Transcripts For CNBC Squawk Box 20140915

We had the cognizant ceo on, hes one of the youngest ceos, 38 or 39 years old. This is one of the deals that i didnt realize cog anizant is a big as they are. They were there before but this changes the game because the systems that this company is buying puts together, we may use it, actually, its back technology between the payer and provider. So thats what the deal is. A nice little merger monday. Joe is looking at me like this is okay. Good job. Not interesting. This is what you want. You tell him you want breaking news. You want news at 6 01 in the morning. You want news. Okay. I dont recall trizetto being acquired. I have never heard of them before. Im sure you hadnt yet until you got this. I dont even know if i know apex well. You know apex. In the u. K. , thats where we were based originally. This company is based in colorado. And what in health care would or did they actually they actually do the Technology Service behind sort of the computers where you have the provider and then you have the us, we pay, and you put them together. But we dont recognize that. Or you dont think that you see it. My only all i can do to add some value here is that we have some illness in our family. You are definitely stuffed up. No, i dont have anything yet, i hope, but we we want and actually combined both kids. But a Nurse Practitioner handled the whole thing. I have been to a Nurse Practitioner several times in our practice. She mentioned that she was very excited, and there was a Nurse Practitioner that was also being trained. And they were both excited to be there, unlike some of the doctors that have seen the 50th case that week of the same virus. They like that. This person was into it. She was explaining stuff. They can give you shots and all kinds of stuff. Giving us lectures on the immune system. How fever is good. It was interesting. So she took her time with you guys . She was into it. Because doctors are kind of like, oh, another cold. You know, i need something interesting. Where is my ebola . I want to help you a second, 30,000 employees. So no one can make money on the stock. Its a privately held company that good job with bringing the breaking news. Investors are looking for any clear hints on when the fomc will begin to raise rates. Stocks are coming off the first big loss this month. They are below the intraday highs. Volatility is creeping back below 10 . A little bit of volatility back at 13 . Creeping is the word. We didnt really get the kind of upside momentum this is the first down we have seen in five weeks. The dollar has had its biggest run in years. Because of what the European Central bank that explains oil, gold, and other things. And eventually it might become sort of a headwind for everything. It does make noise. Its more attractive to foreigners. The dollar thats another reason the yields are going up. 1. 29 now on the euro. And gold, if you didnt i just remember that year when they asked us is it going to 2,000 . It had develop from 300 to 1900. And then empathies its going to 3800, but it didnt. Its back. Well, it is 2,000 for 2 ounces. I think im going to buy this. Really . We keep getting solar flares. This was just northern lights. It was not aimed directly at us, i guess. Thats good. Rutgers did you watch the jets . Yes, i saw them fall apart in tend. It was such a great touchdown in tend. Gino is good. But i also want to give props to rutgers leading 100 at halftime against penn state. A big game for us. They did look really good and played really hard. Im glad youre able to find some silver lining. The bengals played well. Im not ready to give them the super bowl ring. Im not sure what happened to San Francisco. Beautiful stadium. And i saw on the big network you didnt notice that when he made appearances with us . Im not impressed with people until they appear on the network. They look better and sound better. Like if you did that cognizant story on like a network, then i would be really yeah. That would be really interesting. Are you going to do it again at 7 00 and 8 00. Hopefully it gets announced. Try to get something a little bit more andrew, i appreciate oh, it was just announced. It was just announced. We were six minutes early. 26 billion, thats big. The young ceo. Yeah. Let me tell you about the other Corporate News happening. Alibaba is set to go public this week. The chinese ecommerce giant is planning to increase the size of its offering because early investor demand has been strong. That ipo is expected to price after the close on thursday and begin trading on the nyse friday. And a fight is brewing in the beer world. Heineken confirms it have approached by snb miller about a takeover. They intend to keep the company. Theres talk of a move on snb miller but its not happening so far. This has to be a friendly deal. Anything over 2 and its not happening. Right. If they say sorry they are above 50 . What else can they buy . I dont know my beer friends to know what else is out there . Theres been a lot of consolidation. More than snb miller owns. Thats budweiser now, right . Yes. Yes. Budweiser is still inbev. But coors is available. Are you still at the bank of montreal. Ive been there a while and am not going anywhere. Whats the news . Its still there. Okay. Thats news. Well get to brian in a moment, but meantime, well tell you about young brands looking to expand beyond pizza, tacos and fried chicken. The fast food giant is opening the first bond shop dallas with casual restaurant. Customers point to the thing they want. It is responding to my lep y they are partnering with the Third Largest Telecom Operator expanding to germany, austria, switzerland, belgium and l lexumborg. They dont have multiple tier pricing. In france, you mean . Or everywhere. Everywhere, i dont know about that, actually. Theres a battle in the war between amazon and hachette. The writers are appealing to the board of directors today. The group called authors united posting a letter on its website saying in part, efforts to impede or block the sale have a long and ugly history do. You personally want to be associated with this . Authors have until wednesday to sign the letter before its sent to amazons board of directors. Would you sign that . You did see that someone, maybe you can actually get behind the u. K. Going on iowa thinking about a run. We know shes there. This guy Bernie Sanders is headed to iowa. He thinks theres a ground swell in the country. Things like hes thinking about i know bernie. Im thinking maybe. You would think i have a better chance. Honestly, i do. I think bernie has been tweeting my claims recently. So this is someone you can get behind. Bernie are there any other bernies i can throw in here. Bernie cavro. He became a red sox, didnt he . I think so. Now i remember weekend at bernies. That guy has a better chance to retweet your columns. I just saw this a few weeks ago. You must be so proud that the left wing socialist in the country retweets your columns to say this guy is a little bit more liberal than i am. It takes all times. Lets get more for investors looking ahead to the twoday trade. Paul donovan, the global economist at ubs. Great to see you. Thank you for coming in. We talked in the makeup room beforehand and one thing you noted is that investors you talk to at point are concerned about missing the upside than waiting for a downside. We are. We had an interesting market where the markets did not follow the quote unquote social market. And now for all intensive purposes, we have not had a conversation over the last three to four months where investors are looking for more than a 10 correction. They talk about it but whether or not they are positioned accordingly, we dont think so. Judging by our conversations with clients around the world, most people are fully invested. They are more worried about missing more upside that downside and that typically is a bit of a frothy level. Just because everyone is convinced the ball is not going to come, thats when it generally does. Basically. We talk about that a lot, but whether or not people are positioned accordingly. But the surveys are telling people we are still kind of bullish. And sit down to answer their questions and do the research for them, it is desperate not to lose money. If i look at the private base, private capitalization is always a big deal. But Institutional Investors are becoming more like they are looking for the next big thing. They are propping up on the radar screen to look into the future for the next big thing. So we are constantly getting little surprises popping up and all of a sudden the markets are moving 3 . Down a half point, that seems to be something we are getting quite a little bit with. What does that tell you, that people are nervous and theres not going to be a way to get around, what dhauz mean . We have moved into a lower nominal return environment. After 30 years or more of high mom mall returns. Not necessarily real returns but five years ago if you guaranteed a 5 return, that was easy to achieve with a minimal risk portfolio. Try to look at your average return on a portfolio to be around 4 . If you lose 10 of your portfolio, it is years to make that back. That didnt used to be the case. Thats really a problem, i think. Well this longterm problem, can you get away with that . The rates are going to be different Going Forward, we believe. However, the story with respect to real rates rise and the economy continuing to improve. Over the last five to six years, the investors are key on the dollar. As the economy improves and the stock market improves as well, we think the effect for 2015 2016 is what we call recorrelation. Recorrelation of stocks, earnings, the economy, Interest Rates and the dollar together. All possibly coordinated. Something investors dont understand and were really kind of playing alltime hockey going back to the 80s and 90s where that was the effect then and thats the true fundamental effect on stocks for the next few years. But 2015 will be the transition year as we start to see rates slowly go up and the economy slowly improving. Investors have to address according accordingly. You are just back from europe and the tone there is different than you have seen the last five years. We were talking about france in a prior comment. We were just in paris a couple weeks ago and since the Portfolio Managers that at least one if not two declines actually said it is to europes benefit into the worlds benefit to have a Strong America. And we are not seeing a Strong America right now, which was shocking to me, especially coming from paris. Now, it came during a week when their own president was having problems with respect to press in the like and the people are not happy with their day, but it is relative. One person actually said well take the tone back. Thats different than the last several years. When you look at whats happening geopolitically. What does that mean for u. S. Stocks . The one thing note getting enough attention, whats happened in europe is it is quite part being in nato. And the only person they speak to in is a single trade deal. If this is passed, it will make the World Trade Organization relevant and give the u. S. Support of the global trade agenda for 50 years. Its a very antichina piece of legislation. Its powerful and is long complicated. Nobody can be bothered through the 5,000 pages of rep lick case. And what is happening now is i should have prepped the two sides together more and its fostering that. This will be a really, really big deal. Paul, ryan, thank you both for coming in today. Coming up thats why they made a movie or ten movies, cutting a tree. I guess it bounced back. Oh, thats in the next half hour. Good, good. Oh. Anyway, i can still play tennis, which is good. Because i dated chrissy a while. Coming up, big news for alibaba. The china ecommerce show is coming up. And you missed the bears to come back to beat the 49ers. Nobody predicted that. You woke up to a much different ending with the bears scoring three touchdowns in the fourth quarter. The weekend in the nfl and the sports world, coming up on squawk box. E financial noise financial noise financial noise financial noise welcome back to squawk box. Alibaba is on its way to become the biggest offering in history. Susan li is here to discuss this morning. Good morning. Good morning. This is a water away from their main market in china. And 500plus investors clambering into the Ritzcarlton Hotel for the main event, five minutes of closing remarks. And he was speaking to an investor community, also a broken community that feels sour this ipo didnt land here in the Hong Kong Market because they felt that they deserved it. They know the market better and they listed their b2b sites. Because of restrictions it didnt land in hong kong, so jack had to turn on the charm saying they still love hong kong and will continue to invest in the city, but he also addressed his ipo going to new york instead as a redefinition of the company. Take a listen. Not a company from china. We are an Internet Company that happen to be in china. And part of his address, jack moss said, take a look at what we are doing in russia and brazil. We are the number one Ecommerce Company in the markets even though we dont have a physical presence. Thats only the beginning. We met oneonone with investors in the city and ive been told hes been meeting with several wealth funds and will be meeting with several wealth funds heading to singapore tonight. From what i understand, they are already on their flights. Susan, before you go, what is the expectation in terms of percentage of allocation of stock for those in china, for example, compared to u. S. Investors compared to even european or russian investors. Yeah, thats a very good question. And i was talking to investors at the road show because as i mentioned, they have a sour taste in their mouths because if it was a hong kong ipo, they would have gotten the bulk of the allocation. But now it is a new york run operation, they are not expecting a lot of the shares to come here to the asia pacific. In fact, i know that a lot of the investors have put in monstrous orders of a billion plus and will be happy to get 1 of the orders they put in with the underwriting banks. Susan li, thank you so much. When we return this morning, a definite maybe. Hillary clinton spending the weekend in iowa making speeches to rally democrats. But stopping short of throwing her head in the ring. We have that discussion next. And as we head to a break right now, a look at last weeks winners and losers in the stock market. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Good morning. Its squawk box on cnbc. Im joe kernan along with becky quick and andrew ross sorkin. If youre asking a cup of coffee this morning, chances are youre not alone. A new survey finds that journalists drink more coffee than any other group of profession. Im doing it right now. The majority of those polled, 70 admit their working act would be affected without a daily dose of caffeine. And i do this on the way in and then i dont bother with it after that. I wait until 7 00. I cant imagine drinking it in the afternoon. I see people at night drinking. Maybe its decaf. I dont believe its decaf. I dont understand drinking it at night. How do they go to sleep . If i have it after 3 00, im done. Bill ackman is headed to europe. Hes announcing plans for an Amsterdam Fund ipo. He hopes to raise 5 billion from a nonu. S. Institution of investors. And u. S. Investors are turning Bank Employees into informants. The wall street journal says officials are gathering evidence against the bankers colleagues in the probe of possible manipulation of currency markets. The paper says the doj and fbi are preparing to seek criminal charges against individual traders as early as next month. That means they are seeing rats in there, in those banks. Nobody likes a rat. Nobody likes a rat. Jack lew has a warning for china. The journal reports the secretary runs the recent run of antitrust investigations could have serious implications for u. S. china relations. Also, last week was the first week in six weeks that the s p and the dow ended lower for the week. Those markets actually closing at the lowest levels they have seen in a month. The futures are slightly lower with the dow opening lower by 11 points. In early trading, for the most part, modest declines. In spain, the ibex is down. 25 . The dax is down by just over 1 . The nikkei ended up by. 25 . Oil prices we have been watching so closely as wti continues to slide. And brent is down this morning as well. Wti down 75 cents to 91. 52. Questions on what opec will do if we fall below 90 a barrel. And look at the tenyear, we are yielding above or just at 2. 6 . The first time we have seen the yield on the tenyear in quite a while. The dollar continues to be strong against the euro. Youll look this morning at trading the euro at. And gold prices are sitting at 1200. Lets talk politics. Hillary clinton and bill clinton taking a trip to iowa. The former first lady making a speech to rally democrats in a Gubernatorial Race for tom harkin. Is this the first step in running for 2016 . John harwood is here, the answer, sir. Ill answer your question as soon as i have a bit more coffee. Cant work without it, john. Exactly. Yeah, look, every sign indicates that she is running. Like a lot of politicians, they prepare for races and they get very forward leading about it. Theres an offramp there if they decide for personal reasons or political reasons they are not going to run. But i think everyone should assume shes running. She had a good time yesterday in iowa teasing everybody and raising her eyebrows and making little jokes and drawing big applause. But its a different story when it gets to winning votes on the ground because she had a similar reception two years before the 2008 caucuses and ending up coming in third. Do you think shell get pushed aside by Bernie Sanders . No, i think hell put both hands on her back and try to push, but i dont think shes moving for him. I dont think shell move for martin omalley, the governor of maryland. I think shes in the strongest position two years out from a president ial election of any candidate i can remember in an open she chemical weapons. The other party looks relatively weak in come comparison. You did not mention joe biden. Is he not in the race . Theres no choice for joe to run against Hillary Clinton if shes running. His decision is contingent on whether shes going or not. Joe biden has done this twice and it didnt work out both times. Hes had a very good run as vice president. Its not implausible that he would run, but i dont think he would try to run into the teeth of the hillary hurricane. Hillary had it last time except for one unique difference, and that was barack obama. And that was a very yunique situation. Bernie is no friend of mine, but hes not barack barack. I mean, that look what he took the nomination and won the presidency twice. I mean, hes an incredible barack obama phenomenon, im not sure there may be a little bit of tiers remorse. But that was a unique thing to derail her in the first time. To i think youre right on both accounts. There just doesnt seem to be the kind of talent potentially in the field with the capacity to knock her off. Some people look at Elizabeth Warren and say thats the dream candidate for the left. But i just dont buy it. Elizabeth warren left, john, is 15 of the country. Right, exactly. Let me flip it around to talk about the right this morning. The front page of the Washington Post has a big piece on rand paul. I dont know if you saw it. A Tea Party Guy there. The drudge report says senator rand wanted to scrap the medicare system but now is not sure. What are these i dont know if they are flipflops or distinctions that will change his potential as a candidate. Rand paul is a different character from his dad in that hes trying to focus more in the way of opening you up to a wider set of constituents, but it also diminishes that side of hot burning intensity of people who say this is a guide who really believes, who really gets it. So this is a very selfcautious decision by rand paul. Rand paul is someone who never was expected to become president. He built the following with the grassroots army, but iran has bigger fish to fry. Hes trying to take what shiz father started and make it more broadly appealing. Thats going to create a flipflop situation like this because the conditions at rand paul developed a live following with and he doesnt play. Nobody is talking about eliminating associate security. Rand paul is the leading libertarian in the country as his father was before him, and the libertarian platform in 2012 was to phase out social security. Thats the problem. If you take the philosophy and you push it really hard, youre going to limit yourself. Rand paul is trying to get out of that and navigate the charges and flipflop. Where do you think the Business Community is on rand paul . I dont think they are going to like him. Hes way out there with crony capitalism. I think rand paul the Business Community is going to want a more conventional figure. Somebody they would suggest like a chamber of commerce. Exactly. Jeb bush or chris chris ty. Probably jeff. My son got to sing the National Anthem down on the field. This weekend . Yeah, saturday. It was 103. The nationals looked like the baseball is as big as a basketball and won yesterday. If and what happened to your nfl Football Team . I think everybody is feeling pretty good about this and this could be the year we were on the First Base Side just past first base, you could hear the this is a guy, rg, who has had phenomenal injury problems. If theres a blessing for our team, its that we can find out how good kurt cousins really is. He was pretty good yesterday against a bad team. And the question is, hes likely to be able to play quarterback the entire season. Well talk about briggs is here, but there are two kinds of people. All they want to talk about is nfl scandal and the people who want to talk about the jets or one of the players calling timeout. It was the offensive coach. No, it was the offensive coach trying to get rex ryans attention. But the guy called it on the offensive coach calling it. Joe, before we go, the bengals, how did they do . The bengals, i have bought it into it too many times. But im waiting. Im waiting before i say theres a super bowl in the works. Is this johns last appearance on squawk . Hes now a big movie star. You didnt see this . Alpha house. He has a cameo. Hes too big for us now. I saw a tweet and somebody said, are those your clothes . You look so washington. Exactly. I showed up and they didnt know if i was and actor or someone doing a cameo. And the wardrobe person said, very good, you look washington. Are those yours . Yeah. I could see you in animal house. Not really alpha house. But in a good fraternity that Department Like the alpha house. You look like the guy paddling kevin bacon. Thank you, sir, may i have another. You look like the guy no, no, no. Tim nedermeyer. No. We have to go. Dont forget about us, john, okay . Dont forget about us little people. We knew you would win, john. Near upsets, upsets and more controversy. Now its Roger Goodells fault that some guy took a stick to his kid. A big week, too, in the nfl on and off the field. And legendary golfer greg Norman Landing in the hospital after a gruesome accident with a change saw on his left hand. That and more coming up on squawk. Wait, wait, wait, its wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. 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. A very close call for greg norman. The legendary golfer nearly lost his left hand in a chain saw accident. He posted this photo from his hospital bed. Norman was cutting back trees in his south florida home. Doctors said the saw missed his artery by a fraction of an inch. It was not fully it was sort of a low and the branch was so heavy it pulled his left hand into the path of the chain saw. Just a week ago, the golfer had posted a picture of himself standing next to a tree and holding a chain saw. His caption, time to trim the sea grapes today. Never ask someone to do something that you love yourself. I love the work. That may not be his montra from here on out. He can certainly get someone who knows how to work a chain saw to trim back the leaves next time. Thats so dangerous. It is. I like myself to juggle three chain saws. Have you seen me do that . And i catch the handle and they flip. There are guys that do that. And i was like, let me take a shot at that. In the circus they do. That looks like fun. The nfls reputation walked into a chain saw today. David briggs has no interest in football other than Roger Goodell now dealing with a Domestic Violence issue and an arrest for child abuse and the results of a leaked study that says a quarter of the players will end up with brain problems. Here to walk us through it all, david briggs of nbc sports. The offensive coordinator for the jets but only the head coach can call the timeout. They just see someone out of the corner in this case, there was someone screaming and calling a timeout in their peripheral vision. The refs had no choice to call the timeout. They didnt have a timeout so they couldnt challenge the decision because they had no more timeouts to call it with. You couldnt challenge it anyway. It was clear on the videotape that he was begging and screaming and pleading for a timeout. That would have been one of the tremendous stories of the weekend if the jets came back to tie or to beat the Green Bay Packers in green bay. Its just so youve seen one, sometimes they try to freeze a kicker and the guy calls a timeout. Then the guy kicks it and it misses. And then they miss and Something Like that happens. That was i mean, i watched that, heres what im talking about. It says here, did you read this . I watched the game. I didnt get up to read the paper yet. It talks about the player who says there was an emotional punch. Yeah. I love that joe gets his news from the newspapers. Get to the point. The point is i thought it was a player that called it. I was watching it last night. It was the offensive coordinator. Yeah. The player got the attention of the player and said, timeout. Tough loss for the nfl, but ultimately the games and look if you guys didnt have this story, would you be reporting on the games . It was a great week for footballs going to go on. Like the guy in the netherlands hates football. Football is all around the world. Heres where we agree. The business of the nfl could not be healthier or robust. The ratings are through the roof. People are selling tickets. Cant you admit the house is not burning isnt something krour going to lead with in sports . On meet the press yesterday, he said as long as the money is there, all this doesnt matter. The question is whether the sponsors, you think, ever look at this situation even with the ratings. Not be associated with what . With what the league has done. What the players in the league, how about that . Because they represent a Cross Section of only Football Players are Domestic Violence . They represent a Cross Section of america. Lets put that out there right now. It does represent a Cross Section of america. Take it all into account. Adrian peterson with the child abuse. Ray rice. How many players are there . And entitled and theyre coddled and they make a lot of money. None of this is surprising in terms of human nation. Theres going to be substance abuse, domestic abuse. Now, goodells job is to protect the brand of the nfl. But that doesnt mean on the thousands of players youre talking to every one of them asked. Thats not the way it works. Theres not a banner flying above Metlife Stadium saying goodell must go. When they come out and say goodell has ta answer for Domestic Violence. Its a problem that needs to be dealt with by society. Not by the nfl. But goodell himself said it was too light. He admitted that. Ray rice actually is appealing the suspension today which should be interesting. Which brings the story back into the spotlight. That could be a problem for the league. Because if he was honest with the league, what was contained in that videotape, why then was the suspension tape once the videotape came out . Even if he wins against the suspension, whos going to pick him up after that . I cant imagine anyone in the shortterm. People knew something bad had happened. You knew that all along something bad happened. Weve got to go. Dave, thank you. The nfl will survive. Coming up in just a moment these guys will continue the conversation during the commercial break. Better tha. Better tha. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. I find it so fascinating how many people ride this and go to work every single day. Im one of the lucky guys. I get to play with trains. People say, wow, we still build that in the United States . And we say, yeah, we do chocolate, soybeans, thisand apricots. Made with what kind of chef comes up with this . A chef working with ibm watson, on the cloud. 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It turned into a profitable night for buffett and a host of others. It had nothing to do with the fight. Well explain that a little later. First look at whats happening with the futures this morning. First time in six weeks the equity markets ended lower. You can see this morning some red arrows. But these are modest declines at this hour. The s p futures down by less than three points. The 10year has continued to see that yield pick up. 2. 6 were watching this morning. Already looking ahead to the twoday fed meeting that will close wednesday afternoon. The policy statement coming out at 2 00 p. M. On wednesday. Also corporate headlines this morning. Alibaba could be on the verge of the largest ipo in history. It will increase the size of its planned ipo. Alibaba expected to price on september 18th and begin trading the next day. So friday is going to be a big one. Also a potential takeover battle brewing in the beer industry. I dont know how much its really brewing. We had to use that. You know, heineken says it was approached by sab miller but they want to remain independent. If you can use feeling is brewing, you got to do it. Or on tap. Yeah. Thats true. Here with us for the next hour, senator heidi heitkamp. She is a member of banking, homeland, security, and small business. We put north dakota. Shes at the center of the Nations Energy boom. You know, i have seen, senator, that Governor Cuomo created 500,000 jobs in i didnt realize he went out there and created each of those jobs himself. But you i would say did get us 3 unemployment in north dakota. The reality is and you know it, thats the story here. A lot of politicians on both sides say they created jobs. Jobs get created after we create conditions that allow those jobs to get created. And in north dakota we got tons of jobs. Whats the Unemployment Rate . I say its zero because we need 25,000 today in north dakota to fill those jobs. Is there anyone that would benefit from a minimum wage hike . North dakota . Not many people. The bottom line is we need to figure out what to do with income disparity and what were creating high paying jobs is a good way to do that. Were fortunate in north dakota that we have oil in the ground and that we have the technology to get that oil out. And we have great industrious people to do that. The story of north dakota isnt just with energy. Weve got highTech Startups in fargo. Weve got say that again. Fargo. Fargo. Love it. Here we go again. Thats good too oh, yeah. I somehow knew youd do that. I think a lot of your listeners would like to hear about our highTech Startups. Go ahead. Were one of the test sites for testing the air space for uas for unmanned aircraft. Thats going to be a huge boom because thats a platform with which were going to develop hightech surveillance equipment. And if we dont over. Regulate in that area, were going to be in a great shape in north dakota not only in the west but in the east. We dont overregulate. Theres a name for people in the house like you. Theyre called blue dogs for a lot of times. Youre wearing a nice red jacket and everything. You are, senator, in a nice red state. It proves that redheads can wear red, thats why i wear it. Im very partial to ginger. But just listening to you, you must be one of the people that are craving some bipartisanship. A lot of the things you say do not sound like the core of the Democratic Party. I came with the idea that we represent the people of our state and the country and not a political party. Weve been pretty vocal about that the whole while ive been there. And i think probably if you look at the shutdown of government, who opened up government . It was a Bipartisan Group led by susan collins. I was part of that group. I think were trying to continue to build on that. No matter what happens in the november elections, we need to have a senate that works. Youre not up in november. No. Thats a good thing. Did you vote yes on obamacare . I wasnt in that senate. Would you have voted yes . You know, i think ive come out with a series of fixes that i think could be very helpful in the health care law. But if you had been sitting then its hard to know. I think if i were sitting there we would have had a different product. Really . Yeah. I think we should have looked at things a little differently. You couldnt go back to the senate because you lost ted kennedys seat. So the senate couldnt have fixed it. You had to do reconciliation wrels. You have to do consensus. Thats the one lesson, i think, from the health care law. Broad based legislation, huge change legislation needs to come from a broader base. And thats what we did with Housing Finance reform. Even lbj when that was done, that was done on a more keystone. You would do that. Tomorrow. Id do it tomorrow. Weve got pipe thats stockpiled in north dakota. Can you imagine the investment all along that route that they have languishing waiting for approval. What do you think is going to happen . I think nebraska is going to approve it and the last excuse goes and theres no legal reason to deny the approval of the keystone pipeline. Now, is it the salvation as some people would argue for the American Economy . No. But it is a critical piece of Energy Infrastructure that we absolutely need in order to get Energy Products to the market. But the far left says 300 jobs, people say its 20,000 jobs or even more when you look at all the benefits from the entire route of whatever kind of jobs. This is what i say. Its obviously more than 300 jobs. But these arent permanent jobs. Just as the president would say, building infrastructure. Road construction. None of those are permanent either. Right. Were talking about something that could be very much a stimulus in a number of states. We dont need those jobs, but we need the pipeline because we need to move our product to market. The real danger to not approving keystone is we havage Energy Infrastructure gridlock we need to break. When they see we can attack the fossil fuel development by attacking the pipeline, then we have a problem. So is it symbolic . To me keystone has become more of a symbol than anything else. But theres Something Else going on here. Thaerlt. And whats going on here is we cant attack the source of the development at its source which is the oil up in alberta, what were going to do is prevent the development of the resource by attacking the transportation. Its going to move on train lines otherwise which is a little more dangerous way of bringing it down. Im not going to concede that as more or less dangerous, but i tell you we need more Pipeline Capacity in that country. We have a bag log on the rails that is desperately hurting my ag producers because you cant get track time. And so weve got to figure this out. Because not just in oil and gas. Weve got to figure it out in electrical generation transmission. Weve got gridlock issues all over and the need to build out that transportation infrastructure. You know who knows that . Secretary monese. Its based on moving the energy, not whether we have enough to develop. The symbol, andrew, is its hydrocarbons. Which is building out more hydrocarbon infrastructure. Which six years ago before this revolution, this fracking revolution came along, the Obama Administration had no interest in it. And theyve been dragged kicking and screaming where maybe they need to do it. But they havent. Because there are people on the left that will go crazy because of climate change. I mean, i can only tell you from my perspective. We need to build out infrastructure. We need more than just keystone hydrocarbon frinfrastructure. Right. Weve got to get it to market. I hope one thing john hess and i are going to talk about it when he comes on are exports on hydrocarbons. You would be like i said, the lights are on at the gop headquarters when you want to come home. But tell me, because regulations, you dont like high taxes, the keystone, you wouldnt necessarily have gone with obamacare. What about the Democratic Party keeps you in it at this point in north dakota . What i used to tell people, i said i looked at the ryan budget and didnt see a lot there for people. I didnt see a lot of investment in technology. I didnt see a lot of opportunity to build out for the future. Whether its investing in children. Whether its investing in higher education. And so i think theres a lot to be said about where youre going to find a party that wants to build out resources for the honor and dignity of the muld class. And thats really what im about. When you say investing, youre talking about Government Spending on those things. Im talking about education investing. Head start for parents who cant afraid to send their kids to fancy preschools. Do you think the entitlement issue that ryan was trying to address, is that something we need to do . You dont like his voucher system or something . Thats right. But i think when you look at whats going on absolutely knock us for a loop in terms of budget deficits, its health care. You know, we dont have a deficit problem as much as we have a growing cost of health care. And weve got to figure that out as we age out, as we look at new technologies. So what would you do . Maybe you look at how could we delay the onset of alzheimers to save cost . How could we get people to live health yer . Those are the things that we talk about in the Democratic Party that i dont hear a lot of discussion about in the republican party. And so i think some of the ideas for the future for me when i look at moving forward to the future, i think those are the values where i belong. But theres things i think where we see gaps in logic behind how business actually works. And what we need to do to provide certainty. And i think thats a fault on both the far right and far left. We need to get that moderate middle talking more and more about certainty in business so that we can get this country moving again and investing again. All right. Well, you cant stay here. You got to go back to washington eventually and go back in that vortex. Its nice here, isnt it . We talk about things. I know. We dont yell. Well, well see. Nice to have you here on set. Weve been in the rotunda with you there. But we came to see you. This time you came here. And its fargo. Well have more from the senator still ahead. You bet ya we will. Next were going to talk scotland. Now a historic vote could split the you nighted kingdom. Why this could send the dominos crashing down on europe. Squawk returns with that and more in a moment. Take and. Exhale. In. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. Welcome back, everybody. Checking the futures right now. We have seen a bit of weakness. This is coming after last week. We did see a decline for the s p and the dow. On friday they ended on the lowest level theyve seen in about four weeks. This morning things have turned around a bit. Before we went to break, we teased this. Scotland is now voting on independence from the uk. We are joined now to tell us where the handicap is. There were four polls released over the weekend. Three show the noes to independents with the slight lead. They always exclude the undecided in these polls. Majority will look like this one. 45 say yes, 48 say no. 7 is undecided. There was one poll done by the telegraph where the yeses are ahead. Undecided there are 9 . Thats what leads us to the decision too close to call. Who knows whats going to happen with the undecided votes. The queen, Queen Elizabeth broke her silence. She did not tell the scots how to vote. She did say think carefully about how youre going to vote. A big protest in scotland because they think the scots who protest think the bbc has been biased against independents calling for the dismissal of the head of the bbc. And we also heard from nile ferguson late last week. He was interviewed in kiev of all places. They were talking about Something Else. But then nile, who weve had on the show, is a scotsman. Heres some of the reason hes against it. Their story is that somehow or another they can increase welfare spending, have a more generous welfare state even as they cut themselves off from revenues from the obviously richest part of the uk, the southeast of england. Their story is that somehow the oil is going to increase in volume when all experts will tell you north sea oil output is dwindling. So its economic fiction and its disturbing that nearly half of scots appear not together. Professor ferguson said if they vote for independence, the first thing hes going to do is apply for a u. S. Passport because hes scared his home will be dead. David beckham has said you should vote no on independence. Does somebody in the government call beckham and say youve got to get involved in this . How does that happen . Every personality in the uk has come out on this. This goes to the core on either side. Everybody and their mother has come out to say something. J. K. Rowling put a Million Pounds towards the campaign for the no vote. David bowie once used an opportunity during a concert to say vote no. Its over the top. The question is what happens financially. Youre going to hear a lot of predictions that theres going to be a crisis, et cetera. It comes down to the issue of whether or not the bank of england would be the last resort to the scottish banks. Immediately they would until they work out negotiations. Its more about what you heard professor ferguson saying what would their policies be afterwards. We also have an investor, an analyst on last week who suggested if this were to happen, other parts of europe would go. Is that what we really should be worried about . The European Union is quite worried about that. In italy theyve agitated for independence. The scots would like to be part of the eu. If they secede from the u conclusion, the problem with that is spain might say i dont want you here. Exactly. Core part of the sthoou theissu. I think the uncertainty is the biggest issue, what would they do afterwards. Theyre clear right now when you read the yes campaign. For now we would continue to use the pound as some part of currency union. But the minute they do that, they lose their ability to control their monetary policy. Right . So if they want lower Interest Rates. And if you need to have an independent Banking System, you must have a much stronger Banking System because you are smaller. That means your banks have to have more capital. What does that mean . Less lending. It ends up being contractionary. The gaelic nile is pronounced like peel. There its like nile. And in fargo i have no idea how to pronounce. My question is whos saying yes . I mean, wheres the passion on this vote . Right. It better not mess up my golfing there. Young people are very much so whos going to have the passion . If youre 16 you can vote in scotland. But whats the reason . They want their british over lords . Thats part of it. Theyve been promised by the yes campaign therell be more investment spending in their country. Well, they have the north shore oil. But i think it really breaks down that the uk that england sends them a lot more money in terms of what they end up supporting. It is likely they would end up running a budget deficit for sure. Plus their current account deficit. Do we know what the currency would be . It would be the pound. Im going there in two weeks. It would be the pound for now. Theres an 18month approach . It would be a kilt. Support es of the yes campaign say subsequent leaders of scotlan scotland. Whats your best guess about the vote . I think its too close to call. I leave tonight for scotland. Friday morning live during your show, the results come out. All right. When we come back, the world getting ready for the biggest ipo in history. Alibabas road show kicks off. What is that going to mean for other internet starters going public . And find out which film managed to overcome guardians of the galaxy. Squawk box will be right back. E financial noise financial noise financial noise financial noise i have 40,ney do you have in your pocket right now . 21. Could something that small make an impact on something as big as your retirement . I dont think so. Well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. And other Car Insurance companies . Yes. But youre progressive and theyre them. Yes. But theyre here. Yes. Are you. There . Yes. No. Are you them . Im me. But the lowest rate is from them. Yes. So thems best rate is. Here. So where are them . Arent them here . I already asked you that. When . Feels like a while ago. Want to take it from the top . Rates for us and them. Now thats progressive. Call or click today. Welcome back, everybody. A movie winning the Weekend Box Office no good deed. Its about a man that terrorizes his woman and family in his home. Dolph dolphin tale 2 takes the second spot. John hess ceo of Hess Corporation will be here. Squawk box returns real quick in just a moment. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box, everyone. Were talking about some of the stories that are front and center this morning. Apple will reportedly get 15 cents on each 100 transaction with apple pay. I dont know if thats on the high end or low end. Health care Group Danaher buyed nobel for 2. 1 billion. They are holding a call with investors at 8 30 eastern time. Attention procrastinators, a new study proves what your mother told you for years. Putting off your school work is a bad idea. The Research Finds that students who turn in their homework at the last minute get worse grades. Tell me we didnt pay for that. Stop the presses. People that dont do their homework and do it at the last minute get worse grades than other people . They do. Come on. Did you vote for the funding for this . She said it was a uk study. Listen. Thank you. Thank you, senator. No wonder scotland wants to leave. Okay. Youre lucky. You dodged a bullet. Im sure weve done stupider things. Ill get you on somebody today, senator. Oh, boy. Shes quick. Shes fast on her feet. I dont think youre going to get it. Unlike me, she was listening. Several waves of western sanctions against moscow for its involvement in the ukraine crisis have limited access for russias largest banks. Our next guest says if we really want to send a message to president putin, the u. S. Should be exporting oil to europe. Joinings us on set is john hess. He is the ceo of hess. Also with us senator heidi heitkamp. Thank you for being here this morning. Tell us about your logic behind this. You think if we really want to send a message, the way to do it is through the exports. The u. S. Is an Energy Powerhouse. Were the number one gas producer in the world. Over 90 years supply of natural gas. And were the number three oil producer in the world. About 55year supply of oil. And the best way for us to respond to the events in russia as well as the mideast is simple. Repeal the ban on crude exports. The ban was put on place in the 70s at a time of a shortage. Right now were in a period of supply strength with a lot of visibility to come. So if duo that, it would go a long way to lowering prices and increasing jobs. And recently brookings came out with a report that supported that. And iahs, from new york times. Now all youve got to do is convince becky. I will say she wants to horde everything. For the longest time i thought to keep it here to get off opec oil. But we can export gasoline but not crude oil. How does that make sense . I might just compliment the senator on that. And so what were really looking at is finding a Natural Market for a commodity that is globally traded. And if you dont allow the exports of this oil, theyre going to reinvest some place elsewhere they can market their oil. So its going to reduce the development and the dollars coming in in development in our country. And its going to have huge consequences in terms of where we are with oil prices globally. Because were going to restrict supply. Instead of trying to control demand. But the other part of this story that needs to be told is its not just the United States. We know what canada can do. Weve seen mexico now do their historic reforms. And so north america is going to become the Energy Powerhouse for the world if we allow them to trade their so youre suggesting we come up with our own opec. Well, not opec because opec was price controlled. Were going to increase demand or supply to control the price. What im saying is we have an energyhungry world. And theyre getting their energy from sources that wed like to say no more. Like russia. And if we deploy these resources in a smart way, well not only help our industry in our state and in north america, but we also will help stabilize europe. Let me ask. With europe, isnt it a bigger situation where they need natural gas . Thats what theyre so reliant on russia for. Russia supplies 30 of europes gas. But also 30 of rush russia supplies 30 of their oil and 30 of their gas. Okay. I didnt realize that. So the ties are very strong. And the importance of the crude export repeal of the ban is not something we can do right now. The gas we export is probably going to take five years before the infrastructure is in place. Because of what it takes to ship it. It would probably put pressure on prices down. But itd be the right thing longterm in terms of makes markets open. If we could talk about natural gas, because a lot of people are concerned if we open it up for exports, thats going to dramatically increase the natural gas price. And the reality is that it costs so much to off shore that natural gas, the secret here is in order to be competitive in other parts of the world, they need a lower price gas in our country. So what people dont understand is that 7 cents in mcf its going to cost to offshore our gas. We would move this gas to Central America where gas prices are over 20 in mcf. What does that do to the economy down there sfl theres so much opportunity to continue the development in our country, to continue to build the jobs and deploy the resources here and then do really great things across the world. Right now prices are so low for natural gas, theyre capping lows. And thats what maybe a lot of my colleagues dont understand. In a debate recently, i kind of booed about that. Look, you artificially deflate and not let the market find its place. You artificially deflate the price of natural gas. You will reduce production. And they just couldnt quite grasp that. When you say colleagues this is not a partisan issue. I know who youre talking about. Thats going into our country in terms of unvengsal oil and gas. Its a hundred billion dollars a year. So its a huge thing and has created jobs. Were spend have spent 10 billion to build our position that the senator and senator hoeven saw first hand on their tour when they came and saw our people and our operation in augu august. That investment has allowed us to increase our investment. Were drilling some of the lowest cost wells there that are generating so m of the highest returns. That has a lot of visibility Going Forward for our shareholders. And weve reduced our well costs. Talk about the american ingenuity. Its all good, senator. But you know its going to stay cheap for a long time too. Because we have a lot of it. And it does sort of some people dont like it because it makes wind and solar, it pushes the economic prospects of those renewable sources we spent so much money and we decided as a government that we were going to make sure that that and it pushes it in the future to get economic competitive with it. Its clean. But theres people who dont care that its clean. Right . I would tell you that there is a number of people right now who are building out Wind Generation because its a lower cost form of generation of electricity. It will find its market. But this puts a lot of that stuff on hold. Natural gas prices have squeezed out coal. The double whammy of regulation of coal and natural gas prices, no one has coal on the books. You couldnt find money on wall street to invest in coal fire generation because of low natural gas prices. Which is the reason why a lot of people want to keep low natural gas prices. What price does crude go that makes it unprofitable to drill . I would say people would start cutting back simply for cash flow reasons another 15 a barrel from where it is now. Do you think that happens though . If prices go down there, yeah. Do you think price wills go down 15 . I think prices have been down 15 since their peak earlier this year because of slowing Economic Growth in china. Strong dollar. Japan as well as europe as well as increasing supply from the United States. The demand continues to rise globally. But slower. Look at the geopolitical thats had no effect. Thats been the offset. You could see just in speculation in the past in the 80s and 90s if there was a disruption in the mideast, boom, Oil Prices Went up. You dont see that that has changed. Right. A lot of the hedge funds are out. One of the increases in supply in the last month has been libbey which has been off the market for the year. Weve got to go. You mentioned hedge funds. Its a hess question. Your whole company has a different board almost completely in the past six months now . Yeah. How is it different . What decisions are different than otherwise . Its interesting. We have some that we made a settlement where we brought some new directors on. Some representing independent interests from paul singer. And then some hess legacy directors. They all bring a lot of skill to the table. We listen to all our shareholders and put in a plan i think was put in years ago to transform our company to an expiration company. Were executing it well and all our shareholders are benefitting now. The company is doing very well. You have any size coffee at hess where i stop, is that your idea . I stop there in the morning. Do you get the small or the large . I was smart enough to get the large. Joe, just so you know, while were selling our gas stations as part of the transformation to our production business, were still going to have the hess trucks. Theyre helicopters and all kinds of stuff. But theyll be sold on the internet Going Forward. But youll only be able to buy them on the internet . Yes. This year at the stations but on the future on the internet. These are the important information. Can we still buy the toys . Big hess story. Coming up when we return, buffett hits it big in vegas. Then later, alibaba set to be the biggest ipo in history. A look at the impact on the ipo market and what it means for other Tech Startups looking to go public. Were back in just a moment. 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. Its in this spirit that ingu u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. Take and. Exhale. In. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. Welcome back, everybody. Little bit of news for you. Warren buffett hitting it big this weekend in vegas. He was at the mgm grand for the mayweather fight. He bet on the sports book for the first time ever. He went up to the window, put 550 on nebraska. Thats how much you needed to put down so you could win 500. Turns out about 40 or 50 people saw him make that bet, they immediately went running to the window and said ill have what hes having. They all went betting on the same thing. Nebraska won by a blowout 5519 more than covering the spread. Made Warren Buffett just a little bit richer and those other guys as well. Hes lucky. I dont know. If you saw him making a bet on a stock, you would follow him. Probably here too. Whatever he tells me to do, i would do it. Even if its football. Pretty much. When we come back, alibaba ready to close its books on investors. Well look at what it means for the market and investors looking to get into the game. Look at the futures this morning. Youll see at this point theyre basically flat. Dow futures up by two and a half. S p down by one and a half. Squawk box will be right back. Charlie, the demand on this network, it is increasing by the second. Its crazy, huh . And people are relying on it more than ever. We cover more than 99 of all americans. I know, i cant imagine living without it. Its a place where people can come share knowledge and ideas. Its beautiful. Thats deep charlie. My selfie just hit a hundred likes. gasps a hundred at t is building you a better network. Welcome back. The alibaba ipo on track to become the biggest in history. Reports today saying the chinese ecommerce powerhouse will up. Joining us now is ethan kerzwag. Good morning. Help us here. Is this overblown . Underblown . Is this the next facebook ipo . I dont know if that was a good thing, a bad thing. Its definitely a media sensation. I think in the grand scheme of things, this will be muted. Like facebook. Everyone will talk about it for a couple weeks. It wont have a big impact on the markets. Because . Because its a specialized event. So it might have an impact in terms of International Ecommerce at a couple of companies that can speak to alibaba directly as a comparable. Its just not a good proxy for the run of the mill ipo right now. When we hear they want to. Raise a price and ipo numbers, is that a good sign if youre an investor . I think its a good sign. Remember, its 12 Different Companies in one. Its not a simple story to understand. Are you buying in . You know, i dont buy public stocks, but i think the company is pretty remarkable. Did you guys ever try earlier on . We dont invest in china, so its not a it wouldnt be a relevant comparable for us to look at it. But as a business as what its done, im impressed. Its incredibly innovative. Theyve taken their core business and expanded to 11 other things. Do you think this as a top of the market . No. Not really. I think there is certainly some frothy behavior going on. Theres a lot of people are moving quickly. And i think the reason thats happening is twofold. People are seeing how fast Consumer Companies are having an impact on our lives and building good businesses in the process. Thats causing a lot of investment. I think theres the other side of that coin which is people are seeing that where it doesnt necessarily exist. But its shifted to what you think about investing in startups today. I imagine you invest in a startup today and think hopefully two, three, four years from now we could have an ipo. Do you think to yourself given where we are right now, im not sure where the economy is going to be in two or three years. We think about that but time the market is totally impossible. We started talking about when the facebook ipo happened. You would have missed that incredible market since then say k it looks frothy right now, lets sit back. So these companies that were talking about, i mean, was anybody talking about uber two years ago . Pinterest two years ago . Will we be talking about them two years from now. I think we do. Would you prefer to own amazon or alibaba . That id put my money in both. I mean, i think theyre two very Different Things that are attacking big opportunities. We compare alibaba to amazon all the time. Its amazon meets ebay. I think alibaba is in more businesses and have succeeded in more things. In that, i would take alibaba. I wouldnt count against amazon. Id even sell some apple to buy alibaba. Some people said with apple, theyre saying its directly related. Have you seen what amazons done in the last three months . Its come down its come down a lot. And that may be money theres a lot of money. Ethan, we should tell you peter teal is coming on squawk box on wednesday. So the question were going to ask you is what question would you ask peter . Good question. So peters famously said its overinflated. Hes taken 20 kids and tell them dont go to college, come into my program and youll get a substitute for college. So id ask him what about everyone else . What are you going to do for all the others . How would whats your plan to actually, you know, Impact Education beyond this 20 kid thing . Okay. Were going to save that clip and play that on wednesday. Thank you for being here this morning. If you at home have questions for peter, post them on our facebook page. Really its his because he owns facebook. Or you could go on twitter and use the askthiel. Lets get back to our guest host today senator heidi heitkamp. I was looking at statistics about north dakota. From 2010 to 2013 there was growth up 7. 6 , more population coming into the state. We know about what the bakken formation has meant for oil production, but what has that inflow of people, that boom, whats it been for your state . Its been huge. As a result we have a 20 to 30 gap in the number of Housing Units that we need single family. Can you imagine that . 30 increase in the number of houses you need. We cant get retail workers. We have restaurants shutting down because we cant get workers. We have spinoff industries that are excited about the ability to work in energy but now are finding platforms in other industries. So we have this growing development. John hess runs a company thats a Legacy Company for us. They drilled the first oil well. And during the 80s when i was working in state government, we looked to find every way we could to keep that industry alive. Now weve got this great technological buildout. It shows what a primary industry, an instractive industry can do for everyone else. And the ripples are tremendous. But its created tremendous interest. We have prostitution rates you never thought youd see in small towns. We have rents that would as i say make new york landlords blush. 3100 a month for a twobedroom apartment in a small town. And so its not without its challenges. But theyre challenges i think were meeting every day. And the resiliency of the north dakota people and trying to balance our Agricultural Sector which is experiencing some challenges, which you guys probably know a lot about given whats happening with Commodity Prices and transportation. You mentioned the transportation. Just trying to get cars on the railroad to get the crops out its been a difficult year for that. Well, most of bakken crude moves on rail. Youve seen obviously high profiled situations of bakken crude with derailments and explosions. Thats created a lot of concern about safety. We think we need to build out more pipelines. The bottom line is we will adjust. The lesson for the rest of the country is when you invest in primary sector, thats the new Wealth Creation for our country. We need to continue that by exporting. We need to build out our exports by authorizing the base we talked about. You get along with the governor . I do. Ive known the governor for a lot of years. Republican, right . Correct. The guy before him, republican. The guy before that, republican. Youve got to go back to before electricity to get democrat. You take a look at what is the you know, were a great state because weve been blessed with a lot of hydrocarbons in our ground. But we figured out hoe to get them out. You released themt into the air. Thank you. Thank you. Feel hot in sneer you wonder why . So my message would be look for those industries. You just heard hightech. Thats great. But you know what . You need to have new wealth created so you can actually have consumers with dollars in their pocket. And thats the lesson i think of north dakota that we need to focus on. Senator, thank you so much for joining us this morning. Its been a pleasure. Thank you so much. Youre finished. With flying colo fors. I hope thats not a statement on my health. When we come back, record preorders of the iphone 6 could have people waiting for months. A closer look at the apple economy. Stick around. Squawk box will be 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. Welcome back to squawk box here on cnbc. Welcome far monday. First in business worldwide. Im joe kernen along with becky quick and andrew ross sorkin. The west coast is waking up to a onetwo punch from mother nature. Waves slamming one of mexicos hot spots this morning. Hurricane odile making landfall in baja, california. Right . In baja. Sustained winds were reported to be 125 miles per hour. The storm could threaten the southwestern United States by midweek. And this morning a 4. 7 magnitude earthquake was reported also off the baja peninsula coast. Scientists say they dont expect any injuries or damage from that quake. Thank you. In our headlines this morning, heineken rebuffing a takeover t attempt by sab miller. They intend to keep the company. Also shares of coors rising on all this deal talk in the industry. The stock up by just over 6 . Also a good morning for yahoo . Shares trading higher again ahead of the alibaba ipo. Yahoo holds more than 20 of the giants ipo shares. Alibaba plans to includes the size of its offering. Scotland is voting on independence from the uk this week. Polls suggest its too close to call. Many companies have warned they will move to england if the scots break away. And the buzz on the street is the rate hikes could be coming sooner than expected. Steve leisman joins us now with more on that. The feds got a bit of a problem here. The markets dont see to believe what the fed is saying about the rates. Its that the markets see the fed more dovish than the fed sees itself. Take a look at this chart. What were looking at here, the blue stuff is e the market. That is the fed fund futures for respectively december 2015 and december 2016. And the green stuff there, thats the average of the feds own forecast for the sum of economic projections. Each case is the market is substantially is two points less in each case there. So the market for example is at 1. 8 and the fed for 2016 at 2. 4 . This dovish view of the market seems to endure even while there have been hits of a somewhat more hawkish yawn as it has been more robust. Growth near 5 in the quarter could be in the midthrees this quarter. Its still substantially below the fed. You can see theres ten basis points in the past months. All this suggests significant catchup if the fed makes changes at the meeting this week. Such as for example dropping the considerable time exchange. Will you grace us with your continued presence here . Sure. Okay. Steve has agreed to stick around. For more on what to expect from this weeks fed meeting. And drew madison is here. Hes the depth chief u. S. Economist at ubs. Were at 2. 6 and its moved quickly back to 2. 6. Are you willing to say at this point, 2. 3 is a thing of the past . The rates on the ten . 2. 6 is where we are on the 10year. Are you willing to say 2. 3 is a thing of the past . No. I think were on our way. You think were on our way leisman . I dont. I think the next inflation reports are going to be low. Youll get a downdraft from energy you dont see anything from oil and the euro to indicate that the rate has been passed . I think theres a cap. I think we may be at the current high range high end of the current range. Youve seen this. You know this. It scares me then. It means the fed if were not Strong Enough to maintain 2. 6 , then the fed is going to feel like it needs to do more. Its one of those things where everyone thinks its going to take five years. Someday its going to happen. Yes. But being short for this long for that long period of time is very painful for people. Right . They have to keep their job through the end of the year and they dont care whapt the last four years. But they would g squeezed out they already were squeezed out. Some did, others financed that loss with gains in their credit. Rates are unreasonably low rates. But Europe Europes going to keep it down. Joe, the stronger dollar is a sort of deflationary impulse thats going to go through the economy here. You base it on inflation, not on growth. I think the only thing that matters for 10year yields i dont see it necessarily as but not u. S. Inflation. I think thats part of whats happening in the world today is european inflation. I want to ask drew here for a second. You think the feds got a bigger problem longer term than shortterm. You think it will take some action maybe this wednesday to solve that prob. Its not what happens in the next six months. Its the next year or two years. Yeah. So thats kind of baked in the cake at this point. Whats not baked in the cake is how quickly as your chart showed the fed will raise rates. So this is the product moving the time language. If they remove the time language, theyll pull forward the rate hikes. And that entire curve will shift higher by two meetings. So youll hit your 50 basis points, 2016 targets. But by pulling forward the rate hikes in front of the fed, youll do it in the most disruptive way possible. Give the guys at the fed a warning. A way to redo the statement. What we think they should do is remind people how the fed tends to move when they hike rates. They tend to go on long lasting, slow movements. 25 basis points a meeting over and over and over again. And i think what the markets pricing in now is theyre going to go in march, take april off. Go in june, take july off. You and i both know fed policy officials would tell you that they dont know anything six weeks after they hike rates. It hasnt had an effect yet on the kpi. Whats the point of pausing at those points . Theres no point. So the feds not going to do that. The fed should just remind people we dont act that way for a reason. Drew, ive been surprised at the economic numbers. Ive been surprised we do our rapid update and were at nearly 5 for the second quarter. We you say that was an i told you so. No. I wasnt saying i told you so. I just dont believe the First Quarter numbers. All right. So were near five. Now were going 3. 5 on the Third Quarter right . Yes. That one i will say i told you so. So this is faster than the fed thought. Yes. Doesnt that mean the fed should be raising rates faster . Well, it does, but they wont. Okay. Im not janet yellen, im not pulling the trigger. I have an idea what they should do. Theyre not going to listen to me. I can tell you that right now. Janet yellen is going toe path of least resistance. Be the least disruptive person you can be to the markets. I think that means they leave in considerable time language. Its considerable time after tapering. Once thats gone, the language is meaningless. You might as well leave it in there. The more gold normalizes what does that mean . Normalized gold . It was too expensive. You mean comes down in price. Based on the last five, ten years of central bank, that drove it up. I think being normalized. These are unreasonably low. You ever want to scare someone . Explain to them how moneys created. Thats why gold moves the way it does. I think for halloween im going at money. Its the scariest concept. You and steve should go together. Hes got some really boring themes too. Fiat money . Seriously . No ones going to know what youre doing. Theyre going to say look at that guy. Random dollar big sign. Im thinking of shaving me head. You should go as lord leonard cains. See if anyone recognizes you. I could dig holes and fill them back in the entire evening. You could. Its on a friday this year so its going to be more fun. What are you thinking . Hes going to be egging peoples houses. Mischief night. I grew up in new jersey. I mean, the joke would be you would take off your the costume you wear every day. The wig. Thank you, guys. Up next, apples big weekend of iphone 6 preorders. What impact will the two any bigger phones have on the bottom line . More after the break. And every four minutes a ship enters the Singapore Strait. Now it is also one of the most dangerous on the planet. The growing piracy problem. Squawk box will be right back. , saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. But what if you could see more 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. Welcome back to squawk box. Apple already reporting record preorders for the iphone 6. Carriers are saying wait times for the new larger iphones could be four weeks or more. Joining us now with his challenge to the ieconomy is david. The 6 plus may be stronger to some degree, some of the reports are suggesting. Does that surprise you . It doesnt surprise me at all. Because weve seen strong indications from the market that large screen size smart phones namely with samsung in the lead on this have been seeing strong demand. From the standpoint of loyal apple users as well as people considering moving over to apple will be drawn to the 5. 5 screen size on the iphone 6 plus. In your sense is this is going to be sold out for the rest of the year. If you walk into a store when they supposedly go on sale, will they have them . They will have them. They need them for display purposes. But the thing to consider here is when we had the announcement last week of the iphone 6 launch, they noted on the 19th, were only going to have this available in Nine Countries versus 11 last year for the iphone 5. Now, among those 11 countries last year was china. When china gets the iphone 6 plus availability, obviously expect a lot of the demand and supply for the iphone 6 plus probably to go to china which obviously takes supply out of the channel in other markets. David, whats your sense of the margin on these products . I assume the screen costs more, they have more memory. Are they making more money on these devices . Less money on these devices . Dollars per unit are probably going to be going up given the fact that fully loaded iphone 6 plus is going to cost you about a thousand dollars. So dollars per unit probably still shows a nice rise versus the iphone 5. Margins probably stay flat until we get curb efficiencies. David, i want to tell you about there was a survey done by the textbook rental that says that only one in ten people says the plan to buy the apple watch. I know its not available immediately. But when you modeled out the watch and you think about the future of apple, what was your take on where will it be . I mean, the watch coming in at 349 a unit compares favorably with the iphone pricing. Granted its not at the high end of the range. But enough to cover hardware. I think the thing you find for the watch is it drives more people to using the iphone because the combination of the two is going to provide millennial consumers with a greater range of data they want information to about personal health as well as other potential offerings. Also the ability to have a smaller device you could use for using apple pay with near field communications, point of sale terminals where people can go in and out. How many watches are they going to sell . Probably over 10 million. In 2015 . In the first half of 2015. First half of 2015. Also tell us about your model on apple pay. Thats always been a become a big issue with credit cards. I mean, apple pay, certainly on a pure stand alone basis, apple pay itself isnt going to move the needle that much ffr the bottom line. Maybe less than 10 cents a share. But the thing thats important to look at apple pay is given the number of retailers that are coming out and supporting it not just in the retail or globally, we think this travels more to the iphone ecosystem. From that standpoint, apple pay helps to drive iphone 6 sales. And that obviously is what drives the bottom line. I gather youre bullish on the company, but let me read something on the other side and i want your response. The same survey i quoted earlier says apple may be on the verge of quote, losing its cool factor comparison to tech contemporaries with just 64 of respondents rating apple as grade school. Versus 72 for amazon. What do you think of that . 64 is more than andrew cuomo got in the primary last week. I think apple remains as the incumbent. I think what people will have to see is the experience of looking at the combination of the watch and iphone 6 as well as apple pay. I think well find this remains an easier to use platform and as a result gets greater adoption. We also look i think the thing to focus here in terms of consumers is to see what happens with the response when the iphone 6 is improved there for sale. Have you preordered one . Yes. Which one . Top of the line gigabyte iphone 6 plus. Thank you. Thank you. Coming up, were going to talk about russia. Russia producing that ban against europe has folks in amsterdam painting the town red this week. More with that after the break. Squawk box returns in a emt mo. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Live shot of the nations capitol. Looks like a renovation going on there. Bill ackman has announced to float a fund on amsterdam stock exchange. Ackmans firm has already secured 1. 5 billion from 30, quote, corner stone investors, trading the shares expected to start on october 13th. There were reports earlier in the year they were looking to do Something Like this perhaps in london. We talked about that. We talked about how it doesnt necessarily its not based on every day. Its based on a normal stock. But its easier for him i guess. Permanent capital. 5 billion is a lot. He always wants to be the Warren Buffett of investing. As long as were on the topic of amsterdam. Hundreds packed the central dam square for its called the central dam square. The tomato throwing fight was scheduled as a protest over russias boycott over european produce. Tickets to the fight costed 18,000. Organizers bought 120,000 today mows for the event. And the proceeds were going to tomato farmers that were hurt. I would pay 18 bucks if i could throw tomatoes at you too. Is that what it said 18 . 18 bucks to get a ticket to an hourlong fight. I would pay that. Better than the paint ball fight. These dont hurt. Thats true. If you didnt want to get shot, you shouldnt have agreed to participate in the paint ball fight. I didnt know it was going to bree bruise me or leave a permanent scar. I know. My job was to eliminate the other team which you were on. Point blank. Point blank. Come on. Shes a girl. You cant do that kind of thing. Oh. Do go on. Do go on. Just saying. I guess they shouldnt be in combat than. What about pilots . Where are you going with this . Commercial. Were going to have an exclusive look at one of the worlds most dangerous waterways. The scary things that happen there and how you could be left paying the price of that crime. As we go to break, look at the futures. Red arrows at the moment. Were back in a moment. Things n get so hectic. So sometimes i need to find an easy way to express whats most important to me. Like, with my crew, i use shorthand to talk to them and tell them what i need. And when i need to talk directly to my fans. But the most meaningful shorthand of all is the one i use when im about to drive x. Its an easy way to tell everyone that im about to drive. And i do it every time before i get behind the wheel. Use x to pause the conversation before you drive. Because no text is worth a life [b ll rings] time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. If energy could come from anything . Or if power could go anywhere . Or if light could seek out the dark . What would happen if that happens . Anything. We get ready for a new trading week. Rising at premarket trading for cognizant. Buying trizetto for 2. 7 billion in cash. They are is developer of Health Care Related software. Also United Rentals and United Health services will become the two newest members of the s p index. Theyll be replacing graham holdings. Universal. Got it wrong in the lower third. And it was wrong in the scripts. Universal health and United Rentals. Thank you. Nokia is also getting a boost in the positive comments from oppenheimer. The Parent Company of ann taylor is facing more pressure from two hedge funds that want the retailer to sell itself. In a presentation to be given today, the funds will say the company could be sold for 65 a share. Seagate technology raising its revenue forecast. They make hard disk drives. Lets talk tech this morning. She joined on the the 12th for her three picks. They were good favorites to have. Sales force is now up 18 . Google up 11 . And amazon is up over 13 . But ann is about to announce that shes going to replace amazon with linkedin which is up 51 since may 12th. Ann, i need to understand its great to see you. But i want to understand why you want to go with linkedin. I think linkedin is headed into big spate called analytics. Theyre already there. I changed linkedin for amazon. I think its getting harder for shareholders to really understand amazons model. Theyre opaque in their numbers. Its hard to see where theyre going in the market. And its clear to see where linkedin is going with their new Product Offerings and business. You raise an important question. Harder and harder to analyze amazon. What do you think they need to do to make it a little simpler . How would you want to be able to model out what theyre doing there . Id like to see more openness on the numbers in their cloud area. Theyre a huge player there. We rarely see a startup pitching to us that isnt working with amazon. But theyre not just a commerce economy anymore. They are an Enterprise Software company. Thats hard to tease out of their numbers. Help us with just a couple other companies. Then i want to actually get your thoughts on alibaba. Youre sticking with sales force and google. Whats the upside on both of those from your perspective . Well, it was announced last week their upcoming dream force which is like the greatest show on earth here in San Francisco for the fall that he will be announcing their enterprise analytics cloud. If you look at the takeup in analytics attached rates to applications, its about 5 to 10 maybe even as high as 15 . Which should increase sales forces by perhaps as much as a billion dollars over the next four years. So thats going to give sales force a lot more room to grow a company in their current growth model. And google . Googles a powerhouse. The revenue for employees is about twice the next largest Software Company. Theyre increasingly diversifying their revenue streams. Albeit small relative to ad sense. Theyre a they are the biggest investment and Software Company right now. Let me throw alibaba at you. That ipo likely to happen the end of this week. Would you buy it . I rarely buy at ipos. I watch right after the ipos. I think they will be a big player here. Their ceo already has a presence in silicon valley. Were starting to see their Business Development folks talk to smaller companies. They are both product builders like linkedin, sales force, and google, and product buyers. So they will definitely be a company on the move and more present in the u. S. Thank you very joining us this morning. Were going to watch those stocks. Appreciate it. Thanks. Let us get to Rick Santelli with the Empire State Survey results. Rick . September number really jumped, strongest since october of 09. 27. 54. So pretty much in line with anything thats a survey. Anything where were polling individuals, the kevlar feeling of those who are doing well in the economy, i think transmits into some of these numbers. No matter how you slice it, best in close to five years. Yields, a week ago friday after truly acting technically magnificent, we closed above a 245yearold. Here we are 14 basis points later. I think its trading as good as any market ive seen with regard to Interest Rate movement. Rick, my opinions have the halflife of like, i dont know, deterium or something. The reason im saying it is because i think gold is finally sort of normalizing. And oil is normalizing. And when were just slowly taking away the punch bowl. And some day it really will happen and therefore were finally going to normalize on where Interest Rates should actually be. Do you buy that . Or you want to argue with me . I dont know that id buy it, joe. I dont know that i buy it. So we may go back to 2. 3 . That would be bad. We dont have ammunition to jump start the economy this time. Listen. If we had the exact type of programs we had in the 70s with rent control in new york and i ask you is this apartment fairly valued, what would your answer be . If the fed didnt have a Balance Sheet over 4 trillion and all the data was the same and the charts were the same, id say no doubt about it. Most likely the next step should be spending time in the 280s. But i think youre also letting some of the fed speak creep into your cranium. The tightening, what fed fund futures say. The interpretation of fed fund futures is just my modest opinion is wrong. Its completely wrong. The market cant devine information the way it used to. Thats the reason we put credibility in fed fund futures. And theyre also much better once a hitter is on a string of hits, okay . Fed fund futures, once we turn the corner and start raising rates, its good at predicting what the next meeting is going to be. But the markets been in a real slump when it comes to what would Interest Rates really do . I dont think the fed fund futures implies anymore. Who knows. The fed could wake up one morning and decide were going too slow, were going too fast. Theres no way to account for that. Theres no way to quantify that. All things being equal, i would say the next step in rates is most likely going to spend time around 260 to 265. Then it will take a step back but it wont really spend a whole lot of time under 247 to 250. The next leg will be 282. I think its going to be, you know, two steps up, one step back. But i dont think were going to see a super charged up to 3 . Okay. I dont know. Cant figure out gold. Cant figure out oil. You cant figure out the dollar because were not trading dollars noim. There was an article about the best decade in a dollar. Its the worst run in the euro. 50 of the index is the currency. Everyone knows theres a litany of weaken the currency. It just seems like everything means were finally going to get out from under this five, sixyear malaise from the financial crisis and these ridiculous crazy rates are going to go and normalize again. I dont know. Well see. Some day. Some day. All right. Thanks, joe. Were just getting some numbers from apple announcing its preorders for the iphone 6 and iphone 6 plus. They say they received a Record Number of firstday preorders. They say demand exceeds the initial preorder supply. They say some of them are going to be delivered to customers beginning on friday and through september. But many of them are scheduled to be delivered in october. Additional supply of iphone 6 and iphone 6 plus will be available to walkin customers starting friday september 16th at 8 00 a. M. So you cant order a watch yet. No. Im going to be one of the walkins. You didnt get the preorder . No. I think im going to get the plus. Are you going to sleep in line . No. Ill wait a week or two. You going to buy the watch . I dont know. If they havent got you, then im worried. I like to monitor my sleep. So i wear the joawbone. But the iwatch you have to take it off at night. I cant do it yet. I cant. Want to make it joke about the jawbone . I think its all put it on the other wrist. Its all thrown off on that. I dont think it monitors anything. Its broken probably. Up next, when you think pirates you think of cap pin phillips in the waters off somalia. Now theres a new hot spot for piracy. Its in an area where more than a third of the worlds ship traffic travels every day. Details after the break. Right now check out the futures. Things have barically budged this morning. Well see as we get closer to the opening bell. Squawk box will be right back. Theyre custom made trains. You cant get any better than that. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. 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You know what else i can do on my phone . Place trades, get free real time quotes and teleport myself to aruba. I wish. Welcome back, everybody. Onethird of the worlds shipping passes through the Singapore Strait. It is one of the most trafficked waterways on earth. Also happens to be one of the most dangerous ones. Its the new hot spot for pirates. We are joined on set with more on this. Ted, this was the first id heard of this. Whats interesting is everybody when they think about piracy or modern piracy, they think about somalia. They think about what theyve seen in captain phillips which opened a lot of peoples eyes. But actually piracy there has almost been wiped out. Only 13 attacks last year from a high in 2009. And it has exploded in the Singapore Strait and like the southern part of the south china sea. Why . Well, theres a couple good reasons why you do it there. One, its the busiest commercial waterway on earth. By a long shot. A third of the worlds Global Shipping go through those waters. All of the trade between europe and china. All of the Persian Gulf Oil that goes to the big economies of asia go through this little area. Which at some points is only a kilometer and a half wide. Is this the same type of piracy we think of with somalia . No. Thats a great question. First of all, its a different business model. Somalia was about taking hostages and ransoms. Highly profitable. You put guns in their faces, take them somewhere safe, then you hold them until the ransom comes along. Well, that isnt what these guys are doing. What theyre doing is actually closer to the old they take the stuff . 18th century model where you take everything. What these guys are doing is theyre actually coming alongside, docking, sometimes spending hours, eight to ten hours overnight and they will actually siphon liquid cargo off of one vessel onto their own tanker. So they need tankers to do this. Where are they getting the tankers from . Thats another part of whats going on here. Obviously theyre heavily capitalized. Thats the reason, everybody i talked to and i did more thon ts story. Everybody agrees theres organized crime here. Also if youre going to take crude oil, youve got to sell it somewhere. You need a fence. You need a fence. Part of the reason its appealing to them to steal liquid cargo is because its extremely hard to trace. Especially if you mix it with another one. They hold the ship at gunpoint while they siphon it. Yes. Its still traumatic for the guys on the front lines. On breaking bad they didnt know what happened when they stole that material. Its not like that. This they know theyre being siphoned. Thats crazy. They need a tanker, stop the ship, siphon it off, then they drive off with the oil and set it. And they need a buyer in advance. Sometimes they need a refinery that will look the other way. And they need sometimes well, they need intelligence. They have a client saying im lo looking for this particular type of diesel fuel. They need to find a particular port, when it will be leaving so they can tracking these guys the whole way along. They have inside intelligence. Everybody i talk to agreed. This is local sources from the outside. When you say organized crime, where are they . Probably malaysia. Malaysian organized crime. They must have good organized crime. Probably. What was used to stop the attacks in somalia and can those same sort of techniques be used here . Its interesting. The geography makes that difficult the reason that we manage to basically put the kibosh on the sew ma somalian pirates is we have a flotilla there thats helped out and they drench the area in ships. The ships out there are not in this bottle neck setting. So the pirates were able to try to track down a ship, get it alone. Think of it more as a street criminal. Hits you when youre in a dark alley. Thats what they would do. And enough cops on the street plus improved tactics being taught to the sailors on board almost eradicate it. The reason that hasnt worked yet in these waters is that you have a group of traditional maritime nations and it is exclusive to us the United States is about to join the coalition out there stopping it. They you cant tell when theres an attack happening because two vessels alongside one of other shifting cargoes is incredibly common. I dont know if theres too much relief, but is the profits possibly going to terrorist organizations like isis . There are sources who say theres a very good chance. There are islamic separatist militants on sumatra. We also know we have the precedent of the somalian pirates were working with terrorists. They were funding al shabab or its equivalent in that area. So we know it has happened and its a lot of money. You can get a take off one of these hits with two teams of seven guys each. Plus the fencing operation. Why dont the boats themselves have greater why arent they manned with guns, manned with you always say you like guns in this case . In this case i might. Thats good. I ask everybody that. Some people do believe that arming the vessels with private security firms, for example, would be a good idea. Now, there are problems though. There are serious drawbacks. Earlier this year or late last year we had a group of italian marines who were on board an Italian Tanker off the coast of india and allegedly opened up on a fishing boat and killed many who were not pirates. There are 55,000 merchant vehicles in the world. And the expense of arming or putting guys on that ship is not worth did one guys not going to do it. And most of the time theyre not killing the sailors. They let them go. If you insert guns into the equation, you could be talking about you escalate the situation. Yes, thats different about somalia as well. No killings. At least, you know, knock on wood, so far. There is also we know as documentation as we can get, we know that of the huge per siptous drop that took place in somalia, seven of the hijackings were stopped by Armed Security guys. But the mass majority were due to mass vigilance. By boats with armed people. Who were able to get there quickly. And much better arms. Good to have those when the pirates have arms. Yes. And also we also if you think about it, its a pretty boring job to be the guy with the automatic rifle on a merchant vessel that is probably going to have nothing happen to it in 20 years. The chances of any individual ship being attacked in the Singapore Strait is low. There are a lot of jobs. Digging ditches is not boring. But sitting there with it would not be that bad. Take some dramamine and just sit there. And play on your iphone 6. We had two s. E. A. L. S die on the vessels that were taken. Thats weird. Thank you for bringing this story to us. Ted kemp. You can see his article on cnbc. Com pirates. When we return, jim cramer on the week ahead on wall street. Dont forget, in just two days peter thiel is going to be here. If you have a question for him, send them to us. Tweet us squawkcnbc or you can post a question in the comment thread on our facebook page. We got more squawk when we return. But what if you could see more 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. Welcome back. Futures this morning. Markets setting themselves up for the morning. Dow will open higher it looks like. This is good news. Dow about 14. 5 tonights higher. Nasdaq higher. S p 500 call it almost marginally lower but may turn around. Making head loons this morning, apple says its received more than 4 million preorders for the new iphone and breaks a record. Demand far exceeding supply and some customers wont receive the devices until next month. New york stock exchange. Jim cramer, are you youre not in indianapolis. No, no. I should be. Tonight a very big game and i have to tell you i think its tough to go against luck with real receivers. Thats all right. Fantastic game. Theyre 01, too, arent they . Eagles won the first and colts no ed to win bad. They need. They do. Yeah. Thats you know, i just by talking about it, everybody wants to talk about Roger Goodell. Im waiting for ive been waiting for the season to start and college, georgia, killed me. That was amazing. How about the bc game . Unbelievable. Amazing. The defense man handled. That was unbelievable, jim. I know. A head case game. Bc saluting the family, that stadium. A game to be at. We forget. Could be the most exciting thing in the world. I love jesuits obviously. Bc is a great school. I work with screaming eagles. Almost as bad as the notre dame types and the sc types but with sc, too. Theyre crazy. The alumni. Anyway, jim, it wasnt a great week last week. Some day when the market acts like the other averages where they just realize im on this kick. Some day the party really is over in terms of fed and i wonder if were starting to see beginnings of that or whether the economy can take the baton and no. I was worried, too. I felt last week was about, okay, everybody sells stuff to buy alibaba but if you lose the fed or change the way the considerable the words taken out, you have a market where theres some pockets of good but theres a lot of companies that are just doing okay and i dont want to see the big high Growth Stocks sold to get alibaba because then the money wont come back. Theres not a lot of money coming into. Theres not the interest i would have expected given the averages. Im with you. Its tepid. Usually not a zero sum game and sometimes it is. Thats what i think you and i are feeling. Without new money coming in, amazon, listen to ann. Saying certain stocks she doesnt like anymore. They go down today. It is like, wow. Those are stocks to sell to buy aliba alibaba. I saw it last week. Without new money coming in, if the fed gets tighter, i think youre going to see people say, you know what . I dont know. I dont know where i want to be. Do i want to start buying in microsoft here . Theres just i think an on week and alibaba is the focus an by way of that yahoo . Everything else is like, well, i dont know. See what happens in europe. See what happens in the middle east. Lets see what happens in japan and if when you have a lot of see what happens you dont have a lot of buyers. Who are the three best teams . San francisco loses. Seattle lost. Seattle lost. Geez, you know, boy. Is Richard Sherman gates cost them. Whos the three best teams now . I tell you, its really. You know, look. Green bay looked totally vulnerable. Panted in the first half. New orleans . New orleans . Cant play outside of the dome. Very disappointing game. In the end, throwing it to graham every single time. I could figure out that game plan. The bengals . Injuries now. I dont know where. Eagles . All right, gjimbo. See you later. Yeah. One of the most successful sitcoms of all time is popping back up in new york. See how you can grab a cup of coffee with your friends. Well be right back. Ng chimes sfx ambient park noise, crane engine, music begins. We asked people a question, how much money do you have in your pocket right now . I have 40, 53, 21, do you think the money in your pocket could make an impact on something as big as your retirement . Not a chance. I dont think so. Its hard to imagine how something so small can help with something so big. But if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge sfx crowd cheering might not seem so big after all. 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. Welcome back. The First Episode of friends premiered 20 years ago today and that aired for ten seasons on nbc. To celebrate the anniversary, a popup replica of the neighborhood coffee shop is opening up in new yorks soho district and serve free coffee from this wednesday through mid october. Maybe we should all go. Good name. Central perk. Join us tomorrow. Squawk on the street begins right now. Good monday morning. Welcome to squawk on the street. At the new york stock exchange, premarket is modestly positive as stocks did break that fiveweek winning streak. Were set for a blockbuster week. A fed meeting. A scottish referendum. An alibaba ipo. The launch of the iphone 6. We begin with the markets trying to reverse course from their first losing week in about two months with the fed meeting on tap this week. Im going to have fresh and bubbling details on the