Transcripts For CNBC Squawk Box 20160920

Cac in france up by quarter of a percent. Check out crude oil price. Crude oil down by 16 cents. 43. 14. Big news is whats happening in georgia and atlantis and other markets where they are having difficulty getting oil or getting gas to the pump. Its been shortages for a lot of drivers showing up and much higher prices for some of those drivers. Thats a story were watching very closely. Lets get an update on the man suspected of setting bomgs in new york and new jersey. Ahmed khan rahami is being treated for gunshot wounds after a shoot out. He was spotted yesterday sleeping in a doorway of a bar in linden, new jersey. Two officers sustained minor injuries after a gun battle. Rahami was conscious as he was loaded into an ambulance. Investigators say at this point hes the lone suspect in the case. Hes a 28yearold naturalized u. S. Citizen born in afghanistan. Hes been charged with five counts of attempted murder of a Law Enforcement officer and more charges including terrorism are expected in the case. Well get an update on the suspects condition in a couple of minutes. We were all part of history yesterday when they tested live on air the alert. We heard it. Came on the blackberry too. Mine went off, like a what is that. Right at 8 00 the. They were able i guess they used Something Like 12 times in the new york city area, three times during hurricane, things that were approaching. I like it for a megan something or other, heres the car this, kid just kidnapped. What i want to see is a picture. At any point picture. If youre going to be useful i think it came with a picture. Mine said look at the news outlets. If you can see a picture of the amber alerts of the virtually alerts it helps a lot. New world. Back to Business News were waiting on a decision from the bank of japan thats due early tomorrow morning. According to a poll by reuters boj is seen easing policy this week. Twothirds of respondents saying japans central bank is likely to cut rates. Does that mean increase negative . We could see an increase in Government Bond purchases. The fed kick off a two day policy meeting today forecasters expect the central bank to leave the rates unchanged for the sixth straight month sentiment apo among policymakers is mixed. Something might happen if they did that. We could see 30, 40 points off the dow in seconds and then what would they do . They dont want to be responsible for that. On todays economic calendar, august Housing Starts out at 8 30 eastern. They have been forecast to drop about 2 last month. Building permits are expected to rise more than 2 . Less tell you about a few stocks to watch today as well. Shares of ascena plunging. Posted weaker than expected earnings and offered a down beat full year forecast. That stock is down by 23 . Seaworld is suspending its Quarterly Dividend after paying out a final installment to shareholders at the beginning of next month. The money saved on Dividend Payments will be used to repurchase shares but that stock is down by better than 6 . Carl icahn reducing his stake in chesapeake energy. He said that the company he thinks has done a good job but doing this as kind of writing down some tax losses on it. The shares of that stock down by 4. 5 . The other big story is wells fargo chairman and ceo john stumpf who is testifying before the Senate Banking Committee Later this morning over the banks sales practices. Wilfred frost is in d. C. Today and hes got more on that. Good morning. Yes so the ceo john stumpf will tell the Senate Banking committee that hes quote deeply sorry today for the recent fraudulent account scandal. Seen the share price decline 7 since the story broke on the 8th of september. The fine of 185 million has already been paid with 5 million set aside. The ceo accepted accountability but theres a sense that he and the company have not yet sufficiently placated a desire amongst consumers, press and politicians for a fuel apology. Hell say today im deeply sorry we failed to fulfill our responsibility to our customers, to our team members and to the american public. And that he quote accepts full responsibility for it. But still theres no clear sign that he plans to resign he says, quote im fully committed to doing everything to fix tissue. Hes also expected to run through both the number of accounts in question and number of employees involved to clarify in his eyes that its not as bad as some have been making out. No mention of claw backs of executive pay are expected which will remain a major issue for discussion. The other question on the agenda is whether theres any criminal wrongdoing something that stumpf denies and unlikely this hearing will unearth anything of that note since the cfbb investigation already failed to do so. The whole industry will be glued since this story broke. One thing you just mentioned thats particularly interesting is john stumpf is going to apologize but also going to make the point that things are not as bad as some are making it out. Thats a tricky thing to try and do before senators who are very likely to be fired up and using this as a way to really hit at the banks particularly in an election year. That was a risky strategy to say hey its not that bad when we know there were 2 million fake accounts that were created. This is pretty widespread. Theyve already admitted they fired over 5,000 employees over the course of five years over this. I agree. I should clarify. I think he plans to go further than he has done so far in terms of highlighting the extent of how sorry he and the bank is. But he does want to put clarity on those numbers to make sure the facts are clear to all those concerned and some reports perhaps hes been disappointed with, you know, the level of the numbers and how they have been reported. On the note hell say i want to apologize for not doing more sooner to fix the issue. Clearly a level of apology he hasnt done yet in terms of his own actions towards sorting this out. I suppose the offset of that is whether there will be action to back up the words and thats why i bring it back to this idea of claw back of executive pay. He said thats up to the board to decide. I wonder if people are placated until they see a big scalp in terms of an executive or himself in terms of claw back of pay. Theres a story of the executive in charge of the arrest banking. I thought she left. Shes still at the bank at this point which may complicate matters even further. Shes retiring. Thats been confirmed as of july. The other fascinating question i think that they are sure to post them, but claudia russ anderson, we were told yesterday took personal leave of absence in june of this year and that somebody has been announced to take on that role and, again, the bank maintains that neither of those two departures although clearly linked to this issue are leaving for any reason other than personal reasons, retirement and personal leave absence. Im sure hell be grilled on that because it just seems very, very convenient and fact that neither of them are facing claw back of pay is something people find hard to grasp. What do you make of the idea that at least in his prepared testimony john stumpf seems to suggest the numbers are exaggerated. Thats my takeaway. At one point he says i want to high like your direction of pwc was to err on the side of the customer teen be overly inclusive in attempting to identify a population of customers that may have suffered financial harm. Absolutely right. Thats what i was mentioning earlier. That 2 million number he says was the accounts that they could not rule out that have possibly been missolved. But no guarantee that they had been. He wants to clarify that. Not 2 million definitely illegally missold. Its not a winning argument. Just to take it a step further not so much in terms of clearing up in terms of what theyve done in wrongfulness, of those 2 million only 115,000 were fee paying and that just highlights how small of a hit theyve had to pay money back. That 2. 6 million or equivalent of 25 million per account. That highlights a separate point. This isnt an earnings issue for wells fargo. Its a pr issue. Its a customer image issue which does lead to a possible multiple issue in terms of the share price should it still be trading at a premium to the sector but not so much an earnings sector which it does highlight by the number of accounts involved. Okay. We appreciate it. A programming note, cnbc will bring you the hearing at 10 00 a. M. Bob corker will tell us what he wants to hear from the wells fargo ceo. Hell join us at 8 30 a. M. When you put stumpf apostrophe s. You have seven consonants. And wilfred frost said its left down to the board. Left up. Opposite things. Tomato tomato. Rubbish. I was going to say the words were not supposed to say. Ppi. No. Ones we got in trouble for. The britishisms. Oh, yeah. The fed kicking off a two day policy meeting today. Joining us right now is chief Investment Officer for equities at federated investors and the senior u. S. Economist at ubs macro research. Gentlemen the front wage of the wall street journal says whatever happens today with fed the markets are already doing the feds job pointing out the ten year has gone to 1. 7 . Dollar index is down by 1 and dow is down by 2 since these iterations from the fed since they started moving on this. Steve, what do you think . Is the market anticipating any sort of move this year or it is kind of off the table . I think at this point theres a pretty strong is consensus they are going in december. Way too much noise around this hike that they cant go in december. Its very hard to do it tomorrow. It just given the data that weve had lately. What if they did it tomorrow . I think people would be upset. Therefore i dont think she will do it. Why do they care . Our view is long term we are in a low Interest Rate cycle here and trying to keep our investors focused on that. We think the ten year peaks at 2 , 2. 5 cycle which is very bullish. Near term theres a lot of noise. Tomorrow also we have the bank of japan and frankly theres nothing they can do thats going to make the market happy. Meaning that you think theres going to be waves that ripple through the market no matter what they do i think people will be upset with them either way. Eat they are will announce more qe or say were done and then people will say gee our feed has been cut off from another source. Mario draghi did it two weeks ago, the fed is talk about hiking in december, the boj is done. So, were near term cautious partly for this reason, partly because of the elections and other things. But i think the markets are pointing here where the Central Banks cant help them. Thats the reality and adjusting to that. Sam lets talk about that. If the boj does say they are done at this point and doesnt do anything that paves the way for fed to raise rates in december i would think because part of whats happening is as much as they dont want to admit it the fed is trapped by what every other central bank is doing. The fed is more focused on domestic. They always have been. They continue to be. No reason in the world they shown have raised Interest Rates to this point. Theyve thats right. Theres spill over from foreign growth into the u. S. From oil prices. Every time they talk about raising rates it raises all kinds of concerns what that means for the and then our exports. They would be more concern about domestic. We had weak isms. Slightly softer employment number. If you look at where we are in the unemployment rate, how much job growth weve seen based on the numbers were looking at that they are following every day i cant imagine this warrants near 0 Interest Rates. I think youre right but thats not how the fed is thinking about it. Janet yellen in june gave this long list of worries of domestic activities. To me thats cover. Their real concern is whats happening shes giving lip service to her domestic agenda but shes very focused on what they are going overseas. Its hard not to be. Hard to argue were not affected or impacted. Its more a function of growth than necessarily the policy decisions that havent been that effective arguably. When do you think they will raise Interest Rates. We expect them to move in december. Theres a drum beat of change in sentiment amongst fomc fishlg officials. Whats the chance that it happens in december i get theres a better chance in december than tomorrow but i also think that once we get to december well be having the same conversation again. I dont understand why we wouldnt be. Unless the bottom falls out of the economy between now and december just because its a calendar year. So many times people would be upset if she doesnt move in december at this point. You just told me they would be upset if they move tomorrow but be upset about anything right now with the fed. The reality is that the fed is done in terms prove providing a feed to the market. Were going through process now adjusting. You also said that you think that Interest Rates will remain incredibly low for an incredibly long period of time. Thats my focus. Maybe a quarter point doesnt matter. This is a lot of noise. They are also thinking two more knicks r hikes next year which is likely. Short term theres a lot of short term traders in the market. Were not even going at 1 a year from now. 1 a year from now. One and done. Thats bullish. Near term theres short term money in the market. They think this is the beginning of a long term move. Very quickly you agree with. We do. Okay. Low rates for a long time and maybe thats the message for investors. Gentlemen thank you very much. We appreciate it. Coming up shaking up the sea sweep. Some management moves in some fortune 5000 companies. And then later jack welsh well be our guest host from 7 00 to 9 00. Squawk box will be right back. [chains dragging] [eerie music playing] [crickets chirping] [owl hoots] announcer if you dont fix them, sparks from dragging tow chains can cause a wildfire. And that could be scary. Bye, smokey only you can prevent wildfires. We have an undate on the man suspected of setting bombs in new york and new jersey over the weekend. Ahmed khan rahami is being treated for gunshot wounds after a shoot out with police. We go newark, new jersey. Reporter good morning, becky. We just spoke to a patient who came out. He said theres a Strong Police presence inside of the trauma center. He says there are several Police Officers that are guarding a roped off area inside and there are several other officers guarding some entrances outside. This is the hospital where Ahmed Khan Rahami was brought after that wild gun battle with police to undergo surgery. Were told that gun battle with police started after a bar owner in linden noticed a man sleeping under a stoop taking shelter from the rain early in the morning. He tried get the man to leave, tried to wake him up. Thought he recognized him from soecht media reports that were circulating around that time. He called the police. The police came and as they approached rahami, he pulled out a gun and opened fire almost at point blank range at one of those officers hitting him in the bullet proof vest. That kicked off whats described as a running gun battle for several blocks, several city blocks. Surveillance video showing rahami firing indiscriminately at times in the air. People taking cover. Officers were able to stop rahami shooting him in the street. He suffered several gunshot wounds. They handcuffed him there. Transported him to the hospital where he was alive and he was obviously very coherent when he arrived at the hospital to undergo surgery. One of those officers injured in that gun battle also came to this same hospital to be treated for a grazed wound to the forehead. Hes been treated and released. Rahami is expected to make his First Court Appearance on wednesday to mace charges relating to that shoot out with officers, five counts of attempted murder against Police Officers as well as a slew of other charges and there are federal charges rear lating to terrorism that are expected to follow later in the week. Becky, back to you. Again thats gad in schwartz. Glaxosmithkline name agnew ceo current head of Consumer Health care Emma Walmsley will take the job replacing andrew witty who announced plans to retire. Intel is Namg Robert Swan its new cfo. Hell replace stacy smith who will now lead Sales Manufacturing and operations and swan comes from private equity firms General Atlantic and had previously served as ebay cfo. Walmart has completed that acquisition of jet. Com have agreeing to buy the online start up for 3 million. It gives walmart access to jets pricing software. Something youll see jet. Com looking more like walmart and walmart. Com looking more like jet. Com. They are hoping to combine these audiences. One brings in the urban Millennial Shopper jet. Com. Walmart. Com appealing to more people looking for bargains. This was a deal that would be very lucrative to jet. Com ceo who is joining walmart as head of its u. S. E commerce business. Hell be getting somewhere even if 450 and e7 50 million in cash from the deal. Also for staying on as an executive hell be receiving more than 3 million shares of restricted stock over the next five years. Based on walmarts Closing Price on monday those shares are worth about 206 million. Remember when he came here. We were all skeptical. I know people who were investors in jet. Com who were skeptical and in the end pulled off mark lowry has done this before. Heck of a deal. Lets talk about the likelihood of Hillary Clinton winning the white house in november. It has slipped while donald trump has seen a lift according to results of our Quarterly Survey of the cnbc cfo council. In july 90 of u. S. Respondents believe clinton had a lock on the election. This dime her lead fell by ten points. Republican nominee donald trump hit a high with the council, 20 of respondents think hell win when asked for the most important political issue, nearly 65 said Corporate Tax reform fold by Monetary Policy at 12 . For full survey results check it on out and go over to cfo council. Cnbc. Com. Americas direction, achieving prosperity and securing america for the debate. It will be hosted by lester holt at 9 00 p. M. Next monday. It will run for 90 minutes and without commercial interruption. Super bowl of debates. Thats right. Big event. No commercials. You want 90 minutes you want to get as much as can you. Super bowl rates. Forehand and after hand but we want 90 minutes. 30, 45, 50. Slip in a few breaks. Yeah. Thats what well do right now. When we come back the election effect on the markets. Its not about trump and clinton. Its about gridlock versus clean sweep. Thats a report from merrill lynch. A programming note ill be speaking to former president bill clinton later today. Thats coming up on the Halftime Report starting at noon eastern. Stick around, well be right back. Announcer coming up at 7 00 a. M. Eastern straight from the gut business titan jack welch will be our guest host from economy to politic, no topic is off the table. Squawk box will be right back. Okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Announcer dont let salmonella get funky with your chicken. On average, one in 6 americans will get a foodborne illness this year. So, learn the right temperature to cook each type of meat. Keep your family safe at foodsafety. Gov. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley are you with me dr. Wu are you really just a shadow 0 of a man that i once knew look at this. Wait a minute to find out why were playing that. Welcome back to box. This is cnbc firstperson. Msnbc. Com. Lets check out the u. S. Equity futures. Things are indicated higher once again not that this mattered yesterday. We saw the dow future up triple digits in the morning only for the market to end slightly lower. This morning the dow futures are indicated up once again up by 65 points. S p futures up by over 7. 5. Nasdaq up by 8. Take a look at the yield on the ten year right now its yielding just below 1. 7 . That yield is just a couple of ticks below where it closed yesterday. 30 year yielding 2. 429 . Five year at 1. 2 . Price of crude oil is under pressure this morning as well down about 29 cents sitting right at that 43 level, 43. 01. Much has been said about the business worlds possible reaction Hillary Clinton or donald trump election victory but less attention is paid to the markets reaction to what would happen to a clean sweep of white house and congress by republicans versus a continued divided government. Joining to us discuss these scenarios is david wu who is a ph. D. Normally, david, we dont call ph. D. We reserve that for m. D. S but were making an exception. This is bad for the entire interview. Are you with me. Totally with you. You spell it differently, i think. Maybe it is wu. The song is not ill look it up. Anyway, you have i dont know whether i call it an out of consensus opinion but its an interesting one. The reason i thought it was compelling to talk about, about two weeks ago you wrote a piece about if trump were to be elected that you would see growth explode in the United States but for not necessarily positive reasons because the deficit would get blown out, there would be all this stimulus from the tax cuts, infrastructure and defense spending and bond prices would drop precipitously. Interest rates would soar. Are you talking about a gdp acceleration into the 3 to 4 range. Its possible. To get that you need a republican sweep to the extent you need not only trump president you need also republicans hanging on to the majority in congress. In the last six years as soon as democrats lost the majority in the house, very tight fiscal policy in the u. S. Because democrats wouldnt let the republicans cut taxes and republicans wouldnt let democrats increase spending. We had neither. So from that point you get a clean sweep. Youll see potentially massive fiscal easing especially under a trump scenario. Youre talking about just how trump is talking about this will be the biggest fiscal stimulus since the second world war. Done sound like a republican. You know some would argue in the past they have blown out deficits on defense spending and tax cuts. The only time seriously, democrats and republicans talk about this only when the other party is in charge. Okay. The republicans the only thing i think donald trump and paul ryan have in common they both believe in supply side economics. Wouldnt the if it was see i think thats why i said a republican because they dont get the house the democrats no matter what. I dont know. But a lot of the toss up, portman is way ahead, rubio is way ahead. I dont know what happens in pennsylvania. A democratic clean sweep is less likely. Wouldnt a democratic clean sweep result in the same thing in blowing out the deficit and it would be very similar would it not. No tax cuts but spend a lot more. Clinton camp is talking up fiscal responsibility. They want to do Infrastructure Spending but but they want to fund it by raising taxes on the rich. I think its a question of magnitude. By the way in the Clinton Administration it makes it more likely the fed will hike in december than a Trump Victory. Near term we see wisdom out there that trump is trouble so from that point the fed might be a bit more cautious in terms when december rolls around. You think that they would be less likely to raise rates if donald trump wins the white house is this thats my gut. Im with him. I think also that flies in the face of the whole idea of them being apolitical institution. If you think the markets will be more jittery at that point or more volatility there will be more anxiety producing for them. Economist on cnn talked about how if trump win theres will be a recession. A lot of people in the u. S. Are worried about the fact that Trump Victory means declaring trade war on china, disruption on global trade from that point of view people right now especially people who are not necessarily supporting him and more fiscal i think theres ground for people to actually sort of take a more cautious view on a Trump Victory. We look at both of these candidates and assume a lot of things they are saying is rhetoric, that they are not going to follow through on a lot of the promises with Hillary Clinton be it free college or something along those lines with donald trump him raising a 10 tariff on those things. How fair is that to assume these more extreme position will not be taken up . Personally you think about trade war. I still remember in the Clinton Administration came along in the early 90s they were under enormous pressure from detroit to declare trade war on japan. Japan was flooding the cars with cheap cars. They went with nafta. Exactly. Big difference today in 1990 gm sells more cars in china than the u. S. From that point of view that will be almost suicide for the Republican Party. The president can president is pretty powerful, constitution says Congress Actually is there to keep him under control. Really, im not sure you look at stability of markets and say its a positive because we just continue the status quo. Thats what a Hillary Clinton presidency looks like. Continued gridlock. Nothing happening. People think, you know, people that are supporting her from the right think she will be like her husband and she done mean any of this stuff and govern from the middle. I dont know if thats true or not. It was interesting because not all academics we had Harvard Business people on saying the consensus across the river from the peoples republic of cambridge across the river the disruptive aspects of trump was attractive. That was the consensus for hbs if you can believe that. I agree. The fact if you look at the market, market is pricing not just gridlock, market is pricing very high probability of gridlock. This is the reason why people actually you look at market. The lowest level one year since 2014 the last time it was this low the fed was still doing qe. The market thinks gridlock Means Nothing will get done. This can be the most important election of the year. Because gridlock means no fiscal stimulus meaning the fed is the only game in town. Tax reform. I wonder if just be morphed more income in equality more assets appreciation, nothing gets done more status queue. 90 wrong direction at the end of that four years if were stuck in this muck for another four years. Absolutely true. Thats the consensus on wall street today. Consensus changes as the poll changes. Were now 5941. I was shocked. In the last few days trump has basically moved up in ohio, in pennsylvania, in florida, including three points behind in michigan. Yet the stock market is holding up very well, investors still thinking well. You look at the electronic poll still giving Hillary Clinton why is a tax rate end up a positive for the private sector . Why it would be a positive. I like the republicans that want all these republican policies to go through and think hillary is the person maybe she will reach across the aisle instead of putting a republican in who doesnt have to reach across the aisle. Theres no sense. That makes no sense. That makes to sense. Maybe hillary is the best person to compromise with the republicans. Udon need to compromise if you put a republican in with the republican congress. Then my wife and daughters would like a woman. How about a republican woman if youre a republican. Thats just that whole thing anyway david wu, thank you, dr. Wu. Spelled differently. Wu. But close enough. Well take it. Coming up when we return, todays top stories and at the top of the hour master of management jack welch will join us. Former treasury official john taylor on this weeks big fed meeting and the Central Banks biggest mistake. Then later senator bob corker will tell us what he expects to hear from the wells fargo ceo appearance on capitol hill later this morning. Lets take a quick check on whats happening in european markets. Green arrows across the board. Squawk returns in just a moment. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. The experts at cdw brought a global outerwear manufacturer, allowing them to handle the recent popularity boom in fanny packs. Its pretty fly. Unless being 90s is your thing. Well, cdw and hpe services gave them the flexibility they needed to scale up their scale up their cloud resources, making sure supply meets demand. Poser [ classic ringtone ] whats crackalackin . Hey, did you remember to set the vcr . Increased flexibiilty by hpe services. I. T. Orchestration by cdw. A used car, regulators buying into the vision that Autonomous Cars are the key to safer roads. Department of transportation releasing safety guidelines for the design and development of selfdriving cars. Among the regulations a 15 point safety check assessing crash worthiness, safe guard against hacking. Oh, boy. Udon think about some of this stuff. And what happens if Automated Systems fail and youre going like 60 or 70. Rules also require premarket government inspection on new technologies. The guidelines coming just a week after uber began trials to let customers order rides from Driverless Cars. This isnt so much as elm driving in cars but protecting the safety of people not riding in cars. Companies are rolling out this technology and testing them without anybody checking it out. For years youve had the best way to do this. Youre not driving but you have a person there that has responses. Responsibility. Exactly. The argument from technology from the Technology Folks is that they have better results based on the number of road hours that theyve put in with Driverless Cars and humans are the weak link in all of these things. Can you fall asleep. Distracted driving. Drunk driving. Well be totally superfluous. We can relax. Where was that movie they were all fat. We ruined the planet. It was wally. I watched sully over the weekend. Had that plane been controlled by a computer and not a human im not sure it would have worked out. Did you think that they its about a 20minute incident really. With all the sully personal issues and all that did it work for you i want to see it because i didnt know i was fascinated. They grilled him for doing it afterwards. I dont know what happened in reality. In the movie it was fascinating this emotional toll it took on him and also when you have a crash like that even though its not a crash and everyone got saved his immediate instinct wasnt necessarily to think i saved these people but the investigation and everything that will come and what will happen to his family. I thought it was very interesting and very well done. I couldnt belief they gave him grief and crying avenues hero and saved all those people. I cried during the movie. I know. I cry during commercials. Its complicated. Few words, finding dory. You cried. I did. There was an octopus driving a truck on land. Somehow you still you know my kids liked it. I liked it. And im the pregnant one. Just in terps of pregnancy theres some horse monies going around. I cry over crazy things right now. Like three times a day. Do you . Sad happy things . No. The story last week about the 5yearold who was going kindergarten for the first day and so excited and the bus driver forgot him and left him on the bus. For three days i tried to track down his mother. Im not going to show you niger man shepherds at the veterans grave for five years. Dont do that. Coming up, the squawk ceo call is in session. The phillips lighting chief will talk about the market for l. E. D. Bulb, the rise of the smartphone and his read on the economy and as we head to the break heres a look at yesterdays s p 500, winners and losers. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. You know what, guys . Theres a lot of tree branches and dry brush over here. We should probably move the bonfire over there. [smokey whistling a tune] im guessing smokey liked that idea. With new cabinets this wfrom this shop,house, with handles designed here, made here, shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Thats interesting. Welcome back to squawk box. The battle for the bulbs is heating up. Lighting Companies Like ge all hoping to lock in customers with app controlled technology that may eliminate the need for a light switch. Joining us is the ceo of phillips lighting which was spun off earlier this year. We were just talking about wifi bulbs before we got on the set here. And the light came on. Haha. Anyway, the question i have is all these bulbs i dont know if you have them yet. I dont. Bulbs that are wifi enabled. Effectively im turning the bulbs on with my phone. Why are the bulbs wifi enabled opposed to the switches . Well, at one point you may not even need switches. Since light is digital and can be controlled. Where you talk to your watch and when you enter your living room, you would say relax and all the lamps would turn into the relax mode. And this is not technology that were going to be developing in years. Its existing now. Who is going to control, though, the ecosystem. I know apple with the home kit is trying to control that. You can say date night on siri and it will turn the whole room a little dark. Maybe the blinds will come down, movie will go on. But is that ultimately going to be an apple technology, Phillips Technology . Who is vying for this . We have a clear strategy. We are focused on lighting. We do light source up to the system, um to the app. And we would connect with other players that want to own the smart home. We are working with apple, with goog. Nest, amazon echo. We are working with Samsung Smart things. And we are providing for them the lighting experience. Does this mean the end of all those electricians who are building elaborate systems . Whats going to happen to them . If you want that technology in your house, you get a fancy system. Any time you want to change it, you got to make a phone call, they come to the house. Thats ending . We believe its two different markets. Youll never scale up if you need installers. If you take the phillips lighting system basically its seven minutes. You can do it in your home. Whats the margin of life to the light bulbs for you . Fantastic. Its a business which is growing and which is growing from a growth margin standpoint. And talk about the security issue. Theres a report that some people were able to take full control of these lugt bulbs. I dont know what youre mentioning but there is on a regular basis even the last in las vegas, the black hat. And we contribute to this even because we want those people who are specialists in security to test in our system. And they came up and they said that the system is clearly the most secure one on the market. And they tried to breaking open the hardware to find some weaknesses which they could not. Wherever they find their vulnerability and then we have eight weeks to solve it before they make it public. We work with them on a regular basis to make sure we also have, you know, the ideas coming from the outside world when it comes to security on our systems. What do they do when they hack it . Watch this. I cant see. Or blink them. Stop, stop. I mean, what do they hack for . This is what theyre doing though. No, dont what about all the light bulbs . What can they do with a light bulb hacking it . Its not like hacking a driverless car. Just to find an old school light bulb. I apologize for this, i think the old school light bulb has better light than the new lights. Let me tell you today you have 16 million colors available. All the nuances of white with l. E. D. So you can produce the same light. You can. It takes awhile to light up. And if you drop it, its like chernobyl. You cant return into that room . What do you got to do . If you drop one and it breaks like any bulb if it breaks, it breaks. Some that are scary. With a chemical inside. Its chernobyl or fukushima. No issue with that. Thanks for being here. We hope to have you back. Thanks. When we come back, master of management jack welch will join us for the rest of the show. Stick around. E lights go out. E lights go out. People get anxious and my office gets flooded with calls. So many things can go wrong. Its my worst nightmare. Every second that power is out, my citys at risk. Siemens digital grid manages and reroutes power, so service can be restored within seconds. Priority number one is keeping those lights on. It takes ingenuity to defeat the monsters that live in the dark. Bacteria can hide in food and make you ill. Wow announcer but you can keep bacteria from ruining your day with 4 simple steps clean, separate, cook, and chill. The roadchip to food safety starts at foodsafety. Gov. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. The economy, politics, and Business Leadership in focus. This morning the executive chairman of the Jack Welch Management Institute, jack welch himself will join us. From the feds big meeting to jacks take on why hes voting republican. We leave no stone unturned. Is a rate cut in the cards . What the experts are saying about the chances of a rate hike this year and results and reaction straight ahead. And a big day for wells fargo as john stumpf heads to the hill to testify. Many mike mayo is interviewed just minutes away as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. Weve been watching the futures this morning. Once again you are looking at futures that are sharply higher. Dow futures up about 75 points. By the end of the day yesterday we were down. Well have to wait and see what happens. S p futures up by 8. 5, nasdaq by 9. 5. This is whats making news at this hour. Fed policy mablgers begin their twoday september meeting. Their latest Interest Rate decision is out at 2 00 p. M. Eastern time tomorrow. The data dependent fed meets just one economic report is due out this morning. August Housing Starts will be released at 8 30 a. M. Eastern time with economists looking for a 1. 7 decline. General motors has set the price of its chevy bolt electric vehicle at 34,700. The bolt will have a driving range of 238 miles on a full charge. Do we think thats a good deal relative to a tesla . I think its a pretty good number. I dont know if its as good as a tesla though. Teslas got a aura. The thing they got right is the body. Its a beautiful car. I would like more variety. I need a little when i see one and say thats a nice one. Its silver or charcoal or something. But i want more. I dont know what i want. But i want more. You know . Because theyre all theyre different, the only thing that distinguishes them. They all have the same sunroof. More options. Yeah. I like when the winged doors come up. Have you seen that . They all have those . Some of them. No, i dont like that suvs. No. They look like they were inflated like an inflated prius. Terrible. Lets get an update right now on the man suspected of setting bombs in new york and new jersey over the weekend. Ahmad kahn rahami is being treated after a shootout with police. He was spotted yesterday sleeping in the doorway of a bar in new jersey. Initially he tried to run. Then he engaged in a gun battle with police. Two officers sustained minor injuries. Rahami was shot several times but was conscious. Investigators say at this point he is the lone suspect in the case. Rahami is a 28yearold naturalized u. S. Citizen who was born in afghanistan. Hes been charged with five counts of attempted murder of Law Enforcement officers and more charges including terrorism are expected in this case. All right. To politics now. Nbc releasing the three topics for the first president ial debate. Americas direction is one. Achieving prosperity is another. And securing america is the third. The debate as you probably know by now will be anchored by lester holt. It will be at 9 00 p. M. Next monday and it will run for 90 minutes without commercial interruption. Lets bring in our guest host for the morning. Jack welch. Chairman of the Jack Welch Management Institute at strayer university. Youve got some stuff, jack. I think it would be some talking points or maybe some features of what the republican platform has in contrast to the democratic platform. Or the Hillary Clinton. I needed you yesterday because we had hank paulsen on. I saw. His point was im going to elect as many republicans as i can to the house and the senate. But then maybe hillary is the one that might compromise with them to do the republican things instead of electing the republican guy who you wouldnt have to compromise because hed actually want to do that thing. The logic i didnt quite get. And he wants to elect a woman but not a republican woman. Because his wife wants a woman. I dont know. But there are republican women. But not one running. Not running right now. Maybe a Margaret Thatcher is out there somewhere with small government, you know. Anyway. What are your well, what i try to do i sent a couple slides over. I had two slides that sort of described why im voting republican, why im voting for trump basically. No offense to andrew with his column this morning which i read. I can attest to the fact that if you cross the obamas, the bots come at you on twitter. You think the retribution is just just as strong on either side. So retribution is there no matter which way i dont see what trump can do. If he gets elected, he can maybe do something. You dont want to cross the clintons either. Believe me. Nobodys crossing you dont have to shoot one to support the other. That is an important part of this whole discussion. Tell blumenthal that. Anyway, go ahead. I used probably the wrong yeah, you probably did. Exactly. But what i would like to do is take you through papers rather than just taking and take you through the reasons why im voting for the republican candidate. Taxes. Can we put taxes up on the screen . There it is. The economy and taxes. Basically i want a Strong Economy that creates jobs. Ive been there in 79 and 80 when jimmy carter was there. Then i was there when ron reagan became president and i saw the surge. If i compare the tax rate on corporate, even the never trumps want all these things. So the never trumps have to face into what theyre getting from Donald Trumps proposals. Trump is doing 15 . Hillary has no change. You either take the republican agenda or you take the democratic agenda. Democratic agenda is obamaplus stated over and over again. The republican agenda is 15 . The personal rates are dropped to 12, 25, 33. And Capital Gains at 25 versus 47. 5 top rate. So thats one reason why. I think lower taxes drive more prosperity for more people. Now more . You have more . Thats enough right there. No, im kidding. Now to regulation. Were being drowned in regulation. The George Washington university came out yesterday with a paper showing that youve seen nothing yet. Hes going to increase in the last six months the number of regulatio regulations. Hes coming out with 100 increase in the rate of those regulations. Regulations are choking us. Everywhere you turn. Business startups are the worst theyve been in decades. Every morning you come to work and weve got something else. Weve got a new ruling, another obamacare whack hitting us. So weve got to face into this. And the banks, dodd frank, the banks have more regulators than they have in terms of supporting growth its ridiculous. On energy. Energy independence. I want it. I believe in it. So does Donald Trumps plan. The democrats believe in fracking. Environmental policy the epa is out of control. A pool of water somewhere and youve got the clean water act. Everywhere you turn youve got somebody coming down on you. Promote climate justice. Thats mrs. Clintons plan. Climate justice is a lawyer protection agency. Basically what it is, it just takes care of the lawyers. As far as im concerned, when you look at that you want the republican side. You said something important. You said to be supporting one of these candidates you dont have to attack the other. Thats something we havent seen a lot in this campaign. People coming out are coming out against one or the other. Im supporting an agenda. And Donald Trumps agenda, im for it. Now, the purists, the bill kristols of the world, they dont like the fact that we want to give womens leave. Okay . That trump comes out with that. Thats not pure enough for them. Id argue and tell me if im wrong, but theres a group of people just say yes now. No, no. Theres a group of people that are anxious or nervous that these policies which i completely appreciate that youre behind may not ultimately be Donald Trumps policies. That he has shifted so frequently throughout this Election Campaign that its hard to actually pin down what exactly hes always been for a tax rate hes put these things out there but he said its really a negotiation. Hes gone one thing to the other. Well, it will be a negotiation with congress. But this is his position and i like his position. Congress might not want to reform epa as much as he does. And thatll be a negotiation. Okay . Thats a fact of life. I like him negotiating from these positions a lot more than i like the democratic candidate negotiating because shes negotiating from obamaplus. Okay . It truly is. We might not get all this, but i like starting here and fighting like hell for it because i know itll grow the economy 4 plus 37. We had david wu on ive got some more. Please dont stop me here. Sorry, buddy. And then security. He has an aggressive stance on terrorism. She got more aggressive as the day went on yesterday yeah. I heard that. She didnt say extreme vetting. On immigration, i like restricting until we know who they are. I believe in that. And the never trumps keep talking about more immigration. Okay . On the military, now, hell have to tell us how hes going to pay for it but he wants to rebuild it. Its unclear what her position is on the military. Have you got that chart up there . Yeah. Its up. Now we go to education. How can never trumps who have fought night and day for choice dump on him when hes out there pushing choice in a speech in cleveland . He wants to have school choice. They are totally beholden to the unions. The unions run the k through 12 in United States of america and Hillary Clinton is more to the opposition. That doesnt mean i dont liker. Thats her position. Can we go back to i have a security question for you. Its not so much on the security as on the spending related to security. You talked about jimmy carter and Ronald Reagan. Not only did tax come down during that period, but one thing left out of that equation is how much the government spent on defense at the time. You can argue it was important to spend that money on defense, but it also meant Big Government spending programs. I have a hope that a businessman like trump can go into that vast bureaucracy through defense and all over. I believe Ronald Reagan couldnt do that. He was a politician. Politicians wont cut anything. I have hope you can do 1 from a rocking chair in that government. If you cant get 5 , 7 , 8 out of that big, fat bureaucracy, then you shouldnt have a job. Okay . So i mean, donald trump can get hes saying 1 . If you do it on an annualized basis, it adds up quickly. It does. But come on its lefthanded in a rocking chair, okay . To cut out that bureaucracy . I mean, come on. These are not managers. These are politicians. I know you disagreed with the the column this morning. No, i thought it was right. I didnt disagree with it. Im just here to show you that theres another side. What do you make, though and this is not even rel on the merits of some of these positions that youve taken or others are taking just on the idea that lee hoffman who i quoted talked about feeling bullied. Try obama. Try coming out for jobs arent quite right, the jobs report. Try getting that and you get these buts. I have a kid that worked there that i know very well. They just blast out bots to try and shut up republicans. And they get zero followers or two followers or three followers. You can look at who they are. It happens on both sides. I agree. But his argument was this morning it only happens, theyre afraid of trump. I guess they do have a david brock. But i dont know. I mean, media matters david brock. Thats dirty. Terrible. Lets go on. I can wrap this up and get through it. So choice, the never trumpers have been after choice since day one and theyre getting it. Unions, i dont want. Entitlements. Medicare he wants to change. She wants eligibility at 55. Right. Obamacare, he wants to repeal reform it and get a plan. The public option, thats where theyre driving this thing. You talk about government spending, you get the public option and away you go. Now they go to appointments. The cabinet is critical. Hes put out his 11 people. Well get ginsburg views. I dont like mrs. Ginsburgs views. I dont have anything against mrs. Ginsburg but her views are not mine. The cabinet will get a fresh broad experience. Might get a few guys that might scare you. Might be a little flamboyant. Well get the blumenthals coming back, the cronies. Then in regulatory were get reformers. In her place, well get hyper regulators. How can any business person either ceo to employee possibility want the righthand side of these columns . We want jobs. We want prosperity for all. We want a guy who goes to black churches. We want to guy who supports womens health. We want were getting it with this guy. Now, they dont like some of these things. But i this guy is doing jack, what youre talking about is the message that advisers have been working very closely with donald trump on in that he has come out with some of these thing. The frustration from those advisers is that he cant stick to this message. That he is hard to control. Got a little personality in there, okay . We dont have this coming back to the plane and whispering. Look at what were hearing from the Clinton Campaign on a daily basis, we hear racism and deplorable. Go back and look at the things they did to both mccain and romney. Anything that disagrees with anything, im an old racist. Im not a racist in any way, shape, or form. Theres no policy coming from there. Its all trump. Theyve been going there now since 08. This is eight straight years. And maybe before but i went back and looked. Go back and look at the Huffington Post in 08, filled with obama comments about racism for mccain. The last guy in the world thats a racist. Look what they did to mitt romney on binders. On binders. What is a binder . Now they talk about binders all the time. But all he did was bring in resumes and they made binders a big deal. Do these people message better than the republicans . Absolutely. We have got republican klutzes on messaging. Whered that come from . Thats the last month or two. I thought it was on my computer screen. Delete. Delete. I had no idea. So they know how to message. I thought boehner was bad. The whole thing is sloppy in messages, the Republican Party. This is the message. Two pages and anybody in business i employ our ceo who can possibly pick the right for prosperity and growth and jobs and security in america. Cant possibly vote d. Right. And then you talk nothing about trustworthiness or personality. Any of the other issues. I dont want to go there. Im not going there. Republican versus democrat. All right. Jack is with us for the rest of the program. And thanks for the time. Well talk much more with jack throughout the show. Meantime, though, wells Fargo John Stumpf is on the hill. Analyst mike mayo will join us next to talk about what it all means. Squawk box will be right back. All right. Lets take a look nothing funny about the stocks to watch. Were going to do a reality show off camera. Home builder lennar 12 cents above estimates. New orders up 8 compared to a year ago with deliveries up 7 . And Community Health systems is in talks to sell assets to apollo management. The hospital operator did acknowledge about various options but gave no details. And carl icahn slashed his stake in chesapeake energy. From the prior 9. 4 . Real business anchors of new york. Real housewives of what . Real business anchors of new york. About the commercial breaks. Bravo is part of nbc universal. We have a shot. Crickets. Exactly. No longer will you have to share a thought in 140 characters or less. Twitter has expanded. Oh, good. Details in just a bit. Squawk box will be right back. , who lives here and flies to hong kong, to visit this company that makes smart phones, used by this Vice President , this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Or keeping a Hotels Guests cuttinconnected. I to 35,000 fans. Businesses count on communication, and communication counts on centurylink. Welcome back to squawk box. Among the stories front and center at this hour, Berkshire Hathaway combs is going to jpmorgan chase. Fedex raising rates in 2017. Average of 3. 9 for express air Freight Service and 4. 9 for ground services. A federal judge has now ruled that bitcoin qualifies as money. That ruling is linked to a criminal case that involved an Unlicensed Exchange attorney for the defendant. Argued the Virtual Currency is not money and isnt covered under licensing laws. Meantime, big other story of the morning. Wells fargo is in the congressional hot seat today. The ceo john stumpf will appear before the Banking Committee to talk about the tactics including half a million unauthorized credit cards and phony accounts. Its among those probably the first one actually out there calling for clawbacks of the multimilliondollar executive packages. So before we get into it, we were talking in the last hour about the testimony. The prepared testimony of john stumpf. Which weve all had an opportunity to read. Others should go out and read it. What did you think of it . The ceo testimony, john stumpf, i have my copy here. There are three questions not answered. Why, where, and what. Why did it take so long for wells fargo to stop the problems. Where were the checks and balances including from the board of directors, and what are the repercussions. What do i think of the testimony . It doesnt answer a love o though questions. I think it comes down to the q a today. Very dramatic. I was looking five pages, like wheres the rest . Wheres the peat . It doesnt say anything. It doesnt answer the questions that hes going to be asked today. They want a main course today. They want red meat. This gives none of that. I read one of your reports that suggested you want clawbacks. You believe clawbacks are necessary but you dont believe that john stumpf should be fired. After that and ripping that all up, do you have a different view . Look, i think it comes down to the shareholders. I mean, jack welch is here talking about regulation. Lets have shareholders step in and fill the void more than the regulators. Look, nature abhors a vacuum. D. C. Loves a vacuum. Lets have shareholders hold wells Fargo Management accountable. Lets have clawbacks. I think we should have clawbacks also for the ceo of wells fargo. That would be the best thing to make sure people are held accountable. So absolutely. Look, on the scale of it in terms of the number involved and the type of fraud, it sounds terrible. In terms of monetary number, i wrote about this last week. This is sort of a lame scandal. From a dollar number. Total dollar number. Do you say to yourself that wells fargo is still a well managed on a risk basis . Wells fargo is absolutely still well managed. No excuses for not stepping in sooner. But over nine years with john stumpf the stock has increased. Due to out performance on revenue, risk and returns. Theyve gotten the job done. You know what i did yesterday afternoon . I went to wells fargo branches. Theres one on 52nd and third and i was talking to customers as they left the branches. I said are you a satisfied wells fargo customer on their way out. They said yes. I go well, what about the scandal and all these unauthorized accounts and their answer was well, the bank is convenient, they offer the right products. I wasnt victimized. Even one person said what scandal. So the customers are not leaving there. We did not change our earnings estimates for wells fargo for the next five or ten years. So this is terrible, people at the top should be held accountable. As far as a financial event, nost as big of a deal. In the reputation event, its significant. Somebody needs to be held accountable. Jack, what do you make of it . I agree with a lot of what mike has just said. Look, we had they had been talking about cross selling. Publicly and annual reports. Its the holy grail. Every bank talks about the mergers all come and theyre going to cross sell. Citi corp. Became travelers, all that. They obviously had a breakdown in culture. You get the behavior, you measure in reward. If they had changed instead of they had made the incentive around nps and how customers felt about it. And save customer focus. I dont think they would have had a problem. They had a cultural problem of rewarding certain behaviors that tend to break down. I shouldnt be the last guy talking about managing financial institutions. But look. You saw what had happened at this. And i think one of the bigger concerns has been one of their defenses that it wasnt 5,000 employees all at once. It was over five years. Why didnt that set off alarms over the course of five years . Theres no question they did not act fast. There is no question. Its a culture breakdown. Its not the biggest financial deal in the world. And john stumpf has done a hell of a job. That team has done a great job of cross selling. But its been their strategic job from day one. And the predecessor but it just wasnt backed up with a culture to make sure that wouldnt happen. To the culture question, theyre going to try to change their culture by removing these goals. Right . So that the employees dont feel forced to create these quote, unquote solutions. We talked about this a lot. No more pressuring anyone to open a lot of accounts. People are going to be like meaning do you think the culture is going to shift to the point where employees arent necessarily too aggressive in this instance . About creating the solutions which have created profits for the company . One of the questions is why did it take so long to stop the specific product incentives. They just started that announced theyre stopping the last couple weeks. Theyll stop the start of the year. But this is okay as an outcome but not a now, part of the cross sell at wells fargo has been a myth. It was great in the 90s, great last decade, but the average products that wells fargo sells has been stuck at six for the last several years. So the deposit base. Deposits are up by half this decade. Theyre doing something right. Theyre doing a lot right to have deposits up in this economic environment. The total revenues at wells fargo were 89 billion at the start of the decade. We estimate they will be 89 billion this year. Its not like revenues have grown a lot. This is more of remnant of times passed than how theyre being today. We should ask about how you make sure that you incentivize your employees to hustle. I mean, really. You want guys that are trying to outcompete all of your woman pet tors and you want to open a lot of accounts. Thats why we joke about it. Now all the salespeople are going to be just relax. If someone comes in i mean, you do want people hustling in trying to you get the behavior you measure in reward. Thats just a fact. Now, if you want more accounts, you put some weight on that. But you put more weight on Customer Satisfaction, on customer growth, on all these other things. You just you weigh your plan. Its not that hard. You get the behavior, you measure in reward. If you measure only one thing and you reward only that, youll ghaet. If you say Customer Satisfaction and you measure Customer Satisfaction by putting people at the door like mike was and get all the measurements of customer. Customer satisfaction is what business is all about. And if you measure that properly and live on it, you really do change the game. That was a really good youre a good guest host. I have a lot of satisfaction. He had the answer. Very good. Jacks going to be sticking around continuing to satisfy our audience. And mikes taking off but we appreciate your time. Thanks. Nice to see you. Quite dramatic. I should have torn up mine. Quick programming note for everybody, cnbc is going to be bringing you that wells fargo hearing coverage starting at 10 00 a. M. Eastern time. By the way, folks with, your tweets are no longer limited to the 140 character limit thanks to twitters expanded tweet. Allows for attachments like gifs or videos to be from the account so you can ramble on longer. With the hopes of giving users the chance to say more about whats happening. Millions of gamers waking up this morning to play destiny only to be snubbed by servers. Rise on iron was expected to go live this morning at 5 00 a. M. Eastern time. Gamers on the xbox and playstation consoles were having trouble logging on. Activision stock rising 37 . Were supposed to feel batd for slack who are woke up early to do this . Maybe they play a bit and then turn on squawk. Its day one of the fed meeting and the results of the fed survey are out. Details when we come back. Plus becky is going to be interviewing bill clinton today. Thats going to happen on the Halftime Report noon eerp time. Squawk returns in a moment. Hahaha umhmmm hey nikki what are you doing here . You tell me, stephen. What . Im snapping. Youve been streaming my videos all morning. Now youre with this thing . No its not you its verizon they limit my data. I had to choose. Come on, girl. Lets get us a man with unlimited data. Why pay verizon more for data limits . Introducing tmobile one. One price. Unlimited data for everyone. Ok, so we drowned the fire. Yep. Stirred it. Mmhmm. Drowned it again. Mmhmm. And now just feel if its cold. Yeah. Cool. [camera shutter clicks] [whistling a tune] smokey just gave me a bear hug. I know. I already posted it. Welcome back, everybody. Investors awaiting the feds decision on Interest Rates. Are the experts saying about the chance of a rate hike . Steve leisman is here and he has more. Perry cuomo said it was nothing like a hike for the holidays. Nothing like a hike for the never mind. What . Economic jokes. Thats not a joke. Im singing. I do it semiprofessionally. As you know, joe. Heres whats happening. 90 say no hike coming tomorrow. Thats our 41 economists, analysts, fund managers, strategists. They say 90 no hike. More than last month say no hike tomorrow. There is 21 or a percentage out there saying its possible. Couple of primary dealers as well. But the vast majority say no hike. As to why, its interesting to look at. 31 say its because of Global Growth concerns. 22 say its because the markets not ready for a hike. Inconsistent data. For a very long time, this kind of consensus is very unusual. Distribution is larger. Some will say 88 now saying the hike will come in december. Is that just to save face . Like theyre going to have to do it without going another year without a rate hike . I think thats part of it. All of the other things listed in there, the Global Growth concerns, theres talk about the elections. They dont sfeel the fed is keeping rates low to help one candidate or the other. They just think the fed wants nothing to do with the election. We want to show you one more chart, the path of the fed funds rate. Theres the Market Outlook for rates and the fed. Theyve moved closer. That 2. 5 is up a little bit. Well see on the meeting projections from the fed if they bring that down a little bit. Lets bring in john taylor. Professor of economics at Stanford University also senior fellow at the hoover institution. John, your view has been that the fed has waited too long to raise Interest Rates. Whap do you think happens at this point . Its a low probability coming up this week. The high probability in december. I think its time they should move. I think it would be better if they did. I think it would be better if they did it already. They are behind. Its a very unusual kind of policy. The survey, i remember that it said over 60 of people dont believe the fed even has a framework for making these decisions. I think its important to have some normalization to what theyre doing. Its about time. I wish theyd do it already. December seems like a likely guess to me. Hey, john, real quick we had some guests on earlier. Top of the 6 00 hour. We talked about depending on who wins the presidency, that may shift what the fed does in december. Do you think it matters . I think now its the fed realizes they got to move. You hear what theyre saying. Still mix of opinion. But i think its very likely in december. Unless they can figure some other excuse again. Its been a whole year. At one point they were talking about four moves this year. I think its about time. I dont think it makes too much difference about the election at this point. What do you think about this . The argument was somehow if didth trump was to win, theyd be more anxious about moving in december. I think the fed is careful not to insert itself into the election. I think they should have hiked in september. She did not have her troops in line when it came to sending out the message. The data didnt cooperate, but im not sure it was major data that didnt cooperate. If its that jobs are 150,000 to 200,000 that essentially were doing about as good as were going to do that you and you dont need emergency rates, thats the reason to come off. John, if they actually raise in december, where does that leave us . Are they close to getting back on track or is this going to be a very low Interest Rate environment for a long time to come . I think theyre still behind. I think steve just mentioned theyll be 2. 5 . Could be higher than that. It was a long way from 2. 5 . I think thats where they got to go. I think it would be beneficial. Theres also the japans meeting and europeans are figuring out what to do. Its all the related. The fed getting back to normal would be beneficial to our economy and the global economy. A lot of people in the survey, people are starting to get concerned but more so now that the effect is ultimately hurting. That the low Monetary Policy has done about as good as it can get. And starting to hurt the km i. Jobs numbers between now and december . There are, joe. Yeah right. Youre so skeptical. So many things can happen. Thats true. John, thank you very joining us today. Great to see you. Hope to see you again soon. And steve, thank you. When we return, more from jack welch on leadership in america. Check out the futures at this time. Strong all day. It was strong yesterday morning and didnt get much for it by the end of the session. But up 74 on the dow today. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. 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Weve got jack welch in the hot seat this morning. Another ceo is going to be on the hot seat this week. Its mylans heather bresch. I want to raise that. What would you have done . I wouldnt have been involved. By the way, i thought she did a great job on your show of laying out those boxes and showing the various chunks of the price increase where they go. I thought she did a first class job and did one of the cardinal rules of management. She came out, put her face out there, and made her position. Now, on the other hand, if i were on the board, i was involved in those price increases. Board members are not like stumpfs district manager in peoria who jiggled things a little president john stumpf probably didnt know that. When you raise price of a major product, the board knows, you know. So its not illegal to raise, she did nothing illegal. Now you got to say shes facing an ethical moral battle over price we had Walter Isaacson on yesterday. He raised the case how do you sleep at night . No. More yes you can raise the rate but it haunts your reputation therefore your bottom line longterm. And the point not just for the company. That these two examples are going to be black eyes for business at a time when politically its already a bad time to be a business leader. Theres so much of the political cycle has revolved around bashing Business Leaders. The fact is theyre getting a blowback to their reputation because when youre dealing with health care, youre dealing with every Single Person in the country. So the question should have been do we want to face this thing . Do we want to raise prices . The board should have been debating price increases with her. And said they should have made the decision and they all should be out there. Saying we did this because of the promise hes taken too much. When were not getting enough. Obviously today in hind sooisig they would not have raised prices that way. Stay where you are. Were going to have jack sticking around the next hour. Also when we come back, walmart connecting with jet. Com. We have the details after the break. Check out the futures at this hour. Still some green arrows. When we get back a lot of those green arrows yesterday. But right now dow up about 63 points. S p up 7. 5 and also nasdaq up 7. 5. More from jack welch on the race for the white house next. Stick around. Squawk box will be right back. Z these goofy glasses. Yeah. Well, we gotta hand it to fedex. Theyve helped make our ecommerce so easy, and now were getting all kinds of new customers. I know. Can you believe were getting orders from canada, ireland. This ones going to new zealand. New zealand . Psst. Ah, false alarm. Hey you guys are gonna scare away the deer idiots. Providing Global Access for small business. Fedex. Intel is naming robert swann the new cfo. Swan comes from private equity firm General Atlantic. You know those guys . I know ge. But he was cfo of the lighting business. He was also the cfo of ebay. He was. Very good guy. Also walmart has completed its acquisition of jet. Com after agreeing to buy the startup for 3 billion last month. It gives access to jets pricing software. It could also be lucrative for jeff laurie. Based on walmarts Closing Price on monday, the shares hes been granted as restricted shares over the next five years is worth over 256 million. Coming up, peter fisher of blackrock is going to be joining us. And later senator bob corker. Were going to talk todays big hearing on the hill. Squawk returns in a moment. Th. 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. From the creative galaxy in my idea box. Would you help me make art . Each one of our journeys keeps us young hey, i have an idea well never get older. Arty go be amazing amazing announcer give your Cardboard Box another life. Thats why a cutting edgeworld. University counts on centurynk to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. Wells fargo feels the heat. Mr. Stumpf heads to washington in the wake of the scandal. Senator bob corker tells us what he wants to hear from the bank boss. The fed kicks off a twoday meeting. Why this could be a september to remember. Plus jack welch straight from the gut. Were being drowned in regulation. And basically i want a Strong Economy that creates jobs. The management guru is our special guest 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. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and andrew ross sorkin. The futures have been strong all morning. 66 points up on the dow. The nasdaq just under 8 this morning. Also if youve been watching oil prices, under a bit of pressure. Wti now falling below 43 a barrel. Thats a key level weve been above for several days. Weighing in at 42. 82. Keep an eye on this. As oil prices go, when they fall below some of the issues put pressure on stocks as well. Among our top stories today, john stumpf is going to be testifying before the Senate Banking committee over the banks sales practices. Wilfred frost is in washington. Hes going to watch all of this coverage. He joins us now with a preview of what to expect. Thats right. Thank you. John stumpf set to appear on capitol hill at 10 00 a. M. Heres some of the key points hes due to make. Hell go further than he has before in terms of apologizing and say, quote, im deeply sorry we failed to fulfill our responsibility to our customers, to our team members, and to the american public. And that he, quote, accepts full responsibility for it. Hell even say we did not get it right. We should have done more sooner to eliminate unethical conduct. However, he still maintains no sign of resigning saying, i am fully committed to doing Everything Possible to fix the issue. Hes also expected to run through the numbers. The numbers of accounts in question and the number of employees involved to clarify in his eyes its not as bad as some have made out in certain reports. Were not expecting any mention of clawback of executive pay which will remain a major issue for discussion. As will the question of how much executives knew about this and when they first found it out. Finally the question of whether theres any criminal wrong doing. Thatll be on agenda. Though not expected to materialize since theres no sign of that in the cfpb investigations. Those are the headlines of the prereleased remarks which of course you discussed with mike mayo. Im not going to tear them up because i need my copy, but i do agree with mike myo that the focus part of this will be in the q a. As well as bob corker that youll be speaking to that senator Elizabeth Warren is one of the members that calls herself a big m part of the creation of the cfpb and clear consumer advocate and will be charged with her questions. By the way, wells fargo is in fact up today in the premarket. Down some 7 since the story broke on the 8th of september. Guys . Thank you very much. Again, well be watching and taking this live as it comes. Wilfred will be keeping on track of whats happening there. Well be bringing you the wells fargo hearing and john stumpf hearing which starts at 10 00 a. M. Eastern live right here on cnbc. Top of todays agenda, the start of a twoday fed meeting. 90 of respondents said they will stay. Markets being unprepared for a hike is the top reason the majority of those surveyed say we will see a hike in december. Joining us now to try to handicap what may or may not happen, peter fisher from the tuck school of business at dartmouth university. How strong do you think the economy is in reality . Its doing pretty well. Its not very strong, but clearly the labor markets healed a lot. Other measures of inflation that they look at is low. Ores are picking up speed. Cpi is up at 2. 6 . So the economy is going okay. Im not very worried about inflation, but i think the feds got to be at least concerned with whether their measure catches up with their measures. Doing okay. If you had breakfast with janet yellen today, what would you tell her to do . Shes backed into a corner. Shes not going to do anything with rates this meeting. I think that i would tell her youre way too focused on tactics and not enough on strategy. Were always debating whether or not theyre going to move 25 basis points which isnt that important. And we dont seem to get a lot of focus or a lot of clarity around what the strategy is. That said, the big news item was at jackson hole where she said extraordinary policies are here to stay. She said there is no exit. Were going to have a big balance sheet. All these extraordinary policies are here to stay. And so everything they said five, six years ago about how simple it would be not to worry, now theyre saying never mind. There is no exit. And thats part of the strategy thats got to be clarified. To the extent that economists and some Business Leaders, how much do you care about this particular issue . I assume most Business Leaders this is a yawn at this point. So my question is when you think about the true economic repercussions of raising Interest Rates, you dont think it happens in september. Do you think it happens in december and do you think it has any impact on the economy . Is that to me or jack . I didnt know who youre asking. You. The 25 basis points is trivial but what is important is the expected path. If we think 25 and theyre doing more, those two thats what matters. The expected path of Monetary Policy. I agree with jack, it doesnt matter much. What happens to the fed funds rate. But what their strategy is for the middle term, its very confused. Are they getting ready for the next recession or trying to normalize rates . Which is it . Is their forecast that murky . Theres a lot of stuff they should clarify for us that are confusing investors and the economy that doesnt have to do whether the fund rate. Should we given the history, peter, should we think their forecast will be anything but murky. Where theyre anchoring policy is what they need to talk about. If their forecasts are this bad or this murky, then they need to tell us what theyre anchoring policy on and its not clear. They seem to obsess on near term financial conditions. So what happened to the dollar or stocks last week. And yet the model of the economy doesnt really include those things. They dont have in the basic sector of the economy. They just focus on the overnight rate. Its time they try to clarify. Peter, heres a question for you. Its political in nature which is this. Given how upset a lot in the marketplace seem to be on how the fed approached this, donald trump says it sounds like he would get rid of janet yellen as soon as he would win. What does that do to the marketplace . Well, it adds a little more uncertainty but given how murky the feds forecast is and how unclear it is about what the fed does next, im not sure that alone is that disruptive. There are a lot of things that would be disruptive. We wouldnt know how the committee would operate or what kind of person he would appoint and what that persons strategy might be. So yeah thats a little bit of uncertainty. But the path of rates just isnt whats weighing on the economy here. All right. Low productivity is whats weighing on the economy. Has Hillary Clinton said anything supportive or otherwise about janet yellen . I dont think shes commented one way or the other. She weighed in on yellen. She said trumps a racist. Peter final question to our friend in hanover. By the way, go get whats that great burger place . Mollys balloon there. Youve been . Ive been there. Yeah. The other piece of this is as a i know youre an economist, but as a market prognosticator, what do you think is going to happen between now and the end of the year and how does the election play into that . Well, i think the election will give i mean, the level of vitriol in the election is going to tell us something about whether the slim chance for tpp passing, the Transpacific Partnership passing in the lame duck session has any chance. I think thats going to be theres no chance. I think thats going to weigh on the market toward year end. I think the chances are slim to none. Fit goes to none, that may weigh on the market. I think the market is going to look through to the policies of what the next president is going to focus on. I think that will be interesting and those will unfold before year end as the president elect announces their likely cabinet. Peter, great to see you, sir. Thank you. Nice to see you. Thanks for having me. A few stocks to watch today. Lennar reported quarterly profit of 1. 01 a share. That was 12 cents above estimate. And new orders up 8 from last year with deliveries up 7 . Shares of ascena changes. Owner of ann taylor. Posted weaker than expected earnings and offering a down beat full year forecast. Seaworld is suspending its Quarterly Dividend after paying out a final installment to shareholders next month. The money saved on Dividend Payments will be used to repurchase shares. And carl icahn reducing his stake in chesapeake energy. Shares of the company falling on that news. Allergan is buying tobira. It will pay 28. 35 per share. And just to muddle things up, up to 49. 84 per share in contingent value rights depending on the achievement of certain milestones. Thats like a less than 2 billion deal. When we come back, Cyber Attacks may be on the rise but fewer companies are disclosing data breachings. We have that story next. And a programming note for you. Dont miss our conversation with former president bill clinton nap is later today. Thatll be live on the Halftime Report at noon eastern. Announcer alvin and the chipmunks want to remind you bacteria can hide in food and make you ill. Wow announcer but you can keep bacteria from ining your day with 4 simple steps clean. Im ready for he rinse cycle announcer separate. All woah announcer cook. Fire in the hole announcer and chill. Chipmunk we chipmunks are notoriously tidy. Announcer check your steps the roadchip to food safety starts at foodsafety. Gov. Chipmunk whoo this is awesome welcome back to squawk box this morning. Companies are getting hacked more often but arent disclosing the incidents in regulatory findings. This is according to a new article in todays wall street journal. Just 95 of the 9,000 Public Companies in the u. S. Have informed the s. E. C. Of a data breach since the beginning of 2010. Now, before that, more than 2,600 breaches of public and private companies occurred during that time period according to the privacy rights clearinghouse. Most states have laws that require disclosure if a certain amount of consumer data is compromised. Whether the data breach is, quote, material. That usually means a judgment call on the companys board failing to disclose a breach could draw the ire of investors. But frequent disclosure could overwhelm investors and harm the stock price. Were going to talk about this next week at a conference cnbc is putting on in cambridge. Its october 5th. Aspen institute. Its all about cyber security. We talked a little bit about it yesterday, but im sure well get into more and more of it as we get closer to the conference too. I think were two weeks away. I apologize. When is october 5th . Two weeks. Our guest host this morning is jack welch. Jack, one of the things we always look forward to when you join us is your take on economy. Because you have access to dozens of firms and you have a very good feel for whats happening in the economy. Last time we talked to you, i think you said that things were still kind of bumping along. Where do you see things right now . Bumping along. I mean, i think peter captured it too. Things just arent booming. Now, if youre in health care, you think this is a great economy and we have some businesses there that are doing extremely well. If you were in industrials, i can sympathize with janet yellen in that one quarter youre excited. Its going to be good. And then the next quarter you get whacked again. Is that because of the global economy, because of the dollar . Its just theres no big burst. Theres just spirits. One customer will do well. Two customers will do well. Look, we got a 1. 5 to 2. 5 economy. Thats what we have. And now what we are doing will become habitualized. Thats why i have these charts. These charts are all about not just chatting, these charts are real. If we want growth, we will get it. We know how to get growth. We talked about deficits. I jump out of my shoes when i see guys talking about deficits. This president that she wants to emulateplus created more deficit in his eight years than every president cumulatively up to this point. And theyre out there now talking about theyre deficit hogs. As we talk about the arguments against the republican plan. Give me a break. Twitter, one word comes up on you today. Old . Deplorable. But deplorable. It was funny because paulsen used that word yesterday. Completely not thinking about it. But thats going to be one of the words that were going to remember. So old deplorable then. Youre in the basket. Youve made it into the basket of deplorables. I dont think so. Im talking about policies. I know. I am not talking about people. I dont think that means youre not in the basket. Everybodys in the basket. I might be in there. And i go in there with a tshirt. Jack, lets talk about whats happening at strayer institute. The school of management at the strayer university. Its about the most exciting thing ive ever done in my life. Whats it been . Five years . Five years. Since you first launched it . And i want to tell you some news. At 9 00 Princeton Review is putting out a list of the top 25 online schools in the country. And guess what. We are one of them. It is so exciting for our team and our people. Its also a bit about consumer measurements this morning when were talking about wells fargo. Thats all we do at our school. Its all about the student. The student is the one giving the feedback. And this Princeton Review, the first time we put our name in the hat after five years, and we have made it. Our faculty at 9 00 today will be off the roof. Our students because i always tell them how fast our school will grow, how big it will be will depend on their performance, and how they feel about it. And the facts are the brand only five years old is now one of the top 25 online schools in the world. And the growth the students have been coming into this into the mba program. I know weve talked about growth i think the last time you were here too. But youve seen a pretty rapid increase in the number of students who are coming in. Well, we started were in 1400 students now. We have 600 graduates. We gave kirk cousins, that quarterback of the redskins a degree last june. We had our first graduation at the mall. Students were coming across the stage, becky. And it started in a small way. I got three promotions while i was in school. Then it became a course. Everybody i handed a degree to had a number. Three promotions, two raises. It became a raucous exciting thing about their success. This school is all about changing lives and their trajectory. Average age is in the 30s. They are mature adults spending their money, the companys money. And it is really growing. Probably worth pointing out that this is a time when Business Schools have probably had a rougher time post2008. Postthe financial crisis. Because business has been seen as not necessarily a place that a lot of people want to show up. Some of the best and brighters want to go elsewhere. Silicon valley is business. Silicon valley is business. But im thinking of engineering. I think mbas probably had a tougher time since 2008. The growth rate has been very slow. Flat, if you will. Our growth rate has been 30 . Now its tapering as the law of numbers catches up to us. Its 30 this year but its been 45 , 50 . And because what we are doing is we are satisfying consumers. And we are changes lives with whats happened. These people are getting promoted. They dont have to take off for two years and go to a campus. I tell them if theyre 25 years old, they got a rich grandfather or father, show up at a campus. But if you want to get promoted in your economisting job and move up in their company whether it be fedex, verizon, ge, boeing. Now we have a number of hightech companies now who we moved in that sector, if you will, with 20 international. Which is growing nicely. But the big thing today is we dont know the other companies in there. But we know were in there. And we are so turned on by this, its unbelievable. And our students and our faculty will be jumping through hoops today. Congratulations. And were going to continue with jack in a moment. Coming up, the ratings are in. This years emmy awards were the least watched ever. Well be back with the numbers. Then later today dont miss a live interview with bill clinton. Beckys going to sit down with the former president at noon eastern. Squawk box will be right back. Still to come, a grill on the hill. Wells fargo ceo john stumpf set to testify before congress today. Following the banks fake account scandal. Senate Committee Member bob corker tells us what he wants to know. When squawk box returns. Whats the value of capital . Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. Welcome back. The futures right now up 73 points of the dow. Indicated up eight on the s p. The nasdaq is indicated up just under ten. I guess i havent oils up a little now that the market goes up a little. Is that the way it works . Its crazy the way those two are correlated. You wouldnt think that necessarily that would be the case. But we were up all day yesterday. Oils now down and the markets up. All right. Who doesnt know that it filters through the entire economy. Did you see that now youre not supposed to use premium gas . Have i been wrong . Consumers have wasted billions of dollars on premium gas. As kwoun, im so cheap i would never use the premium gas. Never. In a corvette . You know, jeeves i dont know what jeeves does but when im at the rental with the rental car when i do my own, i dont use it. I dont either. Youre the only one who does. Sucker. Because im in new jersey. Okay. We got to go. Were coming back in just a minute. Were minutes away from the august Housing Starts. Well bring you those numbers. Then heading to capital hill to testify, weve got senator bob corker. We want to know what he wants to know when he starts that grilling. Back in a moment. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. We got a tempurflex. And bounce of a traditional mattress. You sink into it, but you can still move around. And now that i have a tempurflex, i can finally get a good nights sleep. Change your sleep. Change your life. Change to tempurpedic. Housing starts hitting the tape. Rick santelli has those numbers. Lets get to him. Rick . Yes, the august starts and permits 1. 142 million seasonally adjusted and annualized. Theres a slight revision but not much from last month which stands at around 1. 21 million. So its a drop of close to 6 . If we look at the permits side, a much smaller sequential drop. 1. 139. Just shy of 1. 14 million. And that follows 1. 145 million. So both were a bit negative. Both missed expectations. On the headline of 1. 142 million, how does that stack up . The best read for the year was february at 1. 21 million and change. So weve lost a bit, but at least theyre not all in there. Theres a lot more room to go, of course. The equity markets at least and the futures now are a bit higher. But everybody continues to monitor whats going on in the fixed income markets. We hover just below 170 in a tenyear. Much more attention being paid to things like all the short rates that have made adjustments but well have to wait and see if the fed of course is going to be continuing to follow through on that Market Dynamic or not. Joe, back to you, sir. Right, rick. Thank you. Moved up a little bit. Up over 80 at this point. Meanwhile wells fargo is under fire for opening fake accounts and racking up tens of thousands of dollars in fees. Right . Millions, but tens of thousands per. Or even less. Less. But when youre talking a bank the size of wells fargo, what was the whale . Why talk one or two million when you can talk thats austin powers. Billions. Its a small number, thats your point. Im surprised you feel comfortable making that point. It is a small number. I think in fairness its a small number. Thats why the materiality is its a reputation issue. You do not lead with the house is not burning. Ive heard people suggest this is worse in some cases than robo signing which is to say and now im going to get in trouble for saying this. Robo signing there were people not paying in time and the banks to make it more efficient, it did this not so great thing and there was a huge real impact to people in their homes. But this is theres something in a weird way that might be more unelt kal about opening random accounts without taling the other person. The robo signing impacted people. Thats what im say ppg they may not be comparable but its hard to look at this at a dollar basis. And you look at 2 million, whatever it was, and the reputational damage is now over 10 billion probably. Just the stock price. Now the doj has begun a preliminary inquiry into the banking giants actions. Ceo john stemp umpf is set to ar before the committee at 10 00 a. M. We have senator bob corker in. You heard what we were just talking about, senator. Its all really helpful. It enlightened me. Thank you for that discussion. Am i detecting a hint of sarcasm . No, no. Very helpful. Reputationally, its tough. We need to get to the bottom of this, but wells fargo has paid for some of this, no . 23 billion in market value. But i think there are some legitimate concerns here just regarding internal controls. No doubt some low income citizens probably had some credit issues that may have affected their ability to do other things. Because when credit card accounts and other accounts are opened, it affects that. But you its 50 days before an election. This is the thing thats going to be focused on. Theres no question theres some legitimate concerns about how a culture like this that had been so out there relative to try to conduct it like a community bank, how the issues could have been going on and for so long with so many in the banks. I think there are some legitimate concerns here. Hopefully itll be a constructive meeting and well see. Im trying to read between the lines about what youre saying. You seem to be indicating. But its being demagogued a little because of the election and its a little bit over the top compared to what the Bank Actually did . Is that your take . I think theres going to be a whole range. I think, you know, you look at this executive which was in charge of this. Who apparently was a workaho c workaholic. There was an account today in the wall street journal about her signing leases. It was very microfocused. Yet at the same time systemically there was something happening within the bank. And i think it will raise some legitimate questions about the size of these institutions, their ability to ensure that the culture is throughout on the other hand, on the other end of the spectrum, there will be folks, im sure that, that want a bankers head on the end of a stick. Therell be a wide range, i would guess of tone and questions today. But i do applaud the chairman of the committee for calling the hearing and hopefully itll be constructive. Theres also questions about what role the regulators played. Was this really something an l. A. Times reporting, you know, figured out was occurring or did our folks that are involved in regulating institutions actually play a role . So well see. You combined the some of these other recent corporate stories like mylan. And you bring it back to corporate compensation. And then i was making the case the other day that, you know, the no, its got to be based on performance. Thats how you got to tie ceo pay to performance. Okay. Lets do earnings per share. Then you do that for awhile. Wait a minute. Theyre doing all this stuff earnings per share, make it on revenue. Wait a minute. Now theyve got salespeople. So how does how do you win on this . How do you do maybe youre right, jack. Maybe it should be Customer Satisfaction. Maybe it should be average wage gain at the company. I dont know what you do, ceo compensation now. Look, i dont know. I will say that you and i both, all of us on this set jack certainly has dealt with this through the years. But i think there are issues in large institutions where you have people on one hand who are micromanaging details and yet dont have their head up at times at the 10,000 foot level looking at culture. And again, for this to go on for four years and to affect so many people, it is kind of interesting that internal controls didnt red flag what was happening here. But its our job to oversee and to make sure that appropriately institutions that are large and complex like this are properly regulated. And, you know, a lot is being made out of this. In some cases theres reality to that. Well see. I think it ought to be hopefully constructive here. Senator, you made a quick comment about the l. A. Times versus perhaps the Consumer Protection bureau in terms of who discovered this. How important is that ultimately. And you know youve heard from democrat who is have said that this situation, this episode at wells fargo is an example of why that agency is needed. Do you agree . Well, i think we do need to have legitimate Consumer Protection and, you know, republicans. I know its going to get into that no question. Republicans certainly support that. I think that having a fivemember board or commission as part of this is something that would be an important governance structure. It being subject to appropriations from congress would be a legitimate effort. But i dont think any of those things would have negatively impacted here. Its hard to determine at present. Im saying this i dont know hopefully the hearing will shed light whether this is something again and a reporting uncovered. And the Consumer Protection just came in with a vacuum cleaner to vacuum up 100 million in fines or whatever it was. Either way, something happened here. And it was inappropriate. And probably which is especially bad some low income citizens were negatively affected. And, you know, those are things that we need to protect against and, again, i hope we have a constructive hearing. I agree with everything you said this morning, senator. But id like to chang you on the never trumpers. Id like you to get out there and put the policies of the Republican Party in this election Going Forward against the democratic policies and really talk about why we need a republican victory in the white house. Because i think these its a binary choice. We dont have four other people to pick from. Its a binary choice. And i hope you will be with your articulate behavior that always seems to make the case in the right way get out there and work against the never trumpers. And bring some of them on board with the realization that we need these tax policies, these regulatory reforms, these terrorist issues. We need a supreme court. We need all of these things and to stop the never trump train from republicans. Its just crazy. Well, my staff tells me youve been doing an outstanding job of that this morning. But i do think at the end of the day more and more people will understand there is, in fact, a large policy difference between the two that effect our country in a very divergent way. After were out here more and more people will be talking about that. I know you are out there actively doing this. And i appreciate you saying that. Senator, help us, though, square up your support for trump to the extent that you are supporting him with your critical comments that youve been making for quite some time as the head of the Foreign Relations committee about russia and butten and trumps comments about putin which seem to be much more supportive. I ran for Public Office as a business person nine and a half years ago. I came into e the senate i think a lot of times when people run for Public Office, you know, they dont really sometimes fully understand some of the nuance that goes with it. Some of the alliances weve had in europe for 70 years or so. When they get here they realize things are somewhat different and there are some nuances. I know that was the case for me. Ive been here nine and a half years. What ive chosen to do is when i hear comments that, you know, maybe are not taking into account some of those things, i try to with my Public Comments lead a bread trail to the extent i have the ability to do that to a different place. And so, you know, for instance, is it isolationism thats being proposed . Or is it more Foreign Policy that focuses on realism . Much like the great jim baker led when he was secretary of state. So again, i think theres ways of taking comments and making, you know, adding some nuance to them which is helpful in this debate. And thats the route that ive chosen to take here. Hopefully in some way, its been helpful. I just want to see good things happen for our country. You know, i really do. And this is a great, great nation. We obviously are dealing with great difficulties right now in many areas. All of which can be overcome. But i feel my role here as chairman of Foreign Relations committee where i work with people on both sides of the aisle at the end of the day to help lead us to a place where our country is doing those things that are in our national interest. All right, senator corker, thank you for being with us today. Thank you. Thank you very much. And a programming note. Cnbc will bring you the wells fargo hearing and john stumpfs testimony starting at 10 00 a. M. Eastern time. Coming up when we return, stocks to watch plus much more from our guest host jack welch. Back in a minute. Later on cnbc, becky quick sits down with former president bill clinton live from cgis annual meeting. 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When we return, jim cramer joins us live from the New York Stock Exchange. Well get his take on todays top stories, what he thinks about the markets. Its all here when squawk box comes right back. With this level of engineering. Its a performance machine. With this degree of intelligence. Its a supercomputer. With this grade of protection. Its a fortress. And with this standard of luxury. Its an oasis. Introducing the completely redesigned eclass. Its everything you need it to be. And more. Lease the e300 for 549 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Lets get down to the New York Stock Exchange where jim cramer joins us now. I didnt look at oil and say oil must be up. Its actually down today. And were up a little. Its early. I know that im not going to take my cue from europe. Ill take my cue from oil. We dont have mojo to stay up. There are some bizarre things going on. We have a deal from allergen that seems like a huge payment. We have upgrades of auto stocks. Its not all bad. In general, i think oil is always going to be able to take anything down. Its too early for me to accept the futures judgment. Its rare when we get i dont know how much the public is going to watch john stumpf but certainly cnbc viewers are going to be interested in what goes on there. Corker alluded to it. There may be some grandstanding that goes along with this today, dont you think . The term claw back will be in the news and i think that mr. Stumpf when he came on mad money said its really not up to him. Its up to the board. I think pressure on the board will be great after today. I think when i read what Hillary Clinton has to say, i think that represents america because i think mr. Stumpf may have misjudged that even though the fine wasnt as large as jpmorgan and bank of america, the scale has really turned off people. There is a big upgrade today. People feel it will be business as usual. Theyll hate that in washington. They dont want business as usual. They want no business. Exactly. Theyre going to say, listen sh which senator will say everyone should close their account at wells fargo and go to their credit union, right . There you go. Not which, how many . Thanks. Well see you in a few minutes. Bears. Wow. I got to tell you, i love a guy like wentz. A guy coming out of nowhere. A young kid with real poise. That was a hell of a performance last night. I just love this. With a smile on his face, jack. Were missing that in sports. There he is. Hes what we need. Thank you. Okay. Thank you. Coming up on squawk on the street, an exclusive interview with sprint Ceo Marcelo Claure and dont miss beckys interview with former president bill clinton. You can catch that live. Thats at noon eastern. Stay tuned. Youre watching cnbc, first in business worldwide. Hey look, its those guys. [music] jess are you good to drive . Shawn im fine. Jess how many did you have . Shawn i should be fine. Jess you should be . Officer go on and step out of the vehicle for m bud see ya, buddy. Good luck so, it turns out buzzed driving and drunk driving, theyre the same thing and it costs around 10,000. So not worth it. Thats not news. Our guest host could be lets move on. Anyway. Jack, weve got about four minutes. I think youve made your case fairly compelling as far as you see it. I understand where youre coming from because the policy initiatives that you point out in the difference between the two parties on the policy initiatives, i dont really hear it very much talked about on cable. I dont hear it anywhere. Its personality stuff. Who said what, when. Or emails or this. People have got to come to the conclusion its a choice on policy. We dont have another choice. I mean, both candidates have their flaws. Lets not say one or the other it just keeps happening. But if you want jobs and you want growth, you got to go with youre mostly speaking to republicans that havent come around. I want to talk there are many that think the obama economic record is great. 9 to 10 real unemployment. Lets go there. Hes requesting to take a victory lap and talk about his achievements at the u. N. Speech and hes been doing this week thats politics. There are people on the left that think that the supply side stuff has been tried and doesnt work. They say gross stuff has been tried and doesnt work and they say resulted in the financial crisis. Thats what they say. I was there in 79. One of the benefits when we call me old. I was there in 79 and i was there in 80. I saw what happened. I want to go back to getting some of that. Theres a good piece on the kennedy years and the reagan years. Look, we have become habitualized to 1. 5 to 2 growth. Thats what they were saying with jimmy carter. We cant get out of it. Give us a chance. What people say is different this time. When we push on issues like this, not only automation which is what hank paulsen said yesterday but the idea that we can only be as strong as the rest of the world is too. Comparatively were outpacing but without growth from europe and asia, its tougher for us to get that growth. I mean, theyve got policies that have to come around. We are following into their policies. Obama is going to the european socialistic policy. We dont want that. We want a free market, open. What about trade . You had a lot of slides you showed us and you did not show us a slide on trade. Both candidates, tpp. I dont want to go there. I rather have trump negotiating a new tpp than i would mrs. Clinton negotiating. I dont like the way these people negotiate. I dont like the iranian deal. To the tpp issue, after donald trump went down to mexico, you saw the foreign minister ended up resigning under pressure. He was somebody who Many American ceos was terrific in terms of trying to create relationships with the country, bringing business in there. My question is why are you more convinced that donald trump will be better than Hillary Clinton on issues like that when even the contact seemed to politics. Internal politics. Mexican politics. Thats all that is. But that could happen again in other countries. Not if they want to deal with the United States. Watch the democrats attack on this policy. Theyll attack. Theyve been out there on deficit spending. Ronald reagan was a politician. Jack, we want to thank you for your time. Were out of time. Im sorry. Congratulations on everything. Thanks, jack. Princeton review. You have to hear about it on squawk on the street. Well see you tomorrow. Right now its time for squawk on the street. Good morning. Welcome to squawk on the street. Im david faber with jim cramer live from the New York Stock Exchange. Carl quintanilla on assignment today. Wells fargo ceo john stumpf testifying on the hill over the banks misconduct generally speaking. Lets give you a look at futures this morning to see how were settinp