Transcripts For CNBC Squawk Box 20151009

Thats right, 50 lanes merge into just 20 lanes. We thought we had it bad here but check this out. This was hours with these people at a stand still. We show you this to make you feel better about things about yourself today. Some people abandoned their cars. That used to happen years ago in china. Maybe five or six years ago and then suddenly people would just walk away from their cars and into the villages. But wow. This makes me feel better about my commute today. You dont live in l. A. That doesnt look a lot different from the 405. My first thought was china and Second Thought was l. A. But what is the widest highway . How many lanes . Not 50. But wide. Like 5. Like 5. And across on both sides but yeah, 50. So lets get to the u. S. Stock market. Were looking at what is potentially setting up for the best week since february for the dow and since december for the s p 500. This morning things were flat but we did see gain across the board yesterday. Well continue to watch this. A couple of stories were watching this morning. Falling short of estimates. Company hit by slumping Commodity Prices including aluminum. The stronger market not helping things. Shares down on that news. Next month they announced they would split into two companies in a bid to revive the stock a little bit. Also european Freight Company buying u. S. Based rival uti worldwide. Doing that for 7. 10 per share in cash or about 1. 4 billion to roughly 50 premium to yesterdays closing price. Elon musk has never been afraid to speak his mind and today no exception. He brushed off concerns that am could become a new car competitor. He called apple the tesla graveyard where employees that fail at his company to go work after taking a jab at the apple watch. He then went on to say cars are very complex compared to phones or smart watches. You cant just go to a supplier like foxconn and say build me a car. It almost sounds like they struck a nerve with that. I dont think ive ever heard him say anything that pointed. Ive never heard him that strongly worded against another company. People peak sometimes. You were talking about how anybody that talks about elon musk talks about him in these tones no matter what hes talking about. Thats weird. I understand that the iphone is not a car but if i were to look at what transformed the entire world in terms of the way we act, okay i like your electric car but id like it to go 300 miles. Y you havent done an iphone, you didnt invent the personal computer. Im very impressed by elon musk. Look at all the things he thought of that didnt happen. He has no right to throw stones at am. Im not going to knock him. You knew steve jobs. Elon musk is not a steve jobs yet. I think hes getting there. Hes in training but hes not there yet. You know who his best friend is. Who . Larry paige. So google is making cars the whole time and you never heard a word about google. Google is another one compared to tesla at this point. You have work to do to rise to the point of how transformative google has been as well. Hes had a couple of bad experiences. At least hes trying new things. Thats fine but the other person, his history is already complete. This is in training. How old is he . 44 years old. Cofounded paypal and tesla and rocket ships. You love people about inventing themselves and creating something out of nothing. I think that you can jump when too many people defer everything you say, they write it down as its coming from, like your infallible and you can jump the shark and then hopefully theres not a humbling experience on the way. Hes had some humbling experiences. A Company Almost went out of business. Like two hours left before they were able to save the company. Maybe its just trash talk. Thats why i think it has maybe hit a little close to home when you react that way. Ill have to check twitter. Which camp has more more of the wacos. That ought to make everybody happy. Good. I got them both. Commodities giant glencore is cutting 500,000 tons of global zinc production. About a third of the annual output. Prices dropped 30 to five year lows. Gap shares are underpressure. The retailer says september same store sales dropped 1 and watch shake shacks stock today, they will convert about 20 billion shares into class a shares. It will let preipo Investors Cash out. New analysis reports suggest that mac sales are slowing to the lowest rate in two years. Shipment of the apple product dropped 3. 4 year over year. It marks the slowest growth rate of am computers since 2013. Turmoil in the Republican Party. Kevin mccarthy dropping out of the race for the House Speaker at the last minute stunning just about everyone. John harwood is covering the story from d. C. What the heck happened . What the heck happened was that the House Republican caucus came face to face with the fact that it is in chaos. You have a faction of members that dont know how to govern or arent terribly interested in governing and they collided with those who are and Kevin Mccarthy found that he did not have the support needed to take over the reigns from john boehner and we went into yesterday believing he would be dominated by the Republican Caucus and instead he came out and made this announcement which took everybody by surprise. The one thing i always said to earn this majority werer is haven was confidence. Ill stay on asthma joir majori but if were going to unite and be strong we need a new face to help do that. So nothing more than that. Now the reality is its not a new face they need for the Republican Caucus. They need the faction that has been making it difficult to govern to acquire the maturity to play with others and thats the problem. Paul ryan who is, people are trying to draft into this job may for a short time be able to paper over that gap but he would face the same thing that john boehner and Kevin Mccarthy did. He made a deal with patti murray on budget levels. The conservatives did not like that deal. Paul ryan is going to have to make more deals like that if hes going to be successful as long as we have a divided government and until the Freedom Caucus and people like them come face to face with that theyre not going to solve the problem. I saw somewhere john, i think it was in forbes where they basically say this is parliamentary politics. What the republicans are dealing with is a loose coalition of 2 or 3 different parties. I dont know how you resolve that issue or why paul ryan would be able to hold it together for much longer than mccarthy or boehner would be able to. Hed be able to hold it together for a little bit longer because of the credibility he has as a conservative. People dont doubt where his heart is ultimately but this is about maturity and the people who dont recognize the limits of the political power they hold in a divided political system, if they dont acquire the ability to recognize that then the republicans cant do their business. They can do it in the senate but they cant do it in the house. The guys in the freedom, even congressman brat they have their own guy that they like in florida. Same name as whats his name, Daniel Webster . Is that it . Yeah, dan webster is not really their candidate. Hes a place holder. Yeah but then, it was saying him but when they said what about paul ryan, said absolutely. Called him transformational and could go in but doesnt sound like hes going to. All the stuff thats interesting about how split the caucus is, that is interesting but i think theres more to this story than were reporting on and you know that there is. You saw the email sent and the letter sent from the gentleman. Are you talking about walter jones and all of that . Yeah, thats fine and i dont doubt that there may be other layers to this. Theres other layers to this and just his demeanor. Fair enough joe but thats not why john boehner stepped out. No, im talking about mccarthy. I understand. But until you resolve the issue that forced boehner out you do not have a functions caucus. I know. I understand that. Whatever mccarthys problems and the same thing is going to hit paul ryan again no, no thats not what im talking about. Okay. Im talking about the inability of certain people to accept the limits of what they can do and what they cannot do. When boehner stepped down everybody read this, the knee jerk reaction that well get through the debt ceiling and get a budget extended that carries us through the end of the year. What are people thinking at this point . Boehner agreed to stick around until the next speaker is found but what happens with this whole idea of being able to shutdown the government at some point or another . The irony becky is that by extending this chaos for a longer period of time into the fall its going to keep john boehner on the job and make it more likely that he disposes of the issues and avoids the shutdown and the debt limit crisis. I think that john boehner as a patriot and somebody that sees what his party needs to get done and avoid is likely to resolve a yearlong budge deal and raise it through the 2016 election and when he walks away and hands this terrible job to somebody else he may have, as he put it the other day, cleaned up the barn a little bit. Thank you. Well talk to you again soon. Lets turn back to the marke markets. Melting up again yesterday. Its down 30 or 40 points. What reason . Its been moving higher ever since it turned around. Its the weird issue where it helps the energy stocks. Its been up since friday. Its been up since the fed is back. We are back to the west week for the s p since december and the best week for the dow since february. Yeah, october is just beginning though. It aint over yet. Were back on the you dont watch fear the walking dead but you see someone trying to go through withdrawal. Its horrible. You throw up and youre sweating and you get a little more and you seem fine again. Youre feeling good. Functional. But youre still on the drug but youre still feeling better. Joining us is lou green. David voi. Really lou, thats, you know, were getting more mileage out of easy money again . Thats probably the case because after the fed took a pass in september and then the jobs data was, you know, the worst looking the deeper you look into it and people are pushing into the future the idea of when the fed is going to raise rates. However they havent backed away from the idea that theyre going to raise rates therefore i think theres limited upside just like there has been limited upside throughout the last six years. The market goes up when the fed expands its Balance Sheet and the s p is where it is now so thats the tricky thing. If there was to be a suggestion of more qe then you put the after burners on but right now i think that just delaying a rate hike is probably not enough to push us back to the highs. I have to get used to the idea of even thinking there could be more qe. So then wed have to start watching for when we could end the qe again and wed be in the waiting game for ending the next round of qe and then start the waiting game around if we would ever go up. The one thing with waiting for the end of the qe, that hasnt played out. The market over the last six years as the fed Balance Sheet expands the market goes up until its done. Do you really think after burners could go on . Thats been the pattern for the next six years. David where do you think we are right now . Is the market going up on easy money or going up because we still have the prospect for a pretty good economy compared to the rest of the world . I think its the third option. I think its were going up because the fed stayed on the sidelines and took pressure off the u. S. Dollar and theres a lot of fears that you would see them rush out of emerging markets and that didnt happen until the fed meets again. I dont think the market needs anymore stimulus. I dont think we need anymore qe. The u. S. Economy is okay. This is an International Issue and its all related to the dollar in my view. So this rally can extend as long as the dollar stays in the range its in now and market is going to go back down. Part of the reason that oil has gone higher. Not just supply and demand but also the dollar. So david, were you fortunate enough to deploy any cash when we were threatening to break 16,000 . We most recently trimmed our equity exposure a little bit. Were fully invested but we look at the fundamentals and were seeing economic deterioration internationally of course but also at home and since the fed met you had a weak jobs number and weak manufacturing and exports. Wage growth, 2. 2 again so we slowed down since the fed met which suggests they wont raise rates until march. I dont think the fundamentals support this rally. Were enjoying it while its lasting but i dont think its sustainable until you get more traction. Well have to see that starting with china in a couple of weeks. Big round of data points coming out of china in the next couple of weeks. Thats going to be important. Would you say youre in a mode where youre selling rallies and not buying dips or would you just happen to trim a little . Would you trim more . I would trim more if i thought china was slowing down even more. Of course you can speculate what the real growth rate is. If we felt it was going to 5 or maybe to 4, i would say yes wed probably have to think long and hard about trimming more. Theyre mad at the colonel. I know that. I saw what happened to yum brands but thanks. I got a scare when i saw that traffic jam. What if every Single Person in china get ace car . Even if its electric cars. You need to power the grid to charge the cars. If everybody in the world is driving a car not everybody in the world can drive a car. Why cant they be like you . You dont have a car. I dont. Youre not part of the problem. Im not. You put your money where your mouth is. Exactly. Youre a good citizen. Theyll get uber eventually. No, they already have uber. They do. The rock and roll hall of fame is about to get some new members. Nominees for the class of 2016 Just Announced well bring you those names next but first as we head to a break, take a look at this date in history. 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. Rock and roll hall of fame announcing class for the 2016 nominees. I like some of these other ones. Good because the ones that we were talking about the acts eligible for induction, the cars should definitely be in. Chicago. I cant believe chicago is not in. Cheap trick, two hit wonder. No thanks. Deep purple should be in. Janet jackson thats who youre listening to right now. I would defer to andrew on anything jackson related. Does janet rise to the level . Id give it to her. Absolutely. I know you like michael. The jbs. Who is that . Not sure. Steve miller, i know becky likes i like steve miller. Nine inch nails. Thats awesome. Come on. Nba. Definitely. I cant believe theyre not already in. And the spinners. The spinners, you probably dont remember but they were big. I cant believe the cars arent in it. You dont want Janet Jackson. You think nwa should be in it. Is it rock . No. I dont know how it works. I dont know how it works either. With janet i dont know how it works either. Theres an 800 person voting membership. So its like the Baseball Hall of fame or something. Okay. Yeah. Yeah okay. I dont know, andrew. How many Janet Jackson songs can you name . I can name zero. You were just listening to one. I know. But i dont know it. Its janet, miss jackson if youre nasty. There it is. Okay. I remember the malfunction. Thats what you remember her for . The malfunction with Justin Timberlake at the super bowl. You dont remember that . I do. I just described it. Well, you acted like you didnt remember it. But you would have had to of been watching football to see it. I watch for the commercials. A little bit of news this morning outside of the music world. Finance ministers and central bankers are gathering for the imf world meeting. Thats where we find jeff. Good morning, andrew. The message now at this Imf World Bank meeting has been we risk another Global Financial crisis if policy makers dont Work Together and the sub text to this has been a message to the Federal Reserve not to move on Interest Rates too quickly. Christine lagarde saying theres too much debt and leverage in emerging markets. Very much the focus on the American Consumer still continuing to pull the Global Economy along and the Federal Reserve not doing anything to damage that. I was in a late night briefing with the treasury secretary who has arrived here now and he said you know what, there is the capacity and the will elsewhere in the world to try to pick up some of the slack here and he pointed the finger at europe and asia and said this is not a job that the United States needs to do alone. We need to see those countries also engaging more aggressively in creating demand and you know what, he also turned that twin message of the capacity and the will toward congress and said there are a number of issues domestically where we need to see Congress Pick up the slack and he pointed out tpp in particular. Of course weve seen Hillary Clinton come out in opposition in recent days to that but he said we do need to see ratification on that and he also said we need to see the debt ceiling raised. The Exportimport Bank back in business and funding for Infrastructure Projects but the point of jack lews message was to focus on the imf and the world banks view that the u. S. Needs to be doing more here. Saying the rest of the world also needs to get a little bit more in the game and demonstrate the will they want the Global Economy to grow at a faster pace than it is currently doing. Back to you. Thank you very much. When we come back this morning, attention all your road warriors. Before you throw away your boarding pass listen to our next story. Why you could be at risk of identity theft. Well get to that next. Squawk box will be right back. Excellent. Researching a hunch, and making a decision. Time for a change of menu. Research and invest with e trades browser trading. E trade. 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. Is she going to make it . Somebody else sang it. But thats her song. I saw her perform it. She could be inducted into the rock and roll hall of fame. Well be playing this music all morning long. If youre like me when you get your boarding pass when you check in you probably forget about it. I use it as a bookmarker. Winds up on my purse or on the floor. Maybe something happens to it. Theres a new report that suggests you better be really careful with that stub because all the lines and pixel marks on it contain a lot of personal information about you. Theres security that found out this guy took his friends boarding pass and was able to find out his frequent fly kwier number, name, information and was able to take control of the account and create a new pin number. Even if they give you just a stub . Yeah. Dont you just use your iphone. I feel like if youre using paper. But its nice to have the boarding pass. I worry if my phone runs out of battery so i print it out anyway and keep it with me. I go straight with the phone. I downloaded the ios 9 immediately. I make a lot of rookie mistakes. You know how do this. Im waiting for the next one. Been a week or two. We are talking a lot about the hall of fame. Right. Music hall of fame. So im excited about it but the mets are in playing the dodgers. This is exciting and then you have the cubbies are in playing st. Louis which has been a dominant team. So im excited. Im watching last night on fs1 and pete is one of the commentato commentators. Pete rose . Yes. No way. But hes wackier and crazier. Hes so insane. Someone said something about it and pete himself said dont talk about hes got this weird sort of cadence. But he was good and they were all standing up and he had a bat. He was the greatest hitter ever but hes crazy. Now theres a controversy over whether he should be in the Baseball Hall of fame. The reason i thought about it this morning is because someone tweeted is his the jet dark. Someone tweeted does pete dye his hair and then they said joe kernen could advise on that. They mean because im from cincinnati i think. No. Yeah they do. Theyre questions your hair color. You know now i got how can i i know its real. I can see right here. Not that theres anything wrong. I dye my hair. I know but i did the leaf blower challenge for the haters. How can i prove its now dye. Lift your chin right there. Youre right. Can you get in and see the grey. Zoom in. The grey is there. You can get that to look that natural. Maybe its too perfect. Im sorry that my hair is too perfect. Im sorry that im too perfect. The things you have to live with. Tonight both nl teams like pete was classic. Who is going to win the royals . And he goes well kansas city is more of a National League play. National league team. Thats where my money is. Exactly. Anyway, do you like the cubbies. No. But who is your team . Yankees. That hurt the other night. I know. One night after 162 games. But im a new yorker so i should root for the mets. But youre right the cubs finally break the curse. Jerry seinfeld a lot of big people are mets. I never liked them. I liked them when wilson was playing for the mets. Like a long time ago. Its really not that long ago. Final story, netflix. Do you both subscribe to netflix now . Netflix. Im tempted to go back on. You do subscribe. Theyre raising the price by 1. So what. But remember the last time they raised it it creates problems. It was a 40 increase or something crazy and after they promised people they would keep it lower. So now with hbo going over the top and hulu and amazon and everyone trying to do the same thing, is there more competition and does that change the dynamic . Is a dollar too much. Its been on my list of things to do and a dollar will not stop me. And by the way content costs theyre going to spend 5 billion in 2016 to buy content for netflix. 5 billion annually. They need this price increase. Because theyre having to buy content movies and tv shows. Theyre probably going easy because of the past experience but the dollar doesnt seem out rages you. I like it but im still mad whenever i try to find a movie you dont want to watch that. Its going to be harder and harder. Thats why theyre investing so much on original content. Right now the competition for movies and other things. You can try to watch jaws and theyll try to talk you into watching splash. Its not the same on most cable offerings you can find any movie you want to rent that night, 3. Oh, you havent seen, there are certain movies everyone should see. You do peter pan on netflix and they show you a play of peter pan from chicago or canada because they dont have the rights to the real thing. He walks on water too and Reid Hastings or whatever. You better get some movies on there to be able to watch. You are a tough critic this morning. The new American Horror story hotel, kathie baits is so scary. It was troubling. Disturbing. I saw things i was hoping my kids werent looking around. Coming up, geo political hotspots, were joined with a map of the stories that have him worried. Right now. trader vo i search. I research. I dig. And dig some more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. We heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Con semiing russias intervention in the war torn country. Our next guest thinks we have moved a step beyond a proxy war in syria. Do you want to talk about russia . The whole missile situation. Landing in the wrong place. The americans are saying yes and the intelligence hasnt been shared. Explain what were talking about. The russians having launched a battery of cruise missiles that didnt hit their intended destination. They did not warn anyone that this was going to be done until they were flying. The fact is, deconflicting is hard with a country that youre saying youre going to isolate as far as you possibly will. They have intentionally been breaching turkish air space which is a nato ally. And european air space too. I consider the turks european but the europeans dont. But clearly the syrian war will be worse but the potential for conflict and between the russians and nato ally is real. Its the equivalent of a bad child saying you will Pay Attention to me and engage. This is strategic and i dont think its stupid for putin. S a assad is losing power. The iranians can provide Ground Troops so the russians dont take as many causalities. Thats why they waited for when they did plus the europeans are trying to get rid of sanctions on ukraine. A couple of days ago the militaries on the ground said they were going to back off of their election that they were planning which is illegal. The cease fair has been holding. The russians are basically saying ukraine can be frozen but if you want any solution down the road youll come through moscow. This helps them end the isolation. The americans are saying theyre deepening. When clients call you and your number one global risk right now is what . Whats your time frame . If its a medium time frame its the arise of the shortterm standards. If its the shortterm time frame it would come from the escalation of the russian issue. You mentioned that theres new news on the china cyber. You know the summit went well. It was well managed but we did say beforehand that we were talking about putting sanctions against them because Chinese Companies have been benefitting from cyberattacks against the americans. U. S. Government came out a couple of days ago and said there are three Chinese Companies they have identified that have directly benefitted from cyberattacks. These are state owned enterprises in steel and aluminum. It is a big deal. If that means we are a precursor to direct sanctions because you cant say it and do nothing what are they going to do. We can. We have done it before. True. Thats fair point. The right commentary from the right on the meeting was to come out and to say we have arrived at an understanding on this so they wont do it anymore on the cyber they thought that was a joke because they thought the chinese got the best of us by pretending to agree they wouldnt do it again. When will we know if there was an understanding . I think members of the Obama Administration that came away from that said were glad theyre at least willing to say theres a problem and sign their name to something but they werent expecting a change in behavior. No one it seems like serious it seems like we shouldnt be quite as ready to embrace all open and free relations with china if they wont somehow curtail this. And the problem that you have is that we dont have the tools on this issue. When the chinese are attacking our companies we know its undermining them and im going to organize a summit and invite them and theyre going to come and theyre going to beg me to have more access to my market and tell me how wonderful i am. We dont have the ability to strategically align with our private sector who are doing Everything Possible to out flank each other. Mark zuckerberg said would you suggest a symbolic chinese name for my newborn. Are you kidding . No, i swear to god he did that and xi jinpings response was im not going to do that and n im not letting you do business in my country. How do you respond when the people taking it on the chin are saying publicly no, we want to get in. The potential for sanctions to be implemented against china because of this persisting and expanding is real and the companies are not small companies. Theyre Big Companies owned directly by the chinese state. I dont see this getting fixed. Why dont you see some form of retaliation in a terrible, terrible way. By the chinese . Yes. The reason im mentioning this is if we heavy sanctions even if theyre small against three Chinese Companies i dont see how that doesnt become tit for tat very quickly. When we started leveying sanctions a couple of years agatha didnt become anything we wanted. Theyre nothing compared to us. It doesnt effect america but chinese lets not draw red lines. Lets not draw red lines. We could use a different color. Some grey. I think most of our lines are grey and makes it easier. Thank you. Great to see you this morning. When we come back this morning, the start uptaking the socalled on demand economy to a whole new level. The company that brings a beauty team fit for hollywood stars right to your doorstep. The glam squad is here and well talk to them when squawk box comes 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. 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 this morning, investigation into ubers data breach last year in stolen drivers records is focusing on executives at rival, lyft, thinking an intruder used a Company Security key on a public website to access up to 50,000 driver records. They deny the executives in question or any of the employees being involved in that breach. Thats intriguing. Intriguing. I dont know who to believe. Well talk about a company applying an uber model to the beauty industry. Glamsquad is an on demand app thats a beauty provider delivering professional hair, makeup, and Nail Services to clients in new york, l. A. , and miami. Glamsquad raised 15 million. And joining us now to talk about the latest financing and the future of the ondemand economy is glamsquads cofounder and ceo, alexandria wilkeswilkenson. Thank you for being here. Thanks for having me. They can be at my house in an hour . They bring elite beauty independent professionals, delivered to your home or office or hotel room in three cities, new york, l. A. , miami, and theres three beauty services, hair, makeup, and nails. The idea. Uber makes sense to me, and i get this, but how do you make them feel comfortable, they will do my hair and makeup. Is there a ratings system . How do you know who shows up at your door . So we are very conscious of how important it is to send the best of the best, so we make sure that all of our beauty professionalings are licensed, trained, have thousands of hours of experience before they even come to try to be a part of glamsquad. We take only 8 of the beauty professionals who apply to be pa part of the squad and take it seriously. We go into the clients homes every single day, and our clients give incredible feedback. Some use us two to three times a week. Wow. Do i get to choose who shows up . Whoevers closest, available, the first to take the job . Do i have input at all . Typically, we find our clients rely on glamsquad and all the beauty professionals are able to execute our signature looks. We have different looks, different names, and you can customize those looks so if you want your hair straight, thats the editor. If you want volume, thats the bombshell, but you can tweak a service so that youre happy with what youre getting. So what type of Hair Services are we talking about here . So we offer today blowouts, updo, focused on women, no cuts, no color. Oh. Nothing for the guys yet . Were happy to send manicures and pedicures, and some men are using those services. There you go. Its a cool idea, but whats to stop somebody from using your app, saying what they like, and whats your number, ill do it on the side . Thats a great question and something we worried about in the very beginning, and what we found sour beauty professionals are so busy, they are often making they have the potential to make 1. 5 to 2 times what they made previously, so they are loyal to the system. They know that if they were to be taking side jobs and sort of taking clients away from us, they could potentially lose so much upside in working with us, so it really doesnt happen. At the end of the day, the client, shes time starved. What cut do you take of this . So, one thing thats great about glamsquad from the beauty professional is they get 20 gratuity. 50 dollar blowout gets an extra 20 gratuity charged. Makeup is 75, and so blowouts are huge for anybody that you know about that . I do. Anybody that because straight is better people think, i dont know. And its 50 so 70 . 20 . So its 50 blowout, 10 for the gratuity, so its 62. 50. At your house. At 7 00 a. M. In new york city, we have professional women who love getting the Services Done just because before they go to work, so 7 00 a. M. In new york city is prime time. Thank you. Thank you. Wow. Coming up, the gop, really, in crisis mode. Well talk to peter king. 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. 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. Earnings on, and the numbers are not pretty. Mike Thompson Says where we could be in for a dismal quarter. Without kevin mccar any in the race, they scramble for a new candidate. Congressman peter king and harold ford will break down the race. A new fbi warning, holders of secure chip credit and debit cards, dont let the guard down. How you could be vulnerable to fraud as the second hour of squawk box continues right now. Live from the beating heart of new york city, this is squawk box. Welcome back. Running up the flag pole. You know what that is . No, im not telling you. Im with becky quick and andrew ross sorken, and the asian markets up, u. S. Equities at this hour, they have been a little bit positive. Good gain yesterday, and its been a good week after a tough month and a tough quarter. The scary october time period is friendlier to those who like the markets. Up to date on the watch list. Export and import price data at 8 30 a. M. Eastern time, and 10 00 a. M. , wholesale numbers for august and fed speak on the together as well. Federal reserve vice chair bill dudley at 11 00 a. M. Eastern time on squawk alley, and separately, dennis lock you know hart gives a speech in new york at 9 00 a. M. Eastern time, and chicago fed president Charles Evans speaks in milwaukee at 1 30 p. M. Eastern time. A lot of news and headlines there, and in corporate news, apple removed applications from its app store over security concerns. At issue, use of certificates in the apps that could expose use of data by monitoring to third parties. Nay are working to address that and get the apps back in the store. Alcoa fell short of estimates, hit by slumping Commodity Prices like aluminum, a volatile currency market, and stronger dollar is not helping things. Last month, of course, they announced they would split into two companies. It is the most world time of the year, the floods of reports kicking off the Third Quarters earning season. Dom . The reason why you have some out there saying the markets are not sick, but they are not well is about what im going to show you here. Its earning sessions this time around, and dom hold on. Were having a problem. We may need you to come over here to set. Yeah . I think were going to do that. All right. Ill come here. Hes going to join us on set, and well talk about what to expect, and mike, of course, S P Investment advisers service chairman, but what can we expect . People think theres nothing to move the market at this point. Will the Third Quarter earnings surprise pleasantly or lousy numbers people expect . Its not going to be good news. In fact, right now, according to the consensus, were down 5 , negative 5 growth. This will be the first negative growth since the Third Quarter of 2009. Thats not real good news. Only good news is its not a high bar to jump, right . Looking forward, i think, were at the bottom. If you try to put a spin on it, say, well, maybe this is the bottom because the outdated quarter Going Forward and data is murky looks to move up, but thats a good thing, and comps are easier as energy is less a drag on the whole entire s p. Just to put numbers behind it. You talk about the idea, the expectations right now for s p 500 companies through yesterday down 4. 5 . Wow. In the wheel house youre talking about. Those people say that, okay, well, you got to exclude energy. Remember the days we excluded financials post the financial crisis . Now they exclude energy. Which is 10 20 . Its now 8 of the overall s p 500. Wow. Its important because energy is a sector that is expect eed show earnings declines over 60 if the analysts sfiestimates c to fruition. Wow. The bullish case is the three most important sector we argue in the s p, technology, financials, and health care. The three biggest wanings in the s p slated to show gains, be it modest, technology 2 , financials 8. 5 , and health care at 4. 5 . Those three sectors do the heavy lifting now to counteract whats happening with the Energy Sector overall. What do you think . Start with financials, mike. Financials, you know, tepid, single digit growth, mid single digit growth. Good margins, i say x energy, your s ps probably in the 22. 5 positive growth. Down 5 as of yesterday, so, you know, its a big swing. You know, i think the real question comes down to top line revenu revenues. A negative number at 1 . You know, its hard for me to think about this earnings season being anything too spectacular. The real question is how do you justify 16. 5 times next years multiple with Earnings Growth being the negative its not positive, and Revenue Growth being negative, and i think what you have when you look at valuations, this, to me, after years of looking at this sort of looks like a wall of worry type of rally. The other thing i would point out is that you have, right now, that the fed is going back into this more of a dormant state position, theres a dividend yield on the s p. As long as its the best place for income and fixed income instruments do not compete with it, it holds despite you dont have the cat least driving evaluations. What happens if the fed raises rates in october or december . Yeah. Thats interesting. I think what happens is theres a constant rotation from stocks moving boomers who are misallocated knew into anything that gives them a reasonable yield, north of 2. 5 . Whats happening in the market is that theres so much money waiting for yield to come out of the credit markets, that the good news is that Interest Rates go nowhere fast and the market is the arbiter of that. If theres yield, gophers pop the heads up. The bond is supported by people rotating out of the misallocation you have. Whats interesting, though, you talk about, perhaps, the secular tail winds for these instruments, bonds included. They say, oh, Interest Rates rise, but you have this whole segment of the population, possibly, that needs to reach for yield, go after dividend paying stocks or corporates, and so the question then becomes whether or not even if the fed raises Interest Rates, do you still have that kind of bid, that secular bid from those in the market buying bonds. Boomers retire all the time. You do if the fed raises rates, but raises 50 basis points on hold indefinitely. Youre not talking about sure. Getting near 2 any time soon. No. If you talk about dividend paying stocks like that, they have been volatile this year. Real estate, investment trusts, those things, volatile. The question is whether or not you see any kind of a real, real take down of the stocks just because the fed raises by 2550 basis points. There are camps who say, yes, utilities will be crushed more than they have been already and the reits will be the same way. Theres an argument to be made that, perhaps, demographically because theres so many people who need these kinds of instruments that youre always going to have a bit of a bid to some of the securities, so when they drop, people step in and buy, perhaps, i mean, this is thats the argument that the bulls make for these defensive sectors. Whats the probability the next move is q. E. , not raising rates . Whats the probability . Its got to be less very low. It really does. That would be something, though. Joe. You know, i saw a wellrepubliced asset manager who did a survey of people, boomers, 53 years and over, they have 100 equity portfolios. How absurd is that . You have trillion equities that belong somewhere else. Thats the nightmare scenario. We had one bad jobs number. Thats a really just an outlier idea, but think about it, think if we had a couple, and then its clear, octobers off, you know, i was sure it was october. Im not convinced. Last five objects, weve seen realities. Whether they raise rates. Oh, yeah. Up until a couple weeks ago just last week, you had four governors including yellen saying there was going to a rate rise by december. This year. Right. Now we dont know. That what i mean, if they push it past end of 2016 and then there are if there is that slow down weve seen in the beginning of every year, i dont know why, or whatever it is, but im just wondering. I dont think qe again, but just think about it. Thats, like, i dont think an asteroid will hit us, the 2 mile wide asteroid wont hit the earth, but what if theres another qe . Thats frightening. Wed be so stuck, so few policy remedies. I think the market would absolutely spit that one up. We just heard they would not. One said qe is an afterburner. They are looking for the symbol saying the fed is to the point where the economy is sustainable, anemic slow growth. Been there, they have not done it. Fact, but i would say that the one thing that the numbers are not reflecting is that consumer, the Consumer Sector is still the growth sector plus 11 . Could be the best one of the best earnings so far. Its consistent. Since 2008, the consumer keeps pulling this economy along and i dont think that stops. I dont think that stops. You have pressure from multinationals to not raise rates. Down 5 s p, like you said, with even including whatever including energy, youre going to have a hard time if youre the fed because youre the all the ceos are whining and crying. Earnings down. You call it negative growth. I like how you do that. Negative growth. Theres growth, but its negative. Its the wrong growth. Negative growth of 1 . Thats not growth thats shrinkage. Now the market is going to actually take over the control of the yield curve because any movements in it, any particular yeah, thats not good either. Sweeps in, and the curve flattens. Can i say one thing about this . The idea here is i spoke to a lot of traders over the past few days here who said youre not seeing a reason to go higher or lower in the market place right now because no Portfolio Manager out there has a catalyst or reason to change the strategy. They are not trading. They are not doing that because they know dont whats going to happen. If theres a qe on one extreme or have a rate rise on the other end, it would at least give a reason for Portfolio Managers to change their strategy. Or alter allocation. Right. Opposed to saying, okay, were going to trade because people either put money into mutual funds or take marginal amounts of money out of mutual funds and only trading for these reasons for the next whatever it is. If it happens, youll see action in the markets. All right. Dom, thank you. Sure. Mike, thank you. Thank you. Okay. Coming up, republicans scramble for a new candidate for House Speaker after Kevin Mccarthy quick the race. Peter king and harold ford, jr. Will be here next on the top candidates for the job, and soda stream is under pressure. The stock down 16 in the last six months. We have the ceo joining us on the squawk set, and plus, secured chip credit cards as a rule nearly to fraud. Detills on the fbis warning straight ahead. Surprise we heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Dropping out of the race for House Speaker, and peter king says we need a speaker who can bang heads and break legs, congressman peter king is with us this morning and former congressman harold ford, and, congressman king, at least starting with you for a sec, obviously, everything is used for political spin nowadays. Democracy, many times, is ugly, and its in the past theres been, you know, when a speaker is elected, theres a lot of jockeying, a lot going on, it will be taken care of eventually. Is this much worse or a little worse than previous things seen in washington . No. I would say this is unprecedented because in the past, you did have fights within a party over who the speaker or majority or minority leader would be, but with a decision made within the party, they went to the house floor united. So in our case, john boehner had the support of 8085 of the republicans, stepped down because one faction was willing to bring the house down, shut the government down, and now we have cell phone mccarthy had easily 85 of the votes of the republicans, but you have 3035 people who said when it came to the house floor, they would not vote for him, and that means nobody gets 218 votes and could have a catastrophic situation. I dont recall it being like this where interparty fights are taken to the floor of the house, especially with the constitutional officer, and the speaker of the house is not just the head of the Republican Party or democratic party. Hes the speaker of the entire house, a unique position. The majority and minority leaders are the partisans, the speaker is partisan, but he has obligations to the entire house, and i just think we have people in the party who do not realize that, a minimum knowledge of the constitution, and it can be very chaotic. It needs straightened out. Boehners going to stay, and people say at this point, not currying favor anymore to keep everyone happy, hell work with democrats to do things necessary to do and not worry about the repercussions of the 30 gauys. Ronald reagan was president you said it was unprecedented. Im saying its not. Its not the end. Yeah. People out in the heartland are, like, christie said, i dont want to watch game of thrones, i dont care who ascends or doesnt, do the business. We are agreeing. Okay. Its not unprecedented to have republicans and democrats Work Together. Thats the way its supposed to work. Listen, as republicans, we should try to get all we can, which espouses our partys position, but the president has the veto power, the senate with the 60vote rule. Get the best you can and make deals. Nothing wrong with making deals. Policy and democracy is deals and compromise. People from districts with the overwhelmingly democrat or overwhelmingly republican, never had to deal with people who do not look, sound, and agree with them or know what its like to compromise to get a a deal done. Theres nothing wrong with making deals. Thats what democracy is. Its competing interests coming together to try to work out the best arrangement they can for as many people. Harold, without taking too much satisfaction in everything thats happening here with these, i was watching you sit there, keep seeing you smile, and then democrats are loving this . Peter said it well. Its unprecedented not just to see a constitutional office, but speaker second in line to be president behind the Vice President , the speaker would be president. Theres huge responsibilities the speaker has, and peters second point about people working together, we could have a point which i dont know that the house will where you have a speaker supported by democrats and republicans in order to win. Peter probably doesnt want that, but at the same time, he would not totally disagree. I hope someone like peter or tom cole runs for. Could be anybody. You dont have to be a member of congress, right . Which leads me to say that you could be candidate. I could be a candidate. To bring people together. Newt gingribeginningingrich. I think a cole type leader in the house for republicans and democrats is someone to accomplish the template that was articulated this morning. No, actually, i think that is that is a possibility. My name, news day, does not agree with me, floated that idea, but im not looking for that. You mentioned tom cole, harold, i think cole, if Paul Ryan Paul ryan, certainly, he would be one of the leading forces. Just no interest. By the way, this is in new york in the 1960s, the state legislature, democrats couldnt agree on who their speaker and majority leader should be in the senate, and Nelson Rockefeller came in, and there was a Coalition Support for speaker and a democratic majority leader with republicans providing the balance of the votes, so, listen, its important that the government works. You know, christie is easy and outside to criticize. Saying that, the American People dont care about the nuances. They just know that the peoples house is not working. We have to make it work. We need democrats to do it, lets do it. So youre calling an end to the rule, essentially, which was that any vote has to be carried by a republican led majority on the issues. You dont think that works, and youre calling for an end to that, congressman . Have the rule when feasible, but, for instance, last week, 151 republicans voted the shut down the government. 11 Committee Chairman voted to shut down the government. Three people in leadership voted to shut down the government. The reason they did it was because they knew that a coalition of 90 republicans and 180 democrats were going to vote to keep it open. You know, listen, whenever you its possible, yeah, have a the rule, but running the government comes first, and if it means paying our debts, meaning defending ourselves against terrorists, for instance, republicans wanted to shut down the department of Homeland Security when isis was burning people alive. Responsible people move forward. The speaker of the house really is hes above politics. Congressman, just speak to the issue because its what i think the markets want to know, which is does this increase or decrease the chance of the government staying open in. Oh, i would say we have to keep the government open. I dont know whats going to happen. I hope that calmer heads prevail and tell the caucus they can play the games elsewhere. They cant determine whether or not the government stays open, whether or not we pay our debts. How can you be conservative and be a deadbeat nation and not pay the debts . Thats irresponsible. I would say, especially if boehner stays on as speaker. The talk is hell stay on until theres a new speaker, giving him the opportunity to increase the debt ceiling by november 5th. We have to govern. Theres so many things to argue about, disagree with, philosophical arguments, but those are legitimate issues, not shutting down the government, not defunding the department of headland security. Working closely together in the congress, peters point, if boehner stays on, theres a willingness to find a coalition of democratic votes to keep the government open. If republicans cow tower or placate to the conservative members, the handicapping number, you say its a higher percentage we find ourselves in the unfortunate predictment of a government show down or shut down, but listening to peter this morning, im encouraged. I think theres a growing consensus among some republicans including the rational ones own those who bend the institution for a period of time like peter that you have to find agreement, even if that means finding agreement with democrats to do the most fundamental and responsible things government has to do, which is to function. I applaud peter and tom cole and the ryan in the conference who understand that. Did you you saw eva is not running for mayor . I did see that this morning. And . I hope that republicans in congress are able to find a leader that ensures we do not shut down government. What are you doing . Do you have plans in 2017 . This is joes campaign. Ill draft you. I will. Ill draft you for this. Do you want me to do this . Start this ball rolling . You for paul ryan or cole . I love paul ryan. Im not convinced, but how long for the session . 14 months . He wants to stay with his kids, i get that. I love that man. A guy with nine kids, father was a bartender, people want it. Now you cant give it away. Its weird. Isnt it . To not want to be the second in line to be president of the United States, you have people turning it down. Its crazy. I know. Congressman king, thank you. Thank you. Peter, great to syou. Me for speaker, you for mayor of new york . Please. Save us. What about the mets . You dont have a team in tennessee, do you . The cardinals were the team in memphis, but im a yankees man, but rooting for the mets now. Okay. All right, good. Good. I like the cardinals. Thank you, harold. Great to see you. When we come back this morning, china finished its golden week holiday wednesday and people spent the vacation at the movies. Unbelievable Box Office Numbers when we come back. Time now for todays aflac trivia question. In what game was the term grand slam first used . The answer when cnbcs squawk box continues. Aaflac 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 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. Now the answer to todays aflac trivia question. In what game was the term grand slam first used . The answer . Whist, a forerunner of bridge, where it means winning all 13 card tricks in a hand. Welcome back, everyone. This is cnbc, first in business worldwide, among the stories that are front and center this morning, worldwide pc shipments dropped 8 to 74 million yunits in the Third Quarter. They cited the stronger dollar, making them costlier, and United Continental seeing better than expected earnings, they site extra revenue from frequent fliers, and commodities giant is cutting 500,000 tons of global sink production, a third of the output. Zinc dropped 30 in the last five months to five year lows. Some block buster numbers from chichina, the holiday set office records, totaling an estimated 299 billion, yes, billion, 70 increase from last years total. The country is home to more than 5600 cinemas serving a population of more than 1. 3 billion. In incredible, right . A bunch of imaxs too. Saw a lot of mission impossible, right . U. S. Films action flicks, yeah. Right. Check this out. A tarp attack caught on tape. A grounds keeper slips, nearly run over by the tarp at the game. There was a rain delay, and the up licky keeper was not injury. They defeated the rails, and as you know, that guy is backing up, not helping him. You see that . Like, oh, save yourself. I saw the first couple innings, and just right out of the box, he could oh, too late to save him, oh. Two games tonight. And news from canada, and, you know what . The other day when i we just talked about this. Randy quiad, we talked about him, he had problems years ago. Is that him . Yes. Oh, my goodnd. The actor was released from jail, but faces deportation to the u. S. Next week. He appeared in a hearing with long hair and an unkept beard, but thats in the eye of the beholder, i think. If you followed the story. In 2010, this is what i was talking about, quaid and his wife charged with trespassing causing damage to the guest house of a home they once owned. They fled the u. S. Saying they were victims of a persecution. Quadi plaplied for residency in can canada because he was being stalked, and that was denied, and hes arrested this week because authorities felt he would not comply with app order to leave canada by next wednesday. They declined to comment as they left the montreal Immigration Office christmas vacation, so many an interesting look. Rerack it. I was reading. I didnt look at it. Yeah. Or santa. Cousin eddy, dude, wow. Look at that. Hes not wearing the white shoes. Those are sharp, clark. Really sharp. Remember when he says, no, no, you cant buy us stuff for christmas, no, no, no. Okay, but heres this list. Heres the dog food, and get something really nice. We did the jelly of the month club yesterday. A lot of vacation were stuck in the 80s. Yeah. Coming up, daddy says i kiss best. Anyway, french kiss best. Beverage wars coming to a kitchen top counter top near you, and keurig taking on the cold drink maker, but soda stream is working on new innovations of its own, both stocks pummelled, and the ceo will join us next on the squawk set. Welcome back to squawk box, cola wars headed to the kitchen counter. The new rival, well talk about that, keurig partnering with cocacola. They make a case on squawk on the street last week, saying why theyll be on top. Weve listened a lot to the consumers of inhome machines today who have them in the home, and what they said is they want a machine that comes out cold, the product has to be cold, so we deliver that. They told us they want it carbonated without a source. Its in the pod. They dont recycle it. The move comes after a tough few months, soda stream down 20 year to date, and keurig down 50 . Here to discuss this is daniel, the ceo of soda stream. Good morning to you. Good normorning. You brought things with us to show off. What do you think of what he just said . Look, you know, i think its much bigger than that, whether theres a canister or not, we are pioneering the industry of home carbonation, have been for many decades, been in the states for five or six years, and its a big honor, a validation of the category that a player leek cocoa la together with keurig decided theres merit in home beverages, the significance here. Which is better . The consumer will decide. Will you make them cold automatically . Its in the works, launching in a years time. Its not about whether its cold or not. Theres other factors. Its more important to make the consumer make however they want. You decide how many bubbles, how sweet it will be, and it has to be healthy. Theres nothing healthier than water. Thats what we co. Are you focusing more now on carbonated water opposed to coke or pepsi or whatevers going to go in it . Thats right. The thats the big distinction on what soda stream has been doing for a long time and what cocacola is doing. We are a we are a sparkling waters company. Take tap water and press a butt button, and you get sparkling water, and att ethe flavors you want. Cocacola is a sugared soft drinks company, athey make a devees to make what you could in a can, thats the distinction. The consumer decides what they want, coke at home or healthy waters at home. Carbonating it with c02 . Thats right. Classified as a pollutant by the epa. C02 is perfectly to be perfectly healthy. Im with you, believe me, but this is the only context you can have the cword without someone accusing you of war in syria. Its regular carbon dioxide, they conflate with carbon and smoke and soot and that stuff. Its an odorless, color es gas. Its different from co. Were not talking about carbon monoxide. Its co, 2, classified as a pollutant by the epa. Telling you the absurdity. Fine. The Beverage Industry is one of the biggest categories in the world, and theres three converging factors going on. Megatrends, health and wellness, environment, were polluting the world with a billion bottles of cans a day. A pollution . A billion bottles of and cans produced and most are trashed. Well live in trash, and the third trend is empowerment. They want to be empowered to customize and personalize. Thats what we do at soda stream, okay . Thats whats changing those three forces changing the Beverage Industry today, and cocacola recognizes that they have to provide a different Delivery System to the consumer. They are doing it at home like weve been doing for decades. Just speak to this. So pepsi was working with you still is. Still is. She says, when you go to make your own, its hard to replicate the taste of the original product, so they taste the product at home, oh, doesnt taste as good. Pepsi, out of the gate, working with us starting a year ago, and were expanding with pepsi right now, decided they dont want to deliver the pepsi in a can at a home version. They want pepsi home made. Its different. Its half the calories. Its naturally sweetened, and the consumers make pepsi the way he or she wants, sweeter, more bubbles, less bubbles, and thats what we do with pepsi at soda stream. Thats different from keurig cold. They provide what you get in a can at home for more money. When i was thinking about my daughter loves, all shell drink is carbonated water, okay . I was thinking, to use tap, people dont want to drink tap. Thats why they buy bottled water in the first place. If i use bottled water like an evian or kings supermarket water, isnt it easier to buy . I have to buy the bottled water and carbonate it. How much cheaper is that than just buying carbonated water . Were in 45 countries of the world. Not everybody has bottled water . In the modern world, europe, u. S. , japan, people drink tap water. Its good, its healthy, and we work with municipalities. Theres no issue with tap water in the modern world. Thats why were not going to china or india tomorrow. You can make your own. You wont taste the difference between that and what you pay dollars for, only this is 8 cents a receivering. Does anyone buy bottled water and carbonate it . I dont know. Is there a filter in there . Of course, yes. We have products that provide filtration in the future. We have 25 Million People using soda stream regularly. Were the biggest brand in the world. Were bigger than others, and does the cold threat worry you . I mean no. We welcome this competition. We need this competition to succeed. Look at the coffee category, the single serve coffee business, it really took off when competition happened. It was not keurig alone, but so many others came in, thats when everyone needed to have their single serve coffee maker. We need this competition. Weve been lonely in the category. Its a new category. It takes some time to build, and we welcome this so much, embrace it, and its different. Competitors have a different story here, okay, they do soda, the sugary drinks, and we do the waters. Its time. This is the future of beverage. Ten years, everyone has a home carbonation device, no one is carrying bottles or drinking that unhealthy stuff. Do you short Soda Companies . No. If youre long or short the soda guys . Look, the brands that represent the big soda players are power. If they are smart to extend into the new Delivery Systems, which they are, pepsi and coke, theres a future in the industry. Dame, thank you. Thank you. Appreciate it. When we come back this morning, hockeys new home in brook land, the barclays cement center, and at the top of the hour, darrell issa says if hes a candidate for the House Speaker job. Stick around, well be right back. All right. The new York Islanders are coming to town after more than 40 years on long island, the hockey team will play the seasons opening game at the new home in brooklyn, and they are playing a key role in that, ceo of Barclays Center and Brooklyn Mets and leads the Business Operations for the new York Islanders and is joining us now on set, resurgence in hockey, its nice its coinciding with the move. What a sweet spot. Were excited about it we relocated years ago, never thought wed have the chance to do it again. Tonight is opening night. We played a defending stanley cup champion, the blackhawks. Rangers beat them. They did. Hope any theyll lose today. Its been a two year journey, you know, main taping the old traditions from long island, and that was very much a big part of the transition, but also infusing a little brooklyn. What do you mean, what traditions . I mean, you know, the franchise was out for 40 years, a fan base accustomed to Different Things relating to how the game is presented, and weve tried to take the traditions over to brooklyn, whether its the pa announcer, the organnist, Pay Attention to the banner, the arena, and we want them to feel welcomed, but also infusing brooklyn. This is the new brook lip, right . The brooklyn flair. This is a third jersey. Since moving to brooklyn, black and white is adopted as the color. Well wear it 12 times, and right now its the number one sell eer nhl. Weaver proud of it. These stripes remit the four cups won in long island. We tried to maintain the tradition and infuse brook len. There are complaints, but did you turn the corner 1234. I think so. You know, the fans have been active via social media, and i learned a lot from them, and sometimes they are nice, other times they are not, but thats the world we live in, but, you know, tonight, sets up a new chapter, and i think with the fans seeing at the game tonight is balance. Well bring the old and infuse the new, and i think, together, well grow together, you know, throughout the season, and i think it should be a great experience. How is the Barclays Center, its been three years its been terrific. Celebrated three years, the music business is terrific, and we have the chance to have the biggest year we have had. Boxing is big, the mets, family shows, 240 events this year, building, and with the islanders coming in with their 44 dates, that makes us that much busier. Who do you compete with . Madison square garden . The markets big enough for all of us issue and i think weve proven that. I mean, in the m certification g and Barclays Center, they are ranked as far as the Top Performing venues in the country, if not the world, since opening, and, together, we are growing the market here in new york. Manhattan, theres no more land. Its excepensive here. You cant live here. Brooklyn is ready. Were there. Part of the renaissance in downtown brooklyn. Many great retailers are moving to brooklyn. The demographics are terrific. Do you see that mayweather is talking to pacquiao, can you do that . Were big in boxing. Lets do that. I dont want to go to vegas. I dont know that that story was real. Come on. Theres a rotator cup problem. If its real, we want to be the host. Can you below theyd do it again . The last one was disappointing. How much more million . It was a meganight. Do it again . Wed love to be a participant of it. Oh, my god. Cia zrazcrazy. We watched it together in omaha. Thats right. All three of us. Amazing. Cool. Janet jackson can open. I dont know. Thank you. Thank you so much. Thank you. Appreciate it. Coming up, a new warning on security vulnerabilities that supposedly secure chip credit cards and debit cards, details after the break. vo what does the world run on . It runs on optimism. Its what sparks ideas. Moves the world forward. Invest with those who see the world as unstoppable. Who have the curiosity to look beyond the expected and the conviction to be in it for the long term. Oppenheimerfunds believes thats the right way to invest. In this big, bold, beautiful world. Dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Welcome back, the fbi issued a new warning, enhanced security pins are still vulnerable to fraud. We are joined now with more, and, aman, this is a concern. We thought we were safer, but not as safe as we maybe considered . That is right, becky. Consumers and banks work to switch over to the microchip enabled credit card system called chip and signature, the name of the system that all the banks switched over to here in the United States, but the fbi alert that came out last night. Look at the image. You see what the fbi sent out to everybody in the country. This goes out to retailers, consumers, everybody. They are saying that these new credit cards are still, quote, vulnerable to fraud, and vulnerable to exploitation by fraudsters. This is a battle between the retailer and banks, and groups react overnight to the fbi alert that went out last night. The National Retail federation has argued in the past that the banks have not gone to a high enough security standard. Theyve gone to the socalled chip and signature standard, not to the elite chip and pin standard theyd like to see. Theyd said we think the fbi is on the mark. The banks in the u. S. Chose to implementless protections. The National Retail declaring victory given last night. The banks, however, talking to industry representatives last night, they say they want more clarity from the fbi here because they say the fbi is actually advising consumers in the alert to do something they cant do, which is to use the chip and pin technology. That technology, they say, is not available in the United States. Its not planned on being available in the United States, and this goes into a long running battle between the retailers and the banks over who is to blame for the data breaches seep in recent months. The banks want clarity from the fbi, and if we get more clarity from the fbi, ill bring it to you as soon as we have it. Great, thank you so much. Looking forward to it. You bet. Stop eating these protein bars during the show. Coming up, republicans scrambling to find a new c candidate after mccarthy dropped from the race, and darrell issa served in the house for 14 years, is he planning to throw a hat in the ring . Oh, chicago. So, yeah, chicago might get in. Well be right back. More data means more freedom to do. Whatever. Thats why at t is giving you 50 more data. Thats 15 gigs of data for the price of 10. Because the more data you have, the better. And right now at at t get 300 credit for every line you switch when you trade in a smartphone and buy any smartphone on at t next. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. Chaos in the Republican Party. Kevin mccarthy drops from the race for House Speaker, suggesting that the party may need to hit rock bottom before its governable. Congressman issa, a possible candidate for the speaker position, talks dysfunction in the halls of congress and what he plans to do about it. Is there a doctor in the house . Bent over like this, id feel 100 better moon river the new program for practicing doctor interest in getting their mba, and its all online. Jack well welch and medical systems joining us for a special announcement. Plus the scary business of halloween. The numbers are frightening, but could a pumpkin shortage kill the holiday spirit . Grab a chain saw. As the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. All right, rubber stamp, deep purple, yes. Yes. Take them in. Hall of fame. Yes. Welcome back to squawk box on cnbc, first in business worldwide. Some people have written in, they want to like organize some type of demonstration that you have to have somebody you want to put in it to look forward to every year. I guess so. Cheap trick . Before the cars . Before deep purple . Oh, its app outrage yes. The futures are indicated now up about 35 points. Checking out the markets in europe, which are responding in like fashion to the continued rally seen yesterday, and now they are all up more than 1 , portending some good things, perhaps, for markets here today. Okay. A couple stories that investors are talking about this morning. Oil prices are rising again. Crude on track now for the biggest weakly gain in six years. Brent rising 11 in the last four session. Meantime, wti crude is now at a twomonth high. Looking at 50. 28. Alcoa fell short of estimates, hit by slumping Commodity Prices, including aluminum, and volatile markets in the stronger dollar not helping things, shares down last month after announcing they would split in two companies. Gardener reports they dropped 8 to 74 Million Units in the Third Quarter. Max sales there slowing to the slowest rate in two years, and that may explain why dell may be wanting to go off and do an emc and get as far as way from the pc business as humanly possible. Theres another story today, House Republicans are going to be meeting this morning on capitol hill. Congressman Kevin Mccarthy dropped from the race for House Speaker, leading to the question, could the next best guest be in the running . Joining us right now is california congressman, darrell issa, thanks for being here today. Thanks for having me on. Obviously, its an interesting time, which is not a good thing, but, in fact, it is an opportunity for republicans to real soul search which direction were going to take our party on americas behalf. And, so far, your soul searching, whats that brought you to the conclusion . That we need a cap dat as Kevin Mccarthy said yesterday that gets to 240 members, bringing conservatives back into the fold feeling they have a seat at the table, they can have an say jagenda. Who do you think is the best candidate to do that . Well, i certainly, when they float paul ryans name, all of us get excited that paul could bring us together, but can ditly, paul has not yet said hell do it. A lot of people are still urging him, and, hopefully, this morning, well find out. If paul ryan is not interested, if he says no again, then who is the choice . Well, you know, from the field that ran, i dont have a second choice. I am really looking beyond that. I said this morning that i would consider, i am considering whether or not to put my name in the hat. To be honest, i probably am better suit eed to be the republican leader or Committee Chairman, but thats not a question of suiting at this point or even experience. Its a question of can we come together . Can we get our broad Party Together on a set of common value so that we can start putting 218 consistent votes up for meaningful legislation . Thats what well be talking about this morning. Its an important time for republicans. We have a mandate that we have not yet met after the last two elections. Congressman, the real problem is that the 3040 republican congressman who are with the Freedom Caucus, who are associated with this, they are not interested in cutting deals and seeing things with the other side. They would like to see their initiatives enacted and think that leader boehner did not or House Speaker boehner did not do that. They thought he was too willing to compromise and give in. If you were to take on the role of speaker, how would you go about doing that . Would you insist on republicans having their say and having their voice, or would you be willing to compromise in order to get thing passed the senate and signed by the president . Well, first of all, the last part is an essential part of governing. It is about not compromising on your values, but compromising on how much everybody gets in a process of moving in the right direction. I will take a little issue. The interpretation that the 40 or so members of the Freedom Caucus are an all or nothing crowd couldnt be more misunderstood. Many of the members served as fantastic members, even chairman on the Oversight Committee for years. They are people who, in fact, simply want to be heard. They want to be recognized that they have good ideas, and they want some of those good ideas included in legislation. Thats a long way from take it or leave it. The fact is they are not the problem. They are part of a challenge that we have to meet the expectations of the American People. You know, when leader mccarthy said 240, he didnt say 247. Youre never going to get everybody. Sure. The fact is that i believe strongly that the members of the Freedom Caucus can, in fact, have a seat the the table and can be and are necessary to be a constructive part of a republicanconservative agenda. You say it was the Freedom Caucus, they were in the at fault at this, but frustrated by john boehner. Do you think he was at fault in this . I do. I think that Speaker Boehner when he used terms for unnamed members that were somewhat felt the agenda was not moving, he forget it was a team issue everybody has to be represented at the table, and, in fact, the speaker of the house is a person who has to make what needs to be done happen, but at the same time, the leader, the whip, they were often, i believe, telling Speaker Boehner that they had that he had to maybe do things a little different. Ill give you an example i used earlier this morning. We voted a 14 billion program for nih called the cures act. Nothing wrong with the con cement of trying to get more funding for research, but we did it with a phony payfor, smoke and mirrors, ten years to pay for it, using petroleum for the second time. You imagine how American People and younger members sent here for honest accounting and to cut the size of government chafe at the idea that theres a 14 billion new program that spends 14 billion in five years and claims to pay for it in ten years, some of which is by selling the same Strategic Oil already sold in the budget process. For anyone other than a businessman, they dont see the ridiculousness in seeing the same oil twice as a problem, but i do. A lot of the Freedom Caucus, those are the kind of things that shouldnt have come to a vote without honest accounting of how to pay for it. My guess is john boehner did not do that because hes looking for tricky accounting and lie about it, but my guess is it was too tough to come up with other programs that 218 members would great to cut, is that what you think too . Well, becky, ill use the example appropriately. This was a completely discretionary decision. It did not have to come to the floor. You know, while the reauthorization and reforms in the xm bank are bottled up because the chairman does not want to move it, quite frankly, there are lots of other bills that the chairman want to move that boehners not moving. He made a decision to move this. It did get the majority of republicans, but many of them saying we could have done better than that, and those who said no were not saying no because they dont believe in the cures or in the nih, but they voted no for the most part because they found it to be an unacceptable way of expanding government. So that kind of thing within our conference, its not a question of what we do. Its a question of who we listen to and how we do it. Theres a republican, a conservative, a fiscally responsible way to fund programs, and then theres the way where you do it say, well, well pay for it later. We did that with Medicare Part d under president george w. Bush, pay for it out of taxes, and candidly candidate obama said we were irresponsible because we were expanding the deficit. Republicans are tired of expanding the deficit. If we can do a program, we have to know how were going to pay for it, and if we cant pay for it, second guess whether or not to do the program. Congressman, you said something a moment ago about john boehner and his leadership style, and when frustrated, he called other congressmen and women names . The crazies, the idiots, that sort. To the faces or behind closed doors . Look through the record. Some were fairly public. Look, john boehner served a long time and worked hard, and hes dedicated his life to this institution. He believes in the institution. When he made a decision that he was no longer the right person to do this, he did so out of concern for the institution. He has the respect of members who disagree with him on what he did, but not on his motives or the fact he was dedicated to congress. The fact is, he found that he was no longer the right person. Kevin mccarthy found he couldnt get to 240, so starting this morning, we are looking for a consensus candidate or team that can get us to 240 or more. Thats what we need to do because Speaker Pelosi is not former Speaker Pelosi is not going to help us move an agenda. We have to move it mostly on the backs of republicans and from time to time, conservative or free market democrats that are willing to come along. You said that you are considering a run. Youd like to see paul ryan run. If he does not, is that the biggest deciding factor, if he does not run, you will run . If we cant find a consensus candidate, then every member of Congress Needs to be willing to step up to the plate and ask the conference, could i be that consensus candidate . If we cant find a single candidate, then im very much calling for us to reconsider the entire team, to build a balance of the speaker, the leader, the whip, if thats what it takes in order to have all parties at the table and feel that they have a real voice, a real voice in management. Mccarthy says hes staying, but if theres not a consensus candidate, you think the leadership of the Republican Party should be tossed aside and voted again . The word tossed aside is inappropriate. Everyone memen menwants a worka conference. No one covets the job so much they would through the future under the bus. The challenge before us is one candidate to unite us with the existing rest of the team. If we can, thats the first goal starting at 9 00 this morning. Congressman, do you think that paul ryan looks at, you know, what his daytoday job would be, and he sees that, okay, i try to bring the two sides together. The minute that i dont satisfy either the Freedom Caucus or the minute i do satisfy them and i hear it from the other side. Its personal. Its ugly. They are going i can imagine what the Freedom Caucus would say to him if his conservative feet were not, you know, did not live up to their expectations. Who needs that . Who needs that . How can anyone bring it together . Im not most usually people want to be speaker of the house. Its unbelievable prestigious and quite an accomplishment and to serve the country as well. This is a sad commentary that you cant give the job away because of what its going to entail. Well, first of all, when it comes to paul ryan, i believe that he, with a young family i know. And desire to travel less than the speaker would have to, and with his desire to do real tact reform, to really make the system work in the 21st zenk century, those are his priorities. Though, the children were younger running for Vice President. It would be nasty. Only 14 months, too, congressman, so for your country, if it was not such a, you know, daunting challenge, maybe hed say, okay, 14 months, okay, ill do it. Well, youre making a good argument, were going to be continuing to make that argument with paul ryan, but on the other hand of it, understand the business of being the speaker of the house, not just now, but most of the time, is a little bit like the great honor of being allowed to speak to the entire town on what you truly believe, just before they tar and feather you. Right. Thats right. Thats you heard that. That must be what thats the common perception. You heard that before, right . About being the speaker . Ill use that. Ill remember that. Use it liberally or conservatively. You talk to everyone before you are tarred and feathered, perfect. Thank you. Thank you. When we come back, online prescription for doctors to earn an mba, new offering from long time squawk box guess, jack welch, and the ceo of Thomas Jefferson medical systems and university. Check out futures rights now before we head to the break. Looking at green arrows, and the dow would open 52 points higher. Back in a moment. patrick 1 whats it like to be the boss of you . patrick 2 pretty great. patrick 1 how about a 10 raise . patrick 2 how about 20 . patrick 1 how about done . 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. [during sleep trains the triple choice sale. Big for a limited time, you can choose up to 48 months interestfree financing on a huge selection of tempurpedic models. Or choose to save 300 on beautyrest and posturepedic mattress sets. You can even choose 300 in free gifts with sleep trains most popular Stearns Foster mattresses. The triple choice sale ends soon at sleep train. Sleep train your ticket to a better nights sleep you can change that if you need to. Rising cost, changing technology, and increased regulation, welch, todays physician need bedside manner and business sense that jack welch is teaming up with Thomas Jefferson university online. The executive chairman of the jack welch management institution, and steve glasco, welcome, gentlemen. Great to see you. The rationale, i mean, i understand it in todays world, an mba would be invaluable to a doctor with a pc or professional corporation orments menmen mew the real world. 400,000 doctors in the World Without an mba practicing, and with the changing health care regulation, its a opportunity for us and them to come in and joining up with steve here who is on the forefront of changing what he calls Population Health at jefferson, the two of us, its a dream. We have nine students already without doing anything. Doctors who just want to get a handle on the business. And, steve, i will bet weve heard earlier this week that one of the reasons we cant get costs under control is because theres three desperate entities involved in every decision. The doctors dont think about the treatments cost, the partys not thinking about it, the insurance thinks about it. You have a doctor with a business sense, everybodys watching the ps and qs. Im an ob gyn, and i figured if i can deliver a 9 pound baby, i can figure out business. We have to focus on the individual. We have to think about the population population, how steve, that babys coming out, dude. Just because you can deliver a baby doesnt mean youre jack welch at general electric. The babys coming out, can you stop the baby . You sit there. Give it hot water. I cant stop the baby or health care changing, but at the end of the day, the industries with the most disruption are academics and health care. Agreed. And you got them both. Ability for us to have a relationship with jack welch clearly someone who kraecreated leaders and positively disrupted business, and Thomas Jefferson is a fantastic relationship. Would the doctor have to consider himself a businessman to want an mba . Run a professional corporation and employ, you know, other doctors, or would just a country doctor benefit from an mba . I think both, but i think the fact is were a couple trillion dollar industry, and deciding to go into business and manager, its not just finance, but being a manager. Its just as important as you decide to be a neurosurgeon or family doctor. Everybody need an mba . No, but with everything changes, im confident if i was out there practicing, i could get the jack welch management institute, Thomas Jefferson university relationship. Think about how busy doctors are and how much time it takes. Must be easier online. There are several schools out there now offering these types of things, but they have to go to a campus, give up their time. Were going to have a fully Online Program to do at nights and on weekends, and the price is going to be 39,000. So its 40,000. 40,000, and the others are a hundred grand, et cetera, and you go in residency for a month or ten days, three times a year. And give up your practice. They captain afford to do that. Without the residency aspect and human pieces, whats that do to the educational experience . Were over a thousand students, offering real life experiences, and they get raises and promotions, so the same happens to a doctor. Were not teaching actual medicine. Were teaching steve, tell the courses youll be offering. Yeah. Things Like Health Care law, health care problematics, understanding data, i mean, again, we have a college of Population Health, only one in the country. How do you care for a group of people with the best quality at lowest cost . Your question, the key will be having the faculty, and they do this very, very well, saying, how can you apply principles to what you are doing now. They have a residency in a way. Its their real life. How fast can you do this . 18 months. Thats not fast enough. Wow. Thats fast. If only ben had, you know, the left did you see that they set him up yesterday. The 18 months is my fault. I cant be fast enough for jack, but academic world, thats fast. Those who couldnt explain the debt ceiling are hammering ben carson because he tripped it up. Too late for him to get an mba before the election . Well give him a scholarship. All right. Very good, steve. Excellent. Thats exciting, the program to change the focus of doctors and allow them to cope with obamacare and the other stuff out there. Steve, i guess you are making the stuff almost up on the fly because the entire industry is changing so fast. It is. We changed the vision. We were a Hospital Company with the most amount of beds in philadelphia, and our new vision is we will Reimagine Health care and education to create unparalleled value. Reimagine value. Jack welch. How much is the individuals paying versus what programs are for them . Well, we dont know how hospitals will treat it. Right. Companies are now paying it in our program. Okay. In the jack welch management institute. 40 i told you. I think what youll find is ceos say, oh, thank you, if i get 206 my docs to get this, this would be great. You have them all. We have 70 or 8 o places i talked to, and, boy, if you can help me get my docs we went through healthcare reform, think about it, all the transformation, weve not changed the dna of the it is physicians, still learning the old way. This is something that individuals will decide to do, and their companies will decide to do it. Okay. Thank you. Thank you. Thanks a lot. Nice to see you. You too. Thanks, appreciate it. When we come back, the slow down on china on everyones mind, whether there is more downside with john rutledge, and then, trick or treaters for halloween fans running scared. There is a pumpkin predicament going on. I dont know if you heard yet, a shortage, the future of halloween in a moment. 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. 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 . 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. 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. Welcome back to squawk box, Rick Santelli with breaking news. September read on income and spending, oh, im sorry, import crisis. Import prices. Down one tenth month over month, a smaller drop than expected looking for numbers down. 50 and last month it was revised from 1. 6 to 1. 8. Year over year, down 10. 8 7, but shocking, but we expected the number down 11 , and last month was 11. 9. The other way, exports down. 7 minus 1. 4. Becky, back to you. Thank you, sir, very much. Have a great weekend, all right, rick . You too, becky, go cubs. Oh, yes, were rooting for you guys. Steve liesman has more. Steve, what do you think . You were deeply pouring over that the entire time. We were talking about Janet Jackson. I didnt look too much at the numbers here. A little better than expected if you are concerned about prices falling. Rick is right, looking for 11 year over year in decline in import prices, now 10. 7. At the margin it does not matter. The key issue there theres an impulse from overseas, one that plays largely at the fed table. We sth we saw that yesterday in the minutes where i was surprised it was not a close a call as people thought it was. The idea was when you read these minutes, there was no strong argument on the table it seemed to raise rates. It was all about why they shouldnt. Now, i will concede the context was one to raise or not, and they never put forward, but in the context of i look forward to a motion to hike rates. It was not on the table, no strong argument, but hawkish comments, but not a lot. This is data dependent. As data comes in, there was a general sense that remember, they go in june, backed off of that, the data was squirrely, and data was on the table firmly. You had dudley saying after market volatility the case was less come pelling, stan fisher said it was on the table, cant wait until we see the eyes of inflation, and then in the meeting, they didnt hike. Thats how it happened. Probably . The wide shot of the hitting so its on evidence, the hitting . Probability in your mind that the next thing that happens is qe here, not a rate increase . What is the probability . 10 . 2 . I think its 510 . 510 . They will use it. They will do it. They will do it. Would that not be an alibi . Im in a difficult position here. I have a bet with rick they raise this year, a 100 donation to the charity of his choice. I will do that gladly, but its going to be embarrassing for me to lose to rick, very embarrassing. 10 , whats that say . Come on. Qes not possible again . I think theres some discussion among some guys who are really deep in the leads here on this, and i mean, the weeds figuratively not literally, but quicker to go to Interest Rates more than qe. They dont want to raise the Balance Sheet, theres a sense they dont want to bring on additional negative Interest Rates. Stimulus. Do you consider the scenario . If they dont hike, i lose in 2015. I will lose. Ill stand up here and tell you. Look, look, i mean, if the jobs i want it to happen because the economys not good. Theres talk out there that the lousy payroll numbers were more noise than what they were. The claims, in the 260 range, hard to argue theres jobs. Hope jobs come back and in a place where the fed hikes a quarter point because the economys good enough. I wonder what is likely, your bet they raise this year or Boone Pickens bet oil is back to 70 before the end of the year. Wow, wow. Hard to get to 70. Maybe not. Two things i have to say. The first is that im talking to dudley this afternoon, and forget what i have to say, the most important person at the table right there. Its what don rutledge says on china thats the most informative thing for anybody. Thank you. What a leadin. Was that a lead . Its very important. Another lead, john rutledge, investment strategist at geneva based easy for you to say. Yes, what happens . I would think that the probability of the rates going up is just a little bit lower than the cubs winning the world series, but the economy sucks right now, the manufacturing side, especially, regarding china, Manufacturing Industry is very, very weak in china, theyve got, you know, falling import prices, partly because although we talk about it, devaluation in the currency, its appreciated by a ton in the last year against all emerging markets, against all of the Raw Materials suppliers, so prices are down, and so but that seed of the Conversation Service side is okay, but they got to reprieve this week. The leaders of china, and when you sit privately with them, they only talk about stability. They never talk about gdp or anything else. Stability means stable politics, stable politics means stable jobs, and the biggest risk to them right now is outflows of capital. Theres a ton of capital that went in there. They have capital controls so you cant measure it. Its illegal. That capitals flowing out now. This week you mean a lesson on how to do capital in china, and i was writing it down. Tell people how. Absolutely. How to take money out . How to legally move your money. If im a Chinese National and want to move a million out of china, i send a 2 million boat load of stuff to myself. The other business i own in australia. Which would be a cayman company, write an invoice for a Million Dollars, and that invis for a Million Dollars is the man at the port sees, and thats recorded in exports. How much is going on . How do you track it . It ton of it is beginning on forever, and when you see a sharp change in the import or export number. A sharp drop means under invoicing is moving capital out. A sharp drop in the import number means t going the other way. We had imports happening in the hot monday days, now its out. You see that any time they remove the reserve requirements, they are not used to control credit, but offset capital fl s flows. This was talked about. Yeah, yeah. The third one is what you hear the leaders saying. Thats what you hear the leaders saying. Right now, they are happy. This gives them a little more time to get their act together and i think if you talk about when we will see qe, yes, we will, but its in china, not the u. S. They are the only Major Central Bank without qe. Qe, those of you who are older, is what we used to call printing money, right . No difference whatsoever. They are manipulating the currency, float it in the way they want it to float. The currency is pegged to the dollar upward trend since 2005. It moved 3 , 3 is chump change in the currency game. Right. Their prices against their importers went up 17 in the last year. This is taking their appreciation from 17 to 14. This is not a deappreciation. Is there a stat that tells the real story . Everyone talks how bad the data is from china. The data out of china is not very good, but its an emerging market, and thats what you expect. I know the guys measuring data in china who are trying hard. The problem is in the provinces, data comes from mayors and vice mayors who are compensated in the careers by producing jobs so they produce over estimates. Think about that for a minute. They produce an overestimate last year too. That doesnt affect the growth rat. Just puts an error return in it. Overestimates the amount. The next couple weeks, theres all sorts of data, hopefully, that what do you think the Janet Yellens looking at . Not gentle ben, but generous janet is the one were talking about. Shes looking at the pmis are good numbers. They are real . Well, they i are good. They are both good, measuring Different Things, private measures little firms, public measures big firms, both very useful number, and the export numbers matter a lot to me. The gdp numbers dont. . Sounds like the numbers are not kp capturing what you are talking about. They dont. Pay attention to policy, Pay Attention to the export numbers, Pay Attention to reserve requirements, and but, yeah. How bad can it get . With capital controls, its illegal for a chinese personal to own foreign assets. You cant look at normal things youd measure to see what nay are doing with it, and thats true for incoming how bad can it get . 0 . Negati negative . On rates . On growth. Growth. No, no. I think chinas going to grow, you know, they could go to 5, but theres still second Fastest Growing place in the world, just not as much, but the Commodity Markets say now chinas not shrinking as much as people thought it was. Its starting to firm. The property markets in china are good numbers. They are firming up. This china story is page 2 before too long. Appreciate it. Great. I hope it does. Up next, halloweens coming, plan on trickortreating, having a party, or carving pumpkins, you will spend a terrifying amount of money this year. The business of halloween is next as we head to break. Look at last years numbers, and those pretty scary too. Theres a network that never stops improving. Thats grown faster than any other, covering nearly every american. And these geese. But its not who you think. Squawk its tmobile. Our new extended range lte signal reaches twice as far. And is four times better in buildings. Think you know our lte coverage . Think again see for yourself at tmobile. Com coverage if you live in a big city like los angeles, new york, you are no stranger to congestion. Check this video out putting it in perspective. Theres a huge traffic jam at a highway toll booth outside of beijing. Thousands what, maybe more than that, vehicles bumper to bumper as people return to the city at the end of the national holiday. The big problem jam happened where 50 lanes merge into 20. I cant fathom a street with 50 leaps. Imagine frogger in that scenario. Wow. There you have it. Wow. End joy your commute. Thats nothing compared to this. Well, yeah, i cant imagine. Id cry. Id walk. I dont know what to do. Will halloween im getting emotional. Will halloween be a trick or a treat for business in National Retail federation says spending on the holiday drops to 6. 9 billion, but a farmer single handedly pumped up the pumpkin business and pumpkin business i like big pumpkins too. That sounds dirty. Jane wells has the amazing story. Jane . Reporter oh, guys, you know, there is some story out there there may be a shortage of pumpkin for thanksgiving, but not for halloween. There are pumpkins, and there are pumpkinsteins. This is one farmers great story. This is my creation. This is molded fruit. Reporter thats tony, center grove farms, from a year ago after four years of trial and err error, found a way to grow pumpkins in molded shapes, selling to 100 to high end stores. That was followed by the new york times, network tv, and this year, we checked back in. Describe what the last years been like. The last year, boy, let me tell you, something we never expected. Reporter build a better pumpkin and the world will beat a path to the door, or at least sams club will. The walmart subsidiary convinced him to do a deal. When you saw your first one in person, what do you think . Is it real . Its amazing. I mean, it is a real pumpkin. Tony is a very innovative growing, aleadershigning with a our innovative growers. Reporter he signed for more land, more farmers, lowered wholesale from 1 00 to 30. Hey, its sams, part of walmart, but still selling some to other chains for more if he can meet demand. Last year, we did 5,000, a little over 5,000. Reporter how many do you want to grow this year . We have orders for probably close to 90,000. Reporter all right. Next year . White pumpkins grown in the shape of skulls. Even his failures have turned into successes. This thing right here was a mistake. The guys forget to really bolt on the back of the mold so you yacht the front one, the back fell off k and people like these better than the regular ones sometimes. That is really cool. Whats this guy i mean, the one question, jane, is this something that somebody else could try to knock off, or is he really have like a patent on this . Reporter well, hes trying to pa tent it. Believe me, this is harder to do than you think because you have to have a mold that is you have to have the right pumpkin variety, he went through 27. You have to have the right mold material, put the mold on at the right time, not too small to explodes or not too big so the pumpkin cant fill it up. Its not that easy. Thats really cool. That is. Have a great weekend. Reporter you too. When we return, gym cramer from the New York Stock Exchange look, and the dow looks to open 60 points higher. Than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Because at t and directv are now one which means you can access your dvr at the dmv. Change channels while he changes pants. You dont have to be a couch potato, you can be a train potato and let them watch all the shows they love, inside the ride that you really kind of hate. Introducing the all in one plan. Only from directv and at t. Im a gas service rep for pg e in san jose. As a gas service rep we are basically the ambassador of the company. We make the most contact with the customers on a daily basis. I work handinhand with crews to make sure our gas pipes are safe. My wife and i are both from san jose. My kids and their friends live in this community. Every time i go to a customers house, their children could be friends with my children so its important to me. One of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. Together, were building a better california. Lets get down to the New York Stock Exchange. Jim cramer joins us now. Yesterday it starts slow, who is that . Who is in there thats buying and moving us up . Do you have any idea . Any insight into that . I think that anything that sells at a low multiple just caught buyers after the feds minute came out. The short squeeze in oil is monumental. The talk of most of the desks that i talk to is that the dollar has peaked, every against the socalled junk currencies. So thats going to make it so you have a commodity rally that continues, an Industrial International stock rally that continues. Its been almost unstoppable. The market is the most overbought its been for 2015. Joe, theres buyers everywhere if its got value. Interesting. I just wonder i wonder whether the lows are in. I guess youre not ready to say that. I think the lows are in for oil. I dont know if the lows are in for growth, any time they get boeing at all, they come right back in selling the highgrowth semiconductor and internets. Other than twitter, where i think theres a bottom in twitter. Really . I think the prince put a bottom in twitter. The guy has fire power. Im furious at the bottom. They know how it works. They got me conditioned, whenever theres that dot, i knows there new tweets. So i hit them on the either the ones im getting. Now next to that, theres a stupid thing they put in there. They always put the little thing there. I got to get rid of it. I got to get rid of it. That makes me click on it. How do i get rid of it . You cant. You cant. Its an infection. Floss cure for it plus the e t theres no cure for it. Plus the emojis. You know yesterday it was Kevin Mccarthy jack is changing things daily. I feel manipulated. I almost feel soiled and violated by this. Tell adambain. Will earnings show all day long people call it negative grow. Will earnings year over year be down this quarter . I think what will matter is the executives will say that the dollar has peaked, so they wont let you take down 2016. Alcoa, remember, part of alcoa that was bad actually needs a stronger dollar. Dont conclude from alcoa that things are that bad. See, look . I have a new moment. I have to click on that. Moments are good. Northern lights. Ill tell you what it is. Its so important from twitter, i got to click on right here. I know this. I know this. I already knew this. Im sponsoring an ad next to you. I will periscope on the way home. Up periscope. Are you periscoping yet . Is that dirty . What . What is that . Im going to look up urban dictionary what is periscoping. Oh, boy. Well talk about it during break. When we come back, nominees for the rock n roll hall of fame are out. And check out the oh, my god. Oh, boy. The futures so far its not dirty. Up by 57 points. The nasdaq up by 12. We are on track for the best week since february for the dow and since december for the s p 500. Stick around. Why pause a spontaneous moment to take a pill . Or stop to find a bathroom . Cialis for daily use, is approved to treat both erectile dysfunction and the 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. Ask your doctor about cialis for daily use and a free 30tablet trial. Cars should be hall of fame. Private equity firm Golden Gate Capital has taken a 9 stake in ascene that. Thats retail. Thats the Parent Company of dress barn, lane bryant and ann taylor. Golden gate said it is discussing ways of increasing shareholder value. Eli lilly upgraded to outperform from neutral at credit suisse. And the rock n roll hall of fame announcing the nominees for 2016. The acts eligible for induction include the cars, chicago, cheap trick this must be af fa met cal. Deep purple, Janet Jackson, jay bees, shack chaka khan, nine in nails, the spinners and yes. You dont want Janet Jackson in. I dont have a strong feeling. I have other rock bands that i think should be in. Yes should be in. Deep purple should definitely be in. There she is. Thats not really rock n roll . Steve liesman was skeptical. He thinks of it being pop. Control was one of the albums. And rhythm nation. 86 and 89. You never saw her in different strokes. I like her, but i understand the question if its rock or pop. You have no shame, you said you wanted Michael Jacksons glove. She was in good times . Come on. I was in college for those things. You remember that, right . A little. You can become eligible for induction 25 years after the debut maybe thats why. Thats why we couldnt figure out why theyve been nominated before. Am i reading this . Viewers have been tweeting in all morning. Squawk fan john says he is backing Janet Jackson, cheap trick and Nine Inch Nails. Its been 25 year s for Nine Inch Nails . Yeah. It has been a fun week. If you are a bull, youve had a good week in the stock market. Well see what happens the rest of the day. The futures have been indicating higher. Capping off a good week for the markets. Just the fnext week is our b celebration. The 20th anniversary. I know weve been talking about it for 20 years. Now its for real. Throwback thursday, carl, david and jim will join us on the set. Thats cool. Tuesday do we know weve invited everyone we should have invited . Im sure we have been i dont know. Remiss in some issue. We should publicize it so theres a big crowd outside. Join us on monday. See ya. Squawk on the street right now. Good morning. Welcome to squawk on the street im david faber along with jim cramer. We are live from the New York Stock Exchange on this friday. Carl quintanilla hat day off. Lets give you a look at futures as we start our coverage. You can see were looking nor a slightly higher open on all the major averages it would seem to me. The tenyear yield moved up yesterday. Interesting, wasnt it . Yesterday we were at 2. 0. We ended the day well above that you can seere