouraging the kremlin to think it could intervene in ukraine without fear of significant consequences. Did he do anything that may have added to some of the problems were having now or hes just being unfairly criticized by both sides . Well, i think we can go back to all these problems and find somebody we can hold responsible. But you dont navigate from where you want to be, you navigate from where you are. And thats what weve got to do now. We have to decide what our strategy is in that region. We got to decide whats most important to us. And weve got to articulate that clearly to the american people, and to that region. I mean, the article goes on to say that hes tried to actually, because previous president s have been blamed, you know, for whats going on in the world. And hes tried to say, look, the United States is no longer going to be you know, sort of the enforcer of all of good and evil around the world. And that has been sort of characteristic of the presidency. Is that of the current one. Is that the way we should be . Were not, america is not here to lead in certain ways, and fill a vacuum certainly with humanitarian stuff we were going to help those people get off of that mountain. We probably should have done something in rwanda. Certainly we can lead, and prevent genocide, cant we . Or is that too much for us to do because its a village . Well, americas going to lead in the world. Its going to have to lead. Really . Its the one nation that is always going to play an indispensable role. The point is we cant do everything. And so we have got to Balance National interests with values and morality and sometimes were going to leave things undone we wish we could do. Sometimes were going to do things that people will criticize and well never get it completely right. But were going to be engaged. If we try to pretent that we wont i think well pay the price. I think it might be more than a coincidence that theres so many hot spots in so many different areas. Its tough world right now. General, you know, we always want to talk to you about geopolitical issues. Before you go, tell us this, because we keep trying to come back to it. On this year of National Service, what has to happen to make it a reality . Well in the nearterm what we need is people to buy into the idea. Young people already do. But we need my generation, our generation, to accept the idea. Ultimately, we are going to need funding. Both private funding and public funding to expand to help do this to make it a reality. And create an expectation. The ideas that it would be voluntary but were trying to make it culturally expected. So that young people start to ask each other not if you served, but where you served. And i think thats what we can do. Okay. General mcchrystal i think its a brilliant idea and we appreciate you being on the program this morning. Thanks so much. Thanks so much. Im i cant believe you didnt see the New York Times. I read the peter baker piece. Oh, you did . Because drudge put it like as the world boils, fingers point, obamas way. I saw the piece. The entire piece was saying, most, its wrong to blame him. So it was the tps sort of, you know, saying this is what people are saying, heres why its not true. And yet they had a on and when i first saw it it was like wow this is really the New York Times wrote this. Then when i read it it was you know basically excusing. Anyway coming up, bourbon makers but then so youre not so you did read it. I did read it. So you did see the thinking at the times on this. Thats where that first question came from. No. Really. Bourbon makers see a Bright Future which could pay off for both consumers and companies. Details after the break. And news from Dollar General looking to buy Family Dollar for 78. 50 a share. More on this developing story in just a bit. Squawk box will be right back. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase. Like 50,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards, even cash back. And my rewards points wont expire. So you can make owning a business even more rewarding. Ink from chase. So you can. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant recharge along the way. 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Lets tell you whats coming up next, the host of hgtvs Income Property and flipping the block is here and we want to know how scared should we be that the flipping fad seems to be coming back big time . Squawk box returns with that story when we return. Tomorrow on squawk box, the pitch man that for one reason or another youre mesmerized by. Trivago 0 finds it easy to. Is it his cool sexy dad persona . Makes it easy [ bleep ], [ bleep ] is it his walk and talk . Did you notice that theres so many prices out there for the exact same room . Or his shirt and scruff . You can adjust the price so it fits in with your driving range. Or [ bleep ] [ bleep ] cut. Nevertheless, hes amassed a huge cult following online. And he will be here tomorrow to share his story. Its the trivago live. Its that simple. Theres a gap out there. Thats keeping you from the healthcare you deserve. At humana, we believe the gap will close when healthcare gets simpler. When frustration and paperwork decrease. When grandparents get to live at home instead of in a home. So lets do it. Lets simplify healthcare. Lets close the gap between people and care. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com real estate flipping is back in a big way. How worried should we be this time around . Here is scott mcgillivray. Mcgillivray. I got one extra syllable there . Mcgillivray, theres an extra one, is the host of hgtvs Income Property and his latest show is flipping the block. We were talking off camera about why housing isnt even stronger. I cant imagine weve got a bubble in flipping yet, do we . No. I would say its very early to say we would have a bubble. I think theres some opportunities. And flipping is always attractive to investors because its one of the fastest ways to make money in real estate. Its also one of the riskiest ways to make money in real estate. Were seeing it come back in some markets. Not all markets have a lot of success with flipping. But it hasnt come back the way we saw sort of postrecession or prerecession. You actually have to be good at it at this point . And you have to be in the right areas. You could i guess in the heyday everything worked . All boats float in a rising tide, right . Heres the thing with flipping the true format to flipping is to do valueadded renovations. Which means when you put money in to fix it up its worth more than the total cost youve invested. But what happens is, thats a lot of work. And people prefer to just buy something and then let the values increase with the market. Which is called real estate speculating. And i think theres a clear difference between the two. Real estate speculating you buy something, you hope the value goes up and you make a profit. Flipping is supposed to be a lot of work invested in to generate whats called forced appreciation. Right . And so people kind of confuse the two and they think i just buy it and if the markets going up its going to be a good flip. When you first sat down i said how many flips have you done. Yeah. Successfully. You thought somewhere between like 60 . I would say 80 to 85 of my flips were successful. What went wrong with the ones that didnt work . You know what . I would say that either was it a timing issue . It was a bit of both. Underpredicting the amount of work that needed to be done. Im one of those people when you find a hidden problem, im not the person to bury it in the walls and pass that on to the next buyer. So some things you kind of get in over your head. You do the right thing and hope not to lose money. But i would consider a successful flip one where i make a significant amount of money. Enough to justify whats significant . 10, 20, 30 what . What is your threshold . Well, i mean if youre going to be doing ten or lets say ten in a year and you want to be making over 100,000 a year you have to be profiting after all costs at least 10,000 or more per property. Ive had some properties where ive had profits in the six digits. Ive had some properties where ive broken even. I would consider breaking even a fail. Because now all your time and energy has been wasted months, of investment. So the difference between redoing a house that youre going to stay in, and redoing a house to flip, is like its like night and day . Because were redoing a house but were going to live there. And i was reading you were saying like dont spend a lot of money. I think you want to buy a bunch of cheap crap to make it look okay like its totally redone. You dont do that if youre going to live there, do you . Youve got to spend a lot of money and invest in the quality. When youre renovating your own home its nice to know the value of what youre putting in. But its not a necessity. Because, in your own home youre making emotional decisions. You may want a beautiful sunroom off the back of your place because it suits your lifestyle, and this is what you want to do every morning. If youre flipping totally different. Thats a zero. Youve invested your money into the wrong place. So you have to decide, i think a lot of people dont realize theyre actually flipping their own homes a lot of the time. People move around. Yeah, right. And youre investing typically in the home you live in. So you should be savvy enough to say to yourself, you know, if im going to put a Second Office in my house for instance, which is pretty much the worst value add you could do, is renovating, and putting addition on your home to put a Second Office in your house. Or even the first office even the first office we had a study, and instead of a bedroom takes money away from what your house is worth. Exactly. But if youre going to plan on living there for 15 years, and you know, the both people in the house need to have are you from canada . I am. Because were talking about houses, instead of but thats why hes invested both in the u. S. And in canada. Thats right. The house there you go. Well i live in florida and i live in toronto. I do parttime in each. I have a home in both. And its interesting, because i invest in florida, and i invest in canada. And i invest actually in many different states. And you see huge differences. Huge, huge differences in terms of values, in terms of whether flipping is working, or buy and hold i think youre right about what happened. The first time around, we didnt know we were going to sell and everything that we did we barely got our money back i would say based on everything that we did. So thats what you have to think about. You have to think about how long youre going to be there and what value it is to you to what youre putting in. But if you are planning on selling in the shortterm, five years or less are you saying put a bunch of crappy materials . Absolutely not. Absolutely not. And thats i think a big misconception with flipping. Do the right improvements. Do a lipstick job todays buyers are going to be a little savvier. Theyre looking a little deeper than the surface. I think people have been burnt and we learn from our mistakes. And theyre doing Home Inspections. When youre not in a rush, it used to be you buy a house, youre competing offers, you have no time for inspection. Its like highest bidder wins, and now its youve got time. So you can go and see the property a couple times. Youre opening up the electrical panel. Youre checking for mold. Youre having a Home Inspection done. So if youre going to put lipstick on a pig over there, people are going to be able to see through that. Todays buyers, i would hope. So scott, how is your business . Talking about shortterm, longerterm whats holding housing back . Why hasnt the demographic with Mortgage Rates still at lows . I think fear is still a big part of it. One of the hardest things for us to measure in this business, the impact of emotion, the impact of fear on the actual prices. Realistically prices should be higher. So hgtv couldnt find like a telegenic guy to do this job . They had to settle for someone who thats said. The other guy we had on that handyman once that looked like he was a chippendale. Yep. What do they how many people do they interview . Did you actually know anything or did they teach you after they found you. Thats a fair question. Thats a fair question. Lucky for Business News it has nothing obviously in this business its not about looks, right . Exactly. Honestly, the show for me was born out of what i actually did for a living. Out of college i bought a rental property you were flipping . No i started with buy and hold. I bought a place because i needed somewhere to live as a student and there was so much competition for student rentals in the city i was living in i was better off buying than i was renting. As a business student, we sort of analyzed this as a small project, and noticed the profitability. You know 20 hard means so we got to go. Scott we got 20 sends to get to break. Got the the whole thing. Im throwing you off. When we come back a big hour of squawk still to come. The big gathering of the fed heads in jackson hole. Well talk about that and a lot more when squawk box returns. [ dog barks ] [ male announcer ] imagine the cars we drive. Being able to see so clearly. To respond so intelligently and so quickly, they can help protect us from a world of unseen danger. Its the stuff of Science Fiction. Minus the fiction. And it is mercedesbenz. Today. See your authorized dealer for exceptional offers through mercedesbenz financial services. Dollar dilemma. Dollar general cutting down dollar tree in its bid to buy Family Dollar. A look at what the deal means for the dollar retail space. Big, beautiful, burgers. You missed a spot. The ceo of cke joining us to talk about the fast food glut and gives us his outlook for the economy. And china embraces the ice bucket challenge. As the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc first in business worldwide im joe kernen along with Andrew Ross Sorkin, beckys off today. Our guest khost is chairman and ceo of international paper. Its good to have you here. You have your pulse on the absolute finger i wouldnt say absolute. It doesnt feel like a 4 growing economy right now. The other one is counting trucks on i75. One that we used to use. The corrugated boxes. When we have the krafts on from new england we talk about boxes, too. Because things move, commerce moves through boxes. 95 of what 3406s around the country at some point in time in the supply chain is in a corrugated box and we make onethird of them. Have you seen on our network its great. Did you see the woman who designed the box that you can just like pick it up and it turns in to a box . Its more expensive than the ones you have to fold and be very careful with. Will people ever pay more since its such a tough place to make any margins at all, do you think theres room for that product . Because no one invested in it i dont think. Someone might have invested a little but the sharks did not like it. Its interesting. People think of the box business as a kwhodty business but it really isnt. We sell 55 million boxes a day. And rarely do what if each one was two cents more. Wed be a lot more profitable. Wed make a lot but if you had to buy it and it cost you two cents more to make it it would be difficult . Usually relative to the value of the product, the boxes are relatively small piece. And if the box doesnt function to protect the product the contents are impacted. Two cents more, but its a very competitive business. If youre not competitive youre not going to get the business. If you can occasionally we are the Fastest Growing network in primetime on cable. If you could mention that along with me. No one told me to do that. Just a little shark tank promo. Thats at 8 00 eastern time also at 10 00. Followed and the restaurant startup. Yeah. Coming up or not coming up making headlines, we do have some big news. Dollar general Conference Call that is just beginning at the top of this hour as we first broke the story at the start of the show. The Company Making a 78. 50 per share cash bid for Family Dollar. Dollar tree made its own offer for 74. 50 a share. That deal was a cash and stock last month. We now perhaps have a bidding war at hand. Also in global news this morning. China says mercedes is guilty of price abuses improperly using its control over supplies of replacement parts, this is just the latest Company Coming under fire from chinese investigators, under the countrys antimonopoly law. And tesla is boosting the Warranty Coverage on its models sedan just a week after consumers reports highlighted problems with the electric car. Among the changes, the drive unit warranty is now increased to match that of the battery pack. It covers eight years. Thats a long, long time. And what it calls infinite miles which im surprised about. Tesla says the change will have a moderately negative effect on its earnings in the shortterm. Joe . Lets get a check on the markets. U. S. Equity futures at this point were looking really strong earlier today, when you see them up 90 points premarket some of that is maybe a little bit of a snapback from that selloff on friday. Because we were supposed to be up 16. Next thing we knew we were down 80 after that convoy was destroyed by ukraine. And so this is a little bit of a snapback. Although we closed down only 50 or so on friday . On the docket this week Economic Data on inflation and housing and the feds annual jackson hole conference where janet yellen and ecb president mario draghi will be joining us now with more on what to expect ann greenhouse is chief global strategist for btid and lindsay, we ask everyone, dan, whens the first rate hike in your view . Were in the middle of the year. Middle 15. A solid, people are there for a reason. Thats a solid. Do you wish it was sooner or is that too soon . Well, my personal view is we could probably do a little sooner but my job is straddling the line between providing my opinion to clients and providing clients with an analysis of what is likely and the answer for the latter what is likely is going to be somewhere around the middle of next year. People think you look at how well the economy is doing and its not great but its pretty good. A lot of people dont think these emergency measures are still needed. Hasnt the rest of the world and europe in particular given the fed cover to stay low . Because, you know sure thats fair. But also remember its not just from the feds point of view. Its not just the function of the economy doing better but things are improving. Its are you at a level that you deem necessary or you deem capable of withstanding increases in rates. When the fed looks at inflationary pressures or some of the broader measures of the labor market beyond the Unemployment Rate. From the feds point of view they think they have some room to run here so to speak and again, using the experience of the last few years as basis they are much, much more concerned about aborting the recovery early than they are letting it run up too high. Recovery in quotation marks, really. Lindsay are you a behind the curve or ahead of the curve fed person at this point . I think the fed is in terms of my opinion of where the fed is, i think theyre right on mark. I think its very justifiable that the fed is sitting on the sidelines at this point. Looking at the labor market theres a tremendous amount of slack still out there. And i think the fed wants to make sure that the labor market is clearly on the mend before theyre willing to move away from this accommodative stance. Now that being said, i think the fed has a reason, very reasonable reason for moving away from quantitative easing. But again, in terms of the first fed rate hike i have to say that im looking out to the end of 2016, possibly early 2017 for the first fed rate hike. Well your eyes are bugging out of your brain. Two things, first let me disagree although lindsey is sort of, let me disagree. The fed is not sitting on the sidelines, lindsey obviously knows this. We sort of overlook them winding down qe, as providing less accommodation. So they are doing something in the face of whats going on. Sure, sure. Theyre not increasing rates. But im going to take the other side of that, lindsey, i dont see how they make it to 2017 if things continue along the path, a big if obviously, the path that were seeing now, building inflationary pressures, however moderate they might be in a tightening labor market is going to necessitate some kind of tightening policy sometime in the middle to end of next year. I think youre right. If we continue to see inflationary pressures build but as of last weeks ppi report i think that was more in line of what chair yellen is saying that the transitory or temporary inflation measures as a result of energy specifically are beginning to abate. If we continue to see that trend come into play, meaning declining head line inflationary pressures that further justifies the fed sitting at these zero level Interest Rates for a prolonged period of time. And i think the feds primary focus, even if we do begin to push back up to that 2 or even that 2. 5 threshold, their focus is on the labor market, and with stagnant average Hourly Earnings and the composition of employment still very benign with temporary, part time, low wage jobs dominating the employment gains that we have seen, theres plenty of evidence to remain in this accommodative stance. John how much do you focus on what the feds doing and what do you think is actually going to happen . Im not an economist so im not going to try to pretend i am one, but i think the fed is doing the right thing by, you know, backing off quantitative easing. We see no pressure on wage rates in our environment, and were investing 70 million and hiring 100 people in the u. S. But First Investment weve made in five years in the u. S. For the u. S. Market. How many people . Over 100 people. A big company if you dont mind me asking why do you see no wage pleasures in your particular business . Is there a shortage of Skilled Labor . Is there just so many workers you dont necessarily need to pay more to attract talent . Weve got tremendous productivity over the past decade. So if you look at our productivity per person, its up exponentially. You know, we do have an issue longterm of filling jobs as generations change and making sure weve got trained people. But, the supply and demand in the labor markets, because, again, the economys been so weak what kind of jobs . You know these 100 people . These are 50,000 a year jobs. Its a good wage. But were not are these on the floor . In an office . These are on the floor. Expanding one of our businesses to make moor paper cups. Because paper cup demand is growing in the u. S. But i think the point is, until we see a significant increase in demand, businesses Like International paper that serve a set of customer share in the u. S. Arent going to expand. Because we dont need to. Weve got plenty of capacity. Gentlemen, and lindsey, thank you. And dan greenhaus, and lindsey pieza we should be excited about jackson hole. About no, we should not be excited about jackson hole. It is a big problem if we cant be, its going to be hoard to convince our viewers to be excited. Jackson hole used to be an exciting outlet for fed officials to announce new mon ta tear policies. Now they have press conferences. They dont need jackson hole. Thats the frob lem. Im a skier thank you, guys. Coming up next when we return, its technology thats been used in movies like spiderman and the social network. Now otoy is ready to take its 3d graphics and realtime rendering to video games. Well speak to the ceo about this Disruptive Technology and how its being used throughout entertainment. Of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. It can help your business save money. False. The truth is when you compare our Fastest Internet to the fastest dsl from the phone company, comcast business gives you more for your money. Why pay more for less . Call today for a low price on speeds up to 150mbps. And find out more about our twoyear price guarantee. Comcast business. Built for business. Welcome back to squawk box this morning. We have a head line for you. I want to call it like hotel wars. There should be a tv show called hotel wars. Is this the guy from the sultan of brunei making a bid for new yorks plaza hotel. The wall street journal reporting an Investment Vehicle affiliated with brunei has offered to pay about 2 billion to acquire the plaza. Londons governor grosvenor, rather, and the dream hotel in lower manhattan. The sultan and his luxury Hotel Operator have come under fire for harsh new laws enacted in the islamic country. The laws sparked that boycott of his Global Properties including the Beverly Hills hotel. And theres been a lot of news about that recently. For the first time i have stayed at the Grosvenor House on hyde park. Awesome. They redid it and now its awesome. For awhile it wasnt so awesome. Thank you. This is where kshs this is where i truly do yeah, yeah, yeah, for the context. Because i at least have heard of this luxury hotel. Im not totally up to date on it. The Grosvenor House is now they redid it. To the standards that someone like you would expect . Yes. Now its up to snuff. All right. A missive light field or a star trek dubbed the hollowdeck was seen as Science Fiction at best but innovative cloud rendering company which has Googles Eric Schmidt on the board is developing technology that offers us a window in any world. Joining us to discuss is cofounder and ceo of otoy, its like the future, its like honest to go holograms where you can do 3d window but its cloud based. Thats where it throws me. It comes from the cloud. But can show up on any device including devices on the market today such as mobile phones. Google, samsung and others are investing in phone cases that could turn your phone into golgs that you could peer into like the old viewfinders, the old toys, and thats going to be anywhere . Its anywhere. You could be in your room. You could put these goggles on and be on the beach at, in jamaica. You could be next to the taj mahal. Its a cube of light. So its not like a 2d image like on tv. This is something you can walk through and were working on all the different senses, audio, touch the algorithms that must be involved with making it 3d, it boggles the mind. But i immediately think of video game applications. The hollywood has been doing this in really expensive big budget movies for awhile but this brings it home. To a smartphone. An application that you can have on your smartphone . Thaerkt. We are a visual effects company. Thats where a lot of this technology came from. Weve been doing gc for films. Light stage won an Academy Award for benjamin button. So weve been scanning actors and objects holographically for a long time. Thats the seeds that led to this technology where you can put that on the cloud and render it holographically and that holographic stream is very easy to decode while youre navigating through it on a mobile device. Did you read up on this . Yeah, no its amazing. So how far how many years is this away . Years . No its months away. Months away . Were getting the mobile phones that are on the market today google just announced, Google Cardboard, its not a joke. Theyre going to create cases for your phone that you can use to navigate through street view or google earth. The next step is how do you deliver an immersive 3d video scream to that device . So weve come up with this technology that renders everything like it would be for a hollywood film but streams it as a holographic stream to Something Like Google Cardboard you could actually experience that. So this is not something thats years away its really months away i think. And what about wearables . How does that change everything . Is there going to be a time where everyones wearing google glass or Something Like that and youre seeing this wherever you go . Yeah, i think that google glass is really just sort of one end point. Google cardboard is something thats more immersive. It takes you some place. It fully impercents you inside the environment that were projecting. And thats something that i think will catch on even faster than google glass because you dont really need to buy an extra device. This will work with your existing phone and its very cheap. Whats the revenue model . Wheres the money . When you start moving, were already working with three major Hollywood Studios that are looking to take youve got blue rays and dvds that are declining in sales, and a lot of what makes those valuable would be extended content. If you could take the sets from these movies, actors, behindthescenes and turn that into some place you could visit and then stream that thats worth a lot. Its probably worth tens of billions of dollars where you consider that thats where everything is moving. It is going to be applied to both video games and linear entertainment i think. Both of those combined in the shortterm for you the revenue isnt hollywood . Its in hollywood and its also Broader Market right . We think that theres a lot of content creators out there. Our tools are web based you dont need an expensive computer to make holographic rules or immersion. Thats something you can do from a browser. Its more like a youtube cont t content. You can make these kinds of holographic scenes, and distribute that to anyone. Its a meritocracy, the better the experience the more people will use it. You can advertise it, of course you can sell it. So i think that yeah, its broader than just hollywood. Well start with the studios but then we want to see this expand to everyone. Does the Processing Power matter . I mean if you think out two, three, four years from now, w t what what you know how realistic things will look . I know they look pretty realistic already but does it get even crazier . It does. It gets crazier because we can use the cloud cloud based rendering. I know. But theres a processing issue. I like the cloud based rendering idea that you dont the skys the limit basically. Yeah. Infinite. Today we can render just about anything in the cloud and deliver that experience as a hologram. Three or four years from now, youll be able to interact with that world and change that world in realtime. And that will be as Cost Effective as just streaming a static world that you can navigate through today. When we are singularity comes, when weve downloaded our brains onto hardware, we will be traveling in his world. On holograms through cloud based rendering and well never leave right can i do that . Some people will want that. So, yeah. Not everyone. But some. Take out an avatar. Ive got a couple picked out. Who did you pick out . I dont know. Big handsome like that guy that was flipping the houses. I might come back as him. Brad pitt . Yeah, someone so total coincidence that who what your best friends with roddenberrys son and youre doing a holodeck thats just weird right . Weve been best friends since we were 12 years old. Is the cocreator of star trek. Everybody knows gene roddenberry. He invested in the company. And hes investing in many things. He wants to build all the Star Trek Technology he funds to fund that theres the x prize and he said our goal and heres this money build something kohl jules and i said holodeck and here we are. Is bones any of his relatives involved or hes the last one. Shatners hair involved . No . Okay. Thank you. Jules. Jules. Coming up, they like things big in texas. And the new carlos jr. Burger says its just that as you can see right here in this commercial. Thats supposed to be, of course, about aburger. The coo of Cke Restaurants talks the fast food economy in just a bit. Well keep running that for awhile. Youre talking awfully fast for the first time ever. I dont know why rushing through this. We could check out the futures get to the end quick enough. But why. But why . When the world moves, futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with paper money to testdrive the market. All on thinkorswim from td ameritrade. Welcome back. The ice bucket challenge showing no signs of slowing down since july 29th the social media driven craze has raised more than 13 million for the als association. Among the business celebrities that accepted the challenge over the weekend, jeff bezos and bill gates. And ear getting word this morning. The Ice Bucket Campaign apparently now hitting china. Our colleagues in beijing tell us that chinese i. T. Entrepreneurs have been dousing themselves with cold water since the weekend. Back here in the states, another celebrity challenge, this time for beyonce. A texas tech football coach Cliff Kingsbury nominating the green bee brought out his entire Football Team to help him with the challenge. He also nominated former red raiders manny ramirez, its a dominated here which is weird, louis vazquez, and wes well kerr. Wes walker it says here as his team dumped ice water on his head beyonces drunk in love started to play. You see its a great hbo commercial for the new jayz, beyonce concert thats coming up called bang bang, and if you understand what may be happening in their marriage, its a whole i want to ask you about that. I dont know but its fascinating. Theres been rumors. Then it seems like it is going okay. I dont know. Its none of our business anyway, right . Im not sure. Can the ceo of cke Restaurant Owner of carls junior and the red burrito is going to be here to talk about the glut in casual fast food dining. Always an excuse for images like that. But next, air travel in 25 years. What will change . Phil lebeau is here. We can i mean, i dont know if youre as exciting as anyway. Phil . Andrew, 25 years from now no crying kids are allowed on planes. You wont believe it. Weve got the whole story coming up. Squawk box returns. So what ya got on deck . Skyfall. Lean in, then some pinterest, you . Twitter. Minecraft and then some hunger games. Boom. Wow, you guys are all set, huh . Oh yeah, new amazon fire phone. It comes with amazon prime tons of cool stuff for no extra charge. Really . It comes with amazon prime . Yeah, theres so much to watch. Ive been on this earth nine years, ive never seen anything like it. The new amazon fire phone, with a full year of prime included. Exclusively on at t. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com e financial noise financial noise financial noise financial noise welcome back to squawk box this morning. Lets take a look at some stocks that are on the move this morning. First the story we broke earlier this morning. Dollar general starting a possible bidding war for Family Dollar. Its offering to buy its rival for 78. 50 per share in cash. Thats about 9. 7 billion dollars total. Family dollar already has an agreement in place to be bought by dollar tree for 74. 50 per share. Youre looking at Family Dollar now over the original price, so the expectation is there will be a higher bid to come. We will see. Also in a public group said to be in consultation with its banks ahead of a meeting with activist investor elliot management. The wall street journal reporting the ad agency is working on possible responses to elliot which now holds a 6. 7 stake and is said to have called for a sale of that company. And Credit Suisse issued an outperform rating on seaworld entertainment. That stock has been battered recently in the wake of the black fish documentary and disappointing attendance. Credit suisse says the stock is likely near a bottom. So many people complain about the flying experience these days, i mean, take your pick. Small seats, screaming brats in first class. Its old. Its old. They put it in the prompter. But weve done it enough at this point. You drove to connecticut, right . Yeah. So there werent any just your own in this case. Theyre okay, though, right . There i am. You say it gets old. It never gets old for people. The real question is there we go, the real question would it be even different 25 years from now. Phil lebeau joins us with a look at how things will change. I dont know if you ever did weigh in on toddlers in first class. I know where hes coming from. I mean if youre on a long flight, nothings worse. Nothings worse. But do you think they should be in steerage or the wheel well . Nobody thinks that its fun but you cant legislate it out. Theres no way of getting around it. Used to be you could send kids through the postal service, through the mail. In my day thats what we did. We have pictures of that. Would you go back to that . No, i would not go back to that. Andrew flies a lot. I fly a lot. We dont fly as much as you. The bottom line is expect more congestion in the future. And if you are somebody who does a lot of traveling, the bottom line is youre going to see a lot more people who are flying in the future. Look at this, 25 years from now, the number of people flying, even 2032, not even 25 years its going to basically double up to 6. 7 billion people worldwide annually are expected to be flying by 2032. What can you expect when youre flying 25 years from now . Well airlines will be offering more connectivity. Were already seeing it. But its really going to take hold over the next several years and you can imagine 25 years from now youll be able to really keep in touch with people when youre flying. Youre going to be bidding on open seats. This i think is something that well start to see within the next five years. You get on a plane there might be a Seat Available in Business Class theyll say take out your phones put on your bids if you want to move up here. And finally airlines will be offering a la carte pricing so you can customize the type of service you want in your seat. Anybody will be able to walk anywhere. And again, you can be in that big seat and have nothing more than the seat and the seat belt that goes with it. You can be in a tiny seat and have a five course meal and priority boarding. It really allows the traveler to have complete control over crafting the flight journey that she or he wants and fits their budget and needs. So what type of planes will we be flying on . This is animation from airbus in terms of what they envoice the future to look like. Well see more light in planes. Bigger windows, will continue to get bigger in the future and the cabins will have more humidity. Thats what we started to see with the dreamliner so its not as dry as stuffy. But one thing wont change, yes, you will still have irritating people on your flights. My dream flight in 25 years would have special seats, unlimited cocktails, and just be, you know, youd have capability to find a place to relax, have quiet time. In 25 years my dream flight would not have kids. Pretty much. Screaming kids. My dream flight in 25 years would not have crying babies. Now look. That was not that was not there for to bring this thing up. But it is a complaint of people who fly. And weve all been there. Ive flown with kids. I know what its like when your kid has a meltdown on a plane. Theres nothing you can do. But it is a source of irritation. I got a handful of questions. The first is, nobody has talked about whether the planes are going to go faster than they do now. No. Because thats all i really care about. Will they go a little faster . Yes. But the bottom line is airlines have made it clear they will choose fuel efficiency over speed any time. Im a little bit surprised thats that where youre going. You want to be downloaded onto a i want to live forever. But my point is, you saw how many planes were going to sell to china. As middle classes around the globe come up to where they have more leisure time and what theyre going to want to do is travel but its always going to be fossil fuels. Always. I cant see any way theres a lot of research thats being done to move away from that. But what to what . Its not going to be natural gas. Biofuels. Biofuels is still fossil fuel based. Generally speaking. Its not going to be wind, renewable, solar it cant be solar or the carbon foot print is here to stay. Its a matter of how much more efficient and the bloombergs of the world theres only one guy on the plane as they worry about Global Warming. They bring their staff on the planes. Planes on these long haul flights eventually youre going to go into that lower atmosphere hopefully that can cut down the flight time between new york and tokyo by an hour lower or higher . Higher atmosphere. We will go faster. And you know that people do want to what about autopiloted planes . I mean, where theres no pilot on the plane. Thats wont happen. That wont happen . Or people piloting it from the ground . I dont think that will ever happen. The second passenger. Look jim mcnerney he has basically said if we want to we can make a plane take off and land on our own without somebody in the cockpit. Do you want that . Really invested in landing the plane safely . Dont you think that helps not disagreeing. Im just wondering. My other question is you showed this terrific image of a plane that looked like it had sort of a glass shell where you could almost like sun yourself out there. Is that realistic at all . Its not realistic. But it is realistic that youll see more light being let into planes. The bigger windows on the dreamliner i think you know theres some talk that you could see those get larger in the future as well. People want more light. Miles are going to be good yes they will be. Thats the holy grail. You know that. My question was actually, seeing the recent article, on the big plane that airbus staked its future on airbus. Yeah, airbus. Staked its future on should we really be going to them for a prediction of the future when they so badly predicted what the nearterm future im going to get fabrice to come on and you can pick away on him. Is it going to work . Is there a time and place for that thing . For the a380. For leading, unloading, the one with how many people . With more than 500 people going from mumbai to london . Yes, between huge markets there is a small not a huge need we cant put it to bed that boeing that that strategy is better than airbus. I think its been borne out the point to point airbus has basically said that already. What airbus is looking for now is a good way to get out of the a380 problem without drawing too much attention to it. Thats what i mean we go to them for a look at the future. It was cool animation. Tv. Wins out every time. 25 years from now does china make their own airplanes . Yes, theyre already doing it. Youll see the first of those in the next five or six years. Will they be a big threat to airbus and boeing . No. But down the road theyre smart. Theyre going to learn from this. All right, phil, thank you. See you guys. Okay. Up next, is Hannah Ferguson helping carls jr. Sell more burgers . The ceo of Cke Restaurants, owners of carls junior and hardees the Green Burrito will join us and later did you know that more than 95 of all products shipped in the u. S. Are shipped in brown boxes . Yes, you knew that. Weve said it about six times today. International paper makes a third of them. More than a third. Right . Yeah, i guess a third. A big business and a good indicator of the state of the economy. John faraci will give us his assessment in a bit. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Machines will be sprayed to be made. And making something stronger. Will mean making it lighter. One day, factories will work with the cloud. One day. Is today. Welcome back to squawk box. 85 points of upward momentum seen at the open on the dow. And making headlines a study conducted for bankrate. Com finds that a third of americans have nothing saved for retirement. Perhaps most trouble being, if you look at those 65 and older, 14 have no nest egg whatsoever. The two most cited reasons for why not, cost of living, and daytoday expenses. Same thing, arent they . Daytoday expenses. Pretty much. Lets talk about fast food this morning. Competition among fast food and casual restaurants is heating up on friday we asked tim love from cnbcs restaurant startup about the challenges of expanding a restaurant brand but diluting the customer experience. Well that was a shot of bill gates. Were going to try to get you tim love in a minute. I dont know 23 were going to get him in the control room. But if we dont, which were not apparently, were going to now get to our guest this morning, someone who works in the restaurant business. Weve been showing a different video all morning, the ceo of Cke Restaurants which owns popular burger chains carls jr. And hardees. We have been running those commercials that youve been running. Racy commercials. Do you get any pushback on those commercials . We get some. We dont get as much as we used to. When we did the first one back in 20052006 we got some putschback. Not so much anymore. People are used to it and other people have copied it. Tell us about the business, you know, weve been looking at whats happened to mcdonalds over the past couple of quarters and theyve struggled. Im curious what youre seeing from your vantage point. Our sales have actually been very good this summer. The burger that were promoting in that ad with Hannah Ferguson and paris hilton has been a very good seller for us, black angus brief, brief brisket, barbecue sauce, fresh baked bun, onion straws and cheese. I think its one of the most successful limited time offers weve had and certainly one of my favorite burgers that weve ever done. Its been very successful. Mcdonalds is really in a different position than we are. They market to women, kids and families with very inexpensive food. We focus on more premium products, higher end, and our marketing focus is young hung dry guys and the women that love them. So were in a different spot than they are. This interview is very distracting because we have the commercial going while youre speaking. You probably cant see it. Nobody listens to me when thats running. Probably cant see it. Did she actually eat any of that hamburger, by the way . Oh, yeah when you do these ads, they do eat them. But you go through about 50 burgers to film an ad like this. Its quite an experience. Whats the price point on this burger, for example . This burger is around 4. 25, 4. 69. It depends. We dont control franchisee pricing. So its a little different in company and franchise stories. But we offer it on a pattie thats almost a quarter of a pound. We also offer it on a onethird, and onehalf pound version with blank angus beef. So there are three different price points. Im looking at an oped piece that wow yeah if you havent gotten pushback on the commercials, you must be getting a lot of flak for this. Youre talking about stuff with the president , who, you know, has recently just in keeping with the last five years, said corporations have to stop complaining, ceos got to stop complaining, you didnt build that, blah, blah, blah. Anyway, you said here what the president fundamentally fails to grasp is that politicians in washington dont create jobs. Or economic growth. Americas businesses and Hardworking Taxpayers are the key to rebuilding a healthy economy. Our free market has produced more wealth and distributed more broadly than any economy thats ever existed and it happened without government management and then you go on to point out some of the stuff that is, i dont think people really thought this through, the nlrb secretary of labor, they want to actually now get all the way up to general managers that are now working with performancebased bonuses, they want those guys just to be hourly employees, just put their time in and it has nothing to do with earned success or performance base. It seems like that is the zeitgeist from this administration. That were moving towards. And they dont see any disconnect between that and the type of the results theyre getting. Well hopefully you wont get a lot of pushback in this country for saying the kinds of things that i said. I hope people will listen and Pay Attention and kind of look at whats happening between the government and business. Because, businesses do create the jobs. Businesses do create the opportunities. Businesses do allow you to lift yourself up to another level and if people have been successful. Look i started with nothing. I had no Family Support through college or through law school. I worked my way up. I really appreciated the fact that i had the opportunity to do so. It wasnt something i didnt really expect anything from the government. And if people like myself, if we cant speak up and say what the opportunities that have been available historically in this country were, and how whats happening at the government level now is damaging and hurting people, who were like me. When i write these articles i dont write them for me. Ive been successful. Im fine. I write them for the millions of people like me who are down there and really dont have anything right now but would like to take advantage of the opportunities that may be available to them in this country. In their lives. The reason that their forbears came to this country. And i think that if we cant speak up on those issues who is going to speak up . Where did we lose sight and the private sector employment, the employment generated in the private sector, the payroll that come from those employees, its those taxes that go to paying for the government employees. Right . And for paying that inferring that government does. So i dont understand where did they lose sight of that thats where the ability to actually have a government comes from . Not the other way around. That the government makes the infrastructure and gives them the opportunity to succeed here. Thats not the way it works. The private sector allows for the governments existence. I think over time people forget. We had problems in the 30s we overcame those. Business really came back. We had problems in the 70s post president reagan came in and the government got out of the way and business came back and grew. Now were in a position where were not seeing the kind of growth we should be seeing. Not seeing the kind of job creation we should be seeing. You talk to any businessman or woman and theyre going to tell you that the biggest problem they have right now is the government. So we need the government to move aside a little. Let me ask you a question about many, if not most of your employees who work on the front line at your restaurants who i imagine are getting paid minimum wage or somewhere similar, you know, what do you say to them . How do you speak to them given that most of them, if this is the wage theyre going to live on for the rest of their life and hopefully this is just a starting job but these days in this economy it seems to be very hard for just to be a starting job, it is not a truly livable wage . Well, with we do have for high school and College Age Students we do have people that make minimum wage. And one of the reasons for that is we like to keep these entry level jobs open to people so they can get the kind of experience that they need to move on and do other things in their lives. We also offer up to 10,000 if youve been with us a year and you maintain a c average well cover 10,000 of your college expense. So you can actually increase your minimum wage substantially by taking advantage of that offer. Above college age, 22 to, we have employees in their 60s, very, very few, a very small percentage, 4 or 5 make minimum wage and those are people that are trying to supplement their income with parttime jobs or theyre people that are retired and just want to get out in the community. So a very small number have those minimum wage jobs. And you can make we have general managers that make 60,000, 70,000, 80,000 a year between salary and bonus. So you can make a very good career for yourself in this industry. On the other hand, a lot 6 people use it as a stepping stone. To get an education, or to get the experience that you need and if we dont have those kinds of jobs available, you know, i used to work in a baskinrobbins. I got 1. 25 an hour. I never thought id be able to support a family of four on it or that it was a career. Some jobs rust judge going to be minimum wage jobs and we need to keep that in mind. Thank you for bringing us the conversation, and Hannah Ferguson. We appreciate it. Coming up were going to talk to jim cramer who is going to join us from the new york stock exchange. In the mean time check out the futures right now. We do have some green arrows. Well be back in a moment. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant recharge along the way. The green emotion project, funded by the European Commission is using the ibm cloud to make this possible by creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go. Take your business further with the ibm cloud. The ibm cloud is the cloud for business. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Stock exchange. John faraci is here. Looking at his business, everything moves for the boxes, 1 world. I dont know whether you know theres other things that can help you know juice that above 1 for gdp growth, but its just not gang busters in his view, right, on, as it has been at certain times in the past . Sure. I think you can explain away the First Quarter, cold weather, lots of it the economy shrunk. It doesnt feel like a 4 gdp growth economy to us looking at our business. Somewhere else to make up the shortfall. Ive learned the best indicator, ive known john for a long time if john says its around 1 pshgs there isnt some part of the economy growing 4 or 5, its growing 1. Its the finest indicator. Its always been. Im not going to trifle with it. We are probably in a better position than most other places. Right. And thats reflected in dollars and bonds and in equities, i general motors, right . Yes. Look, today we have talks, russia ukraine. I think europe shot itself in the foot. They put the foot on the jugular, theyll slip back into recession. Its difficult to have Worldwide Growth if its just the engine of the United States. Look i love to think were big enough but were just not. How do you play Family Dollar . Dollar general is telling you, Dollar General has so much more gain to happen that i think a lot of us were mystified. Dollar general ceo wasnt sure where he wanted to go. You dont Dollar General. I think that they get. I think dollar tree walks away. I like the eninvestment bank that came up with that idea. I thought of that idea, jim, dollars in the name. Should we call it dollar, dollar, dollar if they get together, or family general tree . I think that i think that as long as we leave tree off, were okay. How about the fact that Walmart Walmart should bid. We would realize theres a pulse at walmart. Not were not sure. When was last time they did something . I dont remember. Well see you in a couple of minutes. Hi, john. Hi, jim. Anything that floats and new meaning for the term mobile home video. Thats right after the break. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back to squawk box this morning. Video from the annual anything that floats regatta in the florida keys. Amateur boat builders showing off their home made vessels. Tick a look at some of this stuff. Most creative a boat made out of two liter plastic bottles. Is that what were looking at . Some boats unbelievable. Check out this story, a house carried on a flatbed truck, got stuck on a louisiana bridge. The company the moving company miscalculated amount of room needed to clear the guardrail. Traffic was stopped while the house was dislodged. All right, john. We want to thank you for spending time with us and joining us today. Weve talked about the state of the economy. Talked about a couple of things that might help. When you say getting money into the hands of consumers, how do we do that . I think competitive tax reform for individuals. You werent talking about minimum wage or Something Like that necessarily . No. I think the i think the longerterm structural solution is weve got to get more money into the hands of consumers, create consumer demand, that will create the job growth. I mean, both parties have different ways of like everything, you know, thats what we sit here arguing about. Do you think anythings going to change in washington . Im a realistic optimist. The realism the optimist in me says yes, the realism in me says maybe not for another election or two. Weve got two coming up. One in november. See what happens there. And then its going to be its going to be interesting. Two more after that. Yeah. All right. Thank you, john faraci. Thank you, john. A lot of fun. Good to see you. Thanks for joining us. To you as well. And good to see you. Nice to see you. Just the two of us. Just the two of us this week. Join us tomorrow. Squawk on the street is next. Good monday morning. Welcome to squawk on the street. Im scott wapner with jim cramer live from the new york stock exchange. Carl and david are off. Road map starts with the dollar store dual. Dollar general offing to guy Family Dollar for 10 million take on a competing offer from dollar tree. David fab already call in in moments. Markets looking to heighten gain as tensions between russia and ukraine ease for this moment. Robert