Transcripts For CNBC Squawk Box 20151008

From activist investor and its shareholder elliott management. Well have a lot more on the talks around dell and from a tech analyst in just a minute. Also Fiat Chrysler and the uaw reaching a tentative agreement on a new four year labor contract. They threatened to strike if a deal wasnt made by midnight. Also 40 pow uaw workers now must vote to okay that agreement. The last proposal was rejected by rank and File Union Members. Many retailers will report Monthly Sales today. Costco saying its september comps were flat. Analysts had been looking for a small decline. Other corporate news, Deutsche Bank warning of a record pretax loss of almost 7 billion. Among the reason, big write downs at its investment ranking unit. It might cut or eliminate the annual dividend. Sony is moving forward with a plan to sell its half of a sony atv music publishing. The journal reports that the publisher is valued at about 2 billion. It owns the rights to most of the beatles songs. Smartest thing that Michael Jackson ever did. As well as artists including taylor swift, lady gaga. Gaga. You think i havent heard her name. I just refused to pronounce it. Its not her name. Queen and kanye west. Well talk to john today who is so iconic. Paul mccarthy is worth 1 million and they ended up being like 2 million or something out of it. 2 million a piece. Yeah. With the settlement but its going to be interesting to talk to him and he truly is iconic. I cant imagine how bitter id be in that situation. Every time you hear a war movie, vietnam war movie, songs popped up and he doesnt make any money from any of those. We have to do put me in coach. We have to do it for the cubs today. Did you see that. We just got past that proud mary, iconic. Its amazing. I would still be bitter. I would too. Plus hes never seen the big lebowski. He has no idea the dude had all of those tapes and supposedly the eagles are still mad at jeff bridges. Not the eagles, man. Oh, no. Lets tell you about a corporate fight brewing between ab inbev and sab miller. Bud wants to buy the rival beer maker but sab miller rejected three offers now. They rejected a raised offer yesterday. We reported about that in the show as it was happening but there is a strongly worded response today in which the ceo says the board of sab miller has refused to engage with us. How long it will be before shareholders see a value of over 42 british pounds in the absence of an offer from inbev . If shareholders agree we should be in proper discussions should voice their views and not allow the board to frustrate this process and let this opportunity slip away. They also have the support of the group that owns 27 of sab miller. They have three representatives on the board and they would like to see engagement in this process. I dont think its going away any time soon. I understand that deal a little bit better than this one . I the understand the outer elements of this dell emc deal because dell, does anyone sell personal computers . They need to get away from consumer businesses and now this is nothing like the company that michael dell started in his college dorm. Hes come half circle. Not selling to consumers anymore. Youre talking about big businesses. Its where the higher margins are. Anyway, back to reports of deal talks between emc and dell joining us is dan with fbr Capital Markets. So the 50 billion that emc is worth, 34 billion is for vm ware. Dell doesnt want them . Yeah, so ultimately they would be buying emc for the storage and then eventually probably spin off the vmware piece. They dont have 50 billion. It would be a 12 punch in terms of some sort of Debt Financing and theyd have to communicate this to investors but this is a disaster situation for emc shareholders in our opinion. They have been a horse and buggy in the right lane and now you have dell looking to merger emc. But theres two structures on the table. One is with them effectively buying emc, if you will. The other is dell going public through emc. Yeah. So i think its more them. I think the one that seems most likely is that sort of merger and then they spin off. Dell becomes a publicly traded company that effectively controls where it goes. Exactly. Thats how we see this and and both have storage and move from a consumer to an Enterprise Company and this is given the options from an emc perspective. Elliott has put a lot of pressure in for them and thats been burning and theyre worried about if they have napkins in the kitchen. Theres an ult may tif that they need to do something. How much does dell still have right now . 11 billion. Thats a lot right now. That is a lot but it becomes a publicly traded company. They can use the currency. What surprised me is theres not a premium being offered for this. Given all the options there were rumors they could have merged. That would mean more sense and a slight premium and then to have such a complex structure and high integration cost. Thats the best option. If you thought they should go left, they went right. They have in a situation where theyre giving them the ultimat ultimatum. Its which way theyre going to go. If emc, we get to earnings in a few weeks and emc does nothing that really starts this becoming a much more proxy battle. Hes in the 9th inning of his reign and now its all boiled over where they need to make the decision. Ultimately we believe the split is the best way to go but a merger with dell would really be what kind of valuation do you put on dell today . At the time they took it private it was 24 billion. We view thats closer to about 30 billion. Its moved up given what they have done in the enterprise. But when you look, revenues have still been flat to declining. Emc has grown gdp right. Was carl icahn right to scream and hollar at the time . Meaning did michael dell buy it at a discount . At too cheap a price . I think dell made a great move then and hes making a great move now. He realizes that emc is in a position of weakness which is why we believe this is a dell initiated process and now emc is left with options that theyre looking at and now they need to make a decision. Do they split, do they merge with dell or do they do Something Like a downstream merger . And this just shows that the board waited for years. Did nothing. Rose colored glasses and now with elliott and other shareholders putting more pressure on them they have to make the decision. Otherwise the decision will be made for them. Is that what rose colored glasses . Looking at the world through it is, right . Nostalgic. Its coming up. The 20 year party. We used to play it just constantly. We can probably cue that up quickly. That would be a good backdrop. Michael dell is something, though, isnt he . Putting together those little pcs with components and now this is totally different. Reinventing that dell would be a totally different Enterprise Company. But it kind of already is. It is. It is. But complete the transition though. The next step, dell takes over as ceo. So this could really be a full turn around for dell. Im not sure theyd like during the conference call. But it just shows whats happening. You have all of these large tax dollar its emc, oracle, sap, hp and theyre sitting there in their horse and buggy right lane and the problem is a lot of guys are passing in the left lane and a lot of people trying to figure out what emc does here. Is everything stored in the cloud anyway now . They missed out on a cloud shift. Youre talking about the 50 or 60 billion market where they continue to focus on the cord data center. Just enough to be dangerous. I dont even know what i said but i know its not a cloud. Its a shift and all of these obviously its going to increase in the scale blt of the whole system. Anyway, thank you. Thanks. Do you buy that . You were out there yesterday. Can you throw language around like i just did . I dont think you can. We talked about fusion and fision. With who . Elon musk. We talked about going to mars. Im in a whole other head space. I think you have been on mars for a long time. Thank you. What is it called . We saw a little bit of the movie the martian which would make you think you never really want to go to mars. I know that already. Im pretty sure i dont. Convinced. Just crossing the tape, Biomed Realty being acquired by blackstone. Its a 10 premium above yesterdays close. The transaction valued in total at 8 billion. Lets talk about the economic agenda today. Two items of note. Coming up at 8 30 eastern time its the weekly jobless claims and the fed will release minutes from the fomc meeting. A big shift in the nearly 13 trillion treasury market. The wall street journal reports that global Central Banks are selling u. S. Government bonds at the fastest pace on record. We knew that china had been selling. That was once the biggest buyer of our debt. They sold over 40 billion to try to prop up the currency but sales by china, russia, brazil and taiwan are a sign that emerging markets are seriously slowing down and could spill over into the u. S. Economy. Theres other buyers including u. S. And foreign firms. They stepped in keeping yields at historically low levels but youre talking about sales to the tune of 123 billion. So what we heard is only about a third of the problem and then has people wondering what happens down the road. Joining us to talk about what he sees in terms of commodities and the economy is the founder and publisher of the gartman letter and a cnbc contributor. This makes you wonder what happens not this year but in the years to come. Theyre selling it and if you look at the bond futures or the note futures theyre scratching near new all time highs so they may have sold it but somebody else is buying them. That makes sense when you look at german bunds and the yields anywhere else. Youre getting a premium for the u. S. Market. Its far and away the safest place to be. But what happens as economies start to improve and yields start to push up just because the World Economy is doing better . That question has been asked in japan for the past 25 years and yet here we are at all time low rates in japan. There will come a time when rates go higher. We just dont know when. Long ago i thought that rates would have gone up. I trade only for my own account. There were times when i would be short of bond futures. I quit it. I will not be short of bond futures again. The fed accomplished its goal of beating the market into submission. Its the old story that the cat that sits upon a hot stove shall never sit upon a hot stove again nor upon a cold one either because they all look hot to him. Thats what is going on. Plenty of sell as good occurring but somebody else is out there buying it and even though the china are rumored to be the sellers theyre rumored to be the buyers. Its quite interesting. Lets talk about oil prices. You are convinced that we have seen the low. The structure in the futures market was beginning to shift. The term structure always moves first. Its the relationship between the front month and second month and in bear markets you always see that spread widen. It actually has begun to narrow in the six or seven weeks. So if the term structure shifted i have to shift and everybody became bearish. I thought as prices were going down i was on that amid panic. Thats not a terribly important circumstance. Demand is beginning to increase. If you look at the front month. If you look at what they call prompt delivery, wti, its actually at a small premium to november. That tells you that there is demand for crude oil that we didnt think was there before. It is useful at all to try to look at fundamentals to try to i used to think that they were. Are you doing that now . Yesterday we had great discussions about, you know, who russia is bombing and whether saudi arabia is getting mad and theyre going to keep production as high as they can to harness the russians and then were talking about rig counts here and. Nigeria. But by the time we know any of that the stuff that youve locked at, the stuff that technicians looked at has already sort of happened. As ive been in the business the past four years if you had asked me 40 years ago i would have said im 75 a fundamentalist and 25 technician. Now im 65 to 70 technician and 25 to 30 fundamentalist. C what can i know that somebody else doesnt know. If hindsight you can explain things fundamentally which doesnt help a lot. Thats the point and after all the smoke clears i think its far better to be a technician first and then quite honestly im now jaundice enough to say ill look at the chart first. Its telling me its going up. Ill go find a fundamental to justify that position. To justify that. Thats interesting. Its what i have ended up becoming over the course of the years. I think it was a great line that said who is the best trader hes ever seen. He said its my 4yearold nephew bobby because he can say thats going from the lower left to the upper right. As i get older in this the simpler i make it the easier it becomes. You take a look at a chart and look at it from the distance and say is that going up or going down and try your best to trade in that manner. Thats not saying something because sometimes that doesnt work either. Well it works until it doesnt work nil. Thats the problem. This is the hardest business in the world because you can be right for 24 hours and excruciatingly wrong for the next six minutes and you have a problem. Its an amazing business. Thank you for coming on. Always good to be here. When we come back, your money, your vote. Why Hillary Clinton is splitting from president obama on trade. Well have a couple of opinions on that but first as we head to break, heres a look back at this date in history. [ girl ] my mom, she makes underwater fans that are powered by the moon. [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] my mom makes hospitals you can hold in your hand. My mom can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] my mom works at ge. Welcome back to squawk box this morning. Twitter is hosting an event in new york today focussing on video. Jack dorsey will be there after getting the ceo job yesterday. We sat down with the twitter cofounder ed williams. So jack dorsey what took so long . For a ceo search it wasnt the longest ceo search in history. We had a big decision to make. We took our time. We surveyed the field and the market and talked to lots and lots of people and wanted to make sure were making the right choice. Do you think hes going to run both companies longterm . I think twitter has what it needs right now and we have to focus on being bold and being innovative and that should be our focus. Theres so much potential in twitter that we havent yet unveiled and theres tons of people there who can build great things. Theres lots on the table. How do we create more value. We should be focussing on deeper and deeper value. The whole thing was weird. Nobody around twitter was overly enthusiastic. It was pretty low key. It was like they gave him the job and said you go do it. I ran into jack dorsey a couple of times because he was out there. Did he shave . The beard is trimmed. Or maybe even gone. Now im thinking im trying to think of what it was. But its not what it used to be but we talked to elon musk about the idea of having two jobs and one of the things he said is its terrible, like impossible and i think this is going to be impossible too. Well see what happens. What is moments and why is it down here . I keep hitting it. It looks like im supposed to do something and then i say why you downloaded the new version. I didnt try to. It automatically gets to you. Its their new way of trying to get you more engaged. Moments. Theres moments down there. The moments im not interested in and they make me hit on it and then it comes back up again like its a new one and its the same one you hit on an ad. Its more of like a news feed. Thats the answer. I dont know. I havent figured out how to make it work. So crazy matt showed up somewhere. Did you see this interview. I read all of this. He said social media is sucking the life, sucking the soul out of people and youre not being come ppensatedcompens since the guy is making a living off of other peoples content for the last 20 years. No, i put it in a different category. What he does i dont think of him linking to others he makes a living off of curating other which is what he said fox and wall street journal was never going to do. But hes talking about social media but the Media Companies said what hes doing is the same thing hes accusing the social media of doing to him. Not from a business he is saying that hes been. No, he is saying social media. He is saying social media is ruining us. As people. As people. Which i absolutely agree with. So do i. In five years nothing is going to change. Im worried that the world may change us in some way so that we have other things to worry about other than looking at a smartphone 24 hours a day. Sorry to go back to San Francisco but we had a conversation we lon musk also about twitter. He deleted some tweets and he deleted some tweets about the new tesla and i thought we had sort of not caught him but caught him in a weird moment. Hes cleaning up his tweet stream. You talk about the way the world works and thinks now. How do you do that . They delete tweets because they want the tweet stream to look a certain way but someone like elon musk is spending a second thinking about these things. How many people do you think he follows . I bet he follows next to none. I bet he follows next to none and millions of people follow him. Hes cleaning what he tweeted out. But if theyre spending all of this time trying to figure out what it looks like we have larger problems. It is the whole world. We tell you about how important these companies are. So many people are spending so much time trying to figure it out. Like isis guys after they behead someone theyre checking their twitter feed. Its messed up. We have 20 days to go until the cnbc Republican Debate. John joins us with the piggebig issues on the table. One of the biggest issues is medicaid. Its always as a program serving the poor. Been more vulnerable to political attack but especially vulnerable this year because of president obamas expansion to medicaid under obamacare. That gave republican governors a choice whether to expand it or not. Each too different paths and now those are central to the debate. Listen to john kasich, jeb bush and Chris Christie justify their stances on the issue. When i look at the old and new testament one thing is clear in there. It does depend on how we help people down on their luck. Lets talk about one specific in relation and thats what you did on medicaid. People look at this and say hes implementing obamas medicaid program. Theres no money in washington. Its money we send from our state of ohio to washington that i was able to bring back to help the mentally ill get on their feet. 80 of the people in our prisons in ohio have some sort of substance abuse. As we treat the drug addiction in our prisons when they come out the rate is 10 . If there is an interview process when were at the pearly gates it wont be whats your views on medicaid. It will be have you accepted jesus as your savior and have you acted on your sense of conscious personally. What do you think of his argument. Do you think that was a mistake. I dont think anyone should have expanded medicaid without the power to reform it. I will offer states the ability to reform medicaid without strings attached. It was what was best for the people in my state. I took an oath as governor to do expanded entitlements. It did not. We already had medicaid at 200 of the poverty level. What it did was make money for the state of new jersey. 220 million a year. Do you think conservatives will buy that . Extending medicaid was a profitable thing for the governor. They dont have to buy it. For new jersey. For the state of new jersey. And that becky in a nutshell is the Republican Debate and well see that may out on stage among many other issues on october 28th when you and i and carl will be there in bolder. Thats a huge issue. It will probably separate those that have exiting constituentcies versus those that dont. Thats right. But theres several republican governors that faced that choice and decided not to attend to them in the way president obama wanted them to. Scott walker, rick perry declined to expand medicaid. J bobby jindal and rick scott has done the same. Lets talk about Hillary Clinton and her decision to avow herself of the ttp which she called the golden example hen it comes to trade agreements. How tdoes she flip flop like that . Politics. She is getting heat from Bernie Sanders on the left and you see this stance. She had some trap door exit words in what she said yesterday. According to what i know now, what i have learned so far, i think this will not is not likely to meet the high bar that i have set. Meaning she could flip flop again. There you go. Exactly. I think the biggest threat this poses to her, she may be flanking left because of Bernie Sanders but what if biden gets in the left and stands by this. Part of the calculation is she has the mainstream position within the democratic party. If joe biden would get into the race supporting ttp he would be on the right flank and not well positioned on this. I just had a quick question. We talked about this off camera a little bit. I understand this completely and i understand that and you can explain it, exactly what happened, but do you ever think with sort of the recent sort of perception of Hillary Clinton would it ever benefit the candidate to actually appear to have a firmly held conviction rather than to do what is absolutely politically expedient without even ever looking back . At some point i would say you know what i admire i dont know if ill ever hear those words but i would admire Hillary Clinton if she actually stood by a conviction rather than just deciding what was politically expedient. Isnt it time to do that instead of just going with where she is going . Joe thats exactly the question that some democrats are are asking. This along with a couple of other things like Keystone Pipeline lately which she has secretary of state seemed to be encouraging along without seeing overwhelming objections, people raising the question arent you reinforcing your most vulnerable point. That is the idea that youre just playing politics and, you know, theres a first democratic debate next week in las vegas and she chose and her team chose to position herself for that debate, get past that event rather than address the concern that you raised. The other thing that she is doing, by the way, she is going to today announce that she is in favor of a new tax on High Frequency trading and some other clean up related to dodd frank strengthening regulation again with the same impulse of responding to Bernie Sanders and trying to portray herself as not the tool of wall street that some of Bernie Sanders supporters believe. I saw saw or wrote. No, i saw opeds saying she didnt go far enough in this new plan she has to regulate wall street. The clinton team is very aware of that and thats why theyll be releasing this plan today with a paper statement. Its not going to do a speech and event. She isnt going to draw special attention. Look at this plan. She is helping wall street again. Theyre trying to control the terms of that debate and emphasize the revival of the swaps push out rule. The tightening up the loophole that allows investment banks to invest in hedge funds. Investing in activities that the bank themselves are prohibited from doing. All of that is part of her plan and she is again trying to get past that debate and see where she is. John, thank you. Well see you soon. When we come back this morning, the winner of this Years National Youth Entrepreneurship challenge. The 18yearold young woman with join us with more than a few lessons for even the most seasoned business leader. Stick around, squawk box will be right back. patrick 2 thats the kind of control i like. And thats what they give me at national car rental. I can choose any car in the aisle i want without having to ask anyone. Who better to be the boss of you. patrick 1 than me. I mean, you. Us. vo go national. Go like a pro. The internet of things. What were recommending as your consultants. The new consultants are here. Its not just big data, its bigger data. Were beta testing the new wearable interface. Xerox believes finding the right solution shouldnt be so much work. By engineering a better way for people, process and technology to work together. Work can work better. With xerox. Why pause to take a pill when a moment spontaneously turns romantic . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com were joined by the winner of this Years National Youth Entrepreneurship challenge. The network for teaching entrepreneurs have imparted start up skills for young people from communities. She won the grand prize, 25,000 if money for her winning the invention. That invention is the guardian locket. Congratulations. Thank you so much. Youre wearing the guardian locket. Tell us about this. This is the early prototype stage which we have. Were using the blue board as the technology. What is that exactly . This is the hardware component to both a and b which is the locket and the app itself. What does it do . The locket has a button on the back of it and when you click it once its supposed to send a false phone call to your phone in order to ward off any possible predators with another two clicks youre able to send a picture of your face, your exact coordinates and three consecutive Text Messages to our top three contracts as well as the local authorities saying youre in need of help. How did you come up with this . How old are you . Im 18. What is the genesis of this . It started in the classroom. It was a combination of two projects. It was my senior thesis in high school as well as my economics class so it all turned into one big project and snowballed from there. I love the idea. Obviously you identify the need because this is a huge issue for women on college campuses. Definitely. And for women out on the streets and cities too. I just wonder i just think about how many times i butt dial myself a day or somebody else. How do you make sure that you dont accidentally knock it off. The first click, the worst Case Scenario is the accidental dial which could be used to your advantage. Lets say you lose your phone. Or someone comes up to you who you dont want to talk to. I have a phone call. I just want to go backwards. I understand there was the class and these two projects but what was it that got you to do this as opposed to something else. You think about what happens when youre in a situation. What do you do when your nervous . I reach up and play with whatever is at my neck like a necklace or a locket and i chose a holocket because it has the space we need to put in the circuit point. Whats the price point on this . Were planning on selling it for 129. Do you know were there other finalists with neat stuff . Yeah. It was so incredible to have the opportunity to compete at nationals because i got to see all of these people from all different parts of, you know, the nation. They had such incredible ideas. There was the eco car wash as well as custom made jobs. The headwear piece. Got it. Awesome. Thats great. Thats really great. For, you know, urban areas where thats going to be, you know, earned success and learning how to start Small Businesses, thats the best way what do you want to do when you get out of college . Right now im working toward my degree which is in business and economics. So right after college i really want to work on my business and i definitely want to see it go far. Youre at ervine right . Yes. Spend four years there. Enjoy some of it before you because youre going to work the rest of your life, you know . Its the only tile when nothing is expected except good grades. Take it easy. Thank you. Congratulations. Thank you so much. Very cool. Coming up, financials in focus, the new head of the american bankers association, an old friend of the show rob nichols on the big issues transforming his industry. Before earning enough cash back from bank of america to take their act to the next level. Before earning 1 cash back everywhere, every time. 2 back at the grocery store. And 3 back on gas. Vince of the flying branzinos got a bankamericard cash rewards credit card, because he may earn his living jumping through hoops, but hed rather not earn cash back that way. Thats the spectacle of rewarding connections. Apply online or at a bank of america near you. Sometimes they just drop in. Always obvious. 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. Incoming American Banker Association president and ceo has a long list of things he wants to accomplish for the small banking community. He joins us on set right now. Is it you would say its still difficult, much more difficult for very important sector of banking . The big guys are doing better. We see that. Small guys still have a lot to deal with. Well, good morning, joe. Absolutely. I would say, first of all our Banking Sector is the envy of the world. In part because it has Community Banks, mid sized banks and regional banks and they each play a really Important Role in our financial ecosystem and we want to improve the policy circumstances for all of these banks but to your point, to your question its no secret that the Community Banks and Smaller Banks in the United States have been facing regulatory pressures associated with the overhang of dodd frank that we want to deal with. So theres Regulatory Reform to get legislation tailored to get it right that we like to achieve and i would say that ive talked to banking ceos of all sizes and theres definitely an understanding that some of the smaller bank versus been caught up in the policy response in a way that they were not intended to. So what is encouraging is in washington theres a pretty bipartisan conversation about trying to improve the policy circumstances and thats right. We have our Capital Markets the envy of the world because we have banks of all sizes playing their Important Role. So we still dont have all the job creation that we like, especially with Small Businesses and entrepreneurs . Theyre the ones that go to the small banks, right . Absolutely. So was dodd frank counter intuitive with this sector not being able to deal with a lot of it . The effect is people arent getting loans they need to start businesses. We need to taylor the regulation to make it work for our entire Capital Market and all of our banks. The big banks learned how to deal with it . They have been able to many of the large banks have been able to absorb some of the body blows associated with the regulation in a way that regional, mid sized and Community Banks have not. Did you think about this when you were writing the rules for dodd frank . Clearly not enough. Did you tell any of your friends or enablers that this might happen. Let me ask about those enablers, one being Hillary Clinton that came out with a man today in particular she talks about strengthening dodd frank as opposed to loosening the reigns and in particular also talks about the need to hold individuals accountable as opposed to the firms themselves. Where do you stand on this . I havent read the entirety of seeing the news accounts and wont comment on every single political candidates views here but as a general observation i say lets look and see if we can get the current regulation right before we layer additional regulation on top of that. We need to end too big to fail. On these big issues theres a lot of Common Ground in my opinion. One of the things that i want to talk about because i know i have limited time is some of the future issues impacting the Banking Sector. Theyre big and important. One is this issue of the rapid convergence of banking and technology projects. My children will receive banking projects different than the way we on set do. There will be regulatory implications that we need to think about. This whole issue of mobile. So much is going to the phone and to the smartphone. What will that look like in five or ten years. Meaning youd like to see the new industries popping up regulated the same way your members are regulated. I would note that in 2013 theres about 3 billion in venture money going into ventech. In 14 it was up to 12 billion. This is a rapidly growing area where people will receive their Financial Products and tools. We need it to be safe and secure so theres cyber implications and security implications. Thats important. Also this issue of millennials. What if there are no banks in the future. Theyre spending it on lattes and head phones and killer apps and stuff. What if no one ever saves another dime. This is huge in our nation. They just overtook the boomers. Theres 84 billion americans born between 81 and 2000 and theres a couple of implications we need to think about going forward. Theyre playing us out. Well have you back though. Youre not going to solve the millennial problem. Its an porn groimportant gr well talk more about it. When we come back, pattie sellers putting together a major gathering of the worlds most powerful women. But first weekly jobless claims and fed minutes and results from alcoa. Squawk box will be right back. At ally bank no branches equals great rates. Its a fact. Kind of like ordering wine equals pretending to know wine. Pinot noir, which means peanut of the night. Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. At ally bank no branches equalsits a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Welcome back, everybody. 47 ceos on the women list control 1 trillion in stock market value. Pattie sellers is the assisting managing editor at fortune, putting together the summit and running it again this time around, and, pattie, great to have you here. Thank you, becky. What struck me is Sheryl Sandberg wrote if women were to sit down and look at the pace thats happened over the last three years, just in terms of women going into the ceo suites or the cfocsuites, it takes is 00 years before theres parody. Is that surprising . No. I think itll take longer. Because . I do. You know, when we started this list in 1998, there were two female fortune 500 ceos. Today, theres 23. 23 less than 5 , but this week in the last few days with coleman leaving dupont and yesterday with the ceo of tjx, owning tj maxx, marshalls, shes stepping up from ceo to chairman. Theres going to be 2 1 ceos. Thats pathetic. They were in the top 11 of the listings. They were. Whats going on . What happened . How do you explain this . Well, i mean, ive been saying for a long time that women and men define power very differently. Women think about power horizontally, less interested in climbing the ladder, and they drop out. Anne marie slaughters book Unfinished Business talks about this. Women graduate from college and graduate schools at higher rates than men, outperforming men, but at some point, those fantastic numbers start widdling away, and its because women are making different choices for balance reasons, for, yes, despite what Carly Fiorina says, the first most powerful woman on our list back in 1998 when she said, theres no glass ceiling. Theres still glass ceilings out there. Who is number one this time . Gms mary barra . Yes, shes number one. Talk about a woman who has had a difficult ride, but shes done a fantastic job, and in a very, very tough environment, shes displaced ibms ceo in the number one spot, and the reason we moved jenni from number one to number three because they had 13 straight quarters of revenue declines, and, you know, shes doing a transformation there, but the stock has gone down, and were waiting for the stock to go up. Thank you so much for coming in. Great having you here. Good luck with the conference. Thanks, becky, well miss you this year. Ill miss it too. Thank you. When we return, the National Retail federation releases Holiday Shopping predictions, first on cnbc here on squawk box. Back in a moment. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive bounty is two times more absorbent. More sit per roll. So one roll of bounty can last longer than those bargain brands. So you get more life per roll. Bounty. The longlasting quicker picker upper. Markets in focus, china rising overnight, dumping debt at a record rate, and clarity on the feds september decision. Market analysis from Rebecca Patterson ahead. Congress set to drill a top vw representative over emissions tests, and what action could be taken against the auto maker. The countdown to christmas is on. Hey, you woah retailers gearing up for the make or break sale season. Were going to unveil new holiday forecast data first on cnbc. The second hour of squawk box beginning right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, im Andrew Ross Sorkin. The forecasters expect an increase in first time filings at 273,000, and wall street is awaiting clarity on the Central Banks september decision to hold rates steady. Well get the minutes from the feds latest meeting today at 2 00 p. M. Eastern time. In the meantime, u. S. Equity futures at this hour are in the red, looking like the dow opens down at 71 points, and we have the news crossing the bank of england leaving rates unchanged, not that much news. I feel like we say that every time, right . Yeah, pretty much. Top stories at this hour, dell is reportedly in talks to buy data storage company, emc. Emcs been under pressure from activist investor and shareholder elliot management. Dell is said to work to secure financing for an allcash offer, but thats a doozy of a deal because the market cash for emc is 50 billion. A lot of talk of whats happening here, but, obviously, the pressure from elliot managements is driving things. Earnings coming up on october 21st, and they want a decision before then, and that may put emcs back against the wall. Fiat chrysler in the uaw reaching an agreement for the a four year labor contract. They threatened to strike if a deal was not made by midnight. 40,000 workers have to vote to approve the agreement. The last proposal was reject by the ranking File Union Members although the Union Leadership recommended voting for it. Volkswagen u. S. Chief michael horn is testifying today about rigged emissions tests. According to prepared remarks, he was informed in the spring of 20 14 about a potential emission problem. Later that year, he was told the companys technical teams had a specific plan to bring the vehicles into compliance. Of course, all of 24 is about a year and a half before the company informed regulators what was happening. Well hear more at 10 00 a. M. Eastern this morning. Ahead of the hearing, Frank Pallone will join us. Signs in a slow down a end emerging markets threatening to spill into the u. S. Economy. China, russia, brazil, and other Central Banks are selling u. S. Government bonds at the fastest pace on record. On set, talking markets, remember beck ka patterson, a cnbc cricketer, and i read that, checked out the tenyear at to 3. So, i mean, sell all you want, but its not affecting the yield very much, which is seems to be based on a slowing economy. Yeah. I mean, it seems like things are quieting down for the moment. Well cross our finger last, but one of the drivers of the anxiety in the last couple weeks is the sense whether its china, saudi arabia, russia, brazil, et cetera, they sell treasuries and assets to get cash, whether its to plug a hole or short the currency. What people are forgetting is the other side of the equation, that we have seen just as much inflow into u. S. Treasury from private investors. In japan, in most of europe, you still have much lower yes than you have in the u. S. , and theres a lot of investors who are nobody trusts us. Im going to cross this worry off the list for now. Good. The one that seemed to come back for me is now i dont think were going in october, obviously. No. Its like weve whatever consternation we had about that, now were not thinking about that, really, and were back to being glad they stay at zero longer so the dollar does not go up so that exports get a little bit better, and its like i dont know that were that concerned about the slow down. Look what happened to yum, but if were now in the camp again, we are concerned about a slow down if we raise rates. If rates go up, economy needs to improve. If rates are not going up, we can do what we did in the last five years, trade higher based on easy money. Were back in that mind set. Bad news is good news again. For now. You know, i dont think the world is that bad. I think the world is just biforkated. You have conferring teetering on recession, globe ally, and thenf you look at the Service Sector of the economy, low energy prices, low borrowing costs, improving job markets, they are great. If you lock at a business manufacturing index, a pmi, just stick your head in the sand, say, i want to go to cash. Make sure you look at the composite, and in the developed world, the Service Sector drives thingenings, were doing okay. Not great, but okay. Earnings season is now thats going to be buy forkated too. Anything tied to manufacturing looks terribles. Maybe we dont think about that. Yum, i dont know if that was macro, but well see stocks go up and down based on the report. Are they going are there going to be good reports this quarter . Youll see some, sure. I mean, its interesting. When i talk to my client base, and a lot of my clients are ceos or former ceos of Big Industries in the u. S. Or globally. Talk to someone tied to manufacturing, they are nervous about the world, and tied to the consumer, someone who has a Carpet Company or someone who ties consumer demand. They say, why is everyone fussed about. The consumers doing really well. If you look at housing prices, look at car sales, look at restaurants, hotels, so, again, you just have to look at the big picture, and if eyou do, there a global economy, not falling apart, not on the verge of recession, and if thats the case, hold the course. I feel like ive done judo the last six weeks with the markets, but glad i did not take down risk. Better off now for not doing that. I mean, its harder andhearteder to read, though, volatility has to be increasing. Vix is down under 20 again for the last three or four days, and, again, i dont want to overstate it. Were going in the right direction, and if chinas sentiment, not china, but if sentiment can just stabilize, so people get a little calmer on that . Could the fed throw a wrench in the whole thing, though, by acting when you dont expect them too . I dont think thats a high risk. I think the bank of japan likes to surprise the markets, watching twatch ing end of the month for that, but Federal Reserve wants it priced in before they go. If they surprised the market, what happens . I dont believe in october. Go in december. Theres a press conference, yellen gives is speech. Shes going to say they hiked because the economys doing well to support it, and going forward, its data dependent, and the slowest tightening cycle ever seen in modern times, and i think thats okay. And the market does what, though in. Goes up because we have clarity, we have liftoff. We see the fed calmer. Why not this month . Its not priced in. It would be jarring. The fed gets it priced in so its no a surprise. I see what youre saying. Priced in meaning what stocks come down from here before the rate hike . They did in september. Thats why myself includes, frustrated in september set up and ready to go. The market priced in the hike k but stocks and dollar went up. Everything was on board. Stocks did not fall as that fed hike was priced into, and they lost the opportunity. Would there be a position for it in december, though . If they talk things up, the market reacts well . Decent data that the u. S. , decent payrolls, not block buster everything you laid out about how the economy is doing is reason they should be raising rates. Exactly. Get the data, have a lot of fed speakers between now and december who can also prepare the market, its not a big deal. All right. Thats my hope. Lets whats the date today . October 8th. The 8th. Yeah. Thursday. Why . Because, you know, september was last month, so theyre, like, putting stuff together right now, all the earnings, and then in the next week, you hear whats coming next week . Start of earnings season with the financials. Yes. Joes favorite time of the year. Banks. The big multis. Thats why they are big. They should be broken up. Theres too much stuff going on. Complicated. Too many things to have to know before hand to know whether its good. Even the analysts come on, oh, yeah, well, they hedge everything because they need time to figure it out. You cant read a release in 10 seconds. You cant. And multifaceted operations and metrics. We will time after time dont have a choice. Gets scratchy. Im not feeling well. Liar youre going to miss the week of earnings . Come back for Consumer Staples . No. Other news organizations wait around for, you know, stuff to happen. Hopefully they are not wishing things to happen, but we have four times a year, built in, rain or shine, we have it built in. Literally thousands of companies in the s p 500. Only 500. Only 500. S p 500. Oh, thats right. Youre channelli inling yogit now. Challenging somebody else. Somebody else. I dont want to know. Well leave it alone. Rebecca, thank you. The Holiday Spending forecast, and congress joining us on the committee grilling vw today, and they called for an investigation in famt si sports site before the trading scandal, and, later, imex listed on the hong kong stock exchange. The ceo is joining us here on set. Back in a moment. Actions. They speak louder. We like that. Not just because were doers. Because were changing. Big things. Small things. Spur of the moment things. Changes youll notice. Wherever you are in the world. Sheraton. Welcome back, everybody, the countydown is on, with 77 days left until christmas, and sounds short unless you have a long shopping list. The National Retail federation released Holiday Spending forecast first on cnbc, and we have the data. Hello, good morning to you, becky. The National Retail federation is out with the holiday Sales Forecast calling for a total increase of 3. 7 over last year for total holiday sales of 630. 5 billion. That growth rate is below last years 4. 1 sales increase, but above the tenyear average. They forecast online sales or nonstore sales to include 68 compared to last years increase of 5. 8 . This is not the first forecast out this season, and this forecasted growth rate of 3. 7 is at least the fourth major forecast to guide for a weaker sales increase than last years actual holiday sales results. However, theres been critics when it comes to the National Retail federations in season tracking data, but remains the most widely followed in the retail industry. Stay here. Well bring in another voice, the ceo of the National Retail federation, and, matt, how do you guys come up with the forecast . What are the factors that go into it . So, becky, good morning. This is based on Macro Economic data. Looking back at things like employment numbers, housing, and consumer credit, Consumer Spending, and so the methodology is very solid in terms of things we look at to make the forecast, and as pointed out, its down a little bit from last year, but above the tenyear average and above 2012 and 2013 were both 2. 7 . We had easy comps after the recession, and then the number dropped down again, and i think thats just reflective of the continuing uncertainty in the economy and consumers trying to figure out where they spend or save. And 3. 7 , though, thats a decent number when you consider all of the talk theres been about a potential slow down economically. All in all, it suggests that you think that consumers are going to show up this year . We do. We think this is a very strong number, and we think it reflects positives in the economy, and gas prices are low, home values improving, and weve seen some momentum in Consumer Spending throughout the course of the year, substantial portions of that, obviously, directed at sort of nondiscretionary, durable goods, housing, automobiles, and then that whole new category where people spend easy conveniences, leisure, travel, and dining. Into the Holiday Season, we expect itll be promotional. We think theres going to be a lot of great exclusive deals, and consumers feel the positive momentum and are going to spent into the holidays. Matt, ive heard some mixed forecasts when it comes to the level of promotions. Do you think that it will be a more promotional season than last year, or, perhaps, promotions targeted to certain days and spending groups . Yeah, you know, courtney, we just had our digital summit in philadelphia the last couple days, we had 5,000 Retail Executives there talking about digital strategy, and i spent an hour with the senior folks on leadership groups, and, you know, its interesting. They talk about regional differences across the country, the weather, and retailers like to campaign about the weather, but this time its true, especially on the west coast, it was very warm leading into a warmer than normal september for a lot of the country driving promotions, and now were already into october, and so some of the folks predicted that the promotional environment would carry straight through the Holiday Season, and that was balanced against some of the retailers that dont get into the promotional game who said their Winning Strategy is going to be things like exclusivity and service and convenience, and i think that, you know, the ceos and others that i talked to this week said that consumers are spending, but you really need to have all the elements there. The price has to be right, the location, the convenience, the timing, the markets, exclusivity, and that theres no easy wins as one of the ceos observed about the economy, said that, you know, even the wealthy become rational at some point so everyone is thinking about the spending, but in light of the positives in the economy, we think its going to be a very strong season. Matt, you mention eed wealth. We watch the stock market every day. How closely are retail sales tied to any dips in the stock market or big gains too . Well, you know, you talked to the ceos of the company, and some of our friends, and board member, and i think that they would say that theres a fairly high correlation between the wealth index, the target in particular, and in the way the customers shop, and other segments, you know, dont Pay Attention to the target as much because they are not invested there. They see more value in what home prices are doing, and thats more relevant to the way they spend, that dumbbell effect of the folks at the top and the folks in the lower segment of the economy looking at two measures. Some spending off the Balance Sheet, others spending from the income statement, so to speak, and i think thats reflective of what weve seen in terms of the segments of retailers that are in general terms, doing better or worse, but having said that, think even inside categories, one of the executives said yesterday that you can do Everything Else right, but if you dont have the right merchandise, you dont execute, your store locations not good, the mobile experience, you dont win anyway no matter the segment. Matt, thank you very much for joining us, great talking with you. My pleasure, thank you. A quick story. Fifa president is suspended for 90 days, and two other officials suspended following that investigation by the soccer groups ethics committee. Prosecutors looked into deals that blatter cut to tv rights to the world cup tournament, and hes denied any wrong doing thus far. A warning for renters. Prepare to pay more. A new survey finds Property Managers in the country are preparing to hike pricings. Details next. Time new for todays aflac trivia question. How much further away from earth does the moon move annually . The answer when cnbcs squawk box continues. Aflaaac. Aaaaflaaaac. Someones sandbagging. Id be tired too. He paid my claim in one day when i got hurt. One day . Serious hustle. Serious duck. In just one day, we process, approve and pay. One day pay, only from aflac. Ah why should over two hundred years of citi history matter to you . Well, because it tells us something powerful about progress that whether times are good or bad, people and their ideas will continue to move the world forward. As long as they have someone to believe in them. Citi financed the transatlantic cable that connected continents. And the panama canal, that made our world a smaller place. We backed the Marshall Plan that helped europe regain its strength. And pioneered the atm, for cash, anytime. For over two centuries weve supported dreams like these, and the people and companies behind them. So why should that matter to you . Because, today, we are still helping progress makers turn their ideas into reality. And the next great idea could be yours. Now the answer to the trivia question. How much further away from earth does the moon move annually . The answer . 1. 5 inches. Welcome back, everybody, Property Managers in the United States prepare to raise rents by as much as 8 next year according to a new survey by rent. Com. The data shows rents rose 6 in the last year. Property owners expect that rising demand and falling vacancies continue to push represenrents higher. Vladimir putin celebrating his 63rd birthday playing in a star studded game in soshi. Teaming up with players, and putin is incredible, incredible. Scoring seven goals to lead his team to a 1510 victory while he also played goalie and blocked, you know, 35 or 40 shots from the other team, and they were all trying im telling you as hard as they can. You know who defend him the second no. Just got out of the way. Exactly. Hes amazing. Hes amazing. Really. There he is. The most valuable player. Yeah. And lots of kpeemt. In chicago this morning, not about the blackhawks, but the rangers beat, but the cubs winning the National League wild card game last night beating the pittsburgh pilots 40. The cubs will take on the cardinals. That five series starts friday in st. Louis, and im excited to see st. Louis against chicago, but the further chicago goes, the more you think that some, like, revelation type event might happen, like an end of the world, your husband thinks the end of days . When you worry. The further the cubs go. If they make it, break the curse, and they win . I think thats, like, antimatter meeting matter. We might just go up in a flame. Back to the future ii, im told, had a weird prediction, saying the cubs won the world series. You know the year . What . 2015. Isnt that weird . We need scary music for that. This is dogs and cats living together. Im angry at the city of chicago for a couple years, so this would at least why . This would make me feel they have, you know, the guy with the hair, that, you know, every former governors in jail, and blaggio his chicago thing has to do with the guy in washington. Anyway, when we come back this morning, a volkswagen executive faces a grilling on capitol hill today over rigged emissions tests. Congressman Frank Pallone is next on what to expect. Right now, though, as we break, look at the u. S. Equity futures, weaker today, dow down 60 points, s p off by 6, and nasdaq down by 13. Can it make a 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 . Welcome back, first in business worldwide, among the stories at this hour, new numbers this hour shows hedge funds post the fourth straight month of declines since september, longest run of losses since the financial crisis, and s p cutting ge outlook after unveiling a stake in the company, ratings firm putting ges aa plus rating on watch for potential credit downgrade, and blackstone acquired shares, 10 above yesterdays close, and transaction valued at a total of 8 billion. A new ad going viral, the commercial that features Jennifer Anniston as a pitch woman for emirate airlines, walking the aisles, looking for the shower, and the bar, only to discover the plane does not have either one. The actress is in her bathrobe and finds Flight Attendants laughing at her, and she wakes up in a first class pod on emirates and realizes it was a bad dream, and that she can go get drunk and take a shower. [ laughter ] if she so chooses. Oh. I guess thats good. Yeah. This is what most of us deal with. Not that. The before. Not the after. I think she probably gets to fly yeah. I think she has planes with showers. As much as you want to drink, probably, right . You know, thats how i fly, so and as you know, i mean, actors and entertainers and stuff deserve that. No matter how big the carbon foot print is because, you know, they are such an essential role in society. Unlike the ceos. They place such a essential role in society. We did not see kids in the bad dream. There were no kids. No kids. Yeah. Whens the last time there was an ad for the front of the plane with kids in there . Probably never. All right. Talk about carbon foot prints yeah. The hot seat, michael horn fielding questions about the troubled auto makers strategy to evade pollution rules. The next guest says if vw did willfully evade the epa act, theyll pursue what they call the most severe action possible. Joining us now with more is democratic congressman Frank Pallone, Ranking Member of the energy and Commerce Committee overseeing the meeting today, and what we heard, Early Released of proposed testimony, sounds like the company is going to fess up saying, yes, we intentionally did this. What does that mean . Well, clearly, that means they violated the law, and, i mean, this is an intentional action. The more serious question is, you know, what are they going to do about it . I mean, we have to find out how many cars were affected by this, what hearing 11 million. Yeah, and half a million in the United States. What do they do about it . Fix the problem so the cars do not emit 40 times the nitrogen oxide that is normally allowed to emit, and, you know, whats it mean for the owners . Do they get damages because they bought a car expecting that it was going to, you know, meet the emissions standards, and then it did not for so many years . So many questions to be asked, and thats really what today is about, trying to get to the bottom of this. You know, part of the problem, at least, base the on what i read, what ive been told, is that if you actually fix the cars so they are not emitting that much pollution, thats a car with much worse performance, will not get the same gas mileage or have the same go and pick up and speed that it would have. Thats difficult to get into. How do you quantify what the damages should total . Thats right. On the one hand, theres the safety issue, the power issue, the miles per gallon, all the things. You understand, people definitely bought the volkswagen because they represented the car was going to meet the standards, have the power, have so many miles per gallon, and all that now is up in the air. And i just think that they got a lot of questions to answer, and thats why were bringing them in today. You said that you would like to see the harshest punishment poll levied. What is that . Well, i dont actually have the amount, but, you know, this was intentional. I mean, im its great that they are admitting that they did it and that it was intentional, but, you know, its a little different than some of the other recalls that weve had in the past, which, you know, were not necessarily intentional. I mean, this is pretty serious to deceive federal agencies, and i dont know what happened in other countries, but as far as our country is concerned, thats 40 times allowed emissions standards. Congressman, when you think about the punishment, im curious how you think of the balance . Its complicated. Clearly, theyve done a terrible, terrible, terrible thing to the extent that whats alleged took place, but at the same time, depending on whatever the penalty ultimately turns out to be, it could affect they have 270,000 employees in germany, for example, many of whom i imagine had nothing to do with this. How do you think about that balance . Or do you . Well, i think you have to send a message. I mean, you know, one of the issues here is, are they the only car company that did this . I mean, thats another thing. I mean, we need to send a lesson that you cant get away with this type of intentional deceit, so i think the fine needs to be severe just to send ale lesson other car makers. Talking about the fine being levied, that, again, looks at the company as the problem, not individuals. There were individuals who made choices and decisions, how do you go after individuals who are responsible, which probably sends a tougher lesson than spending shareholders money to pay a fine. It has to be both. Some people will have to go to jail if they are the ones who ordered this, but, you know, we had a lot of problems. A little different, but nonetheless, you know, our committee has had the problems with the toyota, the air bags, we had problems with the ignitions for chevrolet, and so i think that a lesson needs to be taught to the auto dealers that, you know, this culture of deceit or culture of negligence, whatever you want to call it, needs to stop. Weve had more recalls in the last few years than ever before in the car industry. So im not going to hesitate to say that, you know, if these fines should be levied against the corporate entity in order to teach aless sop so we dont, you know, continue with the culture of deceit or negligence, which were not only seeing with volkswagen, but with other dealers as well. Another issue youve been fired up about and looking into has to do with the Fantasy Sports and sports gambling, and you called for a congressional hearing to review the legal status of those things before the controversy this week that came to a head. What now . Well, were going to have hearings, hopefully. I think theyll be held within the next couple months or so, but the latest development, i think, you heard, was the two of the sites, fan duels and draft kings, that employees had inside information and were actually using it to make bets on the others site, and that shows, again, that Fantasy Sports is unregulated, like the wild west. We asked the federal trade commission to see what they can do, you know, to look into the inside information and its use, you know, to take advantage and game the system, so there seems to be more and more coming out every day about the problems with Fantasy Sports. Originally, this was outside of regulatory scope because people say its not a game of chance, but this is a game of skill, but its really what you hear from the potential of insiders kind of profiting from this that concerns you the most . Its the idea that, look, the problem i have is that Sports Betting in general has been prohibited now for a number of years except in las vegas for the most part, and in my state of new jersey, we had a referendum. We want Sports Betting, bring it out from the shadows, and its primarily done by organized crime now. We want to bring it out of the shadows, legalize it, have the state make income from it. Well, the major leagues and teams with fantasy sport s carvd out the exception . Sports betting, unregulated by the states, and they are making money, and now theres insider trading, if you will, so its just not a fair system. They are gaming the daily sites and the major leagues and the teams that own and invest in Fantasy Sports. They are essentially gaming the system. So you think the nfl and the Major League Baseball and all the things, youre mad at them for gaming the system . Well, absolutely. They are the major envest inves the daily sites. Thats whats happening, and they are suing new jersey because we want Sports Betting in general. I want to see all of this, Sports Betting, Fantasy Sports regulated by the states like we regulate casino, gambling, or horse tracks. Take it out of the shadows, ensure its regulated and its fair for players. In the hearings proposing to hold, yao not talking about just calling in the sports gambling sites, but talking about calling in the heads of the nfl and nba . Oh, absolutely. I think whats happening now is they are taking advantage of this exception for Fantasy Sports because thats where they make money and investing more and more in the daily sites, and these daily sites are unregulated, and peeople, when they place a bet, they dont know what they are getting because of the fact that the systems being gamed now by employees, insiders, and its just its the wild west. Its not regulated. At the same time with Sports Betting in general, its done largely through organized crime. Theres a lot that needs to be done here to regulate, you know, this type off Fantasy Sports or Sports Betting in general. Thank you for joining us today. Thank you. We have to point out in full disclosure, comcast and nbc Sports Ventures both is have stakes in fan duel. Big movers, lest of stocks to watch next, and then at the top of the hour, we have an alarm about the power of opex. That and more. Back in a moment. Hello, ken jennings. I havent seen you since that tv quiz show. Hello, watson. You can see now . I can recognize people, analyze images and watch movies. Well i wrote a few books, did a speaking tour, i. Ive been helping people plan for retirement. And i help doctors identify cancer treatments. Is that all . I recently learned japanese. Yeah, i was being sarcastic. I havent learned sarcasm yet. I can help with that. Welcome back, everyone, futures have been under pressure, and dow down by 60 points right now, and that comes after the dow finally tied together four days of gapes, longest winning streak all year for the dow, believe it or not. And s p futures down by 7 this mornings and the nasdaq down 15. Weekly jobless claims at 8 30 eastern time, looking for an increase in first time filings of 273,000. Well get the minutes from the feds latest meeting today at 2 00 p. M. Eastern time. Dominos pizza reports weaker than expected earnings in revenue, and shares at this point, not too worse for wear so far. Thats been a good turn around for dominos. That in all ways that the companys orchestrated, reinventing itself, new recipes, just tastes better. The bull by the horns, there was criticism, and they sort of built it up again from the ground up almost, from the pizza itself. Morgan stanley upgraded from out perform to market perform. The firms priced target now 39. Deutsche bank warns of the record pretax loss of 6. 7 million, and the bank might cut or eliminate the annual dividend. I think theres job cuts coming at Deutsche Bank as well, and sony reportedly moving guard to sell its half of sony, atv music publishing, the report says the publisher is valued at 2 billion, and you never you did buy the Michael Jackson glove, or no. I wanted to buy. What did it go for . Not that much, did it . No, 5,000. Then it went for hundreds. Yeah. I missed out. That was a missed opportunity. A missed opportunity. You bought bitcoin now. I bought 5 in bitcoin, now worth a dollar. You stopped talking about it. Its not a big deal anymore. Did you talk about it yesterday . We did not. What a miss. See that . What a miss. See that . You should have come with me. I read about that. Bradley coopers hanging occupant with, you know such a weird who jared letto was there. With pink hair. Pink hair, fraeniendly with guy who runs slack. Are you the biggest name when youre there . When you walk around, people say theres Andrew Ross Sorkin . Hes squawk box, too big to fail . Nope. Bradley cooper is walking around. Oh, thats true. Jared with pink hair is walking around. But also, like, business, like, types that are really hot. The guys did they spell the names wrong . Jimmy ivine in the New York Post . E didnt see that. Same guy or messed up . Same guy i think, i do not know. Im sorry, hes real. Hes really. Runs apple. Runs did you . I did. You didnt see any well get you video. It was he was for the show . Well try. I dont know that we can. Was i didnt know you did. Glad they bought beats . Maybe. Unclear whether apple music is working. I use it all the time. I know you do, but youre its amazing. What were trying to understand is a lot of people, you know, sign up free for three months, and we have to see if they transition to pay. Have you . I dont know when theyve done it. When i was in scot land going through the countryside, i listened to pink floyd metal, and i had a flashback, like, almost acid flashback . Felt like that, but, no, the music brings me back to anyway, they got rid of the what was in the prompter. Talk long enough, they do that. I had a lot of things to say. I know, i know. When we come back, imax bets on china from the imax china ipo and the hong kong stock exchange. The ceo richard is joining us on the squawk set. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back, imax is public in china. The giant screen Movie Theater maker debuts today on the hong kong stock exchange, and Public Offering raised nearly 250 million. To talk about investor appetite in china, plus, how two movies the walk and everest could shake up the movie business. We are in new york, and we did not ring the gong. As much as it was appealing to ringel gong, i figured the fight was not worth it, 15 hours. You guys rather than ring the gong. Tell us this. Whats the irk po say about whats going on in china, and in particular, you focus on Institutional Investors opposed to investors. Was that a decision made . Definite a decision, you wanted a book overwhelmingly institutional because of the support in the aftermarket. Retail investors in china borrow on margin, reminiscence of the u. S. Many years ago, flip out in the first day and theres a lot of volatility. Something like 70 of the book was long, the book was oversubscribed five times, and opened last night, actually, in hong kong, and traded up 10. 5 . What are you seeing now in china . In terms of the economy slowing, people not going to pay the premium to see the movie . Thats the reason we did it, ang drew, because the shanghai was down 5 , and investors freaked out. But the shanghai is Energy Companies and airline, and this going to the movies is going gang busters with a 35 compound growth rate for over five years, not just for imax, but the industry in general, and we had to say, hey, chinas not a monolithic thing, but a lot of businesses. China was and is a Huge Investment for you. On a relative basis. Was, a third of the revenues worldwide, the biggest market in the world for us, and by the end of the year, probably, if not when you sat down, we talked about imax in the home, didnt you plan to sell out of the china . We have a joint venture with the biggest Consumer Electronics company in china, selling to rich chinese at 400,000 each. You dont have one . I decided not to get one. How big is it . About 20 feet wide, 10 feet high. That was the problem in my apartment in new york. It didnt really fit. Tell us we were talking when we teased this about the movie, the walk, and oh, oh. And everest. I cant see either one of those. I dont think i could. Id have to leave the theater. How big a deal is that . Having Early Release is aed good thing. Had to make yourself watch it . I did. Youre afraid of heights. Im not kidding, i couldnt sit through it. I was asked to watch it when it was screening, and i said, no way, i have no valium, and then i watched it a week later with the valium, and it was great. Check it out, joe. Theres a spot in the beginning, going across the thing, and the thing broke, and i turned that off. I mean, i get my pulse racing. I dont blame you. Its fantastic. It is. I guess i want to do it, but i like getting scared by slasher, not heights. When these films are made, does the director come to you or you campaign the director . How does that work . Director comes to us. Always . Theres the release issue in terms of the staggered release . In terms of when you get the movies released at the time . Increasingly, though, the markets change where the studios are moving films to accommodate the imax release if a director comes to us. Its a big name director, its jj or chris nolan or that, they move the day to accommodate the director if they want it in imax. This is a scary movie. Whats next year to know about . Well, i mean, the big thing is bonds soon and star wars, some shot with imax cameras. Thats exciting. Joe wont be scared of that. No, thats high enough. Orbit im fine. You have a plane around you. Right. Not walking on a rope. No. Being attached to the ground or seeing a building, thats part of it. Ive been have people watching . Not that i know. Heart attack, died . No, no. Have not got that. No, not that. No. I remember going with my sister years ago to an imax film, and i dont know what it was, but just the whole thing, and she was, like, having motion sickness. Rights. Cheerily, the Chinese People are not getting sick. They enjoy the heights right now, so to speak. Good deal. Thank you for coming in this morning. Appreciate it. Congratulations. Coming up, Boone Pickens issues a warning about the power of opec. He is on set next, and then later, credence clearwater revival front man is in the house. Well be right back. 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. The great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many South Africans for generations. This is an opportunity to right that wrong. The idea was to bring capital into the Affordable Housing space in south africa, with a fund that offers families of modest income safe and good accommodation. Citi got involved very early on and showed an enormous commitment. And that gave other investors confidence. Citis really unique, because they bring deep understanding of whats happening in africa. I really believe we only live once, and so you need to take an idea that you have and go for it. You have the opportunity to say, ive been part of the creation of over 27,000 units of housing, and to replicate this across the entire african continent. Reality with Boone Pickens, the man calling for 70 a barrel blames opec for lower prices now, and why we need a Long Term Energy strategy and russia moving into syria changes the middle east equation. Lower gas prices helping the consumer . What are you doing results of a new study on how what you save at the pump is being pumped back into the economy straight ahead. Plus, if theres one thing that we can learn from the dude in the band, we all love credence. Was there anything of value in the car . Oh, yeah. Tape deck, some credence tapes. Rocker and lead singer f, th missteps and the future of the Music Industry as the final hour of squawk box rocks on. Come on, i had a rough night, and i hate the [ bleep ] eagles, man. Man man hey live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box on cnbc, first in business worldwide, im joe with andrew and becky, and less than 90 from the opening bell on wall street, down 45 now on the dow. Thats better than it was. Its been a great five or six sessions, at least if youre long, and a lot of the fears that we were immersed in a month or so ago, i know the fed the fed is our friend again. Check out the markets in europe this morning. Mostly it was positive earlier. Let me see now, yeah, it is. Not in great substantial necessarily, but there is green arrows. When do we take greece off and stick in shanghai even though its not european. Nothing happening anymore. No. Maybe we should leave it on just in case. It could be, if you take it off, thats a problem. Talking about greece . Yeah. Greece, leave it on in Boone Pickens is here. How can you remove it . Yeah. They captured the news for years. Focused on shanghai now. Look at the size of it. We have the asian board. I know. You look at the size of the economy, it was about the size of rhode island. Right. No to say anything bad about rhode island, but thats not a country. Its a state. Its about like oklahoma. Back to boone in a second to continue the conversation, but in the meantime, stories investors are talking about this morning. Fiat chrysler and uaw reached an agreement on a new fouryear labor contract, avoiding a strike, and 40,000 workers have to vote to okay the agreement. The last proposal was rejected by ranking File Union Members, and bank of england leaving Interest Rates unchanged today. The decision was expected, and this afternoon, minutes from last months fed meeting, and then the National Retail federation has its holiday forecast calling for a total increase of 3. 7 over last year, Nrf Matt Shay on squawk this morning. Its a strong number that reflects a lot of the positives in the economy. We know gas prices are at historic lows, home values are improving, and we have seen m momentum in Consumer Spending over the course of the year. In the Holiday Season, we expect it to be promotional, a lot of great exclusive deal, and that consumers are going to feel the positive moe ten tum and spend into the holidays. A few stocks this morning, emc is reportedly in talks to be bought or combined somehow with dell. That is according to multiple reports, that if a deal is struck, it could be one of the Biggest Technology deals ever since emc has a market value of close to 50 billion. Costco reported flat same store sales in september, however, results better than expected with analysts having forecasts as sales declined. Boone pickens penning an oned on Global Oil Prices this morning on cnbc. Com. He called for prices to be 70 by the end of 2015, but now he says the call is not looking good. The article, titled im not dead yet, though. No, no, you got two and a half months to go to point out. That article, though, is penned, called the problem with my 70 oil call cites opec as the key obstacle in the way at this point. More with this is the man himself, Boone Pickens, and, boone, agreed to have you here. Great. I enjoy coming. I like the new offices. Why thank you, yes. I know a lot of the people walking by that. Friends of mine. We see people we like on a daily basis. Youre not kidding. Sometimes we do. Of course you do. The today show is here, we see guests, rick perry walks by, or, you know, who else . John paulson. Rick perry walks to work. Saw rick per perry yesterday, a great friend, important guy. We were at a funeral for dean kelly in ft. Worth, a wonderful guy, and 86 years old, an old guy. You dont think that doesnt sound old. 87. Well, 86 is not old, 87s not old. Pardon me . 87s not old. Well, you know, youre moving up. Right . Youre getting there. Late middle 80s. Getting there. Boone, you called for 70 oil, and it did no. Are you sticking with the call . Its a legacy call. I have been told you miss on this, and theyll never give you a chance again. What do you mean . Because i came out early own the 70, and, you know, i was bugging everybody, so theres no 30s happened, and were 45, 46, and ive got a month and a half, andrews over here. No, no, no. Body language. I get that all the time. I do, i know. Yeah. No, i know. He always looks at me, he wants me to be wrong. I want you to be right. I want everybody to be right. Would help income inequality if he was wrong. Came out 30 minutes ago said, look, cut everything. Budget, everything, running out of money, 100 million a day. Theres a report that shows saudi arabia with a hefty Budget Surplus three years ago turned it into a deficit of 20 of gdp because they have been losing their shorts. You know why they are doing it, dont you . Trying to force all the frackers out and shut down oh, frackers. Its russia . Independent producers that frack for oil, of course, but, yeah, they decided they are going to change producers from them to the United States. The United States can be swing producer real quick. Shut everything down. So we go down over a thousand, were down to the lowest level now, 614 drilling for oil. What happens now . A guest joining us now saying oil prices bottomed, and we had another guest yesterday saying, look, the problem is every time we shut down rigs like this, the price goes to 50 a barrel, and its fairly easy for rigs to be turned back on. Is that accurate . Well, easy, you know, people work on rigs. And so when you lay down, crude, theyll you know, maybe a weak you know who takes over at that point . Who . The wife of the family, and shes a get your ass out of here and get a job. Youre not hanging around here all day watching television drinking beer. Cant just find a crew and go on again . No. Thats 150,000 people now, and the guys have to work. They have theyve gone to other jobs is whats happened. So its not as easy as just turning it back on . Absolutely not. Talk about iran, oh, put them in, barrels oil a day on that, thats a joke. When they decided to come back with oil after the sanctions, which will be the mid to next year, were not going to see iranian oil in the market for a while, and they cant theyll have 200,000 barrels a day rather than a Million Barrels day. Sticking with the call could be at 70 at the end of the year . Could, underlying we could. I feel like the guy who fell off a 10story building. Going by the fifth floor, he said, im not dead yet, so. [ laughter ] maybe you think youre flying. Until the first floor. I want to tell you, i want to tell you the latest oil field joke. Okay. All right. The is this a clean joke . It is. Its kale. Andrew, you should leave the room. Its sensitive. Very sensitive. I just want to make sure. Going down travel street . Houston, and theres a frog in the gutter who says, stop, stop. She looks down, and says, are you a talking frog . He said, i actually am. She picks him up, and said this is most unusual. He said, ive had this spell cast over me, and he said, if a good looking woman like you will kiss me, i turn back into a texas oil man, and she put him down in the purse, wait a minute, wait a minute, are you going to kiss me . She said, talking frogs are worth more than texas oil. [ laughter ] that was a cute joke. Thank you. And family friendly. Thats when i got scared for a second, but youre good. But, no. I think im still alive on the 70. But im running out of time. Right. Two and a half months. Two and a half months, yeah, but something i would like to talk about that is interesting, and nobodys talking about this, and i cant believe it, that here, russia, struggling a little bit to take the ukraine, didnt they . There was some conversations about it and all. You knew what they were going too. They did it. We have a weak president. Now they just kind of waltzed over to the middle east. They were kicked out of the middle east in 73. They are back. They are back. Thats no kidding. Watch, theyll move quickly into there. Who is it when the price of oil went down to 45 a barrel, who was there . Russia primarily. Some of what we heard is that saudi arabia is continuing to pump because they want to stick it to russia. They dont want them in their backya backyard. Well, the saudis need money. They announced that. They have to have money, budgets out of control, 500 million a day is what it costs them. Okay. Now, who was hurt by low priced oil . The saudis, russia, the rest of opec, and the industry in the United States. Right. Well, nobody cares about the industry in the United States. Nobodys theres nothing there for them. But you, the consumer, are helped by 2 gasoline, and so our gmp is impacted by that, the u. S. Producers out here by themselves, and so there you have it. As a nation, yeah, everybody was. I mean, theres not that much producers around, so youre getting what you are getting ready to see is they are going to bring the price of oil back up. Cutting production . Opec will get to the point where they are cooperating not all pumping . Well, i mean, they are the ones getting hurt, so you say, well, already, the saudis theyve endured a lot of pain. Theres another theory that they can endure more pain to flush out the swamp and put everybody out of business. You think thats going to happen . I dont know. Thats a hetheory. They had enough. Youre going to see adjustments made. And they got a new sheriff in town with the russians in the middle east. Musk in San Francisco this week talking battery power. He thinks two, three, four years from now, everybodys going to have Battery Powered cars, do you buy that . The guys smart so i wont say he doesnt know what hes talking about, but right this morning, the only thing moving that 18wheeler down the street is natural gas or diesel, and look at the diesel. Volkswagen, can you believe volkswagen is the only one cheating . Thats what i was going to ask you. Do you think everybodys cheating . It would be unusual that volkswagen is cheating by themselves and everyone else is good enough to have emissions down on a straight basis. Logic of this old man and him, hes getting old. I know it. What do you think . Oh, i think people will buy diesel cars deserve what they get. I dont know. I had one once. You say they will no, i just no, but theres just do you think it goes beyond diesel . Do you think it goes where just regular what we use here, those are are gaming the system on those as well . Gasoline . Yeah. Diesel is a unique situation. Diesel is not a big part for us. Take the trucks out of there. We had the conversation before. Thats 3 million a day. Right. Its oil. Right. You dont the who makes all the diesel engines for the trucks . Peterbilt, cummins i dont think for a minute they are cheating. Thats what i was saying, you say its unlikely volkswagen is the only one, but do you think that regular gasoline powered which i should have thought of, i was not thinking about gasoline just diesel. Anyone who still drives around a diesel car dr. 50 million vehicles in america. Yeah, how many diesels . Change the fuel, oh. Man. You would have an unusual but, you can rely on me, andrew, on this one, that theres plenty of natural gas in this country. I tell ya, you look at how many people natural gas price has cost their jobs, ceos, your friend, aubery. Hes your friend. Yeah, got me, im a victim of that too. I thought we would have 5, and i was amazed how long a streak, at 68 years old, that they said, we dont want to start the season with a 68yearold quarterback. You meant i was experienced. Im not even i dont start with a 6 yet. Im experienced. Not old yet, boone, right . Well, you have [ laughter ] however i want to phrase it. I said you were not old, and you said i was. Repay me saying im not old. I was trying to be nice to you. Youre not old, just experienced. Thanks, joe, but i was born in 28. Hey, boone, thank you flood watch coming in today. Am i through . They are playing us out. You can hang out if you want. I have people see they come by here, coming to see you. I told them id be here. Well, stay herement dont move. When we come back, health care play. 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. 8 welcome back to squawk with the feds keeping rates at 0, investors hunt for yield, and a bright spot is the reit market, welltower tapped into the 1 trillion market focusing the business on the growing, ageing population. We have the ceo and director of the newly renamed Welltower Health Care reit. The Company Announced close to 4 billion in investments just this year. Good morning. Good morning. Why did you change the name before we get into whats going on in the world. Welltower speaks to what were doing. Sounds nice. Promoting welln t in heal delivery, and we think we are the catalyst to capital to make it happen. How much more consolidation do we see in the reit space in your world . In my world . You know, i think the announcement this morning was interesting and not unexpected. I think thats a good transaction for blackstone. I dont see much consolidation in my specific space. Our Business Model is very different. Focused with partnering on the top Senior Housing and top operators in the u. S. , canada, and the u. K. , and the major health systems. When we introduced you, we teased the issue of Interest Rates. What does that mean to you . Well, what it means to me is since january, the stock price under pressure, and the fact is we have a very strong Business Model. We are still making investments with an excellent cost to capital that reare deploying for the operators, and we have quite a bit of dry powder because we have advertised the company in the last month so our leverage has never been lower feeling good where we are. How do we make Health Care Costs go down rather than up for an ageing population . We have to keep people out of the hospital. We have to. Thats bad for your business. Not really. I dont own hospitals. I stop at the front door of the hospital. Our business starts with seniors housing, is keeping people healthy, redefining home, a place where wellness can be part of ones lifestyle. By that i mean nutrition, mobility, and cognitive and social engagement. Hard to do that in the three bedroom, two bathhouse in the suburbs that you raised your family in as an 88yearold widow. Whats the annual cost for somebody who is in one of your locations . Depends on the level of acuity. For independent living, we have communities, very nice communities in the major markets in the u. S. That could be 2400 a month. For someone with alzheimers disease who needs 10 hours of direct nursing care a day, thats 15,000 a month. This is a terrible question to ask, which is a higher margin customer for you . You think about it that way . Do you have to think about it that way . Its a good question. We dont think about it that way. We are helping to manage the ageing populations. The 85yearolds are growing. By 2050, are growing at 200 . 2030yearolds grow at 10 . This is a huge problem. Right. Up fortunately, as we live longer, the incidents of dementia and alzheimers is going to dramatically increase. We have no drug therapy that is shown efficacy for people with alzheimers. We need models to marry with new technology to keep the Population Healthy because that population deserves quality of life. Tom, thank you. Great to see you. Nice new name. Thanks. When we come back, is what you are saving at the pump really actually pumped back into the economy . Thats the big question. The new study is out on where folks spend the money. We have the details nextment dont forget to send us the stories you are buzzing about this morning, we share them later in the hour, tweet us your thoughts and use th the keepsquawking. Heading to break, dow would open up about 60 points about now, and were back in a moment. Actions. They speak louder. We like that. Not just because were doers. Because were changing. Big things. Small things. Spur of the moment things. Changes youll notice. Wherever you are in the world. Sheraton. Welcome back, stories we are watching this morning, dell in talks to buy emc who has been under pressure from activists investors, and shareholder, elliot management. Up clear what direction it moves because of what a deal would be structured. Fiat chrysler reaching an agreement on a fouryear labor contract. The union threatened a strike if the deal was not made by midnight. Many retailers report Monthly Sales today, and costco the first out of the gate saying september comps were flat. We have breaking news right now. Well get over to rick santelli. Well, we have down 13,000 on initial claims, now, thats not from the 277,000 released last thursday, slightly revised to 276. The new read takes 13 away down to 263,000. Cometing claims move from 2. 19 to 2. 10. Not big moves on continuing claim, and a week in the rears versus initial. Maybe the big ongoing news is the weakness in the data points whether you look at japan or europe on the export side, which is very important to Pay Attention to considering the whole issue of vw, and if theres any contagious there with the german engineering scenario. Theres evidence by the future markets lower, and that might put pressure on Interest Rates which continue to be supple, but to the upside. Nothing urgent, but we really cant put kind of the tenyear under 2 even equities weak. They have stabilized. We have the last of supply today with 13 billion reopened 30 year bond yesterday. The note option went well despite the story in the journal describing how many of the em countries, china, been in reck dags mode, and the number was close to 130 billion. That was less than two months of qe. Its not the end of the world considering the 4 trillion Balance Sheet just to put perspectives. Cubs back to you. Yeah, oh, yeah. You know what . Im not excited about the american league, but im really interested in National League series, rick, really interested, and i have not been that interested in years, but i want to watch. No. Its amazing. They said you could, you know, see the home run from the space station. Thats what we heard last night. Haha, really . I wont bring up the blackhawks, but it was cool. The big ceremony, everything, you know, for winning last year, and then they lose the first anyway, thats okay. You all right with that . No, no, thats okay. Its okay. We get to keep the cup for a while. You do. A new study challenging conventional wisdom, finding americans are, in fact, spending their savings from lower gas prices, not, i guess, banking it or paying down debt. Lets get more details with a special guest, steve . Hey, joe, thanks a lot. Big news on the gas spending front here that people are, in fact, spending it, and maybe the biggest news is the data set that it comes from and the new institution putting it together. Im here with the president and ceo of the new jp morgan institute. Thank you for joining us. Thank you for having us today. Talking about this in a second, you are now using data from 25 million chase credit and debit cards to figure out where and what americans are spending. Lets talk about what youve found when it comes to the gas price savings. Lets do that. For a second, i have to describe how its different. Right. And get to the findings. The institute is really dedicated to next generation of economic research, big data, Technology Platforms meets behavioral science meaning what happens in the transactions against that that that are primary transactions of the activities. What we find by looking at the 25 million accounts is that contrary to what conventional wisdom said in the last while is in this last period, steep gas price declines, people are spending most of what they save at the pump. They are spending 80 of what they spend at the pump. Typical number out there is 45 cents uses, and its almost doubled that . Almost doubled that spent on restaurants, 18 of it hold that off. This chart shows retail spending by people who are median gas spenders, and it was 14 00 a month, and when gas prices fell, that boosted to 1500 a month, the nongas spending. Showing one indicator. You talked about where the gas savings go, and an amazing fact, i think, from this is that people save on gas and spend at restaurants. Exactly. They spend in restaurants, 18 , grocery, another 10 , but you saw it boost to other categorie categories, department stores, entertainment, electronic, and appliances. These are realtime transactions so we see, in fact, that the spend has shifted over and that people are spending 80 of the savings at the pump. So one question thats come up is why dont we see it in the data . Why first of all, obviously, you see where the money goes, some goes into services that may not be picked up by the retail data, but why isnt the impression out there that Consumer Spending is stronger than it is if 80 cents is going to spending . Thats one important piece. Were not seeing through the typical measurements of expenditure retail, and were seeing all spending, whereas debit and credit card, looking at this, is a broader slice, but i think more importantly, for the aggregate data, the reason you are not spending it is gas spent is 5 of total consumption. You can see how a change in t5 is overwhelmed by the other die nap nappics. With behavioral science, we can see the impact of consumption is attributable to gas. People in the south and midwest drive more so they win more. They drive more and saw steeper declines. Why . Lower gas taxes so the underlying gas price matters more to them than in the other western states. People who earn less gain more through gas price decline. Absolutely. Younger folks and low income folks spend more on gas than others do. Two quick things. First of all, this data, 25 million this is actual data from 25 million credit card and debit holders, concerns on anonymity here . All big data has this as an issue. We have, i think, defined the frontier of how we privatize data, so we bring in these data from individual transactions into data repositories that are scrubbed of all personally identifiable information, and anyone with access to them goes through the protocols to ensure that these anonymity and privacy controls are in place. Whats exciting is we are making Data Available for the public good to better inform whats happening in the economy. Rather than survey data, this is transactionable data. To get me joes transactions, you can get me that . Absolutely not. Its important we do it that way to giep a lot of value from the transactions, but we have to respect and do respect privacy. All right. Thank you for joining us. Back to you guys in anglewood cliffs. John forgerty is coming up, not a dead fan, too spacey, but credence played a lot in San Francisco. When we return, john fogerty comes to talk about music, misstem, and lessons learned. Theres no eagles. Stick around. Right after the break. Weve got trouble in tummy town. Peptocopter when cold cuts give your belly thunder, pink relief is the first responder, so you can be a business boy wonder fix stomach trouble fast with pepto. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can seek to outperform. Thats the power of active management. Man, you know, im having a bad day already. Not the eagles, man. This is the actual song that was being played in the cab with jeff bridges. He gets thrown out of the cab, man, the eagles . He loves credence, and thats what we are talking about. A memoir covering his life and career as a music icon, john fogerty talks about the entry level contract the members of credence signed as young musicians, and its one of the worst stories, one you think about, but, you know, young guys that did not know they would be big taken advantage of. Well talk about that with author of fortunate son, iconic song, obviously, the song you got, like, ten iconic songs. What a career, right . Thank. I have not counted, but bad moon rising. I mean, proud mary. Thats. Covered how many times . Do you know . I dont know. Hundreds. When you first sat down, i said, can we go see you have not seen it yet . Well, yeah, i apologize. Im sorry. Ive seen parts of it, you know oh, you have . Oh, sure. All credence, the eight track tapes, all he listens to, and i thought that was classic, a positive character. He told me that when i was on some talk show when i was in new york that premiered the movie, and i didnt know about it then, but he said, we play your music in the movie. Cool. Exactly. So there are a lot of stories. Who was he . A manager . No. He just bought embassy records. Record owner. You asked to look at the k contract, a lawyer, right . Thats true. Saul, the owner, gave me, i was down at his office; he gave me a copy of the contract, and he said, well, look it over, whatever. You know, so i took it back to the band, and we, of course, cant read that. I can read, but i cant read that stuff or understand it, so we decided to give it to stu cook, the bass player, to have stu take it to his father who was an attorney, a rather prominent attorney in oakland. His firm remitted the Oakland Raiders among other entertainment people, and weeks later, stu says, well, dad says its okay to sign. And it was 10 royalties. What should hait have been . What was fair at that point, do you think . Well, we were getting 10 of total sales, not 10 of what you pay in store. Wow. So thats really, like, 5 . The guy with a straight face said if you guys get good, that well renegotiate . Well talk . That was the second question we asked. Well, what if we make it . He said, well, ill tear up the contract, and well make a new contract, but, you know, well share in this i think he said equally, but, of course, the first question we asked was, can we change our game . We were gollywogs then, and we hated that. What was bad about it . He owned all my songs before i wrote them, so, you know more upset with him, stu, or his dad . Upset with the owner of the record company. Nowadays, when i look back, you really did not make a big deal about, well, stus dad should have told us this and that or maybe stu never showed it to his father. We were all young. Stu was just getting out of college, and, you know, its one of those ill never know. Only guy in the universe who knows is stu if his dad saw it. Is that your songbook, the book you wrote the songs in . Its a song title book. I think when i got out the army in 67, i decided i needed to get more organized, you know, up until then, at the inspiration for a song hit me, id find a napkin or something, and i determined, if i do this for a living, i have to be organized. I got a little binder down at the local store and paper and came home, and i wrote song titles on the first page, and the rest was blank. Whats the first one . A few days within a few days i had this phrase going in my ahead, proud mary. So i went to my book there was nothing in it yet, and so on just chills looking at that unbelievable. It said proud mary. No clue what it meant, no idea what to do with it. Really . Yeah. A few months later, actually, i was, i had just received my Honorable Discharge from the army, and i was pretty happy, and so i went right in house and started fooling around with some cords, and within about 20 minutes, i realized, oh, this is a song about mississippi river, and a river boat, wow. So i needed some, you know, i need some grounding here. I went through the book, and i saw proud mary in there, and i went, thats it thats the name of the boat proud mary. You went to someones grave, maybe hes channelling stuff through me. I thought that was crazy, but the way you talk about it, so proud mary, the term was in your head . Its very weird. Its just words. It was not a song. It was just words. Weird. I didnt know what it meant. Now, you play i had a chance when i was young to see you in cincinnati. I was tuoo young, and it was in the cincinnati garden, and just looking at the concerts, you played San Francisco so much, live venues, and woodstock you didnt think you played enough there to be on the album or movie or well, it was very late, as you know, things were kind of loose, it was run by hippies, and, of course, we were all hippies then, so a huge grateful dead fan, just on, and the problem was that the dead were so, like, boring and laid back at wood stock, they were all asleep by the time they came on. Is that what happened . Yes, and years later yes, there was a period of an hour where they were there and there was no music. Just as they were walking on stage, and then, of course, they took its effect, and everybody got lost. So it was a crowd response to credence, but didnt think it was good enough to go on the album . Yeah. Mainly, you know, i was so used to seeing people just up and freaking out and vaccihaving a time, you know, and i got to a point where i was really trying to get them going, and they wildfire asleep, half a Million People asleep. Did you know that . Yeah, i did. Go ahead. I was going to ask about the current music business. Okay. I want to know about spotify, apple music, stream, and what you think of whats going on now . Oh, well, its the world we live in. I mean, sure. Terrible economics . Good economics . Theres a way to make it work . Its pretty tough for a musici musician, you know, i kind of picture musicians right now in the same boat as van goegh, never earning a dime in your lifetime, maybe cut off an ear or something. Right. I dont know. Is it as bad as fantasy records . Probably not, but its tough. No. Its getting better, but because of the digital domains, as you know back in the day with napster, they what did they call that . Ripping . Yep. There was no money at all. Once one person downloaded out there, its out there for free forever. And it is, actually. What do you think about hearing your music played in so many movies and so many times you dont get any of the royalties back from that. Do you like hearing it played . At the time it did not make me happy because no one asked me. I never knew about a movie my music was in until later because i was not consulted. We were treated very badly by fantasy records, and the owner of my songs, and so, you know, thats a sort of thing that would ha, i mean, you want to negotiate. You want to have some sort of, oh, action in the process, action in the process. The finances, i never saw any kind of contracts. I had no idea how much money they were being paid. Therefore, i never knew how much i was getting out of that. So that sort of thing made me angry, i guess, at the time, and confused. Now, i look back. It is nice that my music is in so many neat movies. There were a couple of clinkers, though. I didnt make that choice, folks. It is an iconic scene in forrest gump. You sold probably 100 million records. So you should have and then i think about the library itself, the beetles. And 100 billion records. I am thinking what kind of numbers that should be. Thats a huge nup. They were never audited back in the day. Therefore, we never got a real gold record. Because, of course, they didnt want anybody looking at their books. It was a big mystery. Everything that happened before sound stand, when they started actually keeping track, no one really knows. You have our fan in our ceo, best rock n roll band ever, markoff man. It spans generations. It is great to see you and have you here. Well, it is wonderful that i survived long enough that i now get to enjoy the whole thing. Thats the way i feel. Life is great. Thanks for coming out. Thank you. You bet. Thanks. When we come back today, jim cramer from the New York Stock Exchange. Features have been weaker. Dow down by 60. Squawk will be right back. 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. singing you wouldnt haul a load without checking your clearance. So why would you invest without checking brokercheck . Check your broker with brokercheck. Welcome back. Lets get down to the New York Stock Exchange with jim cramer. My question is, emc dell. How do you play it . What do you think of it . I will defer to david faber, who is franticly working on the story. Emc buying dell, dell may be buying emc and that there is no deal whatsoever. I would say this would be a gigantic amount of money to be able to buy this company. I think that emc is chronically undervalued. If faber says it is real, i will believe it. It doesnt make a lot of sense if dell goes out there and buys it and emc, if they buy dell, i would have to cut numbers substantially. Anything else on your radar . Dominos is on tonight. I know people are saying this number is weak. I am looking through it. It doesnt seem as bad. Costco, the numbers look bad. I think they are much better after you x out foreign currency or gasoline. Take no action on either one of these. I want to buy costco in any dip. We will see you later on mad money with dominos as well. Up next, well get a check on the markets. Squawk box will be right back. Can a business have a mind . A subconscious. 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 . Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Dow futures down by 66. The nasdaq down by 19. Time for keep squawking. We have been talking about the countdown to the Holiday Season being on. Only 77 days until christmas. The nationalle Retail Federation predicting annual sales to rise more than 3 . A lot of buzz on twitter about the holiday wish list. One squawk fan telling us, it is way too early to Start Talking about christmas. It is too freakin early, are you nuts . Gentlemyes, we agree with yo early. Im glad you are back. The week is not over. Another day. Thursday. Zoe yesterday. Jay leno. You missed the party. The party missed you. To divides. Make sure you join us tomorrow. Squawk on the street is next. Good morning and welcome to squawk on the street. Im david faber along with jim cramer. The two of us are live from the New York Stock Exchange. Carl quintanilla has the day off. We are looking for what would be a down open right now on the Broader Market and the dow joans and nasdaq as well. Overnight in asia, you asked, what