Transcripts For CNBC Squawk On The Street 20140924

Rbs is spinning off its american unit, citizens financial first trade this morning. And in retail, bed, bath beyond sharing purchases. That stock surging in the premarket. And say hello to walmart checking. The big boxs largest foray into banking is here. But first, want to get to david with breaking news this morning. Thanks, carl. Were delving into the soap opera that is allergan. This morning we can tell you that salex pharmaceuticals, a company i previously reported on and told you allergan is in talks to acquire, has another potential suitor now in the name of actavis. In recent days, theyve reached out to salix, indicating its interest in acquiring the company. I want to stress these are early stage discussions between the two companies. They have not gotten far down the road there in contrast to it the Allergan Salix discussions, which have been going on for weeks. According to people who know whats going on, they tell me its slowed in recent days and sort of hit something of a roadblock. But again, actavis had been talking to pfizer, or at least gotten approached by pfizer about a deal. That died a long time ago. Theyre actively in pursuit, early stage, of salix and has discussions about a potential deal. The synergies there, many people say, far higher than those that allergan might be able to realize in a salix transaction. Remember, were allergan to buy salix, that would most likely deal a death blow to the pursuit of that company. However, if allergan were to emerge, that would change the entire complexion. Lets go back to allergan and valiant and the continued bat theyre going through. Valiant having sent a letter a few days ago extending an olive branch to the company and having that olive branch essentially snapped in its face by allergan. In a letter from its ceo, wrote, it may be too late but i think we have the opportunity to take the temperature down, come together, see if we can begin a conversation that could by the way, lead to even more value. He indicated he might be willing to go higher while still being the right transaction. I think your shareholders would prefer to see constructive discussion rather than mud slinging. Please consider the olive branch extended. Allergan ceo same day said no way, no thank you. We believe the application of valiants Business Model to allergan would erode and destroy considerable stockholder value. They point out a number of their stockholders who did consent to that special meeting, they say, actually, they told us they share allergans perspectives on valeant and have no intention of voting in favor of the proposal to remove allergans direct tors. Let me finish this off. Valeant says youre worried about our Business Model, heres a preview of our Third Quarter numbers. I got those too. Overall samestore organic growth expected to exceed 15 in the Third Quarter. Expected to beat consensus on revenue and better than guidance on cash eps. Expect continued strong doubledigit growth in the fourth quarter. But well get a lot more on the 20th. All right, jim. Im done. Im trying to process it. Okay. So in other words, salix, which we thought was going to be bought by allergan and might still be bought by allergan. Has a second suitor, who i had also thought was going to be sought after by pfizer. But thats not true now. You think thats done. That is done. Actavis is done. Thats about a month and a half ago. That is long done. In fact, its unclear given treasu treasurys actions yesterday. What is actaviss relationship with allergan . I dont know. I mean, to me, it would be crucial. I thought there was a possibility. That was reported by the wall street journal the other day. I dont know. Do you think theres a possibility the journal got it wrong and they were talking to salix . Im not sure. Salix combination with actavis. Im not sure. Actavis does have some g. I. Stuff. It would be an entire new product line for allergan. I like the tax implication. I like actavis as far as labs. I regard that as a great company. Valeant obviously doing very well. I always thought they worked well with the eye care franchise of allergan. This is all now jump ball. Its a soap opera. Well, a good soap opera. Its like trying to keep track of the seven families, if you know what i mean. Yes, yes. I like that. Salix, ill tell you right now, is the buy of all that. When i hear all that, what the heck would you not buy salix for . Why would you not buy allergan . These are the two. To me, valeant, theyre anxious to do a deal at any price. That makes me less like valeant. Salix is the winner for youre trying to figure out even on an earnings basis. Salix has a lot of good products. Really interesting gastro lineup. You buy salix. You buy allergan. You watch valeant. Actavis, holy cow. I dont know. Out of nowhere, i dont want to own actavis. Theyre an inverted company. Shows the benefit of being inverted and having that lower tax rate. So you can make a case in a horrible market, which lets not forget thats the start of it, that this is the one area you can make a case because the world is slowing. Actavis has a good business, getting better. The stock has been red hot. Salix, we know the approvals look really good. Allergan, using the 16 number. 10 number, we get a 16 multiple. We can justify that stock going even higher. Valeant better than expected. Rest of the market, awful. Its all about gaming this one situation out. Well, jim mentions the markets. Futures are on the rise, of course, looking to bounce back, shake off some of those jitters. S p is in the midst of the threesession losing streak. The dow coming off backtoback tripledigit losses. Jim, you said you cant blame anyone for wanting to take some money off the table. What is the stance . Stay the course . You have to stay the course because i think some of this im going to use a word that people who are geopolitical will not like. When you look at the manufactured nature of what ukraine is doing right now with germany, basically just a naked bid to get money using russia as the bad guy, i believe. But the slowing in europe is so accelerating that maybe the central bank cant do what it wants. At the same time, the new hedge fund wrapped that we hear all the time, that the fed is about to tighten. I totally disagree with that because that would be an inversion of tremendous proportions. I just think as long as russia puts up continues to do this and we get closer to the winter and gas shuts down, the european industry, which is based largely on natural gas, then youre going to see multiple estimate cuts to multiple international companies. Wow. Given that ukraine is basically vanished from the main headlines. Ukraine should be the frontpage story every single day. Because this is about a recession in europe. Youve got the ecb trying to fight a recession just like bernanke did here. The difference is that those countries are disparate, and theres great unemployment and not a lot of economic growth. Now you slap on russia. Some people are saying the russians need the raw cost. First of all, the ruble is up. Second, did anyone Pay Attention to the fact that the peoples republic of china wants as much of the natural gas as russia will produce . They could shut down europe in a second. Who is thinking they cant shut down europe . You talk to basf, theyre worried about being shut down. Yesterday for the first time i can recall in many, many years, somebody who i speak to, an outlier used the word recession to describe what might happen here in this country. I havent heard anybody i mean, were watching commodities come down. This is somebody whos focused, for example, on many of the media companies, which yesterday got schellacked because its worried about advertising. I have to say it took me back hearing that word. Come on, are you kidding me . I saw good numbers from paychecks today, which is a good sign because thats Small Business employment. If you get a second straight number of bad ung employmeemplo gasoline is saving some of retail, but carmax numbers were horrendo horrendous. The housing numbers were seeing, theyre just miserable. Where is the growth coming from . Oil and gas . Wait a second, the world is glutted. Youve got onethird of the production of oil that didnt exist five years ago. Were swimming with oil. Theres no way oil can hold these prices, even with geopolitical crises. Where is the growth going to come from . Federal reserve not going to provide anymore liquidity. Thats the rap. The recession case, which is insane it could be built so quickly. It seems insane. But david, how about this . Numbers have to come down. Do we have to care anything more than that . Numbers coming down. Whether its a time warner or viacom, fox. Speaking of numbers coming down, not a great time if youre a bank to go public like citizens will today. Biggest bank ipo in a decade. Yeah, now, citizens bank, people say, oh, they cut the range. Well, i was going through all the regional banks that i follow. This stock is no cheaper than most of the regionals. Theres no great urgency to do it. They didnt price it in the hole. This is the antialibaba deal. It comes and goes. I dont see any special reason to buy it other than the fact theres so many citizens financial people in this room that they might kill me for saying that. Its going to trade under ticker cfg. Its the u. S. Unit of the royal bank of scotland. I predict the same level of interest for citizens bank, which is where the phillies play. Same level of interest in the phillies as the deal. Theyre in last place, right . I just want to make sure. You gave me a hard time yesterday about the jets. Geno leads the league in pick sixes. Thats what i saw yesterday. Hes very good at that. Hes got a good eye. Always important to stand out in some category. When we come back that was cold. Walmart rolling out a Checking Account while shares of bed, bad, and beyond are on a roll this morning. Also, the president will address the u. N. General assembly this morning. His speech coming after the u. S. And arab allies launched those air strikes against isis. Well bring you live coverage of his remarks. A lot more squawk on the street is back in just a minute. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. Bed, bath, and beyond up sharply in the premarket, posting better than expected Second Quarter numbers. Comps up as promotional activity helped increase instore traffic. Also issuing up big guidance for the full year. I have here in my hand perhaps the worst piece of research in 2014. Ill spare the author of it, but this is the piece i pointed out the guy better know something. He did not. He had taken his comparable sales start number down to 1. 4 . Bed, bath did double. They also guided up to one of the best Comp Store Sales ive seen for fourth for the fourth quarter, talking about four, five. Beating back amazon. They have a very spartan Conference Call where they give you the ten points. The ten points were very bullish. I say if you think the stock is only going to be up three today, you got to be kidding. I was going through the research for the last year. Bed, bath, and beyond says be very, very careful. Deutsch bank, sales likely still on the softer side. The amount of research that said these guys were a bunch of doo us ifs is wrong. When you see an analyst willing to downgrade 12 hours before we get earnings from a company, you want to make an assumption that perhaps they feel emboldened because theyve done more work. I would think perhaps since they run the risk of being nationally ridiculed, better to keep your mouth shut. But sometimes that happens. Ive been ridiculed nationally. Not a lot of fun. Immediately i apologize and say, you know what, i just have to point it out that this piece, along with several other pieces is causing this stock to go higher. Plus, the fact that the camp store Sales Numbers are much better. And if you look at the buy back, have you looked at how many shares theyve retired . Thats why weve talked about it as a creeping lbo. They did a lot of debt. They accelerated buyback. For those of us who shop there, its no surprise. I really like carmen by the way. The coupon strategy is out of control. I just like the coupons. How about walmart trying to get Checking Accounts to its customers over the age of 18 . This is a new team effort with green dot. I like green dot very much. Weve been focusing on these Payment Processing companies. Some of them are on fire. Will this move the needle walmart . I dont know what moves the needle walmart, frankly. Alibaba buys walmart in a merger of equals. Alibaba is a bit less now. About 20 billion or so less. But i just think this is theres so much happening in Payment Processing right now. Just overlay the iphone 6, which we havent even mentioned once in the show, including that its bendable and too big to your face. You have to have a large face. Now were seeing research that argues holiday sales will be impacted because people will be spending their money on the iphone 6, not some place else. Not at lulu lemon. You dont have to, because in usa today, aggressive. Talking about putting the unlimited iphone 6. 50 for everything. You can spend another 20 and get upgraded every year for the rest of your life. Im predicting better than expected christmas sales because of this. When we come back, cramers mad dash. Well count down toward the opening bell, get you one last look at the premarket on this wednesday. Squawk on the street will be right back. Hello. You can go ahead and put your bag right here. Have a nice flight. Music plays music plays traveling can feel like one big mystery. Youre never quite sure what is coming your way. But when youve got an entire company who knows that the fewest cancellations and the most ontime flights are nothing if we cant get your things there, too. Its no wonder more People Choose delta than any other airline. vo solver of the slice. Pro. Teacher of the unteachable. You lower handicaps. And raise hopes. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. pro nice drive. vo well played, business pro. Well played. Go national. Go like a pro. We got about 7 1 2 minutes or so before the opening bell on our hump day. Now, i know that your son, but not you, focuses on fantasy football. Yes, he does. Carl and i focus on fantasy football. Who would you draft first at this stage . You draft selgy. This stock yesterday beat back the wave of selling. Thats because they have a plaque psoriasis drug that just got approved. They also have a pancreatic and Breast Cancer drug. Thats in switzerland. A lot of people are saying this is, like, so what . What else is new . What are you, out of your mind . You have a blood cancer franchise, a pancreatic cancer franchise, a Breast Cancer franchise, a psoriasis franchise that could turn into the holy grail of drugs, which is arthritis. One day celg and these are all for severe. But this is a remarkable breakthrough. Cell gene is not done, going higher. A genius ceo. They vls a Tremendous Investments all over the place. You have been a longterm, a long, longterm bull on this stock. Ever since celg let me use their driveway to run the summit soap box derby, theyve owned me. Its actually quite true. Its worked out well for them and well for you. Lets move on to the financials this morning. A downgrade. Now, this is the kind of thing you live for. Jpmorgan comes out and says, Morgan Stanley cant beat the 10 return on equity. Remember when we were happy thinking it was 6 . Theyre saying its expensive. They wanted to buy ubs. I think if you drop the u you can tell what i think about this piece of research. But the idea of getting to a 10 r. O. E. Has been a target. Well, theyve got a great business. If you look at the we that these have been trading, you want to be the premier retail bank. I think its being undersold by this research. I think theyre leading a renaissance at that firm. It may already be reflected in having a 35 stock price, no . Some stocks there are other stocks allowed to go up besides sales pharmaceutical actavis, valeant, and allergan. You do not have that segment all to yourself. Already im being cat called on the citizens financial. I like citizens financial. Its the same value as comerica. Theres nothing special. Morgan stanley, i think theres something special. I like their attitude. Theyre aggressive. All right. By the way, the aforementioned citizens trading under the symbol cfg will be ringing the opening bell shortly. Well have that and the first trade of the biggest financial ipo in a long time. Were back on squawk on the street. I love having a free checked bag. With my united mileageplus explorer card. I have saved 75 in checked bag fees. Priority boarding is really important to us. You can just get on the plane and relax. I love to travel, no foreign transaction fees means real savings. We can go to any country and spend money the way we would in the us. When i spend money on this card i can see brazil in my future. I use the explorer card to earn miles in order to go visit my family which means a lot to me. Know that chasing performance and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Youre watching cnbc squawk on the street live from the Financial Capital of the world. Well get the opening bell in about 90 seconds. Busy morning shaping up. We did have backtoback trip tripledigit losses for the dow for the First Time Since june. On friday, intraday s p was 2019. Its 45 hands above where we are now. And the russell has been a vast wasteland. The liquidity there is nil. Peemt trying to sell these smaller cap stocks. By the way, yield protection has not held up either. Stocks yielding 5 , 6 has not stopped the decline at all. It is a silent decline in the sense its not really perceived at the higher levels. I heard an interesting stat yesterday, which i hadnt checked out but sounds right. Apple contributed 16 of the s p advance. The s p got 1. 3 . But 16 of those 26 points was just three stocks. I dont like that. When you look at whats remaining, more stocks were down than up. I dont like that. This advance has become very narrow. Its going to soon be limited to mobile eye and go pro. Go pro up huge in the premarket. Its not good. We need breadth. Thats a really good point. By the way, were going to get to a number of names in a moment. Another home builder. Shows you lennar knows how to be a home builder. Kbh is a taker of pain. Theres the opening bell. A look at the s p at the top of your screen. Retail Bank Holding Company citizens financial celebrating its ipo today over at the nasdaq. Provider of network solutions. We mentioned kbh. 3q results, profits were up. Lennar had gotten hopes up about the summer season. People have to recognize you got to stop trading the etfs. The variations with inhousing have become so vast, lennar is so much better than everybody else. Its really rather remarkable. The group is no longer kmodtized. There are some that are much better than others. We havent mentioned alibaba yet. Theyve been waiting for the bids to come in. Looks like they are. Means yahoo is good again. Trying to stay focused on the positive only because everyone else seems to have the negative coverage so well. Well watch gm today. The news theyre going to separate cadillac out as a separate business unit, move the headquarters of that unit from detroit to soho. All this commentary about trying to get hip with cadillac in a hurry, having hired one of the lead guys from audi a month ago. Thats good. That guy is very forward thinking. Of course, they should do it in brooklyn if they want to be cool. Gm also had excellent numbers in china. Gm is a house of pain. It is a total roach motel stock. You were hoping they would ask kyle about this. Look, that was an Interest Rate play on the pensions. There also was a belief that ken feinberg, that the actual litigation would be going obviously this is death because you only talk about money and death. But it doesnt matter. Mary barra is widely perceived as someone who is just floating out there versus what other companies are doing. We will watch starbucks today, buying out part of its japanese affiliate that it doesnt already own. 900 million deal. This is very important. Starbucks stock has been one downhill trend in large part because people think its all about coffee. How many times does howaschultze to say its not our first coffee rodeo . It allows you to pay up to 30 times earnings. Right now its stuck a little lower than that. Want to go back to the story we brought you at the top of the show. Interestingly, valeant is up the most on a prerelease of its thirdquarter numbers, which will be reported in full on the 20th of october. In a response to in a back and forth, they sent a letter to allergan extending an olive branch. Got a letter back saying is no, thank you. Then got a letter back saying youve been questioning our ability to show significant organic growth in our business. You stay focused on our Third Quarter. Well, well give you a preview of our Third Quarter. They talk about what they call samestore organic growth, exceeding 15 in the Third Quarter. And the results will be ahead of consensus on revenue and cash eps. That stock is up the most. Salix has now also attracted interest in actavis. That stock is up a little over 1 . Somewhat surprising. Continue to talk to allergan, although frankly the momentum there seems to be slowing a bit. They got very serious and were beginning to discuss price allergan and salix. Im told now things have slowed a bit. Actavis in the last few days as indicated an interest and has extended that interest, has had brief but early stage, lets call it, discussions about a deal. And then, you know, would actavis potentially be a white knight for allergan. Or if they were to buy salix, allergan would be left dealing with valeant and you have the december 18th special meeting. In the meantime, im still reeling from the notion we should view a Pharmaceutical Company in a samestore basis. Im used to thinking about walmart and target. I know. Thats their words. Because this company has been a its been a smasher of all of the idols. It never does it never plays by the other guys rules. Samestore sales and drugs. Who would have thunk it . Good point. A lot of discussion about the seasonality of this week. Its historically one of the worst weeks of the year. Its fulfilling that role. As people start to prepare for the end of the quarter. Is that sort of where youre thinking is right now . Last night on mad money, i talked about the notion that this would be if you were up a lot versus the averages, this is a big lockin week. If youre beating the market, this is when you decide, you know what, im going to go and rent movies. Im going to go watch taken and shawshank over and over again because youve won. You send those investors that letter. Itll say, were beating the market. You go into cash, which youre now getting negative returns. But thats okay. You want to be selling is here if youre a winning hedge fund. The week after september, options expiration, which we just had, is positive five times in 26 years on the s p. Holy cow. Seems statistically significant. Its interesting you say that. Ive always felt the ones that are kind of a push you know, 53 of the time. This isnt blackjack. If youre head of the house, 51 and you can play forever. This is literally thats a statistic that just says, okay, i got to take action. Yeah. Very good point. Some of the winners today are the ones that have done well. You mentioned some of the biotechs. Micron is on that list. Its funny. I now feel there should be a term it could be bbby. You know, when you have a situation where the analysts have really turned, saying that the supply of drams is so heavy, a lot of bets being made negatively on micron ahead of the quarter. Maybe thats more dangerous than we think. Finally, mcdonalds finding some support here in the low 90s. I wonder if theres some halo effect, if starbucks is seeing something in japan worth buying. This is interesting because it does have yield support. Thats one of the few stocks where yield support has mattered. Dividend hike the other day. But not as big as i thought. Is there something cooking at mcdonalds that could be a major change . Theres always hint that theres a restructuring because the stock has been one of the best performers since that last number, which was horrendous. Thats often a tipoff that something is happening we dont know about. Were waiting for bob to get ready. You can see the activity on the floor with citizens. Safe to say your appetite is not whetted by this ipo. Look, versus other regionals, and the regionals all need Interest Rates to pop to 2. 75 to bake the numbers. Its fine. I dont see people saying, you know what, im going to sell. No. Its not compelling enough, like alibaba where people sold a lot of social media in order to get alibaba. I dont see people selling other regional banks just to get some citizens. Although, the book is scrubbed clean. The book is clean. I mentioned this earlier. Focused a bit on some of the larger media companies. Theres this general concern out there that ad spending is slowing. And that it is going to be a harder season. That said, the ratings coming in for monday night for primetime were pretty strong for the major networks. And today its a mixed bag. Yesterday we saw viacom shares down sharply. Some saw that as a sign, perhaps, they were getting some communication that indicated that was the smart move. Discovery has also been hit badly lately. So this bears watching. Now, david, when you come in, i know we dont want to be too granular, but thursday night is new york giants versus washington redskins. Thats cbs. The numbers have been extraordinary. The nfl obviously has a little publicity problem right now, but i think cbs will have something to you about when we come in friday morning. They may. The question is whether they can sell it at the same rate in terms of advertising against it. I think they can. Im not in that game, but im just saying this is a game people will be talking about if it werent for the fact there werent other issues. Im not saying that because of the nfls problems. Im saying that thoroughly because of companies that perhaps still were suddenly are having a bit more trepidation about marketing and ad spending. I do believe also the secular trend to be able to put more online continues. The online is not its certainly not as expensive to advertise online. No. So lets remember. But i do think that were going to be talking about that game thursday. Not just because i hate both of those teams. Although, dan snyder was very nice to me. His comment, the philadelphia fans are the worst in the league. Thats okay. Youre not sensitive about this at all. Doesnt bother me one bit. Not at all. Lets hop over to post five, see what bob is up to at cfg. Hey, bob. Philadelphia fans, since ive been there for many years, can be very tough on a lot of teams. I can attest to that. We have a nice crowd here from citizens. Take a look. Theres tom farley who heads the nyse. Really a large crowd here. Its been a tough week for ipos. Take a look at four of the major ipos. Citizens financial, the second biggest ipo of the year, priced below the range. Smart and final stores, a company that sells groceries largely placed below the range. Medley management, an Asset Management company, at the low ends of the range. The only real winner was cyberark, a Cyber Security company. Thats a very hot space. The first tech stock weve seen in a while. So very mixed messages here going on. I think the important thing is underwriters have been forced to lower the prices, either because sometimes the fundamentals of the deal werent that great, as in the case with citizens. Or just too much ipo floating around. And thats a good sign. Good sign to reduce the price. Itll make the deals go a little more smoothly once they start trading. But theres clearly a little bit of pressure on the ipo market. By the way, there were eight secondaries that priced overnight as well. Not just the ipo market but the secondary market is really hot. Theres a lot of stuff in the pipeline. I think you might see much more rational pricing now that weve seen some Price Reductions right after alibaba. So quick color on citizens here. This is the 13th largest bank in the United States. Everybody knows its an rbs spinoff. Its acquired by them in 1988. 11 states in the northeast and midwest. As for the valuation at 21. 50, the talk was 21 to 25. This is below tangible book value. Most trade at 1. 4, 1. 5 times book value. This is a little below that. I think the main reason is just subpar returns overall from the company. A lot of people feel that rbs has been a little bit preoccupied with some of the problems theyve had in europe. Im sure itll clean up a little bit at this point. By the way, none of the money goes to rbs. None of it. So theyre not going to be able to use it for any kind of proceeds right now. We did have another Company Announce an ipo. Hess midstream. Dont have a date, but theyre going to trade at the new yoooe stock exchange. Big, big year for Master Limited partnerships. Let me move on while were waiting here. Still 21. 50 on citizens. I just want to talk about kb home. I know you mentioned it, jim. They had a big miss. Bottom line and a top line miss. Apparently there were significant production delays over in california. This may not have been their fault. Just getting permits and everything was fairly difficult. Another thing is theyre trying to move upscale a little bit. Theyre trying to sell somewhat higher priced homes. Thats going to take a little while. I think this was one of the reasons their order was not that great. Only up 5 . Higher priced homes, high eer margins. Its the options. That beautiful fireplace where you make real money above and beyond what you would normally make in a lower priced home. Youre right about the bifurcation, jim. This is lennar. Lennar is the only major home builder up this month. Some of the other big names like toll brothers, standard are notably do to the downside. Still waiting for citizens to open. No indication right now. 21. 50 the price they have. Guys, back to you. All right, bock. Thank you very much. Lets get over to the bond pits, check in with rick santelli. Good morning, carl. Twoday charts really give you an idea of momentum. A lot of day traders down here. First thing they do is compare todays activity to yesterdays. Remember, we live in an Immediate Gratification world in so many ways. Trading, really top on that list. So look at a twoday of fives. Look at the relationship to yesterday and today. As you move down the curve, look at tens. The right side goes a little lower. Look at 30s. The right side goes a little lower. That makes sense. If investors are willing to have negative rates on bills, why not look down the curve and actually get something. As we wait for the growth and the inflation that Central Banks are trying to work just crazy behind closed doors in all their test tubes, we still see the Business Confidence in germany slowing. Many of the big banks have downgraded the growth in china. But we all knew that. You listened to the finance minister last week. Lets stick with the fiveyear. Its the area of the curve i find gets the most interest, whether youre bullish or bearish, whether youre a futures trader or cash trader. If you open the chart up, its no surprised we stopped here. You see that one blip, the highest yield on the chart. Thats a 185yield close. As we get closer to ten basis points below that, most likely youre going to see more buying in the intermediate curve. Twoday of the euro shows its hot. If you open up for the dollaryen, its not. After being really hot, thats august 1st. Just august 1st on that chart. Its like a moon shot for the dollar. But it does seemed to have leveled off. Pay close attention to that. Not only obvious, but potentially significant Technical Area for a pause, so say the Foreign Exchange traders. Carl, back to you. Thanks so much, rick santelli. A lot of buzz surrounding a big ipo. Citizens financial has yet to open. When it does, well bring you the first trade. Be right back. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. Just want to say, i bundled home and auto with state farm, saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Still waiting for citizens financial to open for trading over at post five. Lets check in with bob posani. 21. 50 is the price. We dont have any indications right now. Still waiting in front of a very large crowd. Ceo is over there, tom farley. President of the New York Stock Exchange. Hes been showing up at a lot of these to stand next to the ceo. The ceo will traditionally make the first trade and hit the bell. 23 to 25 was the price talk. Priced at 21. 50. What happened there . I think two things went on. Number one, the companys had subpar performance for a long time compared to its peers. Its a Super Regional Bank in the northeast. A lot of people have argued, probably correctly, that rbs has been a little preupoccupied wit some of their issues over in europe. Theyre the parent company. Also, i think there was some clear influence from the raft of ipos that came last week, including the biggest one ever, alibaba. A number of big ones this week. This is the second largest ipo of the year. We have over 7 billion in ipo this week alone as well as seven secondaries that priced overnight. Its very hard to quantify what the effect of an ocean of ipos were. But its certainly reasonable to assume that that was some influence on it. We saw a couple of other deals as well priced below the range. Smart and final stores, which is a food retailer, priced at 12 below the range. Opened right around the corner here at 13. 10. We also saw medley management price at the low end. Only cyber ark, which is an israel Cyber Security company, priced above the range. So what were getting, carl, is some pushback on pricing. Its reasonable to assume, at least some of that is due to the enormous amount of dollars that are having to go into that ipo space. Back to you. All right, bob. Thank you so much. While we wait for that, former jcpenney ceo ron johnson reportedly launching a startup according to the information. The startup is a highend ondemand Delivery Service for gadgets and seems to be centered around smartphones, troubleshooting, and customer service. Were going to talk to the informations founder a little later on. Ive always felt shes very smart. Yes, very smart. A great new venture shes got. We always wondered where ron johnson would crop up first. This appears to be it. Stunned silence. Not much to say there. You might remember ron johnsons time not just at jcpenney but also at the apple retail outlet. Now this talk about the iphone 6. The hash tag is bend gate. Apparently if you do put it in your back pocket, it tends to curve a little bit. Big debate about how much of this is intentional or not. I think initially theres always been a lot of kinks pointed out. If you have one thats bent, could you send it to me . Im trying to get one. Ill take care of that. A lot of people tell me its too large. They have curved tvs now. Maybe you want a curved phone. And those arent cheap. I just think that, look, the bet against apple, every single day theres a new story about apple thats negative. This stock seems to be reacting to other factors. By the way, blackberry, which is almost at 11 this morning, going to roll out the passport smartphone today. For those who like the qwerty keyboard. I think its make or break for blackberry. This one has to work. What would be working . Do we even know a number . Selling. People have to line up for blackberry. Can you imagine . No. Thats a high bar. I think you line up for blackberry the same way you line up for blueberries and stra strawberrie strawberries. Squawk on the street will be right back. Hello. You can go ahead and put your bag right here. Have a nice flight. Music plays music plays traveling can feel like one big mystery. Youre never quite sure what is coming your way. But when youve got an entire company who knows that the fewest cancellations and the most ontime flights are nothing if we cant get your things there, too. Its no wonder more People Choose delta than any other airline. Live shot of the United Nations in new york city. Thats the president of brazil speaking. That means the president probably isnt too far behind. White house official today saying that in his address, the president will lay out what theyre calling a broad vision of American Leadership in a changing world. When that does happen, we will bring it to you live right here on cnbc. In the meantime, it is time for cramer and stop trading. Okay. Theres a company call ed doesnt get enough credit. He has a drug empire thats always been good for motion, for people with motion problems. Think stroke, whatever. This is a company that people didnt know about, has a phase three drug that is apparently having Great Success with parkinsons. Again, a motion problem. When we talk about the kinds of deals you like to see, whether it be actavis and salix, what youre really looking for is a Company Building a franchise about how to walk better. Ron cohen is doing that. Its a remarkable company. The stock is correct in going higher. All right. Rosh hashanah tomorrow. Yes, i want to wish everyone a happy new year regardless of their faith, color, all that stuff. Does it mean anything historically . Liquidity, anything like that . People always say sell on rosh hashanah, sell on yom kippur. Its not only sack rereligious, its stupid. I do have paychecks on tonight. Paychecks is integral to the idea of Small Business and how its doing. In the meantime, im blown away by your reporting this morning. Allergan is flying. Valeant is flying. Listen, lets not forget many still continue to question valeant and the way it goes about showing some of its numbers. Others point out to me they never gave quarterly guidance, so how can they be exceeding it . I dont question your reporting, which is unbelievable in this story. Have a good one, guys. In the meantime, the president will address the u. N. Assembly as he seeks to build a bigger coalition against isis. Well bring you live Coverage Later this morning. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a newly redesigned cabin of unrivaled style and comfort. The allnew cclass. At the very touch point of performance and innovation. At the very touch point of performance and innovation. I take prilosec otc each morning for my frequent heartburn. Because it gives me zero heartburn. Annc prilosec otc the number one doctor recommend frequent heartburn medicine for nine straight years. One pill each morning 24 hours zero heartburn. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. I have a cold. I took nyquil but im still stuffed up. Nyquil cold and flu liquid gels dont unstuff your nose. Really . Alkaseltzer plus night rushes relief to eight symptoms of a full blown cold including your stuffy nose. breath of relief oh, what a relief it is. Thanks. Anytime. Welcome back to squawk on the street. Breaking news. August new home sales hitting the wires. 504,000. Thats seasonally adjusted and annualiz annualized. That comes after a revised 412 that moves up to 427,000. So from 427,000 to 05 504, thats up a lot. That takes the comp back. We havent been at these levels since 2008 is when im guessing. Yes, since 2008 when you had 504,000 in may of 08. You have to go back a month to find 536,000. Just remember, last time we had Builders Confidence at lofty levels was in 05. This number in 05 was 1. 2 million seasonally adjusted annualized units. But nobody does it better to granulely get down to the true facts of these numbers than diane olick. Well, rick, thats a huge, huge number. Big jump. 18 , as you said. We move to a 4. 8month supply on new home sales. This after we had a disappointing Housing Starts number for august. Remember, important to note, in august these are signed contracts of newly built homes, single family. So theres no multifamily apartments in this number. Again, signed contracts. So its a more recent indicator than the existing home sales number, which was kind of a disappointment, which we got on monday. Thats based on closings. Thats a very big number. Were still waiting on prices. We did get that disappointing Earnings Report today from kb home. They had raised prices dramatically, but again, were not seeing the type of new orders and revenue we were expecting to see. So were waiting to see, do we have price yet on this . Still no prices. Builders have been raising prices dramatically over the last year. That had sidelined a lot of buyers. When we look at the Mortgage Applications for today as well, still very weak on those mortgagedependent buyer side. Builders have been focusing more on the high end. Thats the higher end of the market, which is moving much faster because they dont have those firsttime home buyers coming in as they would like. Thats why you hear from lennar. Theyre not focusing at entry level but those moveup buyers. So we expect that the prices would shift higher. Again, thats a very good number. Some will say its a bit mushy on the margin of errors. Still, a good climb for august. In the meantime, we take you to the u. N. General assembly in new york city. That is the president of brazil speaking at the moment. Our president , obama, expected to speak very soon. According to guidance from the white house, going to lay out a broad vision, in their words, of American Leadership in a changing world. Obviously on a week where air strikes began in syria, trying to take out the capabilities of both isis and now this new Group Getting some attention. Ambassador susan rice on the today show this morning saying is that al qaeda has metastasized and we should get used to hearing about some of these splinter groups, whether or not they pose an imminent threat to the u. S. Or not. Theres also a very strong argument amongst the international community, and this was put forward by the European Union aid chief yesterday. In general, the leadership of the world is becoming too reactive. She said, you know, there are more trouble spots now and more humanitarian crises than ever since the second world war, and people have got to become more proactive, more engaging, trying to solve situations before we get there. So whether he references that in the speech, i think, will be very interesting for an awful lot of other leaders. In his press conference yesterday, he gave us a taste of sort of the u. S. Led coalition, whether its fighting isis, whether its fighting terrorist extreme groups, whether its fighting ebola and some of the problems theyve been dealing with, with russia. Hes trying to enlist support of other countries. Thats whats going to be important at the u. N. Generally semibl general assembly. Lets bring in our chief washington correspondent john harwood with a look at what we might expect later this morning. Morning, john. Morning, carl. You know, this is coming 24 hours after the president unleashed those air strikes in cooperation with our sunniarab partners. He spoke to it the allies yesterday, thanked them for their support. In doing so, previewed his message to the United Nations today. Because of the almost unprecedented effort of this coalition, i think we now have an opportunity to sends a very clear message that the world is united, that all of us are committed to making sure that we degrade and ultimately destroy not only isil but also the kinds of extremist ideologies that would lead to so much bloodshed. This is a moment that in the United States we didnt think we would see with barack obama, who of course rose to National Prominence as an opponent of the iraq war. And its a speech the World Community didnt expect to see. Remember, this is a president who got the Nobel Peace Prize very soon after becoming president of the United States. He resisted getting involved in syria for a long time, but now he realizes that the u. S. Cant avoid given what isil has done, we call it isis at nbc, but the United States has got to lead a coalition. This is going to call on his skills diplomatically as well as commander in chief. The air strikes were the beginning, but now hes got to keep that coalition together, get some moderate sunni grounds forces, the Free Syrian Army and others augmented by our allies and see whether that can be effective. Its going to take a long time, guys. But you know, from the white house, the guidance is that hes going to talk about American Leadership. John, what is the state of the worlds feeling about this . As i understand it, there is this idea that americas losing its leadership position in the world, especially on Foreign Policy. Well, thats understandable given the range of crises that has beset the administration, some of which it has contributed to. Remember, the president s fumble on intervention in syria a year ago was probably the greatest unforced error of his presidency where he indicated that once syria crossed a red line with chemical weapons, he was going to strike assad. He was all geared up to make those military strikes. Then at the last minute, he reversed course and said he was going to go to congress. That was a damaging episode. But of course, now the reference points have all changed because its not assad that were striking. Its isis. It challenges this president while hes got a deal with whats going on with israel and the palestinians and gaza, of course. Thats an ongoing problem. And in ukraine where Vladimir Putin has seized a significant chunk of territory with proxies and russian forces. The United States is trying to lead an effort there through sanctions, not military action, to try to get the russians to back off. Has not been successful so far. All of that has been fed into a perception of weak or uncertain American Leadership. The president is going to try to deal with that today. Okay. Well see what he says. John harwood at the United Nations general assembly. As soon as the president speaks, well bring that to you live. Lets take a quick look at where we are on the markets. A lot of people will be cheering the s p, flat for the session overall. Weve had three consecutive sessions of declines for the s p. Have we done that again today . If we do that again today, that will be the first time this year that weve had four consecutive losses. A lot of people were concerned about the breadth of the mood downward yesterday. Home builders are very interesting. Diana was mentioning that kb homes disappointed last night and was down 6 , 7 at the open. You can still see it down 6. 5 . But the other players, dh horton, lennar have come back because of that very strong figure that she brought you just about eight minutes ago. Thats where we are on the markets at the moment. A lot of yelling and screaming down here on the floor of the New York Stock Exchange because theres a big ipo here today. Citizens bank, its the second biggest ipo in the United States this year after the mother of all ipos, alibaba, last week. They did price below the range, 21. 50. Were waiting for the first trade. As you can see, a big crowd is growing. Interesting to noted this is the largest bank ipo since Goldman Sachs went public back in 1999. Its the 13th largest retail Bank Holding Company in the United States. 130 billion in total assets. If youre from the boston area or rhode island, providence area, thats where this one has a big presence. Well see. We should point out, this is basically a for sale by royal bank of scotland, which is majority owned by the british taxpayer. The pricing on this will be very interesting. Just as we await that trade there, do you want to go to veil . Do you want to hang on here . Okay. In the meantime, lets break away from that for a moment. Where did the summer go . In a week or so, ski resorts will start manufacturing i think we have a trade on citizens. Lets go to bob. No, just a lot of cheering. There it is. Oh, yeah. Its opening. Theres that bell. It looks like were getting our first trade right around 21. 50. Doesnt look like this is going to be a big mover in the initial few trades. But again, 140 million shares did price at 21. 50. And at 21. 46. A little down. That would look like a wise move to price it below the range if its coming in exactly at that level. No great shakes. Not a lot left on the table, it would appear, for the initial trades. And rbs still has a 70 stake. Its selling about 25 . I guess the goal down the road is to unload it as it further tries to comply with regulation. Lets get to bob for more on those first trades. Bob . Well, its an interesting point that you made, simon, about there not being much of a pop. Youre right. In general, underwriters like to price the stocks so theres a modest move to the upside on the first trades. Then closes modestly to the upside. What does that mean, modest . An underwriter would be very happy if they priced the stock, it was up a few Percentage Points and closed up 5 to 15 n that range. That would be considered a successful irktspo. Right now we have it trading essentially where it opened. The stock pricing talk was 23 to 25. Opened at 21. 50. And theres a couple of things you can point out about the company overall. Rbs may have been very preoccupied in what they were doing over in europe. Theyve had some subpar returns. Theyve generally underperformed their peers. Its a Super Regional Bank. Also, and i think its fair to say that the raft of ipos weve seen has put pressure on the underwriters to lower their prices across the board. This wasnt the only one. We saw smartd and final stores also went public here. A highend food retailer. Also priced below the range. Medley management priced at the low end of the range. Only cyber ark, an israel Cyber Security company, priced above the range. Were waiting for that to open at the nasdaq. All indications are that will be a successful one. My point here is across the board, other than for a really hot area, weve seen some pricing pressures. I think thats a good sign overall people are backing off a little bit. I think this will make more rational pricing for the ipo market in general. But its clearly a sign that the sheer number of deals is starting to influence pricing. Guys, back to you. All right. Bob on the floor watching the opening trades. And not a big mover, but it actually is in green territory. This comes after a number of these. This is the biggest of the financials to go public. But remember, we talked to general electric, synchrony financial. Those stocks are down a little. I mean, the issue is that theres still a lot of work to do at citizens. Its return on equity is lower than everybody else. Its got a long path to tread in order to get it to a higher valuation. You can see that quite clearly as we stand at the moment. Did rbs take its eye off the ball . Well, rbd and the british taxpayer were going through an awful lot. They have to sell basically rbs needs to cut back its international exposure. Indeed, of course, the European Commission has told it that it is in violation of the rules and must there are sell citizens, though not immediately now. They did have some leeway. One plus one years. Yeah, december 31st, 2016, is the aim to unload the rest of the stake. For now, rbs holds about 70 . The new headquarters is going to be in providence, rhode island. I mentioned a big presence in the northeast. Joining us here first on cnbc, we have the ceo, the chairman of citizens financial. Took a minute to get you over from the post. Thanks for joining us, bruce. Thank you very much. My pleasure. The fact that it priced below the range and were not seeing a big ipo pop, certainly not like alibaba last week. What do you make of the opening trades . Are you surprised . No, i think again, its a very big milestone for us. Im pleased that were able to get this done. It is actually the biggest bank ipo in u. S. History. We placed over 3 billion a stock. So i think citizens does a great job for customers, colleagues, communities. We still have some work to do on our financial performance. I think the market endorsed that plan, but theyre discounting the price a little from the offering range. I hope youll forgive me. The president is about to speak at the u. N. We go to the u. N. General assembly. Definitely more important than i am. Between fear and hope. Around the globe there are sign posts of progress. The shadow of world war that existed at the founding of this institution has been lifted, and the prospect of war between major powers reduced. The ranks of Member States has more than tripled, and more people live under governments they elected. Hundreds of millions of human beings have been freed from the prison of poverty with the proportion of those living in extreme poverty cut in half. And the World Economy continues to strengthen after the worst financial crisis of our lives. Today, whether you live in Downtown Manhattan or in my grandmothers village more than 200 miles from nairobi, you can hold in your hand more information than the worlds greatest libraries. Together weve learned how to cure disease and harness the power of the wind and the sun. The very existence of this institution is a unique achievement. The people of the world committing to resolve their differences peacefully and to solve their problems together. I often tell young people in the United States that despite the headlines, this is the best time in Human History to be born. For you are more likely than ever before to be literate, to be healthy, to be free to pursue your dreams. And yet, there is a pervasive unease in our world. A sense that the very forces that have brought us together have created new dangers and made it difficult for any single nation to insulate itself from global forces. As we gather here, an outbreak of ebola overwhelms Public Health systems in west africa and threatens to move rapidly across borders. Russian aggression in europe recalls the days when large nations trampled small ones in pursuit of territorial ambition. The brutality of terrorists in syria and iraq forces us to look into the heart of darkness. Each of these problems demands urgent attention, but they also are symptoms of a broader problem. The failure of our International System to keep pace with an interconnected world. We collectively have not invested adequately in the Public Health capacity of developing countries. Too often we have failed to enforce International Norms when its inconvenient to do so. And we have not confronted forcefully enough the intolerance, sectarianism, and hopelessness that feeds violent extremism in too many parts of the globe. Fellow delegates, we come together as United Nations with a choice to make. We can renew the International System that has enabled so much progress, or we can allow ourselves to be pulled back by an undertow of instability. We can reaffirm our collective responsibility to confront global problems or be swamped by more and more outbreaks of instability. And for america, the choice is clear. We choose hope over fear. We see the future not as something out of our control but as something we can shape for the better through concerted and collective effort. We reject fatalism or cynicism when it comes to human affairs. We choose to work for the world as it should be, as our children deserve it to be. Theres much that must be done to meet the test of this moment. But today id like to focus on two defining questions at the root of so many of our challenges. Whether the nations here today will be able to renew the purpose of the u. N. s founding and whether we will come together to reject the cancer of violent extremism. First, all of us, big nations and small, must meet our responsibility to observe and enforce International Norms. We are here because others realize that we gain more from cooperation than conquest. 100 years ago, a world war claimed the lives of many millions, proving that with the terrible power of modern weaponry, the cause of empire ultimately leads to the graveyard. It would take another world war to roll back the forces of fascism, the notions of racial supremacy, and form this United Nations to ensure that no nation can subjugate its neighbors and claim their territory. Recently russias actions in ukraine challenge this postwar order. Here are the facts. After the people of ukraine mobilized popular protests and calls for reform, their corrupt president fled. Against the will of the government in kiev, crimea was annexed. Russia poured arms into eastern ukraine, fueling violent separatists and a conflict that has killed thousands. When a civilian airliner was shot down from areas that these proxies controlled, they refused to allow access to the crash for days. When ukraine started to reassert control over its territory, russia gave up the pretense of merely supporting the separatists and moved troops across the border. This is a vision of the world in which might makes right. A world in which ones nations borders can be redrawn by another and civilized people are not allowed to recover the remains of their loved ones because of the truth that might be revealed. America stands for something different. We believe that right makes might. Bigger nations should not be able to bully smaller ones and that people should be able to choose their own future. These are simple truths, but they must be defended. America and our allies will support the people of ukraine as they develop their democracy and economy. We will reinforce our nato allies and uphold our commitment to collective selfdefense. We will impose a cost on russia for aggression, and we will counter falsehoods with the truth. And we call upon others to join us on the right side of history. For while small gains can be won at the barrel of a gun, they will ultimately be turned back if enough voices support the freedom of nations and peoples to make their own decisions. Moreover, a different path is available. A path of diplomacy and peace and the ideals this institution is designed to uphold. The recent ceasefire agreement in ukraine offers an opening to achieve those objectives. If russia takes that path, a path that for stretches of the postcold war period resulted in prosperity for the russian people, then we will lift our sanctions and welcome russias role in addressing common challenges. After all, thats what the United States and russia have been able to do in past years, from reducing our Nuclear Stockpiles to meeting our obligations under the Nuclear Nonproliferation treaty, to cooperating to remove and destroy syrias declared chemical weapons. And thats the kind of cooperation we are prepared to pursue again if russia changes course. This speaks to a central question of our global age. Whether we will solve our problems together in a spirit of mutual interest and mutual respect, or whether we descends into the destructive rivalries of the past. When nations find common ground, not simply based on power but on principle, then we can make enormous progress. And i stand before you today committed to investing american strength to working with all nations to address the problems we face in the 21st century. As we speak, americas deploying our doctors and scientists supported by our military to help contain the outbreak of ebola and pursue new treatments. But we need a broader effort to stop a disease that could kill hundreds of thousands, inflict horrific suffering, destabilize economies, and move rapidly across borders. Its easy to see this as a distant problem until it is not. That is why we will continue to mobilize other countries to join us in making concrete commitments, significant commitments to fight this outbreak and enhance our system of Global Health security for the long term. Americas pursuing a diplomatic resolution to the Iranian Nuclear issue as part of our commitment to stop the spread of Nuclear Weapons and pursue the peace and security of a World Without them. This can only take place if iran seizes this historic opportunity. My message to irans leaders and people has been simple and consistent. Do not let this opportunity pass. We can reach a solution that meets your energy needs while assuring the world that your program is peaceful. America is and will continue to be a Pacific Power promoting peace, stability, and the free flow of commerce among nations. But we will insist that all nations abide by the rules of the road and resolve their territorial disputes peacefully with international law. Thats how the asiapacific has grown. Thats the only way to protect this progress going forward. Americas committed to a Development Agenda that eradicates extreme poverty by 2030. We will do our part to help people feed themselves, power their economies, and care for their sick. And if the world acts together, we can make sure that all of our children enjoy lives of opportunity and dignity. Americas pursuing ambitious reductions in our carbon emissions. Weve increased our investments in clean energy. We will do our part and help developing nations do theirs. But the science tells us we can only succeed in combatting Climate Change if we are joined in this effort by every other nation, by every major power. Thats how we can protect this planet for our children and our grandchildren. In other words, on issue after issue, we cannot rely on a rule book written for a different century. If we lift our eyes beyond our borders, if we think globally, and if we act cooperatively, we can shape the course of this century as our predecessors shaped the post world war ii age. But as we look to the future, one issue risks a cycle of conflict that could derail so much progress. And that is the cancer of violent extremism that has ravaged so many parts of the muslim world. Of course, terrorism is not new. Speaking before this assembly, president kennedy put it well. Terror is not a new weapon, he said, throughout history it has been used by those who could not prevail either by persuasion or example. In the 20th century, terror was used by all manner of groups who failed to come to power through public support. But in this century, we have faced a more lethal and ideological brand of terrorists who have perverted one of the worlds great religions. With access to technology that allows small groups to do great harm, they have embraced a nightmarish vision that would divide the world into adherence and infidels, killing as many innocent civilians as possible, employing the most brutal methods to indim nate people within their communities. I have made it clear that america will not base our entire Foreign Policy on reacting to terrorism. Instead, weve waged a focus campaign against al qaeda and its associated forces, taking it out their leaders, denying them the safe havens they rely on. At the same time, we have reaffirmed again and again that the United States is not and never will be at war with islam. Islam teaches peace. Muslims the world over aspire to live with dignity and a sense of justice. And when it comes to america and islam, there is no us and them. There is only us. Because millions of Muslim Americans are part of the fabric of our country. So we reject any suggestion of a clash of civilizations. Belief in permanent religious war is the misguided refuge of extremists who cannot build or create anything and therefore peddle only fanaticism and hate. And it is no exaggeration to say that humanitys future depends on us united against those who would divide us along the fault lines of tribe or sect, race or religion. But this is not simply a matter of words. Collectively, we must take concrete steps to address the danger posed by religiously motivated fanatics and the trends that fuel their recruitment. Moreover, this campaign against extremism goes beyond a narrow security challenge, for while weve degraded methodically core al qaeda and supported a transition to a sovereign afghan government, extremist ideology has shifted to other places, particularly in the middle east and north africa where a quarter of young people have no job, where food and water could grow scarce, where corruption is rampant and sectarian conflicts have become increasingly hard to contain. As an international community, we must meet this challenge with a focus on four areas. First, the terrorist group known as isil must be degraded and ultimately destroyed. This group has terrorized all who they come across in iraq and syria. Mothers, sisters, daughters have been subjected to rape as a weapon of war. Innocent children have been gunned down. Bodies have been dumped in mass graves. Religious minorities have been starved to death. And the most horrific crimes imaginable, innocent human beings have been beheaded with videos o of tf the atrocities distributed to shock the conscience of the world. No god condones this terror. No grievance justifies these actions. There can be no reasoning, no negotiation with this brand of evil. The only language understood by killers like this is the language of force. So the United States of america will work with a Broad Coalition to dismantle this network of death. In this effort, we do not act alone, nor do we intend to send u. S. Troops to occupy foreign lands. Instead, we will support iraqis and syrians fighting to reclaim their communities. We will use our military might in a campaign of air strikes to roll back isil. We will train and equip forces fighting against these terrorists on the ground. We will work to cut off their financing and to stop the flow of fighters into and out of the region. And already over 40 nations have offered to join this coalition. Today i ask the world to join in this effort. Those who have joined isil should leave the battlefield while they can. Those who continue to fight for a hateful cause will find theyre increasingly alone. For we will not succumb to threats, and we will demonstrate that the future belongs to those who build, not those who destroy. So thats an immediate challenge, a first challenge that we must meet. The second, it is time for the world, especially muslim communities, to explicitly, forcefully, and consistently reject the ideology of organizations like al qaeda and isil. It is one of the tasks of all great religions to accommodate devote faith with a modern, multicultural world. No children are born hating. And no children anywhere should be educated to hate other people. There should be no more tolerance of socalled clerics who call upon people to harm innocents because theyre jewish or because theyre christian or because theyre muslim. It is time for a new compact among civilized peoples of this world to eradicate war at its most fundamental source, and that is the corruption of young minds by violent ideology. That means cutting off the funding that fuels this hate. Its time to end the hypocrisy of those who accumulate wealth through the Global Economy and then siphon funds to those who teach children to tear it down. That means contesting the space that terrorists occupy, including the internet and social media. Their propaganda has coerced young people to travel abroad and fight their wars and turn students, young people full of potential, into suicide bombers. We must offer an alternative vision. It means bringing people of different faiths together. All religions have been attacked by extremists from within at some point, and all people of faith have a responsibility to lift up the value at the heart of all great religions. Do unto thy neighbor as you would do you would have done unto yourself. The ideology of isil or al qaeda or boko haram will wilt and die if it is consistently exposed and confronted and refuted in the light of day. Look at the new form for promoting peace in muslim societies. We must declare war on war so the outcome will be peace upon peace. Look at the young british muslims who responded to terrorist propaganda by starting the not in my name campaign, declaring isis is hiding behind a false islam. Look at the christian and Muslim Leaders who came together in the Central African republic to reject violence. Listen to the imam who said politics try to divide the religious in our country, but religion shouldnt be a cause of hate, war, or strife. Later today the Security Council will adopt a resolution that underscores the responsibility of states to counter violent extremism. But resolutions must be followed by tangible commitments. So were accountable when we fall short. Next year we should all be prepared to announce the concrete steps that we have taken to counter extremist ideologies in our own countries by getting intolerance out of schools, stopping radicalization before it spreads, and promoting institutions and programs that build new bridges of understanding. Third, we must address the cycle of conflict, especially sectarian conflict that creates the conditions that terrorists prey upon. Theres nothing new about wars within religions. Christianity endured centuries of vicious sectarian conflict. Today it is violence within muslim communities that has become the source of so much human misery. It is time to acknowledge the destruction wrought by proxy wars and terror campaigns between sunni and shia across the middle east. And it is time that political, civic, and religious leaders reject sectarian strife. For lets be clear, this is a fight that no one is winning. A brutal civil war in syria has already killed nearly 200,000 people, displaced millions. Iraq has come perilously close to plunging back into the abyss. The conflict has created a fertile recruiting ground for terrorists who inevitably export this violence. The good news is we also see signs that this tide could be reversed. We have a new inclusive government in baghdad, a new iraqi Prime Minister welcomed by his neighbors. Lebanese factions rejecting those who try to provoke war. And these steps must be followed by a broader truce. Nowhere is this more necessary than syria. Together with our partners, america is training and equipping the Syrian Opposition to be a counterweight to the terrorists of isil and the brutality of the assad regime. But the only lasting solution to syrias civil war is political. An inclusive political transition that responds to the legitimate aspirations of all syrian citizens, regardless of ethnicity, regardless of creed. Cynics may argue that such an outcome can never come to pass, but there is no other way for this madness to end. Whether one year from now or ten. And it points to the fact that its time for a broader negotiation in the region in which major powers address their differences directly, honestly, and peacefully across the table from one another, rather than through gunwielding proxies. I can promise you, america will remain engaged in the region, and we are prepared to engage in that effort. My fourth and final point is a simple one. The countries of the arab and muslim world must focus on the extraordinary potential of their people, especially the youth. Here id like to speak directly to young people across the muslim world. You come from a great tradition that stands for education, not ignorance, innovation, not destruction, the dignity of life, not murder. Those who call you away from this path are betraying this tradition, not defending it. You have demonstrated that when young people have the tools to succeed, good schools, education in math and science, an economy that nurtures creativity and entrepreneurship, then societies will flourish. So america will partner with those that promote that vision. Where women are full participants in a countrys politics or economy societies are more likely to succeed. And thats why we support the participation of women in parliaments and peace processes, schools, and the economy. If young people live in places where the only option is between the dictates of a state or the lure of an extremist underground, then no counterterrorism strategy can succeed. But where a genuine Civil Society is allowed to flourish, where people can express their views and organize peacefully for a better life, then you dramatically expand the alternatives to terror. And such positive change need not come at the expense of tradition and faith. We see this in iraq where a young man started a library for his peers. We link iraqs heritage to their hearts, he said, and give them a reason to stay. We see it in tunisia, where secular and islamist parties worked together through a political process to produce a new constitution. We see it in senegal, where Civil Society thrives alongside a strong democratic government. We see it in malaysia, where vibrant entrepreneurship is protelling a former colony into the ranks of advanced economies. And we see it in indonesia, where what began as a violent transition has evolved into a genuine democracy. Ultimately, the task of rejecting sectarianism and rejecting extremism is a generational task. And a task for the people of the middle east themselves. No external power can bring about a transformation of hearts and minds. But america will be a respectful and constructive partner. We will neither tolerate terrorist safe havens nor act as an occupying power. We will take action against threats to our security and our allies while building an architecture of counterterrorism cooperation. We will increase efforts to lift up those who counter extremist ideologies and who seek to resolve sectarian conflict. And we will expand our programs to support entrepreneurship and Civil Society, education and youth. Because ultimately, these investments are the best antidote to violence. We recognize as well that leadership will be necessary to address the conflict between palestinians and israelis. As bleak as the landscape appears, america will not give up on the pursuit of peace. Understand the situation in iraq and syria and libya should cure anybody of the illusion that the arabisraeli conflict is the main source of problems in it the region. For far too long thats been used as an excuse to distract people from problems at home. The violence engulfing the region today has made too many israelis ready to abandon the hard work of peace. And thats Something Worthy of reflection within israel. Because lets be clear, the status quo in the west bank and gaza is not sustainable. We cannot afford to turn away from this effort. Not when rockets are fired at innocent israelis or the lives of so many palestinian children are taken from us in gaza. So long as im president , we will stand up for the principle that israelis, palestinians, the region, and the world will be more just and more safe with two states living side by side in peace and security. So this is what americas prepared to do. Taking action against immediate threats while pursuing a world in which the need for such action is diminished. The United States will never shy away from defending our interests, but we will also not shy away from the promise of this institution and its universal declaration of human rights. The notion that peace is not merely the absence of war but the presence of a better life. I realize that americas critics will be quick to point out that at times we, too, have failed to live up to our ideals, that america has plenty of problems within its own borders. This is true. In a summer marked by instability in the middle east and eastern europe, i know the world also took notice of the small American City of ferguson, missouri, where a young man was killed and a community was divided. So, yes, we have our own racial and ethnic tensions, and like every country, we continually wrestle with how to reconcile the vast changes brought by globalization and greater diversity with the traditions that we hold dear. But we welcome the scrutiny of the world, because what you see in america is a country that has steadily worked to address our problems, to make our union more perfect, to bridge the divides that existed at the founding of this nation. Americas not the same as it was 100 years ago or 50 years ago or even a decade ago. Because we fight for our ideals, and we are willing to criticize ourselves when we fall short. Because we hold our leaders accountable and insist on a free press and independent judiciary. Because we address our differences in the open space of democracy with a respect for the rule of law, with a place for people of every race and every religion, and with an unyielding belief in the ability of individual men and women to change their communities and their circumstances and their countries for the better. After nearly six years as president , i believe that this promise can help light the world because i have seen a longing for positive change, for peace and for peace, and for freedom, for opportunity and for the end to bigotry. In the eyes of young people who ive met around the globe. They remind me that no matter who you are or where you come from or what you look like, or what god you pray to, or who you love, there is something fundamental that we all share. Eleanor roosevelt, a champion of the u. N. And americas role in it, once asked where after all do universal human rights begin . In small places she said. Close to home. So close and so small that they cannot be seen on any maps of the world, yet they are the world of the individual person. The neighborhood he lives in. The school or college he attends. The factory, farm or office where he works. Arnold around the world, young people are moving forward, hungry for a better world. Around the world in small places they are overcoming hatred and bigotry and sectarianism and they are learning to respect each other despite differences. The people of the world now look to us, here, to be as decent and as dignified and as courageous as they are trying to be in their daily lives. And at this cross roads, i can promise you that the United States of america will not be distracted for deterred from what must be done. We are heirs to a proud legacy of freedom and we are prepared to do what is necessary to secure that legacy for generations to come. I ask that you join us in this common mission, for todays children and tomorrows. Thank you very much. [ applause ] that is the president speaking at the u. N. General assembly. A big broad speech on the u. S. Role in International Conflict covering everything from isil to ukraine, syria and more. Trying to ride that balance between saying we will degrade and destroy elements like isil but without putting boots on the ground or occupying territories ourselves. Lets bring in chief washington correspondent john for his reactions. Your thoughts . Reporter well he came to the world a request they join our mission but with a note of humility. He talked about the United States is not perfect and made a reference to the turbulence and turmoil in ferguson, missouri recently, saying yes we have our own tensions and strife but we constantly work to overcome them. He said we had tough language and he said that the icel and related groups, we called them a network of death so the only language they understand is a language of force and promise to mete out that force in concentration with allies. But he also talked about a partnership with the rest of the world to improve opportunities for young people in the middle east and elsewhere. And he called in particular upon the youth of the world to overcome the sectarianism and strife weve seen. Talked about the generational challenge facing us as we try to overcome religious extremism and fanaticism. And the breadth of the talk indicated had bri ed had had br challenge. Not something that is going to be completed son but thats what he galvanized had world to do. Interesting to see if he gets a new relationship with the arab states in that vain. In the meantimic back to business here. We have a big ipo today. The citizens financial. The biggest bank to ipo since the financial crisis. Raised to 33 last night and currently trading about 22 dollars share. Well talk to the ceo after this break. Bulldog [yawning] its finally morning i cant wait to get to mattress discounters good and early for the tempurpedic bonus event. Ill have first pick from the huge selection of tempurpedic mattresses. Then, ill get to choose 300 in pillows, sheets, and other free gifts. On top of that, up to 48 months interestfree financing. Its a Beautiful Day for mattress discounters tempurpedic bonus event. Mmm, some alarm clock you turned out to be. Mattress discounters feon a huge selection of clearance mattresses. Get two years interestfree financing on tempurpedic. Sleep trains inventory Clearance Sale is on now your ticket to a better nights sleep and we are back here at the trading post, where the big ipo of the day, the second biggest in the United States this year, citizens financial has just opened up and now edging hire. Thanks for hanging around to talk to us. Talk about the timing here. Rbs decides to spin this off. Why go public right now . Again, i think we are ready to be a public company. Weve made good strides in executing our strategy. Rbs does have a deadline with the ec, where they have to exit the investment by the end of 2016. So you want to give yourself enough time to be able to kind of sell down the position. Bruce, how do you feel about the process . The indicative range is 2325. You priced below that at 21. 50. Now were trading up to 22. There is a lot of promise you are going to increase profitability. The aim is to double the return on equity in the next two to three years. Why should people buy today . We have a credible plan. A great foundation, and attractive franchise in a nice part of the country with scale on all in major markets. A good strong clean balance sheet. We have a plan to improve that profitability to get to scale in certain businesses where we are not at scale to start you doing the balance sheet. Do you feel that message got across . I do. That you had to price below the range . I think there was a good endorsement, huge level of interest. People did the work. I think think there is still execution risk looking forward so i think people wanted to price it down to account for that a little bit. And also rbs is going to sell more stock in the future was also a factor. What about that rbs link . In terms of the regulation. Its been heavily regulated and bailed out by the u. K. Taxpayer. What does this allow you to do . Does it allow you to get out of the regulatory overhang. Eventually it will. But the big thing is we get to carve our own path and operate as the u. S. Regional bank and for that last five years they were pursuing derisking and boosting capital levels. Now we can start growing the capital level again and grow the balance sheet. Do you have plans to go beyond the northeast. I think there is Great Potential just to maximize where we are banking so we see lots of the opportunity or organic growth as we run the bank better. We are seeing it rise a little higher new. Come back often. As we track you through. Im sure the investors will be very much watching our execution. We feel really good about the plan we have. Thank you very much. The ceo of citizens park. We are behind time now. Time for squawk alley. Thank you guys. Almost 8 00 a. M. At apple headquarters. John steinberg, ceo of the daily mail. Kayla and josh, good in