Yesterday stocks were down for the third time in four sessions. Not far off the session lows. That was just a decline of 85 points for the dow. A loss of ten points for the s p 500 and a loss of 11 points for the nasdaq. Check out what happened overnight in asia. The nikkei was up by a half percent. Mainland china markets closed for that weeklong celebration that they do. In europe, in the early trade, at this point theyre under a bit of pressure. Biggest decline coming in france with the cac down by 0. 8 . Ftse off by a half percent. The ftse has been the big story. Ftse up yesterday. The british pound falling to the lowest several since 1985. Well talk more about that in a moment. Look at crude oil prices. Cried down yesterday in the regular session. It did pick up some ground in the evening session after we saw a surprise draw down in api inventories. 50, right within spitting distance. 49. 44 for wti. Among the top stories, becky is still here. Yes. Im still here. Its interesting about how that is uniquely unique to a woman. This, the whole thing, knowing whats coming, waiting, just i cant i cant imagine. I used to be afraid of shots. Im not big on, you know, what 50yearold men need to do every five years. Dont like looking forward to that, that day either. This is different. This you have done it before. Youre good at it. Youve done it before. It will happen the. Wasnt so great at it last time. Took 50 hours last team. Im nervous, too. Because of your shoes. Just you know, when it happens, people panic. Its important we do this right. Youll be the voice of calm and reason, im sure. All right. Judd, if you done this . Hes nervous. Greg is nervous. I see the look on his face. I think its one of the big three stories. A packed economic agenda adp employment report at 8 15 eastern. The forecasts call for a rise of 173,000 in private payrolls. May not equate exactly to what comes on friday. Thats slightly lower than in august. At 8 30, august trade deficit. At 10 00, we get the ism services for september. Factory orders, kneel kashkari, jeffrey laker, and Charles Evans all speaking today. Thats great. In earnings news evans already speaking. He said he would not be opposed im jumped ahead. Someone wrote he is not a voting member. But he has been a huge dove. Larry summers, did you read his stuff . I know. Ready for them he is sort of criticizing the fed a bit. Gently. You got to, i guess. In earnings news which which is coming it happens every quarter it doesnt happen immediately like october 1st. Takes a while to put the books together. Thats what i meant earlier. I said cook the books, i misspook. Freudian slip. Exactly. Monsanto and Constellation Brands report a result before the open today. Yum brands is out after the close. As i said, fed speak continues to dominate the Global Market conversation. Just talking about chicago fed president Charles Evans, telling journalists in new zealand today that hes fine with raising Interest Rates by year end. But heres its all been the rub. Depends on whether u. S. Economic data continues to come in firm. The fed doesnt know better than us. That sounds like a lower bar than hes had. Do you have confidence that Economic Data will come in firm . No. I dont either. So were back to we might. But it depends. Something always seems to happen. Seems to get in the way. Not this month, maybe next month. Its october, right . Evans didnt shoot down the idea that november could be a live meeting. Im incredibly dubious of if theyre going to do it, probably december. Fridays number will be important. He adds further moves, we would need to see inflation accelerating. Evans suggestsing isuggesting a most likely come in december. Were at 50 or something . Is it that high . It was. I havent looked at it in a week. Hes not taking november off the table completely. He becomes a voter next year. Just in time for when they actually might. Were watching currencies. The british pound falling to a three decade low against the dollar on brexit concerns, hitting the lowest level since the uk miners strike in 1985, which is when Billy Elliott was happening. Did you see Billy Elliott . No. The back drop of the whole thing. The miners and the strike . Yeah. The backdrop. In this country we wont have more miners strikes s fshgstrik is elected. We wont have anymore mines. West virginia. Things do move, its not good. But its hard for the people going through it at the time. We should talk more about the top corporate stories. The one at the top of our list is twitter. The wall street journal reports that the social need where company is expected to field offers this week. The paper says salesforce Ceo Marc Benioff has been building a case to investors for why his company should be the buyer. Among other names looking, google and disney. They have much deeper pockets. Marc benioff seems to be interested in this after losing linkedin to microsoft earlier this year. Shares of twitter up another 4 . Our top political story is the faceoff between Vice President ial candidates last night at the debate. John harwood was watching it. They didnt have the fireworks that we had seen with some of the president ial debate that we had already watched, but both candidates got a chance to lay out their side of the story. They did. Becky, before i get to that i have to agree with the one wise thing that joe said at the top of the show whats that . The experience of being pregnant pregnant, about to have a baby and having a baby is unique to a woman. Theres no debating that issue. I want you to think about it, harwood. You need to think if it was you. Okay . That you know, men we face certain things where we get nervous and stuff. But nothing compares. I know what i heard on the radio on the way in, tom petty, waiting is the hardest part. I can completely relate to that. You never felt something alien, youre sitting there, you see the guy you never had a coanchor repeatedly show you videos of alien popping out of the stomach. That is true. You never felt something alive inside of you, have you in. Other than a burritos. Exactly. Burritos sometimes alive inside me. All right. Go ahead. Lets get to that debate. First of all, bottom line, mike pence gave the republican ticket and donald trump ahead what they most needed, which was a solid performance, calm the jitters of the fallout from the debate donald trump himself had and the subsequent comments he made. Mike pence was solid in defend ing conservative principles, if not Donald Trumps principles. Both candidates had consistent strategies they executed. Mike pence looked a bit better executing his than tim kaine did. Kaine consistently went after donald trump and threw in the face of mike pence statements that trump made that alienated some voters. Heres an example. Senator, hes going to release his tax returns when the audit is over. Richard nixon released tax returns when he was under audit. If you cant meet nixons standard, people ought to have people cant understand either one of you when you speak over each other. I would ask you to wait until it is that the other is finished. Were having fun up here. Now, mike pences strategy was to redirect questions into criticism of the Obama Clinton administration, as he called it, since she was his secretary of state. He took an interesting apreproa to the criticisms of donald trump that tim kaine threw his way, saying there is no way donald trump could say some of the things he said he said. Donald trump did say some of those things, but if you were a viewer, you would say hes a guy deflecting some of the things being thrown at him. He says ours is an insult driven campaign . Did yall hear that . Ours is an insult driven campaign . If donald trump said all the things you said he said and the way you said he said them, he still wouldnt have a fraction of the insults that Hillary Clinton leveled when she said that half of our supporters were a basket of deplorables. She said they were irredeemable. They were not america. Of course this is not going to fundmentally change the race. Nonetheless, a solid night, good news night, sheadlines saying mike pence won is what the ticket needed. But you dont know what trumps own reaction will be. I communicated with a top Trump Campaign aide said pence won overall but lost to trump, he doesnt like to be upstaged. Whether the positive reviews for mike pence will annoy donald trump, whether mike pences refusal to go point by point and rebut charges at the top of the ticket will annoy him, well have to see. In the end, its in the hands of donald trump and Hillary Clinton in st. Louis. That sounds like a stretch. Thats someone looking at Donald Trumps personality, with a microscope and going, lets see. Hes thin skinned and defensive. What if this Vice President exceeds him. Im telling you, have you heard the first pick a guy makes when he becomes the nominee, the most important thing they remember him for is his Vice President ial pick. I liked dan quayle, i think a lot of people at the time said that was not great for h. W. Sarah palin, some people thought that was a hail mary before you needed a hail mary. In hindsight theres no dispute, i dont think, that you can say that out of the people he had in consideration, that trump had in consideration, pence was a great pick. Even the never trumpers have to say that almost, right, judd . I think it was a good i said it was a good pick at the time. I still think it is a good pick for donald trump. For people who think they can see into trumps soul and think hes a complete psycho, then that would be, hey, im mad. My campaign might do better but im mad because this guy has that looked better than me. I dont believe that will happen. Joe, look, as i told you, i think the bottom line was that this was a good night for mike pence, that it helped the republican ticket. Im telling you what somebody who works for Trumps Campaign told me. When youre on, john, i want you to succeed as a news person when i toss to you. Im not hoping you screw up, lose your train of thought or look bad. I dont care if you do better than me. But how do you feel if andrew upstages you . Would get to me. No. We got to go. If that ever happens, ill see how i feel. For more on the debate and the next president ial debate coming up on sunday, lets bring in judd gregg, and kaine, too, a senator governor. And former congresswoman elizabeth holtzman. Good to see you. Very nice to see you. You watched . I did. Did you have some coffee this morning . No, no, no. I want to go back to sleep. I was up last week until 11 00 watching that one. It set me back. You need to do damage control or did he did okay . I think he did what he needed to do. Tim kaine. Yeah. Basically show introduce himself to the American People. Hes not well known. Mike pence is not well known. People saw that hes a knowledgeable guy, has experience and raised issues in a strong way about donald trump. Judd, you had the early call on the gray hair, meaning wisdom, maturity. You went long ago that route, right . Yes. Gray hair. Do you see it the same way as the congresswoman . I think they both did a good job. As a practical matter, i thought senator kaine had too much caffeine before he got on the show, probably got hyped up on his oneliners. Pence came across much more basically thoughtful and substantive. As a practical matter, these Vice President ial debates, unless theres a major messup, even then certainly the quayle one was a significant one and that didnt affect the outcome people can look at both candidates, okay f somebody happens with the president i can be hopeful with this candidate. As a practical matter, this election is morphing into an issue of what happens to the United States senate. Lets say the present poll numbers are correct, and that hillary does win running a quasi socialist campaign as she seems to be doing, the only thing that will balance our government is keeping a senate republican. The senate race is down to three basic races, New Hampshire, pennsylvania and north carolina. Its important if you happen to be a conservative or believe in government that is of moderation versus excessively large government and government that moves left aggressively and a Supreme Court that is out of control that we maintain the senate. Thats what this election will be about. Three, four, five months ago, the polls, whatever you use, they have gone from hillary to trump catching, almost being ahead, back to widening after her convention, back to close all the time, the trumpers have been saying we have to worry about the senate. You wrote it off a couple times you tied and were even. Why be so defeatist the entire time . You wont have to worry about the Supreme Court. Youre right about that, but you have to be realistic. Again, you know more about the enthusiasm gap. You saw what happened with brexit. That was 52 48 stay, and it was closer. I would think you would be more half full than after empty and be more optimistic. Is mrs. Gregg as defeatist . You two have to talk, because he thinks you moved too far left. I think hillary has an excellent chance of winning now, its not over, but people have begun to see Donald Trumps real temperament and persona in a way they had not the debate was to focus the attention of the American People. How much does sundays debate weigh in . I think not as much. People have already made up their minds. To say Hillary Clinton is a socialist quasi. Not even quasi. Shes to the left of sanders. I dont want to break in like kaine did last night. Its an insult to socialists, i agree. The most telling thing is how, in his own state, New Hampshire, the republican candidate for senate, the sitting senator senator ayot. That was smooth. Said that trump was a model for his kids and then walked it back. Why did she walk it back . Because of her own election. Because the people in her state dont see donald trump as a model for children orb adults. Thats true around the country. Not her finest moment. I think its facing reality is important. Let me defend kelly ayot, hes been one of the best senators in the senate. They represents New Hampshire very effectively, because she speaks as an independent, speaks her own mind and understands complex issues. She is a very strong senator. Was bill clinton a good role model . He was president for eight years . I think when he ran before we knew about him. Well there were some issues that arose during his campaign. But would you say youre not running for any office, was he a good role model for our children . In the end with monica lewinsky, he showed lack of control. Thats just one name. Is there any hypocrisy were not talking about youre mixing apples and oranges here. Its one thing to talk about infidelity. Its another thing to have a temperament where you lose control its not just infidelity i was in government for 20 years, congress, was in new york city, i was there when the first bombs went off in the World Trade Center and the mayor was out of town. You need calmness, measured response. Reasonable. Thats not what we saw with donald trump. I know what you need in a crisis and what you need as a president. I think the American People saw that. I was talking role models. Theres only one person i know right now in this room who understands the presidency. Thats becky. She has two young kids, she has a third one coming soon. And she deals with you guys all the time. She could be president. I mean thank you. Appreciate it. But no thank you. Youd be great. Thank you. Thank you both for coming in. Well talk more about the debate and things that are happening on wall street. When we come back, jobs are in focus. We are just two days away from the september employment report. It could have a big impact on the feds plan to hike Interest Rates. Much more on this after the break. And well talk jobs and the fed with former treasury secretary Larry Summers. Hell join us on the squak set. The countdown is on to the friday jobs report. Today well get an early read on what we might be able to expect on friday. Thats when we get the adp private payrolls at 8 15 a. M. Eastern. Joining us is chief economist from mizuho securities. Steven, lets talk about these jobs numbers. It is important because there is this idea that potentially november is still alive meeting. I dont believe that. December probably still on the table in a big way. Every meeting is live. They made that clear. November is a live meeting. Are they likely to move . Probably no. Is december a possibility . These people have been talking about it for 36 months and done one rate hike. Theres a credibility issue here. And as the old president rolls off, new president rolls on, if they dont do it now, they probably wont do it in 2017. Theres a high probability that december will be the last move for 12 months. Why is that . Are we falling off a cliff . Were not falling off a cliff, but the my is stuck. Weve downshifted this year from 2 to 2. 5 to 1. 25. If we notice the articles coming out, theres a glut of apartments or condos in a lot of major metropolitan cities. Some fed officials pointed out recently, look, were writing off a lot of things, like the dollar strength, the oil. We didnt ease when the dollar rose to 20 . We didnt ease when oil collapsed 50 . Now we will raise rates because the dollar stabilized and oil stabilized at a low 4rw level. Does the 2 target for inflation make sense . We should have a higher number. 2 is ineffective in japan, the wrong level in europe and it will be the wrong level here. I wish the fed would let the economy get to that point. We need to make sure we dont get deflation in this country. You think their policies are harming the economy . I think their policy is misguided. Theyre smart people who have an old view of the economy. Theyre living in the past that we have a world of excess demand. We have a world of excess supply. Thats why Larry Summers is talking about the things hes talking about, krugman is talking about the things hes talking about. I think its nothing more than special cases of excess supply. Thats a bigger, more dynamic problem and requires a different approach in fiscal policy and Monetary Policy. If theres an excess glut of supply, how do you fick that . Theres several things you have to do to get around it. You need tax adjustments that keep the budget deficit and create new incentives to hire individuals. For companies to start spending again. Even if not spending but hiring individuals as opposed to putting machines this their place. Like turning back the hands of time. To some extent we need to. If we change Capital Gains tax laws, we could get a big effect. Anything less than five years becomes ordinary income. Anything after five years becomes tax free. So get rid of Capital Gains entirely if you hold on to it for five years . Exactly. Then you will have a shift to a longer Term Investment process. The big problem is the short threemonth earnings target that prohibits anybody from doing anything in a realistic time frame. If we raise the Capital Gains rate and then just spend a lot of money on infrastructure building, wont that work . Thats demand. The problem with the infrastructure building you dont get a lot of the Shovel Ready Projects you thought unless you change the rules. The dep comes in and says you need a knew environmenew enviro. That was a softball, and i put it over the plate for you and you said what i hope you say. There you go. So obamas shovel ready project didnt work . No, theres a good likelihood if we have Hillary Clinton in place Capital Gains going up to 47 . Her need to move to the left will do the same thing that happened under obama. When youre looking at this situation, you know, we do have to consider that we need a new approach to this process. Unfortunately no one has come up with that yet. Theres things to do out there, but theyre politically tough and you need somebody who doesnt want to be reelected in order to get them done. Micron says they see signs of strong demand. The First Quarter outlook is above estimates but an accounting change makes that forecast look less than robust. Down almost 4. 5 . And sompo will buy Endurance Specialty holdings for 6. 3 billion. Sompo will be buying the Casualty Insurance company. Its the second largest deal by a japanese insurer. Must have been in big trouble because of the deflationary environment. Hard to make money on the premiums. Acacia Communications ExpectsThird Quarter results to come in higher than previously forecast this is an Optical Networks product maker. Coming up, the Aspen Institute is in cambridge, massachusetts, but the Aspen Institute has teamed up with cnbc and m. I. T. As well. Teaming up to host the Cambridge Cybersummit today. Andrew is there. Hell have Walter Isaacson and talk about the biggest issues in cybersecurity next. As we head to break, heres a look at yesterdays s p 500 winners and losers. Guess what guys, i switched to sprint. Sprint . Im hearing good things about the network. All the networks are great now. Were talking within a 1 difference in reliability of each other. And, sprint saves you 50 on most Current National carrier rates. Save money on your phone bill, invest it in your Small Business. Wouldnt you love more customers . I would definitely love some new customers. Sprint will help you add customers and cut your costs. Switch your business to sprint and save 50 on most current verizon, at t and tmobile rates. Dont let a 1 difference cost you twice as much. Whoooo for people with hearing loss, visit sprintrelay. Com. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov welcome back to squawk box on cnbc. Weve been watching the u. S. Equity futures, so far nothing to write home about. Yesterday the markets ended down for the third out of four sessions. Right now we want to turn our attention to cybersecurity and a conference being held on this hot issue. Andrew joins us from cambridge, massachusetts with a special guest. Good morning. Hi, becky. We are at the cambridge cyb cyber summit. Im here with Walter Isaacson. A number of amazing people will be speaking here today. Michael rodgers. You will have the whole list. John carlin, walter, Andrew Mccabe, michelle reagan. Some of the old m. I. T. Professors who probably taught joe. I want to talk about, we were at a dinner last night, you appreciated how insecure or unsecure our cyberworld really is. People talking about attacks literally happening as were speaking. Yeah, at dinner somebody is getting word that theyre being attacked. Its an amazing thing. Theyre sitting with an fbi person. Okay. Am i supposed to tell him . You have an idea which is to separate out the current internet we live in today and to create almost a parallel internet. I dont think its a physical parallel internet, but something that darpa, which helped create the original arpa internet, which created clean slate, you can have a part of the internet, a set of protocols, in which not only do you know where the packets are going to but you know where the packets came from. Thats one of the genetic flaws built into the original internet in the 1970s. You never know where the packets are coming from you can be anonymous, a hacker, a bot. If you had internet with secure i. D. Verification, authentication, costs a lot of money, but nowadays were spending trillions of dollars, and if you hang around m. I. T. , the iq point the being allocated to cybersecurity, we ought to reduce that. When you conceived of this event with folks what is it that you want to get out of it . You put Government People together with Business People in a way thats unique. What happened is coming out of some of the events we had been doing in aspen, people like lisa monaco, the president s assistant for Homeland Security, people like admiral rogers and others involved in cybersecurity said there is a disconnect between three groups, people in government, like the intelligence, people in industry, apple, yahoo and people in the academic world. Lets get a few of them together and say over the next five years how will we rebuild things to make things safer. Couple of news items, Marissa Mayer of yahoo you saw the news that she and the company may have helped the u. S. Government search through hundreds of millions of emails. Searching for key phrases. And other companies saying they did not get the request, and if they got the request they would say no. Do you believe that happened . Yes. I believe that happened and why we need to have this conversation. There should be a certain thing government should be able to request and do. With a Court Order Say we need to know whos been going to this server that is serving isil near syria. We need to know who is getting information in and out of it. We have a court order, help us do that. As a society we ought to say, okay, that makes sense. We dont have rules of the road as we do in most of our lives when it comes to cyber. Government can tap a phone with a court order, can it tap email with a court order . If you have a yahoo mail account, would you be unhappy . No im weird and will probably get attacked on this, i have a yahoo mail account it got hacked, as you know, a few weeks ago by the russians, they hacked into it. They then grabbed control of my twitter account, started saying nasty things. Im mad when i get hacked by an outside actor. If the government is checking to make sure im not providing information, im perfectly comfortable with that. I think most people arent. We have to fine the rigd the ri balance. The election is upon us and Julian Assange may be upon us. What may he have or not have . The russians have been hacking in everywhere, arizona illinois, they did the dnc. Theyre doing these hacks, part of it is to push donald trump who has been close to putin, shall we say, but part of it is so to mess up the system. We dont have one big National Election system. It will be a mess if the russians keep hacking in, leaking material through wikileaks or other places and it undermines confidence in the electionment one thing well talk about today, is our election infrastructure something that cybercommand should protect. Walter isaacson, looking forward to it. With you all day today. Absolutely. Back to you guys. We are out of time but we both have questions. Questions . Bring them on. Mine is super official and frivolous. Walter i want the super official one. We will get that in a second. I do want to follow up, as a yahoo mail user myself, im less upset with the idea that the company got hacked and more upset with how the company dealt with it. If you want to change your birthday, they say no, they want to make sure you get age appropriate information. The idea that theyre Still Holding on to this and telling you its your problem to go figure out. Here are some things you can do that might cost you money. My bigger concern is that they didnt tell anybody about this for a long time and theyre not helping customers since. Yeah. Obviously theyre not doing a great job handling it. But in every single one of these things we can claim the company or the government for not doing a great job handling it, but we need some rules. One is if you want to be anonymous on the internet, you probably should be allowed to be, but what about somebody like me, if you dont want to be anonymous, if you want to be verified v a verified i. D. Only let people into your email account that have a verified i. D. , we should build a system like that for people who want to communicate with verified, authentic people. We get more and more away from that in the merck of anonymity. Andrew, are you in the center of the campus . What building are you in . Thats a good question. We have a huge producing team, where are we . Creskie. The joe kernen atrium. Were in the joe kernen atrium. Im glad they finally made good on the promise to name something up there. Did you go into boston last n t night for dinner . Youll get a call from the development office. We went to the Liberty Hotel in boston, which used to be a jail. The countdown to jobs friday is on. Today at 8 15 eastern, well get an early read with the adp private payroll report. Keep watching squawk box for the instant data and the Market Reaction. Well be right back. The experts at cdw brought i. T. Orchestration to 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. Welcome back. Right now its time for the executive edge. Blackrock is cutting prices across its core group of etfs. The lineup will feature lower cost ratios on 15 stock and bond funds. The move comes ahead after new government rule requiring them to put clients requests ahead of their own. That ruling could come in 2018. Next story is mine. Do i have to introduce myself . Wilfred frost is here. Otherwise it could have been confusing. We slipped into break. Uptown is not an issue. Youre fast. As long as you leave promptly before 6 00. Before 6 30. Before 6 30. Youre here for the rest of the show. I am. New study shows the british financial industry could lose up to 48 billion in revenue in a socalled hard brexit that would leave the Company Without restricted access to the European Union single market. The report by oliver wineman find if Financial Firms lose their right to Sell Services across europe 75,000 jobs may disappear. Some big numbers from this consultancy firms report. Offset a little of that angst with the editorial in the wall street journal today. On . On brexit, becoming Great Britain again. A paragon of free markets. The Atlantic Coast preparing for Hurricane Matthew. The ceo of generac joins us next. Squawk box will be right back. 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. 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 for decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back, everybody. Hurricane matthew inching towards the coastline of florida. The storm already prompting the sunshine state, georgia, and the carolinas to declare a state of emergency. And coastal evacuations. Now, storms like these have residents in these areas preparing for the worst. Joining us now to talk about keeping the lights on during a major storm is the president and ceo of generac holdings. Its great to see you in person. Great to be here. Sorry for the circumstances under which were talking to you about this but this is the preparation before a huge hurricane. What do you see from your perspective . You get calls coming in . Yeah. Obviously we start positioning inventory. We get customers and people who really want to get that product in the area thats going to be impacted by the storm. Our phones have been ringing off the hook since this weekend when it was clear there was a possibility at least the track was going to be close to the u. S. We get a ton of phone calls from people who havent used a product in a long time. These are products that get a lot of infrequent use. Something you pull out of your garage every three, four years and put gasoline in and fire up for the small portable generators. People forget how to use them. We get a lot of phone calls around that. And then the permanently installed types. What can you do with the permanently installed ones this close to a storm . Can you get stuff in . You can. You have a couple its a very short window here still available. It starts to get pretty difficult if you have an impact from an event. You have to wait until the power comes back on. Its a process. Its a Home Improvement project, basically. Theres a permit involved. There should be. Theres the process of contractors. And its a pretty involved type of installation. Gasoline powered ones, youre in for trouble because unless your gas station has one of yours, theyre not going to be able to pump. And we saw that during sandy. And theres also lines for gasoline. I should recuse myself. I shouldnt talk to you about this. I have one. I have one two. Im and a better person because i i dont. The natural gas, if anything happens any time, it immediately fires up and starts. Natural gas systems are very safe. Its underground. The grid is aboveground so its susceptible to weather and the things that cause outages. Natural Gas Infrastructure in this country is fantastic. How busy im sorry. Is the main questions youre seeing the main impact on your people questioning how to fire up ones they already have or people going out to buy them . Its both. The challenge, of course, is if you do have an outage event that impacts millions of people, you have everybody running to a Retail Outlet trying to find one of these products, a portable generator. Theres only so much supply available. But how cyclical is your business . We havent seen huge storms. We havent seen huge outages like we had maybe five years ago. Its interesting. Weather runs in cycling. Ive been with a company over 20 years. Ive seen these patterns where you have a couple years where you have aggressive weather or weather that causes outages. Then several years in a row that you dont. Much more tranquil weather. I dont know why it happens, but something with el nino they tell me. Those are the bigger kind of weather cycles that happen. So that does impact our business. Weve made a critical decision after sandy which was four years ago, were coming up on the four year anniversary. Not that we but there are other things we can do well. Weve done a number of acquisitions and other things. You need to market it all the time. Its like when people go to home depot when the snow is coming and all the snow shovels are coming. Its like i dont you know, for people that havent done it, when its sunny, you need to do it then. Yeah. You have to plan. Its a purchase you have to plan for. You can drive through miles of dark neighborhoods and you can see who has generators. Its our best advertisement sometimes. Aaron, thanks for coming in. Then the clowns are coming to the house. The scary clowns. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov sprint . Im hearing good things about the network. All the networks are great now. Were talking within a 1 difference in reliability of each other. And, sprint saves you 50 on most Current National carrier rates. Save money on your phone bill, invest it in your Small Business. Wouldnt you love more customers . I would definitely love some new customers. Sprint will help you add customers and cut your costs. Switch your business to sprint and save 50 on most current verizon, at t and tmobile rates. Dont let a 1 difference cost you twice as much. Whoooo for people with hearing loss, visit sprintrelay. Com. Jobs in focus. A preview of this fridays preview. Four things the fed should be doing to fix the economy. Former treasury secretary here to sound off. That interview is straight ahead. And the wall street journal says it could happen this week. Details straight ahead 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. Im becky quick along with joe kernen and wilfred frost. Weve been watching the futures this morning and so far not much of anything to really tell anybody about. Dow futures down slightly. Down by about 5. 5 points. The nasdaq up by just over two points. Again, though, yesterday the markets were down for the third out of four sessions in a row. There has been some volatility around a lot of other areas. Things like sterling, some of the other markets weve been watching. Bond yields picking up. I think theyre back around 1. 7 . Yeah. Just shy of 1. 7 today. Making the headlines at this hour, investors looking ahead to 8 15 a. M. Eastern time in this september adp report. Consensus calls for Mortgage Applications rose 2. 9 last week according to figures just out from the Mortgage Bankers association. That increase was driven entirely by a jump in refinancing applications. And amazon has introduced a new feature called prime reading. It allows pri it. Twitter also making headlines this morning. The wall street journal reports that the social Media Company is expected to field officers this week. The paper says that salesforce ceo has been building a case to his investors for why his company should be the buyer. Among the other names that are said to be checking twitter out at this point, google and disney, jim cramer catching up with chris saka last night. I mean, look. Twitter would be complementary to many of those companies. Theres no doubt about it. It has a unique set of data nobody else has in the world and faster than anybody else in the world. Their problem is not the input. Their problem is making it useful and easy and accessible for all their customers. So who buys it . I dont know who, but i can see why google has finally flipped the bit from thinking about it as not scientific and Computer Science enough to wow thats the worlds best data. If we dont have that, our search results wont be as relevant anymore. I can see facebook saying we need to copy it over and over again. Microsoft did the first revenue deal with us at twitter. I dont know about apples ambition because theyve never been good at social and community. But benoff loves it. I dont know. All of this talk has made twitter shares really jump. You could see the big spike its taken. Its up to 24. 22. Blackrock is cutting prices across the core group of etfs. On stock and bond funds which are marketed to buy and hold investors. The move comes ahead of a new u. S. Government rule requiring brokers to put clients interests ahead of their own. What . In handling retirement. That rule which fully goes into effect in 2013 could leave customers investing more. I thought we reported on the same thing five years ago and i made fun of it. We did and you did. But its going to go into effect 2018. I think it was like two years ago maybe. Maybe three. Yeah. We still got two years to wait. So we can talk about it for two more years. But youre right. The idea they would put their customers interests first. They were under the buttonwood in the 19th century. And they finally came around and said i know we care about ourselves but lets actually put the clients interest first and see where that goes you wonder why theres a problem with wall street. This is you. Wilf it says at the top. Yeah nap is my name. Its a short did you go by wilf your entire life . Mainly. Since i moved here i get wilfred. Well, joe is short for joseph. You had a choice for will and fred. Wilfs better than fred. Theyre good names. But theyre not mine. Dont be so pc. Anyway. Fitch cutting its outlook to negative on wells fargo. Fitch says wells could face damage to its reputation from recent regulatory actions and fines as well as earnings pressure. Fitch did affirm the banks existing rating, though, still at aaminus. Which is still investment grade. If you fell asleep early last night, you missed a lively Vice President ial debate. It was their one and only chance to defend their running mates. Plenty of articles note the republican vp candidate mike pence was able to stay cool under pressure during frequent interruptions by tim kaine. Gentlemen, the people at home cannot understand either one of you when you speak over one another. Please wait until the other is finished. Those interruptions came fast and furious. Pence also found himself on the defensive when asked to elaborate on some of trumps policies like banning muslims from immigrating to the United States. By refuses to answer some of the questions regarding trumps comments. Did donald trump apologize for taking after somebody in a twitter war and making fun of her weight . Did he apologize for saying africanamericans are living in hell . Did he apologize for saying president obama was not even a citizen of the United States . You will look in vain to see donald trump ever taking responsibility for anybody and apologizing. The democrat also went after trumps refusal to make his tax return public which pence defended. We have a tax code, senator, that actually is designed to encourage entrepreneurship in this country. But why wouldnt he release the tax returns . Were answering the question about the business thing. I do want to come back on this. His tax returns showed he went through a very difficult time but he used the tax code just the way its supposed to be used and he did it brilliantly. How would you know that . Because hes created a business thats worth billions of dollars today. How do you know that . More on last nights debate and what you can expect in this weekends president ial debate is still to come this morning. All right. Between politics, a rising dollar, anxiety about the upcoming jobs report, it seems the markets are just playing a waiting game. For more now on what to expect, Julian Emanuel at ubs along with jack caffrey. We also have earnings and all of these things go into the view of what they see as the state of the economy for the november and december meetings. Then you throw the election in. What would you do . What do you think you shoulded do in terms of what do you tell clients . I think if we look at the data, the fed is talking about wanting to raise rates because thee see the situation improving. Hasnt paid to look at what the fed is saying and bank on their forecasts for five years. Right . They have certainly been constructively more optimistic tan the reality has wound up being. But they have, i think, looked, forecast, and then responded to say the world isnt Getting Better and thus were not going to tighten until we see the data get better. And that is watchful but reactive. And you think that what we see on friday and you think that earnings, all these things are going to justify an increase. And the markets should be able to handle that. Theyll finally do that. The stock market will cooperate. I think you point to this issue which is earlier in the week you had a lot of focus on comments from the cleveland fed saying november must be a live meeting. Sorry. Not cleveland. November was off the table because they wont go through everything they were looking at. I also dont think the fed wants to be where with rate increases looks like well get one. Maintain credibility. Thats not a happy place to be if youre a policy maker. You dont want to be boxed in. You want the optionality of what youre trying to do. They probably do want one. They probably want to say they did one. The psychological is exactly the same as it was coming into the december meeting last year. That worked well. For the markets. It temporarily didnt. And actually when you look at the setup right now, you could get the same type of reaction over the next several weeks prior to anything in december. But the fact is that weve had some false dons. The data is starting to turn slowly once again. In that respect fridays jobs report is quite important. We think that actually the Interest Rate market is telling you that the fed is going to have the runway to hike. That could create a little indigestion. But thats the way you get to higher prices in the stock market next year. Jack, even without a hike, do you think were set for a much stronger dollar both the rest of the year and next year . Because the last couple of days has shown us that on the other sides of all these, the yen, the euro, the pound, theres fundamentalal reasons for weakness on those sides opposed to just strength on the dollar side. I think historically youve seen the dollar doesnt really strengthen once the fed begins tightening. But we dont have many episodes to draw statistics in that regard. To policy and trying to be a more free trade issue and letting the pound weaken. Bank of japan has been trying to weaken the yen except it tends to still be a safe haven currency. So we come back and forth to one being to the earning. And making everyone crazy. So wheres the rest of the world right now . Take your pick. Japan, are they headed back towards normalizing rates or are they still full bore the ecb back towards equalnormalizing . Youre a long way from normal. How do we go the opposite way and pretend we can do that when thats why our 10year is still at 1. 6. A lot of it is the competition for the incremental Interest Rate dollar, lets say. The fed has leeway to hike, then the spread between the fed and the rest of the world is such that, you know, you could slowly start to move out of negative Interest Rates. I think that that is a large part of why we heard the dialogue from the ecb yesterday talking about the start of qe tapering. They want to move away from that. Its just a question of being able to. If that gets above 11. 77, thats where theyre off to the races. Is this it . Are we ever going to see 2 . Yes. In the next year . Time and level never at the same time. That was big of you to say well see 2. Right. Whats normal in japanese interest in the next years . We still live in a world where you normally traditionally youd want to see nominal Interest Rates in line with nominal gdp. Were well under that. I think were going to get through just slowly and gradually. Are we headed back that trajectory or do we risk getting down before we see two . Would anybody place a bet on that . We dont think so. You dont think if you look at the last several months, were staying lower for longer which has been the mantra for some time. But the fact is that youve got more volatility now around that lower rate and thats normal when the data starts to jump around. Ultimately we think were starting to plant the seeds towards firmer rates in the months ahead. Thank you both for coming in today. Thank you. Still to come, former treasury secretary Larry Summers will join us to discuss four things the fed should be doing to fix the economy. And later an update on Hurricane Matthew as it heads towards the southeastern u. S. Squawk box right back. Used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back, everybody. Lets take a look at some stocks to watch this morning. Micron Technology Shares under pressure this morning after the chip maker reported a smaller than expected quarterly loss. Also issuing current guidance above estimates. However, they are discounting that because of an accounting change by micron. Despite a what seemed to be good news on the surface is winding up with the stock down by 4. 5 this morning. Mcdonalds is near a deal to sell franchise rights in singapore and asia. The deal will be worth an estimated 400 million. That Company Already operates restaurants within saudi arabia. Still to come on squawk box, Larry Summers joins us next. And dont forget government and businesses are waking up to a new reality. Cyber warfare. Were going to have more from the Cambridge Cyber summit later in the show. Andrew is there for us. Well hear from him in just a bit. Squawk box back in just a couple of minutes. Isnt Major Medical enough . No whos gonna help cover the holes in their plans . Aflac like rising copays and deductibles. Aflac or help pay the mortgage . Or child care . Aflaaac and everyday expenses . Aflac learn about one day pay at aflac. Com boat blurlbrlblrlbr who aryou . Hey, jesse. Im vern, the orange money retirement rabbit from voy orange mey represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. What are you doing . Getting your quarter back. Fountains dont earn interest, david. You know i work at ally. I was being romantic. You know what i find romantic . A robust annual percentage yield thats what i find romantic. This is literally throwing your money away. I think its over there. That way . Yeah, a little further up. What year was that quarter . What year is that one . 98 thats the one. You got it nothing stops us from doing right by our customers. Ally. Do it right. Lets get out of that water. Sprint . Im hearing good things about the network. All the networks are great now. Were talking within a 1 difference in reliability of each oth. And, sprint saves you 50 on most Current National carrier rates. Save money on your phone bil invest it in your all business. Wouldnt you love more customers . I would definitelyove some new customers. Sprint will help you add customers and cut your costs. Switch your businesso sprint and save 50 on most current verizon, at t and tmobile rates. Dont let a 1 difference cost you twice as much. Oooo for people with arg loss, visit sprintrelay. Com. In his latest blog, Larry Summers says there are people that this is no time for the fed to be creating uncertainty with talks of a rate hike. Secretary summers joins us this morning with his plan for the fed. Its great to see you. Thanks for coming in. Good to be back with you. Your blog has kicked off some controversy. Weve been kicking things around here. Weve heard other people kicking around things like this. You say this is not the time to raise Interest Rates. There is some criticism in this plan for the fed. Soft criticism, but you would be doing things a little differently. Look, first thing to say is the fed is completely honest, totally trying to do the right thing, and any suggestion that theyre behaving politically of the kind weve seen in the campaign i think is ludicrous. Janet yellen is the least political person in the city of washington. And the political thing to do isnt to be calling for increases in rates. So i think what needs to be very, very clear about that at the beginning. That said, i look at the economy and unemployment is below target. And inflation is below target as well. So that doesnt seem like a time to be stepping on the brakes. And Inflation Expectations have actually declined significantly over the last year. Thats another reason not to step on the brakes. Did they miss their window though . Was this i dont know whether they had a window or not because we havent had a moment when Inflation Expectations have been anywhere near 2 as captured in the market. I think whats going on is what i warned about several years ago when i talked about secular stagnation which is a whole set of structural changes in our economy. Meaning that the neutral Interest Rate, the one that propels things forward at full employment is much lower than it used to be. And the feds moved some on that. But the fed hasnt moved nearly as far as the market on that. And the fed right now is behind the curve on the recession deflation problem. The market is telling you that rates are only headed up as far as 1. 1 on an expected 1. 5 . Somewhere in there on an expected value basis. And the feds saying theyre going to be raising them to 3 . If the fed is that far behind on an inflation problem, thered be a hysteria in the market place. Yet you have exactly that pattern in the other direction. And i look at the number of people who are without work, many cases because theyre withdrawn from the labor force. The fact that total hours in the economy which is probably a better measure than the total number of people has been flat for the last six months. I look at the feds own labor dashboard. I look at the degree of uncertainty that exists in the global economy. And i say why is this the moment for the brakes . Look at it another way. They raised rates in december. You know, because of that the economy was presumably a little tighter, little slower than it otherwise would have been. They were way theyre well short on growth and well short of Inflation Expectations. In terms of their forecasts from december. If they hadnt raised rates last december, they would have been closer to those things. Theyve missed on their forecast every year for the last seven. Youve got to learn something from that. Larry, secular stagnation, savings glut, over supply, and lack of demand. Who could have predicted this . Ive been convinced that rising populations around the globe, peak oil. All these arguments are supposed to be happening and its been the opposite thats happened. Well, if you looked as i did a few years ago at the trend in the real Interest Rate, it had been trending down since the early 1990s in terms of the longterm real rate. Yeah. There are a whole set of factors. One huge one is technology. Because of airbnb, people arent building hotels. Because of ecommerce, people arent building malls. You need less fewer large studios. You get to shop everywhere instantaneously. Lay firms dont need as much space because they have the cloud, not filing cabinets. They have artificial intelligence, not paralegals. Fewer lawyers is always a positive. Whether its a good or whether its not, it does mean less it does mean less building. Weve got a lot more inequality. The marginal dollar going to a wealthy person is less likely to be spent than the marginal dollar going to a lower income person. So i think there are a set of factors 37 the imf did an analysis of this several years ago. They concluded that there had been a significant decline in real Interest Rates. I think weve got to learn to listen and draw from experience. Many of your friends, if i might, joe, were hysterical about hyper inflation because the money base went up. Its pretty amazing. They were obviously 100 wrong and they havent said so. Larry, can i ask you about something you said a couple weeks ago . What regulators have done to strengthen banks hasnt strengthened them that much. Is Deutsche Bank an example of that . I think there are a whole set of special issues associated with Deutsche Bank and there are some special issues that distinguish european banks from american banks. Look. The indicator that was flashing red in 2008 was the market value of equity relative to total assets. The people and frankly i was one who saw that as a serious problem and said we needed more capital in early 2008 turned out to be right. And that indicator which i think is a very good one relative to what are inevitably measures of regulatory capital is flashing great concern with respect to Deutsche Bank in europe and i think the emphasis needs to be on Capital Raising rather than on what i think is somewhat questionable efforts of reassurance. Are they messing up by saying they may be pulling back on Capital Requirements . I think in europe there are some real questions about the degree of commitment to doing whats necessary with respect to capital. And i appreciate the political difficulties. But i think that huge amounts of damage to Financial Stability have been done historically by the fear of dilution of existing shareholders. And thats not whose benefit the system should be regulated for. The system needs to be regulated for the benefit of the overall economy, for the benefit of those who depend on a flow of credit. And im not an expert on the details of deutsches information. I would emphasize the importance of equity values as an important signal that should be heeded. And the question of capital, looking in capital in part through the perspective of the market value of equity. So to put the issue to bed once and for all for deutsche and others, do they need state aid . Do they need a state bailout . Im just not in a position to judge. They need more capital. They need people to believe they have more capital and i expect that that that some of that capital can be raised from the marketplace for european banks. Albeit at some cost to existing shareholders. Look, i think the other lesson of these things is theyre always done too late. They certainly could have raised capital, they may not have liked to raise capital. But they could have several months ago. And when you miss those opportunities to raise capital, it becomes more expensive. Like lehman found out. That would be the i think there are a lot of differences between these two situations, but yes, that would be a lesson u. S. Banks certainly appear much stronger at this point. But i think we certainly shouldnt in any way become complacent. There are always risks, historical experience suggests any year the economy is not in recession theres a 20 chance it will go into recession. Its different at that point and if you look at the middle east, if you look at generalized difficulties in europe. If you look at whats happening in china, if you look at the political risks here in our country, this is not a moment for any kind of serenity. We want to thank you for coming in today. It is always a pleasure to see you. Good to be with you. Among the stories front and center right now, the adp report about 45 minutes away. Expecting 173,000 jobs for september compared to 177,000 in august. Thats just one of several economic reports due to ed ta. The august trade deficit is out at 8 30 a. M. Eastern. And both the ism Manufacturing Index as well as factory orders will be out at 10 00 a. M. Eastern time. Restaurant operator yum brands is out with Quarterly Earnings after todays closing bell. Is expected to have profit of 1. 10 per share on revenue of 3. 5 billion. You got any tacos in england . I dont think you ever had a taco. I have. But i admit that i pronounce that one wrong. Taco. Theyre so good. The worst taco is great. Im more of a how do you say that . You said that the other day. Haiti . I like it all. I think i said haiti. I corrected myself without being pointed out on that one. It sounded wrong. I want to give you a best actor oscar. Ill take it. Do you have power to do that . Yeah. You guys win just on larry, i just violated everything from James Madison university that i was telling you about. I just theres 35 things you cant say like never say i know exactly how you feel. You never, ever say that. Never say the same thing happens to me too. These are all banned. James madison was the place. And i think i just violated six of them talking to you. I dont mind. Say what you like, joe. I do. To a point. Thanks to an increase in refinancing activity. Diana olick joins us with what people are waiting for with refinancing. Now you got me thinking about breakfast tacos. Back to mortgages. Total Mortgage Application volume rose thanks to the 5 jump in refis. Obligations to buy a home, not as strong. Down 0. 1 for the month. And now down a sizable 14 compared to a year ago. That may be due to a surge last year before new mortgage rules went into effect. Now, Mortgage Rates moved back higher yesterday as markets react to speculation that europe is going to follow the u. S. That is tapering its bond buying. This sets the stage for more increases ahead which begs the question why are nearly one in four barrowers still not refinancing. Ran the numbers and found a lot of these loans are either seriously delinquent are at once been delinquent. Another chunk of borrowers have so little balance left on their loans that a refi wouldnt really be worth it. And still more have loans owned by private investors which makes a refi more difficult. In the end borrowers, 13 of them have rates above 5 and could save on a monthly payment. The mystery is why dont they, joe . That is the mystery. I would you know, im looking over i dont know how to say goodbye, diana. Theres so many things here that im not allowed to say. Just go back to tacos. Thats a good idea. Thanks. Coming up, the weather could turn ugly late this weekend across the coast. Were getting an update on Hurricane Matthews path. As we head to break, take a look at u. S. Equity futures. Welcome back, everybody. Hurricane matthew predicted to be a category 4 storm by the time it brushes the east coast. Evacuations have already begun in florida. Nbcs Miguel Almaguer joins us with more on the storms path and the preparations that are taking place there. Miguel, we still see the sun but obviously that may not be for long. Reporter yeah, becky. Those evacuation numbers are staggering. 1. 1 Million People who live along the coast here in South Carolina have been asked to move 100 miles inland. That comes as the governor ordered some 280 school buses later on this afternoon to be prepared to move people inland if they dont have their own vehicles. Matthew a category i believe 4 hurricane is working its way up towards our direction. Working its way north up the atlantic seaboard. Theyre also bracing in states like florida and of course both of the carolinas here. They are prepared for a 100mileanhour winds near. Stores are running low on water and food. Its going to be a long couple of days here as many begin to work their way westward here away from the water line here. So its going to be a busy day for many folks. Thousands of Police Officers and even 1800 members of the National Guard have been called in in South Carolina alone as many people begin to heed those warnings and work their way closer inland. Miguel, last night i saw on nightly news i think there were live pictures of people lined up, cars lined up, trying to get out of low lying areas already. Is that the scene today . It is. Its not just those low lying areas. But even another area in big cities like the one were at here in charleston, there are lines at gas stations already one of the local Police Departments here tweeted out if a gas station is out of gas, dont call 911 as apparently some people have been doing. So there is a rush on supplies. Many people try to load up their vehicles and get their way out of here before that storm system works its way in here. Youre one of the ones staying there so stay safe and thank you for joining us today. Will do. Thank you. When we come back, the chairman of douglas element is one of Donald Trumps closest friends and also an economic adviser to the campaign. He will join us after the break. And donald trump has been quietly ramping up his Fund Raising Efforts pulling in 18 million in just 24 hours after i believe the last debate. Here to talk is robert frank. Were joined by howard lorber. Hes the chairman of Douglas Elliman real estate and also one of trumps closest friends. Howard, good morning. Good morning to you. I want to talk about real estate and i want to talk about the fund raising. But first on this tax issue that has been the discussion all week. You know, clearly it was legal. If you have a problem with it, take it up with the tax code. But the narrative of donald trump has been that his comeback of the 90s was based on shrewd deal making and creating value. Should that change given that we now it looks like taxes were a big part of that comeback story . Well, you dont really know if it was a big part of the comeback story. Because the comeback happened pretty quickly and the chances he didnt have the chance even to use that loss carry forward. 960 million. In a short time. Were not even sure over what periods of time he used it or would have to be completely used now or it would have expired. His comeback was because he stuck it out, he worked out things with the bank, hes a good negotiator, and he lived another day to start again. Right. But youve known him for 30 years. Youve been in real estate. And you were with him during that early 1990s which has come into focus this week. What do you think is behind that 960 million loss . Is it a paper loss . Is it a cash loss . And what do you think happened to it . I doubt it was a cash loss. There could have been some, but my guess is mst more of a writedown loss. On maybe the personal loans he had. Yeah. He had a lot of the bank loans. It was a bad time in 92, 93 in real estate. Everything was worth a lot less. Could have been just the markdowns. Fund raising. You have been very active with fund raising. I think you had a fund raiser for him last week. Are there big donations happening right now that were going to see later this month . Yeah. That was a very good fund raiser. It was thursday night. How much did you raise . We raised around 7 million, 8 million. For one dinner. And theres criticism that nobodys none of his billionaire backers are really putting up the money. Are they going to . The list of people, im not going to disclose it. It will come out in the filings youre seeing big gifts, six figures. 100 six figures. And of course the way its done is now it goes, you know, in conjunction with the rnc. Then it goes through the rnc and they work on the ground game and the other things that support the candidates. So youre sort of limited to now its about 400,000 per individual now. But theres plenty of people giving hundreds up to the maximum. So youve seen the characterization of donald trump in terms of temperament and much worse that you see from depends on where you look. Whether its the far left outfit. But youve known him for years. Racist . No. Gender ive never seen or heard a prejudice word from donald in almost 35 words. Youre not hard of hearing . Youre fine . Hes prejudice against one type of person. The person that attacks him first. And thats what hes prejudice against. Doesnt matter sexuality, color, religion, nothing. But are you comfortable with everything hes said on the campaign trail or do you wish he would tone it down a little . Well, you know, i think its not really what i wish. Its the public. And then also, you know, how he wants to portray himself and how the campaign wants him to portray himself. Im sure there are certain things hes probably like everyone else in life, that hes sorry we wish could take back. Do you tell him, look its probably not a good idea at 3 00 in the morning to start tweeting about the former Miss Universe . Would you have that conversation about him . You know, i was asked a couple time ifs he listens to me. I say yes, he listens. That doesnt necessarily mean you know, he asked a lot of questions. He likes to get information. Hell ask a lot of people a lot of things and make his own decision on what hes going to do. Can he win if he still makes some of these comments . You know, i think he can. I believe he will win, actually. Im still very bullish on him winning. And again, dont forget you have a candidate that is just a horrendous candidate coming off of a career which she didnt create a job, never put anyone to work, has hurt the security of us living here in the United States, benghazi. You can go on and on and on. You know, trump is a businessman. Okay . No ones perfect. Hes going to make some mistakes. But when you look at the other candidate, it looks like all she does is make mistakes. I cant point to one good thing that shes done since shes been around in politics. Not one. I want to ask you about real estate. We just had the Third Quarter come in on new york. You guys cover a lot of markets. You cover florida. You cover aspen. You cover connecticut. Whats happening in new york . It seems that what started as sort of a mild slowdown is accelerating and getting worse . I think before an election thats normal. But also, you know, you cant its hard to analyze the data. Now we report an 18 decrease number of units. But when you look at the volume because i look at commissions all the time, its really only a 4 or 5 decrease. Because prices are much higher. Because theyre selling more expensive apartments. Especially in the new development area. Selling a lot more. The average price per square foot for new development went up 35 . Why is the top of the market the worst part of the market right now . Because those are the biggest gains. You had a period of five to seven years where it may have been worth 20 million. Or all of a sudden when to sell as a resale, they price it at 50 million, they got 40 million. Not saying it was probably worth 15 million. Its just in the eyes of the beholder. Your company helped sell that 88 million apartment that was the biggest sale in the Third Quarter. It went to contract in 2013. Yes. Do you think this year were going to get anything like that again . I mean, 80 million, 90 million . Are those days gone for now . We just sold an 80 million house in l. A. In new york knowing some things that are going on, i think the answer is yes. Yeah . Theres going to be a big deal . Yeah. I think therell be deals equivalent to that going up. Good. Good for us wealth reporters. Thanks for come inning. Thank you. Robert, thank you. When we come back, stocks to watch ahead of the open. And later the adp private payrolls are out. Mark zandi will join us with a preview of fridays government report. Stick around. Squawk box will be right back. . 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. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. And its got the spring 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. Buy the most highly recommended bed in america for as low as 25 per month and a 90 night free trial. Lets take a look at stocks to watch this morning. Endurance Specialty Holdings will be bought by Japanese Firm sompo holdings. That amounts to 93 a share compared to yesterdays close of 87 and change. And sears chief executive Eddie Lampert says the retailer continues to own and operate the kmart chain. The stock has jumped in recent days on word that sears was considering various options for some of the brands like kenmore, craftsman, and diehard. And netflix has struck a deal with luxury Movie Theater ipic entertainment. Mcdonalds is near a deal to sell franchise rights in singapore and asia. And according to a report, it says that saudi arabias reza group is the buyer an the deal will be worth an estimated 400 million. Already operates within saudi arabia. Still to come, breaking jobs news. The adp private payrolls will be released. The numbers, Market Reaction, and a preview of fridays government numbers straight ahead. Plus a bidder for twitter. The wall street journal says it could happen sooner than investors think. That story and much more on squawk box in just a couple of minutes. Guess what guys, i switched to sprint. Sprint . Im hearing good things about the network. All the networks are great now. Were talking within a 1 difference in reliability of each other. And, sprint saves you 50 on most Current National carrier rates. Save money on your phone bill, invest it in your Small Business. Wouldnt you love more customers . I would definitely love some new customers. Sprint will help you add customers and cut your costs. Switch your business to sprint and save 50 on most current verizon, at t and tmobile rates. Dont let a 1 difference cost you twice as much. Whoooo for people with hearing loss, visit sprintrelay. Com. Breaking jobs news. The adp employment report is just minutes away. Well bring you the numbers and Market Reaction straight ahead. Veep showdown. Gentlemen gentlemen, the people at home cannot understand either one of you when you speak over each other. Tim kaine and mike pence defending their running mates stances on tax reform and the economy. Wall street journal columnist Holman Jenkins is here with his take. Plus firing back against hack attacks. Were live at the cyber summit. The final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. You dont know this . He just called us old. I did not. I said the music choices on squawk box are older. I never know any of them. I said the songs are old. As we are singing along. Welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and wilfred frost. I never heard this song. You heard of the beast tles, right . Sure. Youre english. But we had led zeppelin over here at least. Thats a Homer Simpson line. I think he did it with the rolling stones. Anyway. Were counting down to you have everybody. Pink floyd, the who. Oasis. [ laughter ] theres actually a film coming out. That got a good laugh from everybody. Were counting down to september adp report. That one guy is so angry too. Theyre both pretty angry. Hes going to be really mad that we all laughed at the same time. Forecasts of 173,000 in payrolls. Slightly lower than in august. Could have said coldplay. We all would have laughed too. Theyre my favorite band. I know you listen to them. With the spinach bowl and macrame shorts. The 10year note. Its now at 1. 68. Those are lines from 40yearold virgin which you probably also dont know. I remembered the line. Making headlines this morning, Mortgage Applications rising 2. 9 in the latest week. The average 30year fixed rate dropping to its lowest level since july. Also watching crude climbing to the highest levels since june. This after the latest api report showed all u. S. Inventory dropped for a fifth straight week. The Energy Information registration up 1. 8 today. And in global news, british Prime Minister theresa may speaking at the end of the party conference. She said they will respect the brexit referendum and take britain out of the European Union. The referendum was not just a vote to withdraw from the eu. It was about something broader. Something that the European Union had come to represent. It was about a sense deep, profound, and lets face it often justified that many people have today that the world works well for a privileged few and not for them. It was a vote not just to change britains relationship with the European Union but to call for a change in the way our country works. And the people for whom it works forever. This being described as a water shed speech by various commentators. She cited the likes of churchill and thatcher throughout it. Im feeling patriotic and moving the pound opposite. Hitting 31year lows. 1. 27 this morning. On a programming note, dont miss Philip Hammond storm on squawk on the street with me at 10 30 a. M. Few stocks to watch this morning as well. Micron technology expecting an upbeat outlook. But investors are discounting that because of an accounting change by micron. Theyre also worried about broader trends in the market. The stock is down by 2. 25 . Twitter is reportedly expected to field bids this week. Among the possible suitors, salesforce. The wall street journal says the ceo there has been building a case to his investors. Google and disney are also mentioned as possible buyers for twitter as we know. Weve been talking about that. David fabers been reporting on it. Shares up close to 4 . And Constellation Brands increasing its full year guidance. Thats good for a 3. 5 pop for that stock. The white house is revealing new rules that will cut down on tax inversions by rebasing abroad. The aim is to prevent companies from shifting profits overseas in the form of tax deductible Interest Rates to a foreign parent. The new rules would change those payments in equity dividends which are not tax deductible. Warned about unintended consequences and lawsuits. Well get holmans view on this maybe too. In other political news, senator tim kaine and governor mike pence squaring off and the one and only Vice President ial candidate last night. Sparring over Donald Trumps tax returns, heres what they said. We have a tax code, senator, that actually is designed to encourage entrepreneurship in this country. But why wont he release his tax returns . Were answer the question about the business thing. I do want to come back on this. His tax returns that showed he went through a very difficult time, but he used the tax code just the way its supposed to be used and he did it brilliantly. How do you know that . You havent seen his tax returns . Because hes created a business worth billions of dollars today. How do you know that . Okay. The gops nominees taxes are the subject of a wall street journal piece today by Holman Jenkins. In the latest piece entitled the trump tax setup. I find myself ive always hoped that hillary is healthy and well. And i find myself now even hoping even more so that shes very, very healthy and if she is elected able to serve her entire time. At what point were you making today on this . Whatd you make of it . Well, i mean, entire books have been written about trumps casino fiasco in Atlantic City in the early 90s. Theres nothing new here except for one tax return that said he took this 900 million loss and then we speculate all the press speculates that he hasnt paid taxes since then. We have no way of knowing whether thats true or not. This is a piece of news thats been sitting around 25 years waiting to be injected in the weeks before the race. The media have played along in a naive and disingenuous way. What happened in the early 90s . You point out business week estimated that donald trump was probably under water by 1. 4 billion at that point. Yeah. He borrowed a bunch of money in the junk bond market to build casinos, buy an airline, buy the plaza hotel. Then the market went all to heck on him. Howd the market i was around but i dont remember. There was a steep recession in 90, 91. That was partly it. Did not pan out the way people hoped. And trumps casinos were cannibalizing each other. Bad business person . Huge faux pas . A big roll of the dice that didnt pay off. People do that when theyre in the private sector. Sometimes it doesnt pay off. Thats right. And at the same time the junk bond market died because of regulation and Justice Department action. And that there went his chance of refinancing to more acceptable rates. For some reason they thought it made sense to help Companies Get in trouble do this to recover. Was there a rationale . Supposing youre starting a Small Business in the first four years, you lose a Million Dollars. And last year in the fifth year you make a Million Dollars. While your average income over that period is zero. Why tax you as if you made a Million Dollars a year. If in the sixth year, youre taxed at the normal rate. Otherwise nobody would ever go into business. Because no business starts out making money. Should there be limits . I know this is all legal, but if we were to really focus on the tax laws at this point, how would you change them . Would you put limits on some of these things . Would you do away with them . Would you keep them . I think the net loss carrying forward is fine. I dont know how trump generated these losses. Its possible they werent real. But the irs has been all over his returns for the last 20 years. So if there was a problem there, they would have found it. Im not guessing theres anything illegal there. Im thinking forward looking from here. We talk about how the tax laws need to change. Id get rid of the Corporate Income tax switch just a pass through. Is he not the job hes done explaining this has been unessential . He has not done a good job explaining. He said im a businessman, i suffered a reverse, i went on and rebuilt. Thats the end of the story. And i continued to make payrolls and continued to create jobs. Franchise taxes, all the taxes you pay to be in the casino business are huge and he continued to pay those. Whether the company or he personally makes money, theres still a lot of tax revenue. My favorite thing is this happened and hes got his net operating loss, you contrast that to bill clinton, thats 16 million. He did pay taxes on that 16 million he made in four years with laureate university. But i look at the private sector contributions versus Public Servants that somehow are in a position to accrue vast wealth only because they were Public Servants. I just and tim kaine last night basically said Nonprofit Sector deserves our respect. The for profit is somehow scummy and not legitimate. I think it does deserve our respect after seeing what it did for the clintons. Id like to have a couple hundred million. But youve got to generate jobs and growth and productivity gains. You dont get that from the Nonprofit Sector. Youve got a question for holman . I was going to ask off the back of the v. P. Debate last night, do you think that helps in the tough week in the polls for mr. Trump . If pences point of view on all of trump statements that are indefensible is just ignore them. We dont have to talk about them. Everybodys heard this. Hes a guy thats been doing other things all his life. Hes not a politician. Lets not take that stuff quite so seriously, i think if that prevails and it already prevails with a big chunk of the electorate. I think maybe trump has a chance to emerge from this dark period. Right. Of course the next debate will determine everything. Sunday night. Yeah. Because in watching that debate, a lot of people have made that point. One, hillary was very polished in the presentation that she made. But then again, the people that are tired of politicians, that by definition we knew that was going to be the situation there. Plus hitting trumps indefensible statements does not cover up the indefensible report of the administration over the past eight years. So youre conflicted. You dont know what to do. Everybody at the journal, youre every once in awhile you say this stuff. Then you say my god am i saying something good about trump . Youre constantly looking introspective and saying i dont know what the hell to do. Im praying to see the trump i want to see. I believe that guy is there. We had Trumps Campaign manager on yesterday. She said she thought he was probably a little too nice to Hillary Clinton in the last debate and that he didnt get any credit for that. He has said that he very likely will be tougher. Is that the donald trump you want to see showing up on sunday . He should criticize the record of the obama administration. I dont think going after bills infidelities is necessary. Everybody knows about that. But if youre going to talk about treating women badly circa 1996, there is a rich vein there to get hillary off the topic of this beauty queen. To come back to the tax point notwithstanding the point that you feel the press has covered it inaccurately and unfairly. To move it on as an issue, should he now publish his returns and explain loud and clear and the issue will be dead . He wont do that for the reason he hasnt done it yet. He doesnt want the world to see those tax returns. I think there will be a lot to have to explain. Spent the last weeks of the election explaining. Philosophically, wilf, there are going to be a lot of people that cover just legal tax avoidance as something thats really bad because your firemen arent getting paid, Veterans Benefits arent getting paid. Other people have to make up the difference. Then theres the other side that feel that people in the private sector have a duty to try to expand their business with payrolls and hiring and innovation and plant building. And that if i can whatever i can use to keep in the private sector, which is why holman thinks to get rid of the Corporate Tax in general. I understand, joe. I just asked a question. I know. But there is a whole philosophy that if you try to avoid paying taxes but i dont know many people that dont take their deductions all the way down the line. Who has ever won for president who has the kind of tax return he does . You dont see that. Its just too much of an extraneous issue to drag in at this point. Holman, great seeing you. Great to see you. So Brett Stevens yesterday was wasnt that great . It was the greatest piece ive read but i thought someone else had written it. Stick around. We do have breaking economic news. We are a few minutes away from the adp employment report. We will bring you that right after the break. How can good paying jobs disappear . Its what the National Debt could do to our economy. If we dont solve our debt problem 19 trillion and growing money for programs like education will shrink. In just 8 years, interest on the debt will be our Third Largest federal program. Bad news for Small Businesses. The good news . Theres still time for a solution. Ask the candidates for a plan to secure our future. There are you numbers right there. Goods sector up by a paltry 3,000. The Service Sector doing all the heavy lifting up 151,000. So you might get some sense out there on the street that maybe theyre a bit heavy in terms of where the average estimate is for friday. By business size, small medium and large all contributing. Small a little bit less than it has been. About half of what it had been in the prior months there. Medium and Large Business coming back a bit. But some of the interesting part here comes in the breakdown by industry. Construction up 11 but theres manufacturing which has been challenged. Going to go back to february, january this year. Its been negatives and essentially zeros for many, many months now. Part of the flatlining of the manufacturing business. Looking at the market, i think its a little stronger isnt it . It is. Weve been on the flatline for much of the morning. Was it up already . Based on your conversation with holman jen can i said . Yes. Actually based on our howard lorber. Yeah. That was an interesting conversation. Lets bring in another interesting conversizationalist here. Mark zandi. He puts this thing together every month. Mark, whats your sense here . On the one hand its below the expectations. Its below some of the stronger numbers weve had. But theres this big debate out there among economists that this number 150 is even above what the economy should be doing given demographics and the growth numbers. Yeah. Its solid. You know, its double the rate of the working growth population. At this pace of growth, the unemployed and underemployed continue to approach full employment. Its not as strong as it was 6, 12 months ago but i think thats going to happen. You know, we have a Record Number of open job positions. Its going to be hard to fill them. Job growth is going to slow and thats part of this process. Have you been able to take a look at what numbers like this mean for the Unemployment Rate . One of the biggest things the fed remarked is weve been creating all these jobs but suggesting to folks like fed governor theres more slack in the jobs market and maybe we should i think the phrase theyve used is give it room to run. Well, i think there is more slack in the underemployed. Not the straight up unemployed. The Unemployment Rate is consistent with employment. But we do have parttimers that want more hours and people that stepped out of the workforce that are coming back in as Job Opportunities become more available. Thats why the Unemployment Rate has not fallen. Were going to blow through that slack pretty fast by my calculation by next spring. There wont be any more slack. Its going to be a very tight lie bar market. And a year from now at this pace of job growth, our biggest problem i think a year, two, three from now is not going to be unemployment. Its going to be a lack of labor. Businesses will be screaming. I want to take care of two things with you quickly. First thing i want to look at the current fed funds chart which shows Something Like a 13 probability of a november hike. Is the market too low on that . You think thats about right and it goes up to about 57 for december. November is right. Thats the week before the election, right . I dont see that happening. There are not political. We just heard they definitely arent. But you just said they are in a nice way. Well, who told you theyre not political . It just depends on how you say it. You say theyre political or you say come on. And depending how you say it, people go yeah yeah yeah. Capital p or a small p. Exactly. I wouldnt say theyre changing the scope of Monetary Policy because of whats going on politically. I heard what you said. Wait a second. I understand what you mean. And youre right. Theyre just not going to move on the week of the election. Why would they do that . Right. It could be four weeks later. Zandi, im going to come to your rescue here. See if i could throw you a lifeline. Because i want you to do double duty quickly here. You also help us calculate the rapid update. And thats been coming down. We were up near 3 expectation of the tracking forecast. Now were just at 2. 6 . Really lousy construction numbers brought it down. We have a range of 2. 4 to 3. 3 . Does that feel right to you . Yeah solid too. 2. 5 to 3 . Were getting trade today i think thats a pretty big number. Depending how that goes, thatll swing it up down 2. 5 or up to 3 . By the bay, you take that in combination with the weaker growth on the year. And has 20 bucks in there. It all ends up. We were doing 1 . Its all going to average out to that. Yeah right. Steve, ive got a Public Service announcement. You know, adp next month is going with an expanded version of adp. More sectors are going to be included. And were updating and enhancing the model that we use to take the adp number and predict the number. So im hopeful at least in historical back testing this is going to be a bit more accurate than the current model. Just keep that in mind. There are seven guys with pocket liners and calculators that just got really excited about that. And seven . Im sort of one of them. And joe. Im sure hes excited. Yeah. Adp currently at 87. 17 a share Public Service. All right. Yeah. That was a great tease for the upcoming trade number at 8 30. That the same seven guys are very excited about. Plus the additional three sitting here. Oh, youre just making it up. No. Still to come, netflix banking on the streaming giant deal. Details on that and much more after this short break. 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. Yoyeah, i do. E . You guys are working on some pretty big stuff over there, right . Like a new language for crazybig, worldchanging machines. Well, not me specifically. I work on the industrial side. So i build the worldchanging machines. I get it. You cant talk because its super highlevel. No, i actually do build the machines. Blink if what youre doing involves encrypted data transfer. Wait, what . Wowwww. Wow . What wow . There is no wow. New biwhat are we gonna do . Ys. How about we pump more into promotions . Nah. What else . What if we hire more sales reps . Nah. What else . What if we digitize the whole supply chain . So people can customize their bike before they buy it. That worked better than expected. Ill dial it back. Yeah, dial it back. Just a little. Live business, powered by sap. When you run live, you run simple. Good news for bookworms. Amazons introduced a new feature called prime reading. It allows prime members to read select books and magazines at no additional cost even if they dont own one of amazons kindle reading devices. The ecommerce giant Service Provides a rotating library, more than 1,000 books including the hobbit, harry potter and the sorcerers stone and magazines. Meanwhile, netflix may come to a theater near you. Inking a deal with ipic to screen netflix movies the same day they hit netflix. As many as ten original netflix movies in the next year will appear at Ipic Theaters in new york and los angeles. Financial terms of the deal were not disclosed. When we return this morning, we do have some key trade data. The numbers just minutes away. Plus more reaction to last nights showdown between the Vice President ial candidates. Former oklahoma governor mike keating will join us. Squawk box will be right back. 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 welcome back to squawk box. Heres whats making headlines this morning. Put on some new edition and hell know who it is. Or is it one direction . Theres two. New edition is the old one. One direction is the new one. Ive never seen one direction. I have. But i took the kids. Crude oil jumping joe, youve been to some taylor swift, adele. Ive been to taylor swift twice. I know, i know. I like her. But its more for the kids too. You have no excuse. You got no kids. Crude oil jumping to a new that i know of. Same here. That follows the apis latest estimate. Showing a drop in supplies for a fifth straight week. Mortgage applications rose 2. 9 last week driven entirely by refinancing activity. The Mortgage Bankers association that rates fell four basis points to 3. 62 . Thats the lowest level since july. Lets get right to rick. Weve got some data. Take it away. Thank you, becky. Well, we have our august read on the trade balance which is a deficit which is a smidge bigger deficit than we were anticipating. We were looking for something a bit under 40 billion. We ended up with something right around 40 billion. 40. 7 billion to be precise. Its fascinating because we really have scaled down in a positive way, made it smaller. You know a lot of these are in the 30s and 40s. You have to go back quite a ways to get a number at 50. Thats pretty good news all in all just scrolling through. You have to go a long way so you have to go back to march of 2012. So, you know, 39 fits in nicely to give you some context. The biggest deficit of the year was in february at 45 billion. The smallest was right around 36 billion in march. So you could see where this slips right in. Of course we all saw the 154,000 a little bit jobs light. But then we grade on the curve now regarding the economy. Maybe the more important trade to Pay Attention to continues to be whats going on with Interest Rates as we hover just under the 1. 70 mark. We have to go back quite a ways other than maybe three closes higher than this to find exactly where the imaginary Boundary Line is. But probably what you want to pay closest attention to on a closing basis. Because that according to many traders and technicians is the yield resistance were paying attention to. Becky and the gang, back to you. Quick question on those bond yields, whats been driving that tick up . Fed rate expectations coming forward again or Something Else . No, i dont think its fed rate expectations. Of course that can play into it. And we certainly do see that the 2year is at some of the highest levels over 80. I think its a lack of confidence in central banks, questioning of policy that should be questioned, and i think in large part janet yellen hinting about corporates. Buying corporates and stocks have made many really nervous and start to assess exactly whats going on here. You know, these temporary measures have turned out to be over seven years. The cost benefit analysis is highly questionable. And in europe in particular theyre dealing with the likes of Deutsche Bank which is kind of the aftermarket to the policy issues. Why is that . Because we see the issues that Deutsche Bank has to deal with. But once you get over those and they will get over them to some extent, theres this minor notion of profitability. What makes any business healthy. Profits. Where are these profits going to come from . What lines of business arent suffering from the medicine of mario draghi . Or the medicine of kuroda. I think thats interesting because our medicine is going to get more like theirs. Everybody watching this ought to rethink. You know, if a quarter point is so small and American Central Bank cant raise it, but at the time theyre talking about buying stocks and corporates, its because they see the handwriting on the wall as to the questionable level of Financial Assets theyve directly impacted. These are not the kind of dots we want to connect. Thanks for that Rick Santelli in chicago for us. Moving on, matthew expected to be a category 4 storm by the time it brushes the coast of the United States. Evacuations have already begun in florida. Miguel almaguer joins us with more. Reporter were talking about massive evacuations. 1. 1 Million People asked to leave the South Carolina coast and head 100 miles inland. The governor here making that order yesterday asking people to start moving by 3 00 this afternoon. Its the largest Mass Evacuation weve seen in this area over the last decade or so. The governor also says some 280 school buses will be at the ready for those who do not have vehicles to drive them inland. Grocery store shelves have gone bare. Theres even been a run on things like water. The governor says everyone should have three days of food and water at the ready. Its not just South Carolina thats bracing for those possible 100 mileanhour winds. Theyre also bracing in florida where theres been a state of emergency issues there as well. The governor there asking for folks to also be prepared for this storm as it moves in. Theyre expecting storm surges to be anywhere from five to seven feet so its going to be a long couple of days as it now moves its way north up the atlantic seaboard. Back to you. Miguel, thank you very much. Again Miguel Almaguer in charleston. Thank you again. Right now lets get to politics. The first and only Vice President ial debate of the 2016 election is in the books. Much of the latter half of the evening focused on the candidates Foreign Policy decisions. But a big chunk was on the economy. For a look inside the debate, lets turn to former oklahoma governor frank keating. Thanks for being with us. Thanks for having me. The last time you were on was in july. You did say you were voting for donald trump and that your twin brother has been one of his Campaign Managers in oklahoma. Youve officially endorsed him as well as at this point, am i right . Well, i said i was inching my way toward trump. I went through a number of other candidates. But im the cochairman with ed neeson of the reagan alumni for trump. Which im not sure its been announced yet that organization but yeah. So im on the trump side. But becky, to your point, i thought last night was pretty solid on the part of both candidates. They were studious. They were informed. They were direct. They were articulate. Mike pence did a good job of talking about the mess in the middle east. I think tim kaine did a good job of going through all of the serial statements of donald trump and how they have changed over the last number of months. And obviously his taxes. It was a good debate. The only thing i felt was a little awkward and little unsettling was tim kaines interruption of pence frequently at the outset. Then it all settled down. I thought it was good. The undercard did a pretty good job, ive got to say. I thought it was well done. Do you think this makes a difference in this campaign . Weve talked about how there have been some moments in these Vice President ial debates in past years. But they havent necessarily had an impact on the election. Is this time different . I know the experts would say no difference whatsoever. The outcome is the outcome. But i think people are looking for excuses to vote for or against somebody. I think pence came across as thoughtful, humble, decent. Thats something a lot of Trump Supporters who were inching their way perhaps want to see. A sense of humility, knowledge, and appreciation of the fact they could step into the president s shoes. Both of them could. Both of them are bright individuals. I thought what was really powerful was the two of them, their conversation about their faith at the end. I thought that had a real impact, a positive impact for both candidates. I of course thought pence did a wonderful job defending the sanctity of life. His prolife positions are solid as mine are. I just thought it was well done. And i think people who are uncomfortable with one of the other candidates might say theyve got a great vp and ill vote for that guy. So i think that it was an excellent debate. I think it was pence by a nose for the fact he was humble and very informed. But kaine was very aggressive and also very informed. It was a pretty good performance. Is it identical twins, governor . Well, no. Were close. But obviously because that is such a im more of a student and dan was the athlete. You look so much alike. Thats a great thing for a politician. You could say no, that wasnt me. I mean, you can basically never cop to anything you dont want to cop to. Could have been that evil tw in. The older weve gotten, the more we look alike. But you could say i didnt say that. Thats what i mean. Cant pin you down on anything. Havent tried that yet. Maybe ill try it next week. You know, governor, you point out that the debates are important. Vice president ial debate may be important this time. But certainly this second debate were going to see sunday night between the headliners on each ticket is up there too. What are you looking for come sunday . Well, i really think that mrs. Clinton will be aggressive and shell be informed. Shes a very bright woman. But Donald Trumps a very bright man. He has been aggressive, perhaps too aggressive on occasion. And he needs to be informed. I think he does need to prepare. Not over. Prepare, but he needs to give his vision of why a stalled out economy is not good. I shake my head in wonder and sadness the young People Living with their mothers and dad and those young people have College Degrees and advanced degrees, i could not conceive of such a thing when i graduated from undergraduate school and law School Living with my parents. But its an economic fact of life today. I think if trump focuses on the bread and butter issues, im going to climb this economy out of the hole. I am going to end this ridiculous isis aggressiveness. And were going to working to as one American Family to be preeminent. I think thats great. That was the most frustrating thing about the first debate was hearing unchallenged i dont want to say supply side policies but things that benefit the private sector like lower Corporate Taxes, less regulation, things that really were used by reagan and even jfk. In fact, those were not positives for the economy but actually resulted in the financial crisis. Thats what we heard from Hillary Clinton and it was unchallenged. That was the part that was most frustrating to me that this narrative that those things have been tried and that the only thing that really works is more redistribution, bigger government, and higher taxes. When thats clearly you know, anyone thats studied economics, thats clearly not true. Yeah. It doesnt solve any problem. One thing i would like to see more focus on, tax policy to encourage income generation, growth, economic activity. Obviously the schools are having a big problem educating people sufficiently well to be able to compete in the next economy. But to focus on day care and focus on even getting rid of the estate tax when 0. 2 of the public is affected by that. Lets focus on getting the middle income people rich. I think thats whats really important. Focus on the policies. The policies that are being put forth by the candidates. Its that simple. Agreed. Governor, thank you. My pleasure. If you really are governor keating. I am. We need a telltale sign. Yeah. Yeah. Maybe he wasnt available. Hey, ill do it. Coming up, cnbc is partnering with m. I. T. And the Aspen Institute for the first ever Cyber Security summit. Andr andrews there. Were going to get a preview. Squawk box will be right back. Welcome back to squawk box, everyone. Johnson johnson is warning customers that one of its insulin pumps could be vulnerable to hacking. Although it does say the risk is low. That device, the one touch ping insulin pump attaches to the patients body and injects insulin through catheters. The Company Learned the hacker could cause it to deliver insulin and cause hypoglycemia. It is low risk because they would have to be within 25 feet to affect the signal. Johnson johnson provided advice on how to fix the problem in letters sent out to doctors and patients. Again, they are warning low probability but that is probably something to have high concerns about if youre a patient affected. The Homeland Security program cnbc and m. I. T. Are hosting the Cambridge Cyber summit today. And andrew is there. This is one of the scarier stories ive heard recently. Thanks, becky. We are going to talk about that scary story in a second. Cnbc has partnered with the Aspen Institute as well as m. I. T. To put together a day really to talk about how government and business are supposed to Work Together in the future as when it comes to Cyber Security. And of course the scary story that youre talking about is one reason that we do need to find a way to come together which is yahoo in this report yesterday that so many emails yahoo emails and i know becky perhaps your email as well since youre a yahoo user were potentially scammed. Eamon javers is joining us now. We have a new statement from yahoo this morning. Yesterday they gave a nondenial about this story. Reuters broke the story which said ultimately that yahoo had cooperated with u. S. Law enforcement or intelligence agencies to scan incoming emails for certain characters. They didnt say what characters. Yahoo is now out with a new statement and what theyre saying is ultimately more of a denial than what they said yesterday. They said the article is misleading referring to the reuters piece. We narrowly interpret every request to minimize disclosure. The mail scanning in the article does not exist on our systems. Thats the new statement from yahoo this morning. Do we know what agency would have been responsible for this . And Michael Rogers from the nsa is here today. We also have Andrew Mccabe from the fbi. And john carlin who is the assistant attorney general for national security. One of these groups would know about this. Absolutely. There are people in the room here this morning that would know. Ive talked to a number of nsa officials about this this morning. They will not say anything on the record about this story. I dont think that were going to get a comment from Law Enforcement. Were going to try later on as we have them up on stage to get them to talk about this. But so farther buttoned up on this. Presumably this is either the nsa on intelligence or the fbi in terms of domestic intelligence. What would make a big difference in this story is if we knew what specifically Law Enforcement and intelligence agencies were looking for. What words in those emails do they want people to look for . What would be acceptable and what wouldnt be acceptable . You know, when you talk to Intelligence Leaders privately as i have and as you have this week, they talk about going back to First Principles of the United States constitution. The constitution itself talks about unreasonable search and seizure which implies that there is reasonable search and seizure. So its up to every generation of americans to determine what reasonable means in that context. Thats what were doing here today. For example, the terms were terrorism, terrorist, or orlando club, for example. Broad though. Meaning all email could be searched for those terms. Would that be a appropriate use of this technology . Youd have to poll americans to see if they thought that was. Clearly the specifics of this will make a difference. If americans can see whats being searched for, they would say thats reasonable. If intelligence agencies are searching for a list of Trump Supporters, for example, that would be a horrible abuse of power. So what theyre looking for, what theyre doing with this technological capability is so important. And can we just they wont tell us. Can we just talk briefly about how widespread this is. This was about reuters not about reuters. About yahoo. Other Companies Microsoft google and others have suggested using some wiggle words that they dont do this. Do you think they do do this . Well, i would assume just based on nothing other than knowing how the world works is that Law Enforcement agents and intelligence agencies didnt just go to one email provider and asked for this. They asked a lot for it. Were seeing a range of different denials and nondenials and statements from these Tech Companies saying that the system described in the reuters article is not one that we put into place, for example. So there might be some technical nuance here thats being glossed over in the journalism as we turn zeros and ones into words readers can read. There clearly is a range soft responses here. Eamon javers, thank you for that. Guys, back to you. I should tell you we have a very big day. Well bring you this entire Conference Live throughout the day with highlights and look forward to seeing you guys in just a little bit. We didnt have time last time, andrew. Good haircut. Its looking good. Good lighting up there, too. Good lighting up there. Its nice and bright. Well, now it certainly is, just like you. Should we talk to the development office, by the way, for you . I know youre an m. I. T. Grad. Is there a check coming . They ask me for money a lot. Okay. They sent me that tech review i dont know. Suddenly they like me. I dont know, i didnt feel that love when i was there. I dont know. You been over to the harvard coup right across the street there . Across mass avenue . Not yet. But maybe eamon and i will make our way over at the end of the day. But you want to cross near mass general. Did you go to the Liberty Hotel last night for dinner . We went for dinner, we were all there with Walter Isaacson. Atta boy. Former prison. Yeah, doesnt feel like that now. And theres another new jail over there, too, very nice looking place. Although i prefer not to find out anyway, when we return, jim cramer joins us live from San Francisco. Well get his take on todays top story. Futures right now are indicated up over 50. 53. 5 points. S p indicated up 6. Nasdaq looking up 11. Stay tuned. Well be right back. Itched to s. Sprint . Im hearing good things about the network. All the networks are great now. Were talking within a 1 difference in reliability of each other. And, sprint saves you 50 on most Current National carrier rates. Save money on your phone bill, invest it in your Small Business. Wouldnt you love more customers . I would definitely love some new customers. Sprint will help you add customers and cut your costs. Switch your business to sprint and save 50 on most current verizon, at t and tmobile rates. Dont let a 1 difference cost you twice as much. Whoooo for people with hearing loss, visit sprintrelay. Com. Out to jim cramer. He joins us live from San Francisco where i figure, you know, everybody is just excited out there in silicon valley. And theres a lot going on. We have larry somers on, i get kind of depressed. We hear about secular stagnation and all these things that portend years of low Interest Rates, which i think portends years of just average growth. Are we doomed to that, jim . Well, i think that if you listen to the comings out here what you would say is thats a very old world view. Thats a world which just basically says perhaps digitization is zero sum, were going to lose a lot of jobs and in the meantime the world is not growing because just lack of what i regard as being fiscal stimulus. No governments are really getting involved. And i do think that in the end if you just look at pure industrials youre not going to see a lot of growth. But if youre out here, you see growth everywhere. And you see growth because this is about where the companies are putting their money in the future. And the future does look brighter. Look, everything i see out here is double digit. I dont see anything less than double digit. And people are ashamed if theyre not double digit. Great advances are coming the time between them is dilating, its been happening for years. Dont say dilating. Its a dilating joke. Sorry. All right, getting shorter. Jim, is it possible ive heard people say with productivity with technology and innovation gets so great that we may have so much bounty that not everyone has to work and contribute . That we can all sort of just live off the fruits of how smart we are. Would that work . Is there something to work ethic . No, i dont think so. I think a lot of depending upon whether salesforce, facebook, alphabet, the idea that you dont have to go to stanford and be a computer scientist. Theyre trying to make it easier, not harder. Easier for people to be involved in the new economy. Meaning that you dont have to necessarily have anything a really strong academic backgrou background. You just have to have a lot of common sense. Uhoh. Thats the direction people are going. Small business will do better, Small Business creates jobs, a lot of Small Business positives out here. Good. All right, jim, i love that view. Thank you. Thats the oakland bay bridge, i think. Right . Yeah. Beautiful. Im the company data hog. I do the sales, the marketing. I have to do that from my phone. We use tons of data. I really dont have to worry about it cause everything is unlimited. I need data and i need it now. Its the end of data limits for your business. Get unlimited 4g lte data as low as 30 bucks per line. Switch your business to tmobile work. That about does it for us. Wilf, thank you for joining us today. Its been fun. Pleasure as always. Right now its time for squawk on the street. Good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla with david faber at the new york stock exchange. Cramer is live at one market in San Francisco covering dream force. Big day for macro as adp comes in a little light, 154. Waiting for ism, services, kashkari this afternoon, yields remain a big story as oil gets closer to 50. Road map begins with twitter, speculation over who might buy the company hitting