Transcripts For CNBC Squawk Box 20150921

The dow up 75 points. The nasdaq up by 28. Weve got a couple big stories that were watching this morning. San francisco fed president John Williams said last weeks fed decision to hold rates steady was in his words, a close call. Increased concern about the Global Economy in the Financial System led policy makers to wait on a hike. We will see how long that wait lasts. Jim bullard awaits and says its too influenced. President bullard will be joining us right here in studio for two hours this morning starting at 7 00 eastern. Weve got a lot of questions for him. We should tell you this news and does. There was one dissenting vote but bullard was not a voting membership. Anybody who says this is a fed that is unanimous or united in this is going to hear a little bit of a different story today. I kind of wish he you know, i kind of wish it wasnt preaching to the choir. I feel like arguing with someone. Talking to him, you know, well probably get some agreement. It will be like, dont, you know, dont yell at me. Yellen at me. Yellen at somebody else . I mean, if he was on the other side my first question im still going to ask him my first kwu. You have a dual mandate at the fed. Could you list the top ten reasons that you didnt . Because thats what theyre doing. The secondary mandate, inflation. I dont need to pin him down. But theyre nowhere near their inflation target. The dual mandate thats not what they talk about. Not only have they got inflation. Theres ten reasons. I can list ten that ive heard. China. Theyre worried about exporters not being able to her worried about dont think that that market turbulence, the vix didnt have something to do with it, weakness in the chinese economy, emerging market weakness if we raise. There are ten things that they theyre so bogged down in the minutia of what they think theyre doing now. They feel responsible for the Global Economy at this point, too. Well, thats ludicrous. Youre going to be stuck forever. It makes me scared that we have these people that have been appointed and that, you know, suddenly have taken on, you know, so much responsibility in their own legends in their own mind when thats why there should be a rulesbased system. Thats why john taylor is probably right. Its so subjective. You get some whacky person in theoretically. I dont know, dan. Well see how history judges her. What if you got a total screwup in there able to do whatever he or she wants to do. Its a big job. There should be some type of oversight or rules going into it. Nice Market Reaction. Yes. The fed selloff here in the United States friday spread overseas as well. Yeah. Then the enablers say, would have been down 1,000. Would have been down 1,000. You want to talk about just tell me when youre finished. Well talk about something youre interested in. Go ahead. You can do it. Why dont you do it. No. No. Please, i beg you. We were on a plan. You have an editorial on this . No. Go ahead. Okay. In deal news, zurich has a maybe you want to talk about carly again. We can do carly. We have time today. Got to watch carly. Dialog semiconductor buying atmel, 10. 42 share in caps and stocks for 4. 6 billion. Thattest a 46 premium over atmels close. In other news. Barry sternwick is in talks to merge with privately held colony homes. The wall street journal says a deal can be announced as early as today and would value colony at 1. 5 billion. Apples ios hit with a number of chinese apps. The company is saying its cleaning up and removing ma lisch shugsz plans. A tool that developers use was modified by hackers to put bad code into the apps. In overseas training this morning, volkswagen shares dropping the most in almost six years. This comes after u. S. Authorities accused europes largest automaker of falsifying emissions data. Willford frost joins us. This is a shocking story. Usually its hard to pinpoint. In this case it seems a little hard to get your head around exactly what they did if it wasnt for cheating on these tests . Absolutely right, becky. Big news over this side of the atlantic. The crucial thing being intend not that management made an attempt. Volkswagen is down 21. 3 . Opened down 9 and has weakened on trade. Porsche down sharply. Bmw, diamond down 3, 4 and the french autos also down sharply. Why is this moving happening . The u. S. Environmental Protection Agency has accused volkswagen of fitting half a million cars with special desiess to cheat. The german car maker could face a fine up to 18 billion. Now the ceo, martin vintercorn saying hes looking at it. Bernsteins Equity Research team published a note this morning stating that this is not a usual recall issue. Because of that issue of intent that ive already mentioned and could impact earnings to the tune of 35 euros per share. Hence, shares off some 21 . Back to you. All right. Will fred, thank you so much. I dont know if you saw the news on this. The software was written so that it could detect when you were actually undergoing eye missions tests. It would change the performance. I like it. The only reason to see for the software written is to cheat the test. I have never seen anything like this as a recall. Reading through, youre kidding me, right . What were the emissions . Emissions standards . Sulfur and because theyre diesel cars. Diesel fueled engines. Its bad stuff that leads to asthma, leads directly to smog. It is bad stuff that theyre trying to keep out. If you strip it to beat the emissions. Youve got to hand it to them for thinking of it, you know . To be able to tell such a bald face cheating and lying. Youve got to be kidding me. Doesnt happen in real companies. A Little Washington news this morning. The clock is ticking. The next fiscal year begins at midnight september 30th. Congress needs to pass a short term continuing resolution for that funding deadline or face another shutdown heres what jpmorgans Ceo Jamie Dimon said sunday morning. You guys are compromising your families, your friends, democracy is a compromise, its not a dictatorship. Anybody who says my way or the highway on one issue isnt necessarily thinking of the United States of issue. A Government Shutdown is just bad management. Diamond suggests the u. S. Ee corn my would have grown faster without the washington deadlock, Government Shutdowns and immigration. Lets get a check on the markets this morning. We showed you those futures. They were performing better than on friday. Right now theyve given up a little bit already. Dow futures up by 57 . S p futures up by 4 point be point 5. Nasdaq up by 21 points. Last week the markets were relatively flat. Dow down by 3. 5 . Why dont we check out whats been happening in europe and some of the early trading there this morning. This hour the dax is down by 3 4 of a percent. The cac is up by that much. The ftse up by. 4 of a percent and in asia you saw continuation in the selloff weve seen here in when came to the nikkei. Hang seng was off by 3 4 of a percent. The shanghai which seems to beat to its own drum was up. Wti oil prices looks like theyre up by 1. 6 , 45. 41. Checking on the bond market youll see that the ten year is yielding, yeah, 2. 518 . Yield under pressure. Foreign exchange up. The dollar yen at 120. 25. Finally, gold prices this morning, they barely budged. 1136 an ounce. Joining us, steve blitz at itg investmentment and mark grant at southwest securities. Start with you, mark. And mark t at southwest securities. Start with you, mark. And mark at southwest securities. Start with you, mark. And mark at southwest securities. Start with you, mark. And mark t southwest securities. Start with you, mark. For a while youve talked about the ten year never going back up like we think its going to go up. A think at some point you think were headed back under 2. With that in mind, i think that your Global Forecast for growth is probably below what a lot of people think or hoping that we get. Therefore, im not sure that you think the feds decision was incorrect. You probably think theyre just responding to what is a very tepid environment globally, maybe here, too. Yeah, joe, i think thats correct. I do not have a good outlook on Global Growth. The fed, as you know, in their last minutes lowered their expectation for inflation from 0. 7 to 0. 4. I predicted a while ago we were going back under 2 . We did just that. We got to 1. 97. We backed up a little. My big concern for the whole year, joe, is that weve gone nowhere. I mean, the treasury started at 217 for the year. 2. 17. Were down 8. 2 in the dow for the year. Its been a year of absolutely going nowhere. I think maybe the most disconcerting thing if you just consider the facts is that Monetary Policy, as accommodative as its been around the world, looks like it really hasnt borne that much fruit which sets us up for the next time something really serious happens. Weve exhausted what we can do. Were at zero. Weve tried qe1, 2, and 3. This is what weve got. What do we do next time . There will be another slowdown and central bankers arent going to be able to save us next time. I agree with that. As a matter of fact, while for instance in america when we had quantitative easing, the equity markets went up. Interestingly enough, the quantitative easing sings they began in europe, theyre down to about 600 billion in their equity markets. I think thats in the journal today its not working. Eurozone nears limit of what Monetary Policy can do. Theyve been trying and trying and trying and not getting maybe we did get some desired effect. We got some wealth effect from putting asset values in the stock market up to what some people think are high valuations. Where are you on this, steve . Do you feel better than mark does . I wish i did. Is it would make it for better morning television. Maybe not. If it bleeds, it bleeds. I guess. There are two things i want to say what the fed did and did not do on thursday was the reason why the equity market fell off is a bit of a faurls narrative. Why did it fall off . Well, i think they just came back to recognize that the equity market is starting to have difficulty in october. Going off in august. The big issue, a slowdown. The global earnings from the rest of the world is slowing down. That has to by mathematics lower the level of the equity market. Thats whats going on. Janet yellen basically told them what everybody knows. There isnt a fix for the central bank to do against that. All they can do is what they did which is by not allowing the dollar to go big, it said, okay, were not going to hurt translations for american firms and were not going to cause more pain than already ongoing in emerging markets. The dollar went up after that. We were at 114 so that didnt help. The stock market, they didnt get any of the desired effects. 5. 1 , youre already seeing theres very little benefit to staying at what is nowhere near normalized rates. If you see its not working thats the definition of insanity. The second part of the story is this. I agree its insanity. The insane aspect is there is no inflation mandate. The infliens plan date, when it was initially put in to be a governor of what the fed can do dsh. Wait a second. Under greenspan that was the only mandate he paid attention to. Forget about unemployment. Inflation being too high trying to get it back down. There isnt a point forecast in to make it 2 . If youre dealing with no inflation you can be looking or eventually becoming a situation in japan and thats probably the concern. The concern is that you go back any area in the u. S. Economy since the late 60s is growing on the chicken and egg in inflation. The problem with zero inflation. The world, is it that its not safe for leverage . If you got a sharp deflation youve got that debt deflation cycle. Its not so thats theyre trying to make the world safe for leverage. Its not an issue that 2 is some sort of magical number that they need to get inflation up to. There is no mandate. The u. S. In the mid 70s when they started this mandate you said, okay, weve got full employment and 1 inflation. Is that a problem . No. Grant, i hope youve given up on greece. I dont blame you for not getting that right. They elect a guy thats not going to do anything for austerity. Then he decides hes going to do the aus sterts at this. Then they reelect him in a landslide for whos going to do the austerity. I have no eye idea how to put in the hard parts of that agreement with the e. U. , right . It was the opposite of why they elected him in the first place. Thats correct. Give up on that. Just a joke. Its just ridiculous what the eu has done, lending them all this money that they kabtd pay back. This guy is running around saying one thing in the graek greek press, another thing in the european press. Hes saying no austerity. Now we want to renegotiate the debt. Germanys not going to renegotiate the debt, restructure. Stupid. Whole thing is dumb. At least weve got when we do elections here and primaries, we do it in a way to hold our head up high the way its going the rest of the way here. We dont have crazy election stuff happening here. Thank you. Thank you. Mark, see ya later. Thanks. Take care, my friend. Speaking of which speaking of which, when we come back were going to talk about some new poll numbers showing Carly Fiorina jumping to number two in the gop president ial field. Well ask if dump stays with the numbers. Hes still leading. As we head to break heres a look at this kate back in history. Ate back in history. Date back in history. The eclass has 11 intelligent driverassist systems. It recognizes pedestrians and alerts you. Warns you about incoming crosstraffic. Cameras and radar detect dangers you dont. And it can even stop by itself. So in this crash test, one things missing a crash. The 2016 eclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back to squawk box, everybody. Chinas president xi jinping is headed to the United States. Unit joins us. There definitely are plenty of them. The chinese president and president obama has a lot to talk about. The chinese president will be heading to the u. S. At a very tense time between washington and beijing. The United States is considering sanctions against some chinese individuals and companies that could be engaging in cyber espionage. Then on the chinese side china has been more assertive in the south china sea. That is frustrating many individuals who believe they need to be more forceful in the area. Another threat that will be interesting to watch is that the chinese president is heading to the u. S. At a particularly vulnerable time for him on the economy. A lot of u. S. Investors have been changing their outlook over the chinese growth and have been more and more concerned about governments commitment to reform. During the sevenday trip the chinese president is going to be head to go seattle. Hell be touring boeing as well as microsofts abilities. Hell be meeting tim cook. Hell be meeting with president obama for a state dinner and heading to new york for his first speech at the united nations. A lot of speculation is that the u. S. And china could make some progress on the bilateral investment treaty which has been dragging and that they can come to some sort of a deal at Cyber Security, some sort of accord. A lot of people are pessimistic about any inclusion on commercial cyber theft in that accord. Eunice, thank you. Its a long week. Well check back in with you soon. Okay. Lets tell you about some other global news going on this weekend. Weekend elections in greece and Alexis Tsipras is returning to office after a decisive victory. Coming even after party radicals turned their backs on him last month after he had agreed to austerity demands to secure another eurozone bailout. Back here in the states, new poll numbers. Donald trump is slipping a little. Carly fiorina surging. Ben carson being pushed to drop out of the race after a controversial comment about muslims. Nbcs tracie potts has the latest from washington. Reporter the first big pole after last weeks debate shows Carly Fiorina surging from 3 to 15 in second place behind donald trump. As people come to know me, who i am, what ive done, most importantly what i intend to do, they will support me. Reporter fiorina replace dr. Ben carson as number two. I would not advocate that we put a muslim in charge of this nation. I absolutely would not agree with that. He said that on his own. That was what was just startling. Reporter it came just days after trump failed to correct a supporter who called president obama muslim. Hes not. Trumps reply seemed to support getting rid of muslims in america. The fact is there is a problem with some and it is a very severe problem. He is fueling a level of paranoia and frej dis. Reporter tracie potts, nbc news, washington. Outraged at some of the rhetoric around did she call the gop candidates terrorists . No. No. Never mind. That was something else. That rhetoric was okay to ramp up. Youre not cool with the its very clear in the constitution that religion can have nothing to do with whether youre able to serve in the office. Ron barron was doing jumping jacks. Religion, race, creed, color you cant be that way. What was the question . Did he come out on his own . Later i think he said what he was trying to say was that the American People probably arent going at this point to elect a muslim. Different from what he said . Way different from what he said. Exactly. Boy, i just watching hillary, she just was really troubled by that comment. Very troubling. Very troubling. But there is a line that has to be drawn. She didnt draw the line when she called the gop candidates terrorists. That crosses the line as well. Exactly. They all are doing it. When they feign the outrage. Position heal myself. She was called out on that as well. Right. When we come back, weve got a lot to talk about. A drug goes from less than 14, if you believe this one, a tablet, to 750. It happens overnight. Thats more than a 1,000 jump. Take a look back at last weeks s p 500 winners and losers. Its more than the cloud. Its security and flexibility. Its where great ideas and vital data are stored. With centurylink you get advanced Technology Solutions from a trusted it partner. Including cloud and hosting services all backed by an industry leading Broadband Network and people committed to helping you grow your business. You get a company thats more than just the sum of its parts. Centurylink. Your link to whats next. Welcome back, everybody. We are in the chairs this morning talking about a few things that have caught our attention. Weve already spent some time this morning talking about the practices of volkswagen. Kind of cheating when it comes to the emissions test and getting caught on it. They were setting up cars where you could the software would detect when it was being tested for emissions and it would change the output. The cars pass all the emissions tests. Yes, as we spoke about it violates the spirit of the law so amazingly incredibly that it is hard to believe they even did this. Heres another case where bad Business Practices seem to be on play this morning. There are several drug prices that have been jacked up overnight. Now we know that this has been a situation where new cancer drugs have been developed, new heart drugs have been developed. A lot of times they are costing more than people way want to say. This is a different situation. Thats an argument where you can come down on either side. This is a situation where drugs that have been around for 50 or 60 years in some cases are being jacked up overnight simply because theres a new buyer who comes into play. One is darafram treating a life threatening parasitic infection. It used to cost 13. 50. It was bought by a Company Called touring pharmaceuticals, they jacked the price from 13. 50 to 750 a tablet overnight. Didnt do anything different. Didnt do anything new. This is happening time and time again with generic drugs around for years. People shouldnt pay that obviously. Right . But its for Life Threatening Diseases and the alternatives dont always work well. Right. The alternatives, youre going to you cant dictate where youre going to set prices. No one at that point should pay that much. Quickly some other competitor is going to come in with something similar, with the same drug. Not under patent. This is the type of Business Practices that maker one think that business is i know. What do you want to do . Tell them they cant do it. In situations where you are simply acquiring the solution to a life threatening disease and taking it off the market and not making it available. Its such a small disease that no one is even in that business anymore. The population people that get it is so tiny that no one even makes it thats why no ones in that business. The guy is saying the guy i dont know anything with the drug. I dont know anything about the situation but the guy is saying that the money that they get from he thinks hes going to invest. Make other drugs better than that drug. There are other doctors who say we do want better drugs for a lot of different diseases. I havent heard anyone saying that this disease needs to all of a sudden have relationship. These horrible companies. I can understand both sides of the argument with new cancer drugs that come out. If everybody could, if everybody could, theyd raise prices as much as they could. The market takes care of itself. Selfcorrects. Heres the problem. In this instance lets say ten people who cant get this drug who should be able to get the drug there should be an orphan drug. Youre right. I think the market eventually takes over and handles this. This is the type of plus, hes a Hedge Fund Guy that bought it. Hes not some researcher. The transition cost is to an individual. Thats the difference, right . Some family out there is going to have a problem that they probably shouldnt have, right . Probably not. Medicare and thats the other problem is that medicare probably just rubber stamps all kind of weird going to pay for it anyway. Thats one of the problems with the system. Market forces are not allowed to work. There is no market forces. Valiant pharmaceuticals acquired two companies. Got their heart drugs. Raised prices. There you can tie the link back to the shareholders not going with it. Honestly, how much fraud do you think goes into the total medicare . 40 , 50 . Huge amount of fraud. We had the ceo who told us its probably 20, 25 . Probably low, right . Lets say its 20 . He sees the wasted money. You have to fix this. You know what, this isnt fraud. I spent some time at the dmv again last week. Its been privatized. Chris christie, higgs name was they still have his picture. I dont know for sure but i thought under privacy. Four hours to stand in line to renew your license and take a picture. Do you watch how they dont care about you. I think its been privatized. Did you know there was a Company Called the Peanut Corporation of america. I did not. I read about it this morning. Nine people died. He knew he was selling Peanut Butter with he might get life in prison. Hasnt been done to a ceo. Should have been from 08, they all should be in prison, too big to fail. If we did a second version of our documentary. All the ceos of all the major bank would have Life Insurance as far as you and Bernie Sanders are concerned. I dont know where you come up with this. You never give me any indication. The headlines . Im not going to do the headlines. Price line going to cuba. Yeah. Because its flights will be there. Shatners going to go. Maybe shatner. It is ive seen some of the shots. Old but beautiful, right . They need to bone up on a few things, right . They just need internet access. They need theres a lot of things they need. Take a cab, you need a car, hotel room. Uber. How can you do it without internet . You cant call wifi. They have a lot of hotels down there. People forget that the whole world was actually in cuba except for us. We make this out to be some kind of if you were in canada, you could go. London, cuba. You forget that a state thats run like that probably isnt i accept that. Even in the past couple years there are more hotels. Its not going to be your usual you might have a staff of nine that you like on your vacations but its probably not going to be as luxurious as youre used to going on your 1 . I didnt down it. They love jury duty. Coming up, Pulitzer Prize winner, David Maraniss is here. The lessons of motown. St. Louis fed chairman jim bullard will take us inside the room. First as we head to break, a quick check on whats happening in european markets this morning. Were back in 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. This just in 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street. Not rattled. At all. No. Not at all. Not at all. I mean, look at the day. Sir. Sir. What went right . What went right . Everything. Thank you. With threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. My dads company wasnt hacked today. Cool. Welcome back, everyone. Author and Pulitzer Prize winner David Maraniss is out with a new book. From the Auto Industry to motown. What defines society and the culture. David maraniss is here. Hes the author of fwhuonce in great city. Thank you. Having grown up in detroit and watching what happened to your city. I only lived there until i was seven years old. It was deeply primordal for me. It started with the m m commercial. It hit me in a very profound way. Of course, he was just selling cars but it started me thinking about what detroit meant to me and what its meant to this country, which is a lot. Why dont you talk a little bit about why you think detroit was so important from our nations perspective. When you think about it, it created the sound track of our generation, motown. But also the car industry. Labor was strong in detroit. It was very important to the Civil Rights Movement and to the creation of the working middle class. All of that is really at the core of what america is in many ways. Today it has been seen as the example of what went wrong with this nation. How did things start to unravel . Virtually every urban ill played out in exaggerated way from the effects of urban renewal, racial tensions, all of it played out there. Youre right, it did become the symbol of the city of ruin. Im starting to see some signs that it can be a symbol of hope as well. Weve had people like dan gilbert come on the show and talk about what theyre doing downtown. Dan gilbert is the largest owner of property. Hes bought all of downtown. Its wonderful in one sense. Hes gambling. Hes trying to make money as well. Its not all humanistic. Nonetheless, i think what you see in downtown and mid town detroit is a lot of energy. A lot of young people coming in there. You can reinvent yourself there now the way you could 52 years ago when motown was going. What do you think detroit could be five or ten years out . Not 20 years out . Jamie dimon was just in detroit. Theyre putting out all sorts of money. Where is it all going . Its not going to all of the city. When you talk about a renaissance or rebirth, unless somehow magically you can bring back some jobs for the working middle class in that housing, its a huge city with 28 miles across. So many swathes of empty houses. What you will see is the middle of the city that is vibrant. Its different. Its not the same old detroit but its something new and reinvent reinvented. If you take it from boston down to washington, d. C. , youll run through a lot of areas of inner city blithe. I dont know how you would turn it around. Is whats happening in detroit a model . Can it be created or is this a one off . It can be a model first. Detroit hit the bottom is first. The energy can be repeated in some other cities. I think you do see it in some of them. The core problems are almost intractable for a lot of the people who live there. Until you can figure out those problems, which go beyond just the city of detroit but our nation and how we treat urban dilemmas, you cant totally be resolved. You mentioned that its jobs. A lot of those middle class jobs are never coming back even if you see a resurgence in manufacturing in this nation, its going to require people who have higher skill levels coming in to run some of those factory lines when theres a lot of computerization that takes place. Thats right. Thats why im saying the city will be different than it was. It will have to be reinvented in those ways. You see some of that with quicken loans, shinola but its not the old chrysler plant. Thank you very much for joining us today. Congratulations on the book. Great to see you. 1995 privatized. 2003 back to the state. Back to the state. I was down there last year renewing my license. It was horrific. Im telling ya. Im telling ya. Four hours to wait in line to do something that you have i know exactly what evs having for lun. I would stand there for five to ten minutes while they were deciding. Dmv you always hear that. I had to go three or four times. Why . Its a long story. I waited four hours to get my license with a picture taken. You only have to do that every four years now. Im telling ya, it renewed i felt like adam smith standing there. I did. Coming up, a disrupter that wants to help make the next music a star, but first as we head to break, check out the shares on lenar. I dont want them to know who i i am. Taking it out on you . No. Stay tuned, squawk box will be right back. Isnt it beautiful when things just come together . Build a beautiful website with squarespace. So wi got a job ews . Ill be programming at ge. Oh i got a job too, at zazzies. friends gasp the app where you put fruit hats on animals . I love that guys, ill be writing code that helps machines communicate. interrupting i just zazzied you. phone vibrates look at it friends giggle i can do dogs, hamsters, guinea pigs. You name it. Im going to transform the way the world works. proudly i programmed that hat. And i can do casaba melons. Ill be helping turbines power cities. I put a turbine on a cat. friends ooh and ahh i can make hospitals run more efficiently. This isnt a competition vo wit runs on optimism. Un on . Its what sparks ideas. Moves the world forward. Invest with those who see the world as unstoppable. Who have the curiosity to look beyond the expected and the conviction to be in it for the long term. Oppenheimerfunds believes thats the right way to invest. In this big, bold, beautiful world. Dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Lenar. Patron want to help starving artist. They have a crowdsourcing site to help them earn revenue from fans. The founder and ceo is here. Fascinating business and Business Model. Tell us how this started and what this is all about. It started just from my like own needs and own experience. I was getting like a million to 5 million views a month on youtube and log intoe my dashboard and see 150 of ad revenue and i was unhappy with that. I just felt i felt like more impactful and valuable as a createor. I knew i was reaching fans. They enjoyed my work. I felt i should be getting paid more and called up my freshman year roommate and built out the site in a few months and in a couple of weeks i was making a few thousand bucks a month. I would pay how much to subscribe to your need is whatever you want. Can you pay a 1, 10, 50 some folks pay 1,000. Its not what i get for that amount of money. There are rewards. Im like a benefactor, a patron. Youre a true patron of the arts. Like beethovens patrons got their names in the book. Do you think of this more as a Business Model or more as charity, dare i say . Creators, modern day creators are entrepreneurs. And they need everything that entrepreneurs need to run their own Small Business media companies. They are reaching hundreds of thousands, sometimes millions of people. They need to take care of their relationships with their fans. They are actual business owners. But the pricing model is not a market oriented model . No, no. It is. There are rewards. Theres tiered rewards for tiered levels of patronage. You get access to behindthescenes video, exexclusive contend, et cetera. Half the reason the Service Works is because it actually is true patronage. What you just said strikes me this whole promise of the digital revolution where everybody can create content is kind of a big lie. The idea that you had 5 Million People watching things and you were making 150 bucks you got to be kidding me. Sometimes i cant believe that we let it get this far. Like the internet is so good at helping people reach people. But its so bad at turning people call it content. I call it art. Its so bad at turning art into money. Helping creators who populate the web with things we enjoy. So bad helping them make money and patron is an answer to that problem. We keep talking about artists but this is musician, film makers, writers. Absolutely. We have all kinds of artists. We have journalists. We have long form journalists. What do you say to all of those news organizations and other places that say we cant charge. We dont believe theres a market, that theres enough people out there that are willing to foot the bill thats why were so dependent on advertising. What i say to them i tell them of a story that channel Just Launched called the professor. He was hesitant to launch because he didnt know what he would do, he didnt think he would do that well. He was teaching classes at a college and within one day of launching his patron page he does reviews. Within one day his fans were pledging 6,000 a month and he quit his job. So you dont think theres a market, i think youre wrong. Whats the most money any patreon user is currently making . We have some folks who are making around half a Million Dollars a year. Theres some folks getting 30, 40,000 a month through patreon and they are hiring people, growing that your content, building a team. They are building up a small company. The Business Model for you 5 . 5 . 5 of transaction. One last piece. If youre a creator do you have to keep creating lots of stuff all the time. There are certain artists who will do an album once every two or three years or way a book for two or three years. For this service to work you have to put new stuff out there every week, every month. Whats the cadence . The service was built also for some folks like me who dont have regular programming schedules. I dont release content regularly every month. So actually one of the ways a creator can write a campaign is per work. Fans pledge ofry time you release a work and nothing in between. That allows me to go off for six months and work on new production technique or work on a new song or something and when i come back i release a piece of work and fans get charged. You dont have to have a regular programming schedule. Very cool business. We encourage people to check it out. When we come back this morning we have our news maker of the morning. James bullard will join us. For the next two hours no topic is off the table. Youre watching cnbc first in business worldwide. Our squ the morning, st. Louis fed president jim bullard. Well get an inside look at the decision to keep rates low and ask him what it will take to finally achieve liftoff. Busted. Volkswagen admitting to a Software Design that cheated epa emission tests. The Company Facing a penalty of as much as 18 billion and the stock is getting pummelled. Apple disclosing the firstever large scale cyber attack on its app store. How did hackers get through as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box. Right here on cnbc first in business worldwide. General electric chairman says China Remains on a growth path and not as negative on china as others. Making those comments to reporters in new delhi. We have jaime dimons comments. Volkswagen is halting sales of some diesel cars after regulators Found Software to cheat emission tests. It installed software in half a million cars that reduced emissions during testing but not during normal operation. The companys ceo apologized. He said the company will comply fully with regulators and will order an investigation. Rogers volkswagen could face fine of up to 18 million. Its down 27 . Apple says its cleaning up its app store to remove malicious programs. First known large scale cyber attack on the store. Apple made the announcement after several Cyber Security farms said they found virus in legitimate apps. Several of the most popular apps in china were among those that were infected. Apple supposed woman said the affected apps have been removed. San francisco fed president John Williams said the decision to hold rates steady was a close call. He said increased concern about the Global Community led policy make towers wait on a hike. Did you ad lib squish because it was a volkswaggen bug. Jim bullard is president and ceo of the Federal Reserve bank of st. Louis. Steve liesman is here. Big red machine. There is. Its been the currents big red machine for a few years. Believe me i know. My first question, and its kind of tongue in cheek but its going to sound like im serious, the fed has a dual mandate. That may be too many too. So, because of the dual mandate, could you list the top ten reasons why the fed didnt raise on friday . Albeit you could. I can. I argued against this decision. I thought it was time to move and i actually would have dissent on this decision. You see what im saying. Is that what they you wonder why people are pounding the table for a rules based or at least something that gives an indication we need to be clear about what well react to when we make a decision. I have no idea now. Thats why i think its inappropriate to react to Financial Market turmoil, you know in china. In china. Well, you know these things can go down but they can rally a couple weeks later and then people say your going to now change your policy again . Thats why historically the committee has not wanted to react to this type of stuff and has tried to lay out a policy thats more based on growth and labor market and weve been emphasizing labor market. There is minutia to get bogged down if you want to and you remember hamlet, right . He came up with where hes talking about different things. Wringing his hands. That didnt end well. If you remember what happened. Everybody is dead at the end. Yes. I do recall that from the play. So, can you rank i mean the dollar cant get any stronger because of our exporters. Emerging markets may theres a powerful case to be made that its time to normalize Interest Rates and the case is not complicated. The case is that policy settings are on emergency, and the economy itself, the goals of the committee essentially have been bet. Unemployment is 5. 1 and inflation which is being driven down by oil right now but if you strip that out and look at the dallas fed trim meeting inflation is 1. 6 yearoveryear. Thats about as close as we have been to our goal variables in 50 or 60 years. The prudent think is to start inching your policy levels to normal readings. Were still at zero rates and a Balance Sheet of 4. 5 trillion. We havent made one movement in putting those things back to normal. Thats the case for normalization. Okay people say you got worries, you got elements of the labor market that arent quite right, you got this and that. Thats fine. Thats fine. We are going to have a very easy Monetary Policy over the next three years no matter what we do. So dont come to me and say there isnt enough accommodation in the system. There is enough accommodation in the system. Were addressing all the things we need to address, and i understand that there are risks out there but you have to take a prudent policy and start to inch your way back to normal. Well glow gradually. I got nervous there. Can you just turn your back and turn your chair around during the deliberations . I want to say this forcefully because i think the debate has drift ad way you got sensible people that should know better like Larry Summers saying oh, my god the world is coming to an end. This is an easy policy over the next three years no matter what we do. Dont come to me and say we need more. Next time youre yelling, dont yell at me. First im an enable engineer. Some policymakers are hawkish or dovish in their dna. Thats true. I want to remind people jim historically on this show four or five years ago made even a more impassioned argument for the other side. Now you changed. I want throw some of the other arguments at you. Oh, god. Do i mess up your questions with my commentary im sorry. I dont. Im sorry. Watch how you can do this. This is the wrong time for the Federal Reserve to be hiking into Global Economic weakness. You do have an inflation down draft. It goes beyond oil, commodity prices. By the way a good historic disconnect between whats happening with the Unemployment Rate falling and failure of prices to react. I think there is a fair case to be made. Chairman yellen does a great job. The case is gosh inflation is pretty low right now. If you want to look at headline inflation its running near zero. You know thats heavily influenced by oil prices. But still could you say maybe we can wait a couple of meeting, maybe we dont have to be in a hurry, oil has come down further recently. So maybe thats increased and the dollar is stronger so maybe thats increasing the down draft on inflation. Tips based expect inflation measures lower. These factors are reasonable to cite for the committee and chairman yellen did cite those. Its not necessarily concern that they didnt raise its the reasons they cited for it that really have you kind of fired up. Well, i think theres a reasonable dies be built around that the inflation outlook is slightly weaker. We know these are temporary factors, the oil factor. The thing about oil its ultimately a bullish factor for the u. S. Economy. Were going to be able to benefit, were a big oil user, benefit from lower commodity price from around the world. You shouldnt be citing that as, you know, a sign somehow that will come back to bite us. The other argument if youre going to cite emerging markets, you got, you know, brazil, i suppose is in trouble. They have a huge political scandal. You got russia down because of oil market decline. You got china and the only serious one would be china and i think the truth about china is that yes going to grow slower but thats not news. Thats something weve known for quite a while. What problem your solving . What problem your solving . You dont have m and a inflation. You would be hiking for what reason to make it difficult for people to get loans . We have a strategy. The strategy is go a little bit earlier and go gradually so were not marching up quarter basis points like we were in 2004 to 2006 which turned out to be behind the curve anyway. But, i think, you know, go early. Go gradually. That will give us ability to react to problems we see out there and the low inflation issue. The alternative is dont do anything until you absolutely have to and then you raise rates a lot all of a sudden, that would be the a 94 scenario, and that is a, you know, very much volatility inducing kind of scenario where the fed is behind the curve, you raise rates a lot, you might have to go to 50 basis point moves. We dont want to be in that kind of situation. What can you or cannot say to this. Having satin room now, how do you handicap when they move . Knowing who is in the room, what do you think the chances are that october is real . The chances that december. What is the chance that were into 16, 17 . I take chairman yellen 13 out of 17 members said they thought 2015 was likely. That was in the sep. You have to take that at face value. Chair said every meet cigarette a live meeting. You have to take her at face value. Just reading the faces, just reading the emotional, the eq in the room, whats your sense of what will happen here . You know, i think you got to take it at face value. You think theres a chance next month it happens . Theres a chance, yeah. Do you think its a good chance . The problem with going from one meeting to the next is always how much information has changed from one meeting to the next . You can always make that argument. This was a close call. To quote led zeppelin has there been a communication breakdown. Has the communication of the committee something thats hurting its own cause rather than helping it in terms of a failure to send a clear message. Clearly the market, your dont want to get out of the meeting and have the stock market fall by 700 points. Theres not i know theres not that desire on the part of the committee. Has the chair failed in terms of her communication not speaking enough . Have the committee been sending mixed messages . I think the chair does a very good job. Her job is to build consensus. Shes very good at that. Excellent listener. And syou know, puts the arguments together in a great way. Ive been an advocate of the press conference at every meeting. I think that would help us a lot. Help chairman yellen a lot because a lot of the way the Committee Works is that you trade off temporarily between meetings. Okay i hear what youre saying but i dont want to do it here. Lets wait until the next meeting. What this is doing by having a press conference at every other meeting its upsetting that kind of trade off thats normally made. That puts heavy pressure on the september meeting which didnt have to be the case. Why not july . Why not october . Didnt have to be the case. But, no, all the heavy pressure goes on there and then the committee has to make a tough decision in the midst of a lot of Financial Market upset in the run up to the meeting. I dont like that. I think you smooth it out by making every meeting exact italy same. Theres no additional importance given to any particular meeting. If the committee feels i just dont feel this is the right meeting to do this lets wait a meeting you can do that. Once we get the facts, everybodys opinions, i hesitate to ask for to ask for just opinions were stuck and we got plenty of time. In your view ill tell you what my view is. Not that anyone cares. The market may rally if you had gone up, if the fed had raised. I think that weve hit an inflextion points where the benefits i dont see any more. You may disagree with the people that say theres negative effects of staying at zero, whether penalizing savers or money that savers are saving are going to corporations. Even if you dont give any credence to that, what we know is that were not getting much benefit. We dont know what we dont know about the long term effects of this and i think the market has come to that conclusion they got to go. I dont think we would have been down 300. People said we would have been down 1,000 if we had raised. I dont think the market would have acted negatively. I have a message for your friend cramer. The fed cannot permanently raise stock price. The idea that its the fed is going one way or the other and this is whats driving stock prices is not true and hes one of the great people at looking at business, how good is this business, whats the roftability of this business, whats this thing worth and to have him cheerleading for low rates 24 hours a day is, i think, unsavory. Do you think somebody call jim. That makes me think there are market distortions because of the fed policy. You got real low rates. Presumable lei lot driven by Central Banks around the world. How about higher rates that get us better to long range growth. All right. Thank you, steve. Much more from jim throughout the morning. Theres a lot to talk about. Awful lot to talk about. Stick with the big red machine. When we come back were going ball club about volkswagen. They got caught cheating on emission tests. Phil lebeau has the details. A Government Shutdown is looming. Roger altman is up next and well talk to jamie dimon. No one speed. No one way of driving on each and every road. But there is one car that can conquer them all. The mercedesbenz cclass. Five driving modes let you customize the steering, shift points, and suspension to fit the mood youre in. And the road youre on. The 2016 cclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Welcome back. Volkswagen roung afoul with the u. S. Epa with software that was designed to cheat on emissions. Reporter they are. The fact that volkswagen has admitted to knowingly do this is what bothers people the most. Its still unfolding how a this will be remedied for people who have these vehicles and how much of a hit volkswagen will take phil mickelsonly and in terms of sales. Its under pressure and a couple of developments happened over the weekend. Yesterday volkswagen came out and said well stop sales of certain 2015 clean diesel models. Thats a huge step any time a automaker says stop sales. And while it could top out at 18 billion almost everyone i talked with said it would be far lower, it wont be 18 billion and thats determined by the environmental Protection Agency. Those 2015 clean diesel models that are no longer being sold at dealerships or at least for now saefl those vehicles is being suspended and includes the vwpi vwpissat. Yesterday the ceo of volkswagen in germany issued an apology saying i personally am deeply sorry that we have broken trust of our customers and the public. Shares of volkswagen were down as much as 9 in trading in europe. They will be under pressure today. Whats interesting when you look at this, youve heard me say this in the past. Even in the biggest scandal whether it was toyota or general motors, generally speaking the public is forgiving and will say you know what . We know about those recalls, we know about those issues, were still going to buy the vehicles. You throw a couple hundred dollars on the hood of a vehicle they will bit. Many of those who bought clean diesel models they bought them because im doing well, im helping the environment. Its the right thing to do. Particularly in california. There are a lot of comments coming out of california this morning with people saying wait a second you knowingly deceived me into thinking i was driving a car that was not absoluting when in fact it wwas polluting. This Company Relies on car sales particularly on the coast and in california and in california ill be interested to see what a lot of people think about driving who are looking for a clean diesel model. God forgive the prius. If those owners thought the idea of what they might do if they found out that the prius wasnt as green as they thought and all the virtuousness they built up in the past couple of years. And how ugly it is. They got driving the ugly car because its clean. Think if they found out. That would be truly tragic, lebeau. Reporter it would be. It would be. Havent thought about how this might impact other companies if they did that, joe. California too. Every other car is a prius. Every cheese wedge, white cheese, red cheese. The situation in this one is more than feeling youre deceived. If you have to be held to the epa standards youre not going to get the torque you thought there was or the pick up. Good luck pulling one of those cars out into traffic when you cant have that performance when they dont meet the standards. The car doesnt work. Reporter im telling you right now most people wont have these vehicles fixed. People are saying they have to fix them. If you got one of these vehicles is it going to matter that much to you or say ive been driving it anyhow. This is not the gm recall. Reporter its not a life threatening defect. That offsets what you were saying, phil, a little bit. You arent going buy one. In terms of the customer response, i mean if i knew the ignition switch or Something Like that where people were hurt or killed, its not the same response unless youre youre talking yeah, maybe. Reporter when i hear back from people who are diesel fans they are passionate about driving a diesel. Theyve driven one in europe or exposed to a clean diesel model and all say this is the way we should go. It shouldnt be hybrids it should be diesels. I ill be curious to see if we see an impact in sales. People now say this is outrageous, two months later not much impact. If youre going to design a way to pass the emission tests when they hook up the stuff youre not emitting. Its pretty diabolical. Reporter it was discovered by researchers at West Virginia university. Grad students and a nine government organization. They were the ones who discovered it. Not everybody else. This is folks saying lets check this out. How are we going to get around these cafe standards. Check this out. Wow, thats really good. But then they should have thought further. Letter of the law versus spirit of the law things like that, pesky little thing like that. Phil, thank you. Coming up, sports news. Highlights in a key Injury Report from nfl week two. Somehow brady set a new record in terms of how many yards passed against buffalo. And you know someone inspected his balls, right. So theres no way they were deflated balls and still able to do it. I dont see how. Anyway, well be back. 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. Its more than a nits reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced Technology Solutions, including an industry leading Broadband Network, and cloud and hosting services all with dedicated, responsive support. With centurylink as your trusted technology partner, youre free to focus on growing your business. Centurylink. Your link to whats next. Welcome back to box right here on cnbc. Among the stories front and center, lenar earnings and revenue topping estimates. Company selling more homes at higher prices. Also keep an eye on shares of go pro. The camera makers stock could plunge to 25. The paper citing underwhelming Product Launch and stronger competition. Stock down 4. 5 . Starwood waywood Residential Trust is merging with Colonial Homes in an all stock deal. In sports news. Victory celebration muted in dallas. Cowboys beat the Philadelphia Eagles 2010. Tony romo suffered a broken left collar bone. Romo was sacked in the third quarter. He left for this. Fumbled and tried to recover the fumble, 400 pound defender fell on his shoulder. We have our stage guy here broke his collar bone with a similar situation. You were playing frisbee. A little different. Same collar bone that romo broke in 2010 and missed ten games with that injury and thats what scares me. You break your left clavicle. You can still feel, i have tlibs. But he broke his left clavicle before. Broke the same one. Thats going to be scary seeing the guy coming at you. And former Oklahoma State quarterback Brendan Weeden is the back up qb. If you didnt stay up and watch sunday night football the Green Bay Packers took on the Seattle Seahawks in a rematch of yesterday as nfc title game. Aaron rodgers through two touchdowns. The packers won a 2717 victory. Seahawks are 02 now on the season. A lot of hangover seahawks lost to st. Louis last week. Thats right. By the redskins, right . Any given day. Is that why they play those games . I know. When we come back this morning, politico is projecting a 75 chance of a Government Shutdown tend of the month. Well talk to roger altmans about the governments chances. Dow figures are up triple digits, s p is up and nasdaq is up close to 40. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. Sun is shining in the sky there aint a cloud in the sky welcome back to squawk box, everyone. The government is facing its second shutdown in two years if Congress Fails to pass a stop gap funding measure by tend of september. At issue is a plan to defund planned parenthood. Heres jamie dimon on the prospect of a Government Shutdown. You compromise with your family, friends, democracy is a compromise by nature. Its not a dictatorship. Anybody who says my way or the highway on one issue is not thinking about the United States of america. I wish people would overcome that kind of stuff. A Government Shutdown is bad management. Joining us now is roger altman. Hes a former deputy treasury secretary. Roger, what do you think about whats happening right now because the clock is ticking. You now have politico saying theres 75 chance we dont get something done. This is a different situation than the recent shutdown crisis because it involves a wedge issue or a social policy issue, planned parenthood instead of the typical fiscal issues, the sequester and so forth. Might be harder to resolve. Also gets into the question of boehner and boehners speakership and control or lack of control over his own caucus and thats a tricky element of this. But its hard to disagree with the politico assessment. The position is very hard on this and you saw that play out in the republican debate. Planned parenthood was front and center and be hard to solve this. What does that do if theres a shutdown, whats the impact on the economy and beyond . These shutdowns have tended to be pretty short. If it is short i dont think the impact will be meaningful. It all depends on how long it takes them to solve it. Also involved in this is the party thats seen by the public as having caused the shutdown typically in the polls and ultimately in some election sense is the loser. So i dont know how long the republican side especially the conservative side of the party will want to perpetrate this in light of what will be pretty quick negative public reaction. So, assuming its short and theres no guarantee of that, shouldnt have much effect. Our guest host is st. Louis fed president jim bullard. Was this something considered around the table he put up a Government Shutdown before the next meeting . We look at everything and think about this. My own assessment its not that high right now but certainly interested to hear other peoples views about that. Roger, we have a lot of things weve been watching. What did you think about what the fed did in terms of waiting to raise Interest Rates, not just waiting but maybe the dovish statement that came out. Caught a lot of people offguard. First i wasnt surprised. I think the data is pretty weak if you look at, for example, the feds favorite measure pc e. Its running at 0. 3 in the last 12 months and the feds inflation goal is 2 . A lot of misconceptions about the Unemployment Rate. The Unemployment Rate at one level is 5. 1 but what broader measures and the better measure myself is u 6 which takes into account part time workers who would like to work full time and people who stopped looking for a job but if one showed up would take it and its still 10. 5 . Wages are up 2. 2 yearoveryear. The argument were strong and lets move is not such a big one. So i wasnt surprised. I take the element at face value as you were saying about every meeting being a live meeting and just a little more time. So i still think the fed is likely to raise over the next three or four months. But i didnt find the decision all that surprising and i didnt think the Market Reaction was all that sharp actually. With jims point, when we start looking at thing like china and other issues around the globe and thinking that the fed can and should control a lot of those things or at least play into those measures thats a different game. We havent seen that in the past. Thats true. Although, i cant speak for what happened in the room and of course i dont know. But if it were me in there, i wouldnt have paid as much attention to that. On wages, labor markets and on inflation. How do you know staying at zero think about that. Even 10 of what the critics say is true, its a negative feedback loop that causes to you stay at zero forever because the policies you are employing is why growth is so tepid. If the benefits are so small right now what dont know might be much scarier that you do know which is its not working any more. One aspect that you just said that i would agree on is the argument a 25 basis movement is not going to have any effect on the company and psychologically speaking or symbolically speaking why not do it. Roger, you cited labor market data and inflation data. My argument is, Unemployment Rate is 5. 1 . Theres many other aspects of the labor matter. You can construct labor Market Conditions if you want to take that into account thats fine. That index is way above average its level. We have a you lot of mandatory policy over the next several years. On inflation you cited headline inflation numbers. I wonder if do you that if inflation was 4 and driven by an oil price shock. I think the tradition is to think about Something Like core inflation, better measure is dows trim mean running at 4. 6 . Were. 4 away on inflation from our target and 5. 1 is basically right on top of our estimate of the natural rate of unemployment. We vanquished all our pose to. The tanks are on the field. The enemy has left the field. Were looking for another war to fight. We shown be doing that. Youre the master of prudent policy. The prudent policy should be get these policy settings, inch them back up to normal. Hedge your betts. Get the Balance Sheet down. Start get rates up. You still have a policy. In responding to joes question i said i wasnt surprised in a wasnt for reasons the market saw 25 chance going into the meeting. I dont think anyone should be surprise. We can debate all morning various measures of inflation, various measures of Market Conditions. Various data like you just quoted. I want everyone to get paid a lot but thats a lagging indicator thats going to come behind as the economy continues to improve. Also going to cause rates to go up more quickly. Watch what you wish for. Its the right thing from the feds own selfinteresting point ever view in the sense that after all these years as you just said of hyper aggressi er agree you thought there was some softening waiting a month or two or three i dont think will be harmful and i think assuming the fed does move over the medium turn it wont turn out to make any difference. When we raised rates in 2004 the Unemployment Rate was 5. 6 . Then we planned actually a faster rate of rate hikes than were planning now. We ended up behind the curve and we got global Macro Economic disaster. In 2004 the broader measures of labor markets were much more. It was in the general vicinity of 7 . Look at the labor Market Conditions index compared 2004. You spend a lot of time in board rooms. We talk about this all day. But are they talking about this at all and is it doing anything to the deal economy that you live in . I dont think theres tremendous discussion about the inner workings of the fed. Of course people are focused on rates and focused on whether there might be a move. Greater concern is Business Conditions as it always is. And if youre a multinational, a truly global firm, you are concerned because of the bigger emerging markets and all the obvious countries and youre seeing some evidence, a little evidence, i dont want to overstate that, a little evidence of concern and hesitation. But mostly on companies who are focused on outside of the u. S. Roger i want to thank you for coming in today. Good to see you. When we return this morning well have much more from our guest host, st. Louis fed president jim bullard. Plus jpmorgan Ceo Jamie Dimon, his read on china. Stick around, bsquawk box wil be right back. Faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. Thankfully, mary miller banks with chase for business. And with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. Chase for business. So you can own it. Chase for business. My name is watson. Im helping doctors keep people healthy. Take ted here. Im pulling together data he shared from his wearables, Health Records and family history, so we can analyze it. Hes doing everything right. For the most part. No pain, no gain. You are a beast, ted. My name is watson. How can i help you . When you saw recently they had a bump in the road and it was a just a speed butch to show the transition to where they are going is not that easy. Very smart. They are very educated. They have to move to real market reform and let the market make certain decisions. They have to broaden out what you call a democracy, hundred people vote inside the communist party and they will have bumps in the road. That was jamie dimon who was on meet the press yesterday. Lets get back to jim bullard president of the Federal Reserve bank of st. Louis. How much do you think about china these days . Well, obviously, its been in the news a lot this summer, and, you know, we watch it like everybody else. But my basic assessment is yes china is slowing. Hard landing in china is a long shot at this point. How much should the fed be concerned about that and its impact on emerging markets . In terms of the conversation. The impact of china coming directly back to the u. S. Is relatively small so i dont think its that much of a direct impact. Given that, how much of the conversation does it take up, though . I mean when youre in the room how much of the conversation is about whats happening in china, what its doing the emerging markets, what its doing to u. S. Nationals, how we should think about that. When i talk to ceos they are very concerned about china. A lot of the big time ceos and we talked about this before on this program, they have operations in china. So of course thats a percent of their profits. They will be talking about it a lot. Thats not the u. S. Economy. U. S. My is much less exposed to china than southeast Biggest Companies individually are exposed to china. There tends to be more talk in the media than maybe than what you would see for policymakers that are talking about the nation as a whole. So, let me ask you this. The reason youre so confident i dont know that youre not confident that theres not going be a hard land cigarette what we have staff assessments of china from what ive seen, you know, the numbers that china is report, about as good as what we have. Its not a transparent economy. There have been concerns about china for the last ten years that there would be a hard landing. It doesnt seem any more imminent now than it has been in the past. People that have been to china directly, my colleague and friend John Williams was just there and he gave a speech im sorry he wasnt just there but gave a speech on china over the weekend and, you know, i think his assessment was that it seemed okay. Since were talk being internationally, how much do you guys talk about the refugee crisis inwe had people come on, we read things where people suggest the refugee crisis in europe is as bad if not worse than the issues happening with greece and some described it worse. Im learning about this issue. I dont know about this issue as well. Im learning along with the rest of you guys. I havent seen a good assessment for me about what kind of impact would this have on the european economy. I would have to talk to my friend in europe about that. Im not sure they know right now. Does your forecast for u. S. Gdp this year and next year fit in with your assessment that we should be raising rates . What do you see total for 2015 and 2016 . In this round of forecast, we moved up our forecast for 2015 growth. To . To 2. 5 . Next year . Next year 2. 5 to 3 over the next two years. Again this is in an economy that has a very low potential growth rate probably 2 or even a little bit below. Youre talking about above trend growth so because of that im expecting continued improvement in labor markets no matter what we do. This is all baked in the cake. I think unemployment will go down into the 4 range, probably below 4. 5 , and these other aspects of labor markets just continue to improve. Thats why i dont buy roger altmans argument. How do you explain sovereign debt levels . They are very high. Well continue this conversation. Yields. With jim bullard in just a moment. Coming up, big mover ahead of the opening bell well have a list of stocks to watch. Take a look at u. S. Equity futures which are getting back some of those losses on friday, about half of them. Mfs investm, we believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Which means you can watch movies while youre on the move. Sitcoms, while you sit on those. And even fargo, in fargo binge, while you lose weight and enjoy a good cliffhanger while you hang from a. Why am i yelling . The revolution will not only be televised. The revolution will be mobilized. Introducing the all in one plan. Only from directv and at t. To watch this morning. Merck reporting positive study data. Says its are experimental antibiotic shown to reduce the risk of infection with cdif will occur. European semiconductor is buying atmel. A 40 premium over the Closing Price as of friday. Coming up we have much more from our guest host this morning jim bullard. Well talk markets with daniel arbess. He says fears about chinas economy is overblown. Stick around. Vital data are stored. With centurylink you get advanced Technology Solutions from a trusted it partner. Including cloud and hosting services all backed by an industry leading Broadband Network and people committed to helping you grow your business. You get a company thats more than just the sum of its parts. Centurylink. Your link to whats next. Excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. vo wit runs on optimism. Un on . Its what sparks ideas. Moves the world forward. Invest with those who see the world as unstoppable. Who have the curiosity to look beyond the expected and the conviction to be in it for the long term. Oppenheimerfunds believes thats the right way to invest. In this big, bold, beautiful world. Down but not out. Markets looking to bounce back this morning after being bruised and battered at the end of last week. Dan arbess set to else us where hes putting his money to work. Plus st. Louis Federal Reserve president James Bullard is here. Shutdown clock ticking. Congress racing to getting a funding bill down. Jamie dimon is slamming washington, warning that a Government Shutdown is just bad management. Game of thrones conquers the emmy awards. A look at the winners and losers of last nights big show and scorecard how the networks and big players like amazon and netflix fared. The last hour of squawk box starts now. Announcer live from the most powerful city in the world, new york, this is squawk box. Welcome to squawk box right here on cnbc. Im Andrew Ross Sorkin along with beck beck and joe kernen. Take a look at the future. Dow looking to open up higher 150 points higher. S p 500 up 15 points and nasdaq looking to open up about 40 points hire. Checking out the markets in europe at this hour. We do have relatively green arrows except for whats going on in greece. Everything up about a percent sore. Dax up only about half a percent. Well tell you whats going on in the energy complex. Wti crude standing had a 9. 88. Lets get to some stories investors will be talking about. Front and center volkswagen shares dropping the most in six years. This comes after u. S. Authorities accused europes largest automaker for falsifying data. That stock down by 20 this morning. Apples ios store hit by an attack. The company says its now cleaning up removing malicious programs. Apple confirms a tool that developers used was modified by hackers to put bad code into those apps. One piece of Economic Data to watch. Existing home sales come out at 10 00 eastern time this morning. Couple of stocks that are on move this morning. Lenar had earnings and revenue that both topped estimates. Company selling more homes at higher prices. Shares of go procould be a feature. The camera maker stock could fall to 25. Paper cites an underwhelming Product Launch and stronger competition. Deal of the morning dialogue. Semiconductor is buying atmel for 4. 6 billion. Our next guest is known for making some big calls. Joining us right now is dan arbess. Hes a former partner where he ran a 3 billion zreron hedge fund. Also a past member of cnbcs alpha summit and here with us this morning to weigh in you may agree on a lot of stuff. With us is jim bullard from the st. Louis fed. China, we teased before we got to the break in the last hour you were not worried about china at all. First of all, great to be here. Thank you very much. Privilege to meet you president bullard. Andrew, im not worried about china because as you observed a moment ago i tend to be long horizon thinker. So right now im basically professionally out of the markets, im out of the daytoday of whats going on and i can afford as i always have to look at the arc of chinas reform which is right on track. They went from industrialization 10, 15 years ago to urbanization over the last 10 years. They realized their growth model was reaching the end of its efficacy and had to move to developing a consumer led growth model. Theyve done that. Wages have gone up 17 for the past several years. They are liberalizing factor pricing. You should expect to see gdp growth go down 5 to 7 gdp growth driven by consumers is better for china and better for the world than 14 gdp growth driven by investments in bridges to nowhere that are, you know, past their point of efficacy. Since you were a selfdescribed long term thinker, given where Interest Rates are and he would do something different. Based on where we are, what would you do with money right now . What are you doing with your money right now what im doing with money right now is investing outside of the daytoday markets with tluxry of long horizon. For example, during all the turmoil of august, when people blamed the chinese economy by, and conflated what was going on in the chinese stock market which was driven by Retail Investors that were not particularly educated and sophisticated, conflated that with what was going on in the economy and blaming the economy for losses that were being incurred because they had to have an explanation for their investors who were watching them every single day i said thats ridiculous and bought. So im to the extent im in a Public Market im buying. If it goes lower i want to be in a position where i can buy more. I dont want to be in a position where i ham shaken out of investments i believe in. Buying im buying chinese stocks. You have been buying chinese stocks. I have been buying chinese stocks. Chinese equities. Nothing particularly fancy, etfs. Ive been buying some other stuff when stocks get hit and things sell off thats a very good time to go in and buy if you have a nice long horizon. The problem that everybody has got or a lot of people have that are managing peoples money their investors are becoming increasingly impatient because were in a broadly low return environment and low growth environment and their own return expectations may need to be adjusted as Pension Funds are adjusting and reaching expectations right now. In the meantime they are calling up every day and saying whats going on, why am i not getting this, why is it trading this way and trading that way. Not being critical of anybody but just describing circumstances. You wouldnt believe the liberty you have when you are managing your own money. When youre managing money over a return horizon thats matched with what you think is the that horizon is five years multiyear. Its a multiday. Its a multiweek or month. Its a year. I heard of all people al gore Say Something interesting a couple of years ago. He said Investment Business is long short and short long. Which means were long short term capital and short long Horizon Capital but he observed, i think correctly that the recognition of value and the processes of unlocking value take time and we need to have the patience with our investments to give them the time so that you can really realize the value. Would you invest in europe . Right now im not particularly investing in europe because i think europe has structural problems. I want to talk about the fed that we have president bullard here because, you know, this day trading speculating whats the fed going to do, it really doesnt matter whether the fed implement as 25 basis point hike now and says were not going to do much more because conditions are not very robust or it doesnt, the big problem is that for the last seven years the fed has been the only game in town, governmentwise supporting economic recovery. The fed has done everything that the fed can do. Monetary policy has reached its lie pits to what it can contribute to the economy. The problem is were not facing ordinary circumstances or even circumstances associated in more with the recovery from the financial crisis, there are very large structural changes in the economy that are creating big downward pressure on job growth, on wage growth and on inflation. Thats what technology is all about. Technology is about bringing efficiency, is about cutting costs, it is not particularly labor intensive. Think about it. Apple employs 100,000 people. P pays them about 12 an hour which is about a third more than mcdonalds. Guess how much profit per employee apple has per employee, 25 times. Half a Million Dollars per employee at apple versus 18,000 at mcdonalds, that tells you something really important which is our whole economy is shifting. Money is made now, wealth is created in alliance between innovation and capital which is this intermediate in labor and putting pressure on inflation. I made this argument, joe and others would tell you this is its Disruptive Innovation down the road normally in ways that you cant foresee ends up being in that positive for everyone in society. Look, ive had this discussion for years with all kind of people, where ive talked about secular pressures on wage growth and on employment associated with the information economy and the transition to the information economy and everybody has provided the same response as joe which i appreciate but i have not been able and i would love to hear what president bullard thinks to really think through how it will play out. Its different this time argument. I see it. Like for example when i invested, i just invested in a private Venture Capital investment in a company that does microchip verification. Until now its been manually done by engineers who sit in seats and look and examine and game with algorithms the chip to make sure when you put in a new chip in a device it doesnt blow up the chip. This Company Created a mechanism or algorithm. Jobs are disappearing. Automation across the board taking even white collar jobs and i dont see how those jobs coming back. Fascinating insight into technology and capital and i think sympathetic with a lot what your saying sfarpd view and still my view is technology has been advancing for 100 years or 200 years. And wages have increased, real wages have increased dramatically, standards of living have increased dramatically. You look at the committee turn of the 19th and 20th century, 50 in agriculture of the jobs. Now less than 2 today, maybe 1 . So you have all kind of transitions going on in economies because technology is changing and in a rapid way. Its not so clear that thats going to mean real wages or jobs are disappearing, real wages. You could have people taking different amounts of leisure and that is i think a trend in the future. You decide ill work 30 hours a week or Something Like that for the very long future because the hours worked, you know, arguably, have been on a slight decline over time. So these all things the last structural from agriculture to manufacturing was almost one for one. People left the farm went to work for factory. Now we have more leverage. Small number of people with ideas with capital which is not labor intensive are creating huge amounts of wealth. Obviously the benefits of that wealth are being enjoyed by a very concentrated number of people which is going create a big political backlash in the country. I believe well start to see, we already have for 2016. Thats very disturbing. Theres opportunities for capital for sure, but im wondering where the opportunities are for labor. Great conversation. Come on back. Happy to come back any time. Well continue this conversation the next time we see you. Thank you. Coming up secretary of state john kerry meeting with Syrian Refugees and german officials in berlin to discuss the response to the migrant crisis. A look why the eu is struggling to keep up and how the u. S. Plans to help. First though futures at this hour getting back making up some ground. Up 136 points on the dow. 13 on the s p. 35 on the nasdaq. [ scanner beeping ] sir, could you step aside . Sir . Come on. You know who i am. Progressive insurance . Uh, i save people an average of over 500 when they switch . Did you pack your own bags . Oh right the name your price tool. It shows people policy options to help fit their budget. [ scanner warbling ] crazy that a big shot like me would pack his own bags, right . [ chuckles ] so, do i have the right to remain handsome . [ chuckles ] wait. Uhoh. Im watson. And today hundreds of companies are putting me to work. Im teaching watson to help your vet speak dog. Youre a dog, right . Im teaching watson to help you make healthy choices. Im teaching watson to help design a vacation around your personality. Dont judge. Im teaching watson to answer endless questions. How big is infinity . Where do babies come from . Why cant i have chocolate for breakfast . Im watson and im ready to work with you. A. Welcome back to squawk box, everyone. Weve been watching the futures. Weve seen a lot of green arrows. Dow futures are up 136 points. S p 500 by 13. 5, nasdaq up by 36. Over the weekend u. S. Committed to take in potentially up to 100,000 refugees from around the world annually up from 70,000 that we would take right now and the increase would include 10,000 Syrian Refugees that the white house has proposed admitting to the u. S. All while some European Countries are overwhelmed by the arrival as youve seen, thousands of refugees have set up border controls in places that havent existed in 25 years. For more on europes most challenging refugee crisis, david melvin is here. Europe thought we could hand allot of this but, you know, suddenly grassroots, their own people suddenly saying we need to rethink this. Well intentioned moves all of a sudden are much harder to put through. Certainly not been well coordinated, not competently done. The desperation of people inside syria and neighboring countries, theres 4 mill refugees in the neighboring states of syria in jordan and turkey and lebanon. The desperation is so great that weve been warning for over nine months there was going massive flow into europe. Identify just come back from lesbos. People say i have barrel bomb from assad on one side, terror of isis on the other. I got to escape. Its not to europes credit its been overwhelmed it had the eye on the ball. Is it possible to assimilate 4 Million People or is it going to be that europe needs to take in millions of people or should they be resetled in safe zones . Most people want to stay. But the tragedy for europe is now its got 400,000 refugees arriving this year and got a job to assimilate them. Is point . Yes it is. Europe is a continent of 500 Million People. It has big demographic needs. These are middle class people who are fleeing. The met i met. Engineering students, doctors, accountants. Theres a potential economic dividend if the integration is done properly. Thats at that really big if and what weve seen so far would not boost any confidence. If you think about the syrianamerican communities in the United States they are successful. They havent come in the last couple of years. There are successful refugee communities around europe. What people want to see is compassion and competence and up until now theyve seen neither. Europe has to step up. Theres a big meeting of the leaders, heads of government this wednesday and important job to show theres a real determination. I would make this point. Euro crisis youve been commenting for four or five years that miss merkel has been too slow. People say shes been kicking the can down the road. You cant accuse shes been gripping this. Germany will take 500,000 asylum claims over the next four or five years. So this has been done. More challenging. But what it need is the rest of europe to step up as well. What would it take to keep the lions share of refugee in the middle east. Money . Planning. The obvious thing while the war vaguing you cant staunch the flow. Thats why i say right its nice to have compassion for the refugees but you need diplomatic muscle to stem an area in a war without end. In those shorter term those neighboring states of syria, serbia, turkey, jordan, lebanon they need massive humanitarian help because at the moment the u. N. Appeals are only onethird funded. The interesting thing, in the last couple of weeks we at the internal rescue committee saw a massive change in corporate opinion. Google, trip adviser going into partnership with us saying our staff want to do something but they want to it be effective and make an impact and the fact were able to make partnerships with those organizes and say look, we can make a difference in lesbos, in the middle east we can make a difference. Ioc says we can make a difference. Were worried, you know, and europe is worried about isis infiltrating the refugee population. Its a real concern. I under that. Look as someone running a humanitarian charity im the first to say good security is a good thing not a bad thing. We want effective security. What should we be hoping for in syria . If assad is stronger cant he defeat isis or should we hope assad is gone . We dont know what side to come down on. The thing to understand assad is enabling isis. Most of assads attacks are on his own citizens not on isis. So you got this appalling duality there. Assad on one hand bombing, then you got isis on the other causing terror across syria and iraq as well. Youre right to say that russians are absolutely key to this but remember they are piling in at the moment because assad is weak not because hes strong. Hes in a weaker position than he was a year ago. So there are some unsavory characters but iranians are part of this story as well. The big problem is we couldnt figure out who were the good guys were to help arm and didnt do anything at the time. We let it go for years. The options have gotten worse and worse every year and the tragedy is the options are bad now and worse in a years time. Remember putin is coming next week to chair the u. N. Security council. So that gives him power but puts him behind tight ball so there are opportunities to increase the diplomatic and political pressure and i hope that thats what the u. S. Tends to do now that the iran deal is secure. Okay. All right. David, thank you. When we come back, jamie dimon calling out congress and blaming washington gridlock for slow economic growth. His comments are right after the break. 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. When youre not confident your companys data is secure, the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. We heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Welcome back, everyone. In Washington News the clock is ticking. The next fiscal year begins at midnight on september 30th, just days away. Congress needs to pass a short term continuing resolution before that funding deadline or face another shutdown. Heres what jpmorgan Ceo Jamie Dimon warned on nbcs meet the press. I think people, i tell them you guys compromise with your family, you compromise with your friends, you compromise where you eat dinner. Democracy is a compromise by its nature not a dictatorship. Anyone who says my way or the highway on one issue is not thinking about the United States of america. So i wish people would overcome that kind of stuff. A Government Shutdown is bad management. Dimon suggests the u. S. Economy would grow faster with government interfere rent. Much more from jim bullard. August house sales is coming out. Forecast to drop than 1 . Stick with cnbc for the numbers and Market Reaction later this morning. As we head to break take a look at u. S. Equity futures still sharply indicated today. under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing, you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. Welcome back to squawk box. Heres whats making headlines. Driller danbury is suspending its Cash Dividend dealing with low oil process. They said suspending the dividend will free up 22 million worth of cash. Volkswagen is halting sales of diesel cars in the u. S. After regulators found Software Design to cheat emission tests. Ceo apologized for breaking the trust. Said the company would comply fully with regulators and ordered an external investigation. Richard llie jim bullard is president and ceo of the Federal Reserve bank of st. Louis. Our own Steve Liesman is back with us. Jim you talked about why you think it was time to start raising rates why you think the economy is in good shape. You must have a list of what youre worried about too. Whats at the top of the list. I worry about all the same things that everyone else is talking about. Global situation, low inflation. You know, elements of a labor market that dont seem quite right. Those are good arguments if we were at 2 on the funds rate or 2. 5 and the decision was well stick here for a while. Those would being a great arguments in that situation. Thats not where we are. Were at emergency settings, the Balance Sheet is 4. 5 trillion and policy rate is still zero and unemployment is right on top of our goal and inflation is arguably 40 basis points below goal. It must have bean couple of years talking to you and you were looking at the situation of potential deflation as an issue. That was something that worried you at the time. Ahha. You must think were getting into a hot inflationary environment than falling into a deflationary environment. Whats happening now is the environment is switching is whats happening bus unemployment is coming down through natural rate. Now it will go down into 4 range no matter what we do. Its already baked in the cake. We have a very easy policy set up for the next three years. Weve committed to this over shooting environment and thats where youll get into trouble. Can you give us your outlook for funds rate. Obviously they should have hiked in september which means you think they are a quarter behind. How far behind are they. Where would you set the rate and give us your trajectory for where rates would go, should go . We have a relatively rapid rise in the funds rate the. Those projections now are based on optimal policy. We have emperrical model we run and i want says you should be moving right now. What were looking at here is average of fomc and the change relative to the prior forecast. The average is 0. 4 . 20161. 4. This speaks to jims general idea you accommodate for three years. Put some numbers on your own forecast. I hate to put numbers on because im not sure ill remember them exactly right. The basic idea we would lift off in september and go up from there and i forgot exactly what we put down for all of the pace of increases. But relatively rapid. Were definitely on the high side of what projections showed. One of those dose thats up there on the top. This is because but this is very important. This is what were saying is optimal policy. Were not trying to forecast what we really think the committee will do or not and the other dots in there or other peoples forecast are ideas of optimal policy. How do you turn to say to an average american out there to buy a home, start a business and say your life is better right now because i want to raise Interest Rates. If you follow my policy well have a longer expansion, well have a better chance apartment steady growth, well have a better chance of avoiding recession. If you follow the policy of staying at zero until you absolutely cant stand it any more, you know, youre going to have to raise rates more rapidly, youll see more volatility, youll encourage asset price bubbles and the last one we had blew up on us. So well have a better policy for the average you assign some of the blame to the fed being behind the curve prior to that. I think the fed has to take its share of responsibility on that. Thats interesting. One of the things that some investment banks are coming to the conclusion the basis points for 2016 is not a global recession but a slow down. Thats what i attribute a lot of yields in japan and europe. I thought it was that. You dont, number one, youre not sure we should base our Interest Rates on europes Interest Rates which are more and more people think were global now. So you dont think thats necessarily true. But if we are headed into some type of a slow down maybe their rates are appropriate but you think those rates are from qe which we talked about off camera. Well, our european sovereign debt yield so low, european qe, very clear its a powerful program, driven yields to low levels in europe and thats what youre seeing and that does have a ripple effect. Not a reflection of Growth Prospects for the european continent . Growth prospects have improved somewhat for the europeans and european my is looking somewhat stronger. We say oh, were looking at emerging markets. You look at Global Growth not so bad in the u. S. And europe, those are huge economies, might be a little bit weaker in china. Some countries are down, obviously but when you add it all up, Global Growth. When you look at it that day you say look nobody else is growing. What if its qe. If its artificial every where were behind the curve. Jim, i just want to ask you will you let him respond to that . Depends what were talking about. Real yields are low. Thats the question. Its european qes. Let me ask you the issue of inflation and unemployment which inflation keeps coming down but you use the dow. Where does unemployment end up the end of this year and next year and what happens to inflation over that period of time . Ive been saying all year we would be below 5 this year. Actually at some point i said in the third quarter. Still maybe could make that. By tend of the year, and next year i just see further labor market improvement. If we get a big shock from going into recession okay everything is different. On the baseline i would expect with ease iing monetary. There was Mission Creep all of a sudden the Federal Reserve is responsible for global economies. Do you think theres a danger of that. Is that statement by the fed speak to Mission Creep. I havent liked to cite International Financial conditions or the dollar in fed statements because those are very volatile things and they might turn around in a couple of weeks and then youre stuck with people saying now your going to change policy again because the dollar is going the other direction or whatever. The thing about the dollar is it can change because of something changing in the u. S. But it can also change whatever the hell is going with the other guy. So these things are too volatile i think to be provide a reasonable basis. For stock market watchers and ceos and people like that, that was their most important reason to not raise right now was exports. This recovery we have now could be derailed bay stronger dollar. If the uss a stronger economy in a world of weaker economies youll have a stronger currency. Money can come in here, raise rates. Capital to the u. S. Maybe not such a bad thing. We were the first things emerging markets that have been weaker if you listen to what came out of jackson hole a lot of people were saying from around the world Interest Rate hike of not so bad in the u. S. Because presumably weaken the currencies of these emerging markets and put things in better equilibrium from their point of view. Jim bullard is our guest. Well have more from him in just a bit. When we return, sex and swords dominating the emmy awards. Well talk winners and losers after the break. Tomorrow on squawk box the future of financials. A special conversation with former wells fargo chairman Dick Kovacevich and bb and t ceo kelly king. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. Welcome back to squawk box. Futures right now indicating higher getting back roughly half of the losses that we incurred on friday. Goldman sachs is upgrading to out performer from trading oppenheimer and those shares with a target of 236 and you can see that the shares are up 2. Lets talk emmys. Another ceremony emmy is in the books. Julie boorstin joins us now with a breakdown. Good morning. Reporter good morning. Well netflix and amazon may have drawn record nominations for this years emmys but no question the big winner was hbo, not only did hbo win the most awards it was the first work in 13 years to win both outstanding drama and outstanding comedy. Game of thrones broke the records. Hbo brought home a total of 14 wins last night while netflix won only one award and amazon brought home two awards. Comedy central scored four wins. Amc won one. Abc brought home two. Cbs and nbc one each last night. Now hbo got some extra attention from host Andy Sandberg who gave out his password for his hbo now account making fun of hbo ceo for saying he doesnt think that password sharing is a problem. Now the password actually worked for people trying to log in but only for a moment before hbo shut it down. Now despite this dig that Andy Sandberg gave to hbo many people on twitter said it was great advertising for hbo now which is the companys standalone streaming video service. Guys, back over to you. Thank you for that. Did you guys stay up late to watch any of that . No. The emmys . Seriously . Im asking seriously, yes. Coming up next jim cramer joining us to talk about the week ahead for the moorkts. Heres the futures right now. Things looking up. Dow looking to open about 140 points higher. Back in a moment. Lets get down to the new york stock exchange. Jim cramer joins us now. In my ear i was talking about the giants and just like shaking my head. I dont even want to bring up maybe i shouldnt. I guess you watched what happened there too. They said that chips should be embarrassed remember everybody should be embarrassed. Ive given up on the bengals. Giants had some bad luck. Eagles are just bad. Not an easy day post a big loss. I like the tenure of your discussion. It certainly more orderly than the Football Games i saw yesterday. Yeah. I guess bad luck im trying not to usually i like arguments but im not trying to steer to it football. Im not sure bad luck with the giants. Not able to gate playoff after a defensive timeout at third and seven. Did you see that . I did. Again, i come back to the eagles or rushing attack versus the giants just doing some, making some bad errors. I think that the giants look a lot better than their record. The eagles look like their record. Okay. All right. So we not go ahead. I know, jim, thinks we one jim thinks we should raise. A lot of jim cramer your viewpoint, i dont want to put words in your mouth about when its harder to export its harder for u. S. Companies to do well, harder to keep the nation recovery going so why mess with something when its not, if were not above stall speed. Mr. Bullard agree. One day we have to raise rates. He wants to raise them now. I think when china we have to raise rates, when christi Christine Legard says the world is less difficult. I come back to 1997, 1998, 1994, these are times when international did bring down the u. S. I think we have to be cognizant of that. There will be a better time. When it comes, it will be terrific and we ought to take things up to 1. Right now, main street will get hurt. I dont care as much about stocks as i do about main street. I think well be on the same page, mr. Bullard. I just dont think were on the same page yet. Were at zero policy rates and a 4. 5 billion dollar Balance Sheet when inflation, if you look at the dows fed trim mean is 1. 6 year over year. We have vanquished all our foes. Its time to get off the emergency settings. I think that there will come a better time. Im not as sanguine as you are about the worlds situation. I said sanguine relative to the market. And the market was that was a low bar it was low bar on china. Again, i like people were panicking. I said i was sanguine relative to that. I wasnt panicking quite as much. Put it this way, i hope youre right. I feel like there will be a better time, but i think you have been an articulate view, you have articulate view of your position, and i think thats terrific. I think its important we have both sides given the fact that unemployment is a thing of the past. But im looking at other situations worldwide that i think is a problem. I think housing has a right go up a bit. I think autos may be peaking. Im concerned about manufacturing in the country. If youre just going to make it employment, you will make it right. Lets see whos right. But, again, i like the differences of opinion. Whos your Favorite College Team this year, jim . I like the way i like the way lsu lost. I didnt like the way the rams looked for the record, though. I thought they looked better last week. We watched sc, what happened there . I dont know. Thats why they got to play the games. Exactly right. I like games. Id say i like the interaction between different views. I like it, too. When we return, well wrap up the show with our special guest, st. Louis fed president , jim bullard. 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. Its more than a nits reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced Technology Solutions, including an industry leading Broadband Network, and cloud and hosting services all with dedicated, responsive support. With centurylink as your trusted technology partner, youre free to focus on growing your business. Centurylink. Your link to whats next. Daraprim. Back to our guest host, st. Louis fed president jim bullard is here. After all is said and done, i come back to some type of rulesbased system. I love political appointees. I do. I think if the Central Government could pick the ten smartest people, we shouldnt have any markets or anything. Wait, were doing that right now as the as the head of the fed is a political appointee. Lets say you appoint someone thats really wrong. Shouldnt a rulebased system be there to make sure we dont get taken down the wrong road . If you were king youre totally preaching to the choir. What should we do . To her credit, janet yellen has talked and given speeches about rulesbased policies. But then acts like this. This decision, i think, was too discretionary. Too subjective. We will cite a particular factor. What that does is throws off market about what the policy reaction of the fed is. Does this mean will you react to gyrations in the future . Does this mean its the dollar . What is it . Is it china . I agree with both of you. I think we all would like to have a better idea of what the fed is watching, when you say data dependant, which data . But in 2008 and 2009 they moved well beyond what rules were laid out, but at that time it was necessary. One thing do is go back to goal variables. If youre talking about employment, inflation, assess things based on that. It was a case to be made, just a slight weakening in the inflation environment and maybe it makes sense for the committee to wait. If you just did it that way, and chair yellen did try to articulate that, and i think she did a good job, if do you it that way that keeps you closer to what people need to keep an eye on. If you were if we do adopt some type of rulesbased system, how would it be designed to not make it too ridged . I think the requirement is just that you would have to report back to congress about what the rule is. I dont know about that. You put a reporting requirement in, and you would say, well, tell us what it looks like. Your baseline rule. Then tell us why you deviated from it. Its not that you, you know, hammer down that you cant do anything different. It would just mean you have to articulate before ive seen those congressional hearings. Responding to some of those questions from those guys, i dont know if thats i dont know if you want to let that jeanie out of the bottle. Yeah. I dont know. How many people do you want deciding . How many people in the house now . Plus 100 senators . 500 guys asking stupid questions . The reporting would be more like you have to tell us what your baseline rule is. You have to tell us why youre not following it, or if youre not following it. Tell you before or after the fact . When theres a crisis it wouldnt be a perfect situation, but at least it will force the fed to think about what is our an Election Year is meaningless to the fed, isnt it . The fed has taken plenty of action in Election Years over time. You think its irrelevant. When people say more importantly, i think its hard to get elected based on the arcania of Monetary Policy. You dont think people will get elected based on how the economy is doing at the time . Lets say the fed should have zigged versus zagged, make that a criteria of your campaign, youll lose the election. We know the fed cant help the economy. Its at 2 . They tried for nine years. They have been helping the economy. They helped asset prices. All right. Any way the debate continues. Thank for your time. Join us tomorrow. Squawk on the street starts now. Good monday morning. Welcome to squawk on the street, im Carl Quintanilla along with jim cramer carl faber. The bulls trying to reclaim some of what was lost on friday. The worst day of the month so far. As you can see, the tenyear yield bouncing just bit. Oil up a dollar after falling 5 on friday. Comments from st. Louis fed president James Bullard arguing for a rate hike and going head to head with