Transcripts For CNBC Squawk Box 20170824 : comparemela.com

Ftse up over 1 . Finally quick look at the dollar maybe thats moving some of this euro dollar, 1. 18. 1. 18. Remember earlier this year, it will be below parody, 94 cents it shot completely the other direction. Yes amazing frt dont belie dont believe what you read what youre seeing here is true. These newspapers so problematic. Speaking of stories, the big ones today, a major storm gath eari gatherring strength in the gulf of mexico. Harvey was upgraded to a Tropical Storm overnight crude oil prices, lets see, down a little bit. Wti crude just over 48 bucks its been sitting out the rally in metals. Federal regulators say they dont plan to block amazons 1 billion deal to buy whole foods. The ftc making that announcement hours after suhareholders approved the merger. Uber reported a lost of 6 65 million, 9 smaller than the 708 million loss in quarter one. Hpe Ceo Meg Whitman is standing by her statement that she will not be the next uber ceo she said nothing has changed since her series of tweets in late july and where she said she would not be taking on the road. All this after the board was said to be still in talks with her. I dont think the board said they wanted ere in talks with h, they wanted to be in talks with her. She has said over and over again i dont want this job. Get it through your head. Why do you think they want her so badly i think they would like a female ceo they would like a tech oriented executive. I dont know if jeff immelt is in that category and they want someone with managerial experience why do you think she doesnt want it. All the reasons were talking about every day. A huge company, changed the world. You dont think thats an attractive opportunity at the same time theyre all trying toing to shiv each other theres millions and millions of new losers in america they are the lucky ones. They are the lucky ones. It is a curse to win. Watertown i know well from going to school up there, living in newtonville. Is that where the winner was . Thats where the Winning Ticket was sold. I didnt get to play and he didnt get to dream. Someone in mass mass roughacs roughly 7 759 million richer today. State lotto spokesperson said the Winning Ticket was sold in watertown outside of boston. Its not clear who bought the lucky ticket but they are the single biggest Lottery Winner. Is that where the town was based, like a been affleck movie years back no. I dont think. The town. One of the few movies that ive seen. Stuck with mefrnlgts tany. The town. I think watertown, when that horrific marathon bombing happened, i think the guys were around there, too. Oh. I think there was a curfew in wat waterfou watertown. Take the turnpike, you go right in there youre happy for this family . No. I know, there will be a documentary about this family a decade from now. What i did tell you yesterday . You, the first time someone said lets bring in this New York Times reporter to guest host on squawk box, it was like eight, nine years ago or something. Maybe ten a decade that was the lottery. That was when you won the lottery. Thats when your family won the lottery. Right thats when your life you wont win people do win more than once. I would just be happy with that. Didnt even cost you a dollar or two dollars. Would you take the lump sum or the annuity i guess the lump sum. Sitting with me, hes taking the annuity. Every day he gets the annuity. Youre making it an annuity this is an annuity. In political news, any reporting about the relationship between Senate Majority leader Mitch Mcconnell and the president. Eamon javers has more on that. A lot of people buzzing about it and what it means for policy making in the future thats right. Some relationship mending going on yesterday between the two Top Republicans in american politics, the president of the United States and the Senate Republican majority leader, Mitch Mcconnell, both issuing statements saying they can Work Together after a New York Times story earlier this week said improvemently he was worried that the president wouldnt be able to salvage his presidency heres the statement from Mitch Mcconnell yesterday saying we have a lot of work ahead of us were committed to advancing our shared agenda together anyone who suggests otherwise is clearly not part of the conversation mcconnell saying the two men can Work Together on their shared agenda he went on to list a number of items theyll work on together but importantly not denying the reporting of the New York Times from earlier in the week about that strained relationship and his private comments heres the statement from Sarah Huckabee sanders she said President Trump and senator Mitch Mcconnell remain united on many shared priorities, including middle class tax relief, strengthening the military and constructing a southern border wall so theres an incentive to do tax reform and some other things to do on the president s agenda, because they promised voters that they would do those things. They want to go into the 2018 midterm elections with something to talk about that is a positive accomplishment politically theyre attached at the hip, personally though it see seem theres is no love loss remember the elaine chao part of it . Yes alaen ciin ciao was standin s standing by the president while he made that statement on tuesday, she said i stand by my men. Mitch mcconnell was calling into question some things and the president was frustrated that Mitch Mcconnell wasnt protecting him on the russia investigation. The president thinks he should shut dont investigation, mcconnell disagrees. We will continue to follow all of this i cant imagine what its like in their house at night. We should mention you dont want to miss this a programming note we have a big interview coming up today on cnbc House Speaker paul ryan will be sitting down with ylan mui to talk trump, taxes and trade. I think its mui. Dont knit pick here. He got it out. Please. Quarterly results are out from sears now and the loss looks better than expected, just 1. 16 a share versus the 2. 48 estimate by the single analyst who covers sears. His revenue forecasts, he had. 4. 214 billion. Comps one do s were down. Sears Holding Shares trading at 8. 63 this morning. On todays agenda on wall street a few retail reports before the bell. A few more retailers reporting results before the bell including staples, tiffany and abercrombie fitch. After the close, well hear from broadcom and game stop a pair of economic reports weekly jobless claims out at 8 30 a. M. Eastern. At 10 00, july home sales. The feds annual jackson hole summit gets underway in wyoming today. Cnbc is there live with a huge guest lineup well hear from Kansas City Fed president Esther George at 7 30 al a. M later in the day, Steve Liesman will speak to robert kaplan, glenn hubbard, and tomorrow speeches by janet yellen and ecb president mario draghi i mean, we said its the woodstock for bankers. I think it just speaks i question whether it was really like woodstock you see those speakers it is like hendrix were you a woodstock guy . No. My parents would not have let me go i dont know how old you were making your own decisions at that time. No, no, no. Do you know what was going on there. I heard thats why i asked you know what they say . If you actually were there, you dont remember you wouldnt talk about it. They say that about the they say that about the 60s too. You dont have the brain cells left if you were there to remember that i were actually there. Joining us on set are phil orlando from federated investors and scott nations, president and chief Investment Officer of nation shares a cnbc contributor. Welcome to you both. Scott, i was trying to see if your account lined up with andrews the financial crisis is one of them in here thats not the most vent you put the flash crash in here. I talk about five crashes the first one the panic of 1907. Five modern stock market crashes since then the last is the flash crash. Theres a subjective nature into terming whats a crash the flash crash is what the next crash will look like the dow lost 7 in about 13 minutes was that because it was High Frequency trading, fast . Etfs why is that a harbinger of the future it was purely ail lgorithalg. The trader responsible for portfolio trading refused to sell more futures. His quote in 1987, if i sell more than i am supposed to, the market will go to zero that was a human intervention that stopped the crash in 1987 there was none of that in 2010 phil, do you share the concerns about the structure of the market it brings passive ichb venvestm, etfs, are people sleep walking into an issue. Our focus are more underlying fundament fundamentals you have low interest rate, good corp plorate earnings, in terms fundamentals, we see the markets in good shape. Likely to grind higher overtime. That does not mean there will be instabilities and structural issues that can cause air pockets, but were looking at the Bigger Picture which we think is good in good shape. Even if the type of thing youre describing plays out, could you buy that dip would anybody even in other words, the flash crash was also a flash rebound. It was an event that people didnt know what to make of. Im a trader. I was looking at my screen i was certain as it was happening that the markets had been hacked. I thought thats what was going on the entire thing unfolded in about 20 minutes the problem is what if it had not bounced back and then you would have disrupted the market entirely. I think you would have killed confidence it was 2010, it was less than two years from the low in march of 2009. I think it would have been easy to kill confidence the fortunate think is crashes happen rarely. Five in the last 100 years phil, would you blindly buy any dip in the markets Going Forward . Blind is a strongword the short answer is we think were in the midst of a modder 3 to 5 correction in the august and september period. For a number of reasons. If the fundamentals play out the way we think, we would buy that. Who is to say that some black swan event doesnt change that fundamental outlook. So you always have to withhold opinion in terms of evaluating what the cause of the correction is if things play out the way we expect anything you could hear from janet yellen or mario draghi that would change your mind . Were optimistic about getting something constructive out of jackson hole and out of yellen what do you mean constructive. We think well be disappointed, but we would like janet yellen to talk about the fundamentals of what the fed will do in the second half of the year in terms of what is her fiveyear plan for begiing to shrink that Balance Sheet down to 2. 5 trillion to 3 trillion over the next five years what are they looking forward to in terms of the next rate hike were not likely to get the detail we want on that until the fomc meeting in the middle of september. I think the fed would be well positioned to give us some of that detail tomorrow we may not get that. Also, there is a sense out there apparently that if janet yellen lays out a fiveyear plan, whomever the next fed chair may be will be committed to following that. We know they have to shrink the Balance Sheet. They have to 4 trillion is not sustainable what will they do . Simply let the maturing securities run off that would make the most sense they will start in september its time. How much longer it may be time but we spent all day yesterday and the day before talking about Government Shutdown, will they raise the debt ceiling thats a lot of uncertainty to start this massive plan. It wont be massive at first. That may call for them to wait to raise rates until december. Lets remember the goal of buying all of those securities was to drive rates lower and letting them run off will raise rates it will do so very gradually and slowly and where it needs to on the yield curve you both focused on janet yellen, mentioned mario draghi the euro is at 1. 18. Its up 20 this year almost is it going to be anything from him to listen for that could be more market moving i think that they are about 30 months of where we are in the whole process. Weve taken a little step backwards, rates have come down here thats why the euro is doing so well its temporary once our rates pick up again, well see that reverse gentlemen, thank you both. Thank you coming up, kids across the country are headed back to the classroom with new School Supplies, but one brand you might find in your kids backpack is helping those who cant afford School Supplies the cofounder of ub joins us next is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost, so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. School is back. Back in session for much of the country. Gives me butterflies thinking about it millions more kids will be returning to the classroom the next few weeks, many of those who cant afford School Supplies that they need joining me is the ceo of the company ub, which aims to fill the gaps you have been doing this since 2014 2. 5 million kids have gotten something from the relationship with you yoobi makes bright, colorful stuff. For every item sold, we give another item away to a classroom in need in the u. S its that simple lets see give met numbers on how it works. We partners with an amazing retailer in target to literally sell our supplies. So, today whether you buy from yoobi. Com or target, when somebody walks in and buys a product, we partnered with the kids in need foundation which we then together with them, we select schools where 70 or more of the kids qualify for the National Lunch Program Schools throughout the country, coast to coast have been able to receive free supplies from us. Were up to 88,000 classrooms that received free school sup y supplies from yoobi. Socially Conscious Companies like your own, maybe its a chicken and egg situation. How did it start did you start with the premise i want to get this stuff to kids in need . Or did you start with the premise i want to create a cool company that makes this stuff and by the way maybe if were successful we can have this other component. We actually started with cause as our call. In this particular case, my mom was a School Teacher i grew up in a family with not so much money. My mom would spend, like teachers here, close to 600 out of her own pocket on supplies for her classroom. We didnt have that much disposable income. My mom at the most was earning 36,000 a year we know teachers that live like on a salary like that. So ive been fortunate in my career when we started yoobi, cause was the number one focus it was simple aim. We thought we could hit a few hundred thousand kids, with our partnership with target and kids in need to get to now by september it will be close to 3 million kids served by yoobi im curious how it plays out in terms of why people end up buying this product over another product. Weve had this conversation with the guys at willby parker, but people who buy them buy them less for the social aspects but because they look cool but they attract all sorts of people who want to work there, because they feel theres a social purpose to what theyre doing that feels like maybe its different than what youre doing. Dave and neil, who are incredibly good friends, i would almost say mentors of ours, what theyve done with warby is similar to what weve done the number one reason why people buy is because of, a, the design and the quality of the product. But the reason they come back is because of the give. Everyyear, year after year, were noticing more and more people are making their first purchase because of the give but design and quality is always number one on the list how much is federal funding and that may be heading the other way. One may be going down, one needs to go up what is the percentage now to be from our perspective, we know the per spent taj is going down. For federal for federal right over the years we partnered with the department of education who have been amazing, both with the former administration and now looking to partner closely with this administration to make sure that every kid gets supplies we know there are tens of millions of kids turning up to school right now this week without supplies without a backpack some of them without even a pen when they go home toe do their ho to do their homework we believe a Public Private partnership when it comes to school is the most effective way to do it to help parents and kids keep money in their pocket for things that are more important for their wellbeing and families if yoobi can do our bit, were for me, it comes back down to my mom. I wanted to make sure that no teacher has to spend money out of her or her mock ket for supppocket for supplies it was chance, chance the rapper i knew chance the gardner. Chance and state bags donated 30,000 backpacks. So call chance he may be a good partner 340,000 stuffed backpacks at one of his concerts. People like chance, weve been lucky when we first launched we partnered with usher and pharrell last year Everybody Knows a Tropical Storm<\/a> overnight crude oil prices, lets see, down a little bit. Wti crude just over 48 bucks its been sitting out the rally in metals. Federal regulators say they dont plan to block amazons 1 billion deal to buy whole foods. The ftc making that announcement hours after suhareholders approved the merger. Uber reported a lost of 6 65 million, 9 smaller than the 708 million loss in quarter one. Hpe Ceo Meg Whitman<\/a> is standing by her statement that she will not be the next uber ceo she said nothing has changed since her series of tweets in late july and where she said she would not be taking on the road. All this after the board was said to be still in talks with her. I dont think the board said they wanted ere in talks with h, they wanted to be in talks with her. She has said over and over again i dont want this job. Get it through your head. Why do you think they want her so badly i think they would like a female ceo they would like a tech oriented executive. I dont know if jeff immelt is in that category and they want someone with managerial experience why do you think she doesnt want it. All the reasons were talking about every day. A huge company, changed the world. You dont think thats an attractive opportunity at the same time theyre all trying toing to shiv each other theres millions and millions of new losers in america they are the lucky ones. They are the lucky ones. It is a curse to win. Watertown i know well from going to school up there, living in newtonville. Is that where the winner was . Thats where the Winning Ticket<\/a> was sold. I didnt get to play and he didnt get to dream. Someone in mass mass roughacs roughly 7 759 million richer today. State lotto spokesperson said the Winning Ticket<\/a> was sold in watertown outside of boston. Its not clear who bought the lucky ticket but they are the single biggest Lottery Winner<\/a>. Is that where the town was based, like a been affleck movie years back no. I dont think. The town. One of the few movies that ive seen. Stuck with mefrnlgts tany. The town. I think watertown, when that horrific marathon bombing happened, i think the guys were around there, too. Oh. I think there was a curfew in wat waterfou watertown. Take the turnpike, you go right in there youre happy for this family . No. I know, there will be a documentary about this family a decade from now. What i did tell you yesterday . You, the first time someone said lets bring in this New York Times<\/a> reporter to guest host on squawk box, it was like eight, nine years ago or something. Maybe ten a decade that was the lottery. That was when you won the lottery. Thats when your family won the lottery. Right thats when your life you wont win people do win more than once. I would just be happy with that. Didnt even cost you a dollar or two dollars. Would you take the lump sum or the annuity i guess the lump sum. Sitting with me, hes taking the annuity. Every day he gets the annuity. Youre making it an annuity this is an annuity. In political news, any reporting about the relationship between Senate Majority<\/a> leader Mitch Mcconnell<\/a> and the president. Eamon javers has more on that. A lot of people buzzing about it and what it means for policy making in the future thats right. Some relationship mending going on yesterday between the two Top Republicans<\/a> in american politics, the president of the United States<\/a> and the Senate Republican<\/a> majority leader, Mitch Mcconnell<\/a>, both issuing statements saying they can Work Together<\/a> after a New York Times<\/a> story earlier this week said improvemently he was worried that the president wouldnt be able to salvage his presidency heres the statement from Mitch Mcconnell<\/a> yesterday saying we have a lot of work ahead of us were committed to advancing our shared agenda together anyone who suggests otherwise is clearly not part of the conversation mcconnell saying the two men can Work Together<\/a> on their shared agenda he went on to list a number of items theyll work on together but importantly not denying the reporting of the New York Times<\/a> from earlier in the week about that strained relationship and his private comments heres the statement from Sarah Huckabee<\/a> sanders she said President Trump<\/a> and senator Mitch Mcconnell<\/a> remain united on many shared priorities, including middle class tax relief, strengthening the military and constructing a southern border wall so theres an incentive to do tax reform and some other things to do on the president s agenda, because they promised voters that they would do those things. They want to go into the 2018 midterm elections with something to talk about that is a positive accomplishment politically theyre attached at the hip, personally though it see seem theres is no love loss remember the elaine chao part of it . Yes alaen ciin ciao was standin s standing by the president while he made that statement on tuesday, she said i stand by my men. Mitch mcconnell was calling into question some things and the president was frustrated that Mitch Mcconnell<\/a> wasnt protecting him on the russia investigation. The president thinks he should shut dont investigation, mcconnell disagrees. We will continue to follow all of this i cant imagine what its like in their house at night. We should mention you dont want to miss this a programming note we have a big interview coming up today on cnbc House Speaker<\/a> paul ryan will be sitting down with ylan mui to talk trump, taxes and trade. I think its mui. Dont knit pick here. He got it out. Please. Quarterly results are out from sears now and the loss looks better than expected, just 1. 16 a share versus the 2. 48 estimate by the single analyst who covers sears. His revenue forecasts, he had. 4. 214 billion. Comps one do s were down. Sears Holding Shares<\/a> trading at 8. 63 this morning. On todays agenda on wall street a few retail reports before the bell. A few more retailers reporting results before the bell including staples, tiffany and abercrombie fitch. After the close, well hear from broadcom and game stop a pair of economic reports weekly jobless claims out at 8 30 a. M. Eastern. At 10 00, july home sales. The feds annual jackson hole summit gets underway in wyoming today. Cnbc is there live with a huge guest lineup well hear from Kansas City Fed<\/a> president Esther George<\/a> at 7 30 al a. M later in the day, Steve Liesman<\/a> will speak to robert kaplan, glenn hubbard, and tomorrow speeches by janet yellen and ecb president mario draghi i mean, we said its the woodstock for bankers. I think it just speaks i question whether it was really like woodstock you see those speakers it is like hendrix were you a woodstock guy . No. My parents would not have let me go i dont know how old you were making your own decisions at that time. No, no, no. Do you know what was going on there. I heard thats why i asked you know what they say . If you actually were there, you dont remember you wouldnt talk about it. They say that about the they say that about the 60s too. You dont have the brain cells left if you were there to remember that i were actually there. Joining us on set are phil orlando from federated investors and scott nations, president and chief Investment Officer<\/a> of nation shares a cnbc contributor. Welcome to you both. Scott, i was trying to see if your account lined up with andrews the financial crisis is one of them in here thats not the most vent you put the flash crash in here. I talk about five crashes the first one the panic of 1907. Five modern stock market crashes since then the last is the flash crash. Theres a subjective nature into terming whats a crash the flash crash is what the next crash will look like the dow lost 7 in about 13 minutes was that because it was High Frequency<\/a> trading, fast . Etfs why is that a harbinger of the future it was purely ail lgorithalg. The trader responsible for portfolio trading refused to sell more futures. His quote in 1987, if i sell more than i am supposed to, the market will go to zero that was a human intervention that stopped the crash in 1987 there was none of that in 2010 phil, do you share the concerns about the structure of the market it brings passive ichb venvestm, etfs, are people sleep walking into an issue. Our focus are more underlying fundament fundamentals you have low interest rate, good corp plorate earnings, in terms fundamentals, we see the markets in good shape. Likely to grind higher overtime. That does not mean there will be instabilities and structural issues that can cause air pockets, but were looking at the Bigger Picture<\/a> which we think is good in good shape. Even if the type of thing youre describing plays out, could you buy that dip would anybody even in other words, the flash crash was also a flash rebound. It was an event that people didnt know what to make of. Im a trader. I was looking at my screen i was certain as it was happening that the markets had been hacked. I thought thats what was going on the entire thing unfolded in about 20 minutes the problem is what if it had not bounced back and then you would have disrupted the market entirely. I think you would have killed confidence it was 2010, it was less than two years from the low in march of 2009. I think it would have been easy to kill confidence the fortunate think is crashes happen rarely. Five in the last 100 years phil, would you blindly buy any dip in the markets Going Forward<\/a> . Blind is a strongword the short answer is we think were in the midst of a modder 3 to 5 correction in the august and september period. For a number of reasons. If the fundamentals play out the way we think, we would buy that. Who is to say that some black swan event doesnt change that fundamental outlook. So you always have to withhold opinion in terms of evaluating what the cause of the correction is if things play out the way we expect anything you could hear from janet yellen or mario draghi that would change your mind . Were optimistic about getting something constructive out of jackson hole and out of yellen what do you mean constructive. We think well be disappointed, but we would like janet yellen to talk about the fundamentals of what the fed will do in the second half of the year in terms of what is her fiveyear plan for begiing to shrink that Balance Sheet<\/a> down to 2. 5 trillion to 3 trillion over the next five years what are they looking forward to in terms of the next rate hike were not likely to get the detail we want on that until the fomc meeting in the middle of september. I think the fed would be well positioned to give us some of that detail tomorrow we may not get that. Also, there is a sense out there apparently that if janet yellen lays out a fiveyear plan, whomever the next fed chair may be will be committed to following that. We know they have to shrink the Balance Sheet<\/a>. They have to 4 trillion is not sustainable what will they do . Simply let the maturing securities run off that would make the most sense they will start in september its time. How much longer it may be time but we spent all day yesterday and the day before talking about Government Shutdown<\/a>, will they raise the debt ceiling thats a lot of uncertainty to start this massive plan. It wont be massive at first. That may call for them to wait to raise rates until december. Lets remember the goal of buying all of those securities was to drive rates lower and letting them run off will raise rates it will do so very gradually and slowly and where it needs to on the yield curve you both focused on janet yellen, mentioned mario draghi the euro is at 1. 18. Its up 20 this year almost is it going to be anything from him to listen for that could be more market moving i think that they are about 30 months of where we are in the whole process. Weve taken a little step backwards, rates have come down here thats why the euro is doing so well its temporary once our rates pick up again, well see that reverse gentlemen, thank you both. Thank you coming up, kids across the country are headed back to the classroom with new School Supplies<\/a>, but one brand you might find in your kids backpack is helping those who cant afford School Supplies<\/a> the cofounder of ub joins us next is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile<\/a> comes with your internet. You get up to 5 lines of talk and text at no extra cost, so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. School is back. Back in session for much of the country. Gives me butterflies thinking about it millions more kids will be returning to the classroom the next few weeks, many of those who cant afford School Supplies<\/a> that they need joining me is the ceo of the company ub, which aims to fill the gaps you have been doing this since 2014 2. 5 million kids have gotten something from the relationship with you yoobi makes bright, colorful stuff. For every item sold, we give another item away to a classroom in need in the u. S its that simple lets see give met numbers on how it works. We partners with an amazing retailer in target to literally sell our supplies. So, today whether you buy from yoobi. Com or target, when somebody walks in and buys a product, we partnered with the kids in need foundation which we then together with them, we select schools where 70 or more of the kids qualify for the National Lunch<\/a> Program Schools<\/a> throughout the country, coast to coast have been able to receive free supplies from us. Were up to 88,000 classrooms that received free school sup y supplies from yoobi. Socially Conscious Companies<\/a> like your own, maybe its a chicken and egg situation. How did it start did you start with the premise i want to get this stuff to kids in need . Or did you start with the premise i want to create a cool company that makes this stuff and by the way maybe if were successful we can have this other component. We actually started with cause as our call. In this particular case, my mom was a School Teacher<\/a> i grew up in a family with not so much money. My mom would spend, like teachers here, close to 600 out of her own pocket on supplies for her classroom. We didnt have that much disposable income. My mom at the most was earning 36,000 a year we know teachers that live like on a salary like that. So ive been fortunate in my career when we started yoobi, cause was the number one focus it was simple aim. We thought we could hit a few hundred thousand kids, with our partnership with target and kids in need to get to now by september it will be close to 3 million kids served by yoobi im curious how it plays out in terms of why people end up buying this product over another product. Weve had this conversation with the guys at willby parker, but people who buy them buy them less for the social aspects but because they look cool but they attract all sorts of people who want to work there, because they feel theres a social purpose to what theyre doing that feels like maybe its different than what youre doing. Dave and neil, who are incredibly good friends, i would almost say mentors of ours, what theyve done with warby is similar to what weve done the number one reason why people buy is because of, a, the design and the quality of the product. But the reason they come back is because of the give. Everyyear, year after year, were noticing more and more people are making their first purchase because of the give but design and quality is always number one on the list how much is federal funding and that may be heading the other way. One may be going down, one needs to go up what is the percentage now to be from our perspective, we know the per spent taj is going down. For federal for federal right over the years we partnered with the department of education who have been amazing, both with the former administration and now looking to partner closely with this administration to make sure that every kid gets supplies we know there are tens of millions of kids turning up to school right now this week without supplies without a backpack some of them without even a pen when they go home toe do their ho to do their homework we believe a Public Private<\/a> partnership when it comes to school is the most effective way to do it to help parents and kids keep money in their pocket for things that are more important for their wellbeing and families if yoobi can do our bit, were for me, it comes back down to my mom. I wanted to make sure that no teacher has to spend money out of her or her mock ket for supppocket for supplies it was chance, chance the rapper i knew chance the gardner. Chance and state bags donated 30,000 backpacks. So call chance he may be a good partner 340,000 stuffed backpacks at one of his concerts. People like chance, weve been lucky when we first launched we partnered with usher and pharrell last year Everybody Knows<\/a> a School Teacher<\/a>. Everybody knows. Whats incredible is that organizations such as bank of america and Merrill Lynch<\/a> partnered with all the way through to the mom and Pop Companies<\/a> buying supplies from us for their teams they are also giving back just through their actions. Its amazing thank you thank you very cool appreciate it. Coming up, ibm teaming up with Food Retailers<\/a> to put Blockchain Technology<\/a> to work. If you dont understand what it means, youre not alone. I spent time figuring it out and ill explain it to everybody even medical services are using the technology back in a moment guitar legend just by playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial<\/a> can help you get there. Even if its chasing squirrels, theextreme risk of burstd a pipes and water damage. Y. Soon, Insurance Companies<\/a> wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back youre watching squawk box live from the Nasdaq Market<\/a> site in times square. Good morning u. S. Equity futures at this hour are rebounding one day theyre up, the next day theyre up, they sell off. Up 38 points today after weakness yesterday because of the shutdown some other things happening yesterday. A couple earnings reports were not great. But seems to be somehow correlated to that the nasdaq indicated up 8. 802 right now. The s p up a little bit under two points facebook picking Andrew Bosworth<\/a> to lead the consumer hardware efforts. Business insider says this comes as facebook prepares a video calling device video calling device for release next spring. Bosworth was most recently Vice President<\/a> of facebooks ads and business platforms and considered a close confidante of mark zuckerberg. For 2020, potential president. Linkedin cofounder reid hoffman talking tech valcations in a cnbc interview. He told john ford he thinks things are getting lofty as you get to a network world, we get to larger and Larger Companies<\/a> ten years ago it was more oil companies, now its more tech companies. They benefit from this global scale in a network role. It gets down to a company per Company Decision<\/a> now what it does mean is probably most of the valuations are probably too high. Thats the challenge for being a professional venture capitalist investor and trying to discern companys you can catch more of that interview later today on squawk on the street. There are many ways open Ledger Technology<\/a> can be used for other industries today ibm spotlighting a developing use for blockchain as it partners with Food Companies<\/a> from walmart to dole joining us is brigitte mcdermot mcdermott. I spent time last night we talk about blockchain. When we talk about blockchain, we used to talk about bitcoin, which is a currency. Explain the technology for people when we say an open ledger, what does that look like. Blockchain is a trusted system of record thats all it is its that simple it means that when you want to share information with people who you know but maybe you dont totally trust, you can like them like us not naming names. But you can put it on the blockchain when you put it on the blockchain it cant be changed like doing a crossword puzzle in pen. If you do a crossword puzzle in pencil, your friends are like did you do it . Did you cheat . If you do it in pen, they know if you crossed it out. Blockchain records it in a way that everybody trusts the information the way it was described to me was the idea that when you buy a home, theres always these different constituents, component parts. The buyer and seller, but theres the bank, the you have to do ridiculous things like a title search, all of those documents could be passed along in an open ledger, right . Let me use the example for food safety. Thats what were talking about today with this announcements with these Food Companies<\/a>. When you have food, its grown lets say its grown in mexico you have a papaya grown in mexico you ship it, put it through a packager, processor, cold storage, distribution center, retailer all of these people have information about when something was picked, when it arrived. What was done to it. Whether or not they have the certificates that show they did their hot water tests, whether they have their Global Food Safety Initiative<\/a> certificate. All of this information is incredibly useful if as in the case of papayas you have salmonella if you live in new york now, you shouldnt be eating papayas. I didnt know that. Thats good to know. So what you want, when something happens like on may 17th when the first case of salmonella was reported, we should have been able to quickly say lets look at all the information of everything thats been sold and triangulate on what caused the salmonella but the information is sitting in sill loos the grower has some, the processor has some everybody has information. You cant look and go we have a couple of illnesses, the commonality is the papayas these papayas came from mexico are you sure it cant be hacked people come on and express concerns about blockchain, they say how do you know this thing can be fully protected one thing that i think is great about blockchain, when it was first developed 2008, i think it was, it wasnt so much that it was this brilliant new idea like quantum computing. It was this idea of how do we put together technologies that we know really well. So cyber, data management, data distribution so it took all of these technologies and said lets think about them differently so were not reinventing the world. Were using it differently theres so many people out there who know how to build, secure kind of how much of this is about permissioning . It almost feels like some kind of grand sharing dare i say, like a facebook for business with sort of permissioning on sharing. There are two parts to it in terms of all of this information. A lot of people when they think about blockchain, they think about cryptocurrencies. Its about anonymous access to information. There is no permissioning. Everybody can see every information. Still the information is unhackable and secure because of the way that the information is put on the chain and is stored with a hash. When you go to what we talk about, which is enterprise blockchaining this is about how do you let Enterprises Use<\/a> it for business where they want enterprises dont want anonymous transactions thats when you get into permissioning. You say, okay, if i have a transaction where dole is selling food to walmart, they dont want crowing tore see that information. Right if driscolls is selling fruit to walmart, they dont want crowing tore s kroger to see it. But when theres a problem, i want to see the whole chain, that might include all sorts of competitors. When theres a problem, what weve done is build the food safety solution. Theres blockchain, the underlying technology. The announcement we made is two parts. We built the ibm Blockchain Platform<\/a> which helps us and others to build out Enterprise Solutions<\/a> in blockchain using the technology where theres not a lot of depth and capability right now. Not enough people know how to build good blockchain solutions. We built the platform to make it easier to do that. Having done that the first example were going out with is ibm blockchain food safety saying we ran a pilot of this. We built the Technology Solution<\/a> with walmart earlier this year we proved that in this case we did traceability on mangos pa papayas, mangos. We showed we could trace back instead of 6 days, 18 hours, 26 minutes, which is what it took them to identify the farm where a package came from, we did it in a couple seconds. Now were saying thats great. You can do it linearly, but lets do it across the network what other industries will this be applicable to . Ginni rometty says blockchain will transform transactions the way the internet transformed communications i cant think of a single i industry that the internet hasnt transformed, and the same is with blockchain and what competitor do you wake up to saying were afraid of what theyre doing im worried about the people who know the businesses. Blockchain is about transformation, about thinking differently about how you theres not a Technology Company<\/a> that is even near what youre trying to do . No one else has the platform, so the underlying technology, the expansive look at solutions and the services to help build it no one good answer make it easier on the house quicker, cheaper if we could have source data put on the blockchain nice and secure, everybody would be happier. How quickly do you think you can get it done. I dont think its in time for the purchase youre looking at. This is for a friend. Just asking for a friend. Could you close in less than a week probably not going to happen in less than a week but really fast all right thank you very much. Coming up, tech analyst picks from mark mahaney. And then comments from Esther George<\/a> from that symposium in jackson hole. And later in the morning, Scott Gottlieb<\/a> will be here to talk about the process of cushing k tobacco addiction. Welcome back to squawk box. It is now time for the executive edge venture investor and squawk box beguest host Chamath Palihapitiya<\/a> will be creating a new Tech Holding Company<\/a> they hope to raise 5 million i an ipo and go out and acquire merging businesses that have little incentive to go public themselves its a similar model to Berkshire Hathaway<\/a> Chamath Palihapitiya<\/a> has long criticized the current venture model. What is he to sophia . Dont know where it comes from i dont know the history of it the next time hes on, im sure well spend a good time talking about it i would like to know what it means. Vice president mike pence hinted that the u. S. Is considering further sanctions against the venezuela government of nicolas maduro. The comments came last night you may be assured under the leadership of President Donald Trump<\/a> that the United States<\/a> of america will continue to bring the full measure of American Economic<\/a> and diplomatic power to bear until democracy is restored in venezuela recent reports suggested the Administration May<\/a> ban the trading of new and perhaps existing debt issued by the maduro government. Bitcoin is boomi inin iningn venezuela. Electric power in venezuela is heavily subsidized so its essentially free so people are using the power to mine bitcoin. All right. All day its a learning experience for some of us. Check this out sesame street out with its latest parody video. This time of the megahit despacito which is apparently a big hit. I just found that out. What is the target audience do you know despacito ive heard of the song. This version is called e el patito, spanish for duckling. Sesame street has had a lot of parities over the years, including orange is the new snack. So you dont know despacito either im aware of the song the one im heard, im not sure fizz the Justin Bieber<\/a> one or s awesome. I dont know how i landed on it. I listened to it probably a dozen times. What is it . So i know its coming at me. Its at the top of pop rising if you go to pop rising in spotify, you will know whats cool and hip the next couple weeks. Theoh this is a big deal this despacito thing. The second song in history to remain at number one for 15 weeks. Did they say what the first was . Probably i can find it in here no there we go decemb i wonder if its i got a feeling. Maybe lets get over to tiffany. Earnings out from luxury goods retailer earnings were 92 cents, 6 cents above the estimate tiffany saw strength in diamonds, fashion and designer jewelry. Social security pit t despite the double beat, shares are down someone sweet day when we come back, tech stocks up 22 this year. Theyve been flat over the past month. Mark mahaney will talk about his winners and losers in the sector and give us our whats working series next. Some interesting picks back in a moment when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security<\/a> helps protect business, from the largest Financial Markets<\/a> to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Welcome back to squawk box. The tech sector enjoying a strong rally in 2017, up more than 22 since january, but are names like facebook and netflix overvalued we also want to talk about snap and amazon and so many others. Mark, its great to see you in person. Good morning, andrew. We talked about it yesterday, wpp coming in with what seemed like a terrible quarter and also predicting where advertising was going. Where do you think all this money is going ive got a couple of good ideas. I think facebook, google and possibly amazon, so they cited specifically wpp cited specifically weakness in consumer Package Goods<\/a> in north america. Wpp is talking about 1 to 2 growth worldwide facebook just gave you its 17th straight quarter of 50 yearoveryear growth. Google gave you its 30th quarter of at least 20 yearoveryear growth the dollars have to be flowing there. The surprise candidate, which hasnt been mentioned in the News Coverage<\/a> yet, theres this thing called amazon which is generating more ad revenue than snap and twitter combined, or darn close to it. Explain that, though. Well, weve got a global audience thats probably well north of 300 Million People<\/a> that are all looking to purchase. The people on amazon of shoppers what you want to do there, its almost as good as Google Search<\/a> engine on google people tell you what theyre shopping for on amazon theyre shopping in categories. Youre talking about sponsored product. Yeah. When i say im looking for lululemon, mens pants. You know what youll see at the top . Levis people are shopping. Theyre in Shopping Mode<\/a> thats the beauty of google. People are interested in what theyre interested in buying if youre a consumer Package Goods<\/a> company or apparel company, get there and you can get target ready people are looking to purchase. So one day people you dont think people are thinking about amazon as an Advertising Company<\/a> . No. Its doing 200 billion in revenue and advertising is 2 to 3 billion its tiny. Look at their Earnings Call<\/a> last quarter for amazon they talked about two places where employee growth is really escalating or accelerating one was cloud, the second was advertising. Its the first time they ever mentioned that. You are bullish on snap. Yes. I just spent some time with the snap guys. Make the case for everybody. One of the few. I think were close to a valuation floor. I think we just tested it as we went through the lockup expirations and we had two negative prints. Numbers had to be slashed two times in a row i think we found the valuation floor. If they can get those daily average users to start growing again on a yearoveryear basis, theyre rolling out more functionality. The map functionality, have you played with this its very cool. Im not on it. Weve had some of the analysts say they need to get the word out about this feature more this company likes to hide their Technology Innovations<\/a> and let people stumble across them its kind of a passiveaggressive kind of thing. But thats a way to generate some real momentum. More engagement by the way, theyre showing it they disclosed that their millenials are spending 40 minutes a day. Yes, they have captured the millenials, but are they going to capture any other cohort . Are they going to capture the older cohort which is finding its way onto instagram and some of that functionality . So theres tentative evidence from survey work weve done theyre starting to get more traction with 30 and 40yearolds if youre over 25, swipe right swipe right twice to get to the discover tab and youll see very interesting content. Cnn update, like swipe through that i think most people the espn content on there is better than what you find other places. I think thats why cnn is doing theirs. They saw the great success. You search lululemon mens pants on amazon and i get a dockers ad, just like you said. Its 2 to 3 billion in advertising dollars. Watch amazon, watch that space. Thats how joe ended up with all the dockers, looking for lulu pants. Another seinfeld piece. Another seinfeld episode that you dont understand. Coming up, at President Trump<\/a>s speech tuesday night he talked about his commitment to the coal industry and mentioned a mine opening well talk to the ceo of coal, the Small Company<\/a> that is opening the mine on 8 00 fda commissioner Scott Gottlieb<\/a> will weigh in on the fdas new strategy to curb tobacco addiction even further so new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance<\/a> and speed across all your locations. Hello, mr. Deets. Every Branch Running<\/a> like headquarters. Thats how you outmaneuver. Every Branch Running<\/a> like headquarters. Ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction<\/a> with full Service Brokerage<\/a> firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. Becareally want to be there, but you cant. At cognizant, were helping todays leading Media Companies<\/a> create more immersive ways to experience entertainment with new Digital Systems<\/a> and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. Good morning wall street looking west as the annual fed summit in jackson hole, wyoming, gets under way. Well tell you what to watch for and get a live report straight ahead. The president s energy agenda, how policy could change the coal industry. The ceo of corsa coal joins us to discuss. And the spike setter craze what it could mean for big breweries and their bottom line as the second hour of squawk box begins right now. Announcer live from the beating heart of business, new york city, this is squawk box. Good morning welcome back to squawk box right here on cnbc were live at the Nasdaq Market<\/a> site in times square im andrew ross sore kkin along with joe kern en the dow looks like it would open up higher, about 35 points higher nasdaq up 6 points the s p 500 looking to open about 1 point higher heres whats making headlines the Kansas City Fed<\/a> symposium at jackson hole, wyoming, getting under way today. Speeches from janet yellen and mario draghi and Steve Liesman<\/a> is covering the symposium. Later this hour well have a conversation with kansas city president Esther George<\/a>. In the meantime were going to get a fresh read on the Housing Market<\/a> later this morning. The National Association<\/a> of realtors out with existing home sales for july thats at 10 00 a. M. Eastern time analysts expecting an increase of half a percent. Tiffany reported a quarterly profit of 92 Cents Per Share<\/a> revenue was also above forecasts, but Comparable Store<\/a> sales declined by greater than expected, 2 maybe not enough people buying the little blue boxes, i dont know. Some longstanding issues, tiffany shares down 1 . Hp ink reporting Third Quarter<\/a> profit slightly better than expected. Revenue from workstations and desktop pcs rose 12 hp ink share is down 2. 5 . General electric is going to sell a division. Reuters says ge would like to sell the business for 2 billion. The share is down 0. 1 of 1 . That will do it too once they get that restructured part of ge going, that will do it i think thats the answer. That will get it, you know, maybe above 24. 5. The fact that Warren Buffett<\/a> sold his shares . 24. Tom flanery has his work cut out. Sell this, buy this, restructure this, move this over here, joint venture with this. Meanwhile Nbc Universal<\/a> 24. Stuck at 24. Considered a done deal, federal regulators dont plan to block amazons deal to buy whole foods. They made the announcement just hours after whole foods shareholder vote, after they voted okaying. Amazon hopes to wrap up the deal by the end of next year. Uber reporting a 16 jump in quarterly bookings it posted a loss of 645 million. Thats 9 smaller than the 708 million loss in the First Quarter<\/a>. Trip requests more than doubled. Positive results come amid the slew of corporate scandals, including a legal battle, but so far all of the scandal and soap opera seems to not be impacting the customer and whats so fascinating about uber has always been that the frontfacing piece of uber, meaning who the customer interacts with, its one of the few companies where it has nothing to do with headquarters. Its the drivers. And they dont really work for the company because theyre all contractors. And theyre pretty good i love talking to them i took an uber down here meg whitman is sticking to her guns she is standing by the statement that she will not be the next ceo of uber. She said nothing has changed since her series of tweets in late july in which she said she would not be taking on the role. It came after reports surfaced saying the board still wants to be in talks with whitman about a ceo seat. Lets talk markets now joining us is Gabriela Santos<\/a> and phil blancatto we promised viewers that wed really dig into this whole jackson hole thing thats happening. That we are calling woodstock for central bankers. Ive got a producer thats given me alternatives. Are you just calling it that . No, he called it that im not calling it that. Here are some other suggestions and we welcome any suggestions from viewers what about comiccon for central bankers. Its more like that. Freaky weirdos dressed up in star wars outfits. Is that better how about burning man . Coachella. Lollapalooza. What about you . I want to take squawk to burning man. Can we host from therenext summer burning man is going on right around now. Yeah. And i dont think were what is that scary face that i see whenever they talk about burning man. The big man what do you think we could get our own rv, like the squawk rv. We could hang out. A road trip youll travel around, do a shot when you get there Nothing Better<\/a> than a buddies road trip. Yes thats what im thinking. I see who were those two guys did you see what she came up with that is one of my favorite movies of all time how can you not think of any other movie with two guys going across the country. Andrew, read the teleprompter no, im kidding. Oh, wow wow wow a lot of love. What time is it in the morning . Geez louise. People, lets talk about it was a joke. Im sorry, i apologize shes new on the show. I did its sort of an inside joke. Gabriela, jackson hole, what do you think on that note anything significant . We could get a little bit of a wild card with yellen, with her speech on financial stability. It could go two ways really the base case, shell use the speech to talk about Financial Regulation<\/a> and the need to preserve a sound Financial System<\/a> but she could use it to talk about the need for the fed to balance their goals of inflation and unemployment with a focus on also maintaining appropriate financial conditions so that would be that second option would be a more hawkish tilt and could see some movement and reaction in the shortterm part of the yield curve. Shes talked about the participation right, right we look at this wonderful unemployment number and youve got a Participation Rate<\/a> thats still 8 , 9 below when we were at full employment for her, she wants to raise rates because she has this lack of ability in case something goes wrong but the reality is you have a labor market that still has a lot of people outside of it. Its a challenge for her shes fought to be very careful with what she says for her and with dudley, the two of them being on the same team but theyre not exactly saying the same things. For them, i think theyll have a little tug of war here september i would believe is off the table. Maybe december but the numbers arent great enough to get you there. So the journal did the piece on Global Growth<\/a> and gave the stamp that it happened they cited a recovery from the financial crisis along with global central bankers so i mean as we unwind here eventually and as that slowly moves across the globe, isnt that something to worry about, that the Inflection Point<\/a> has been passed and were headed on the other side of this im really glad were actually giving the Global Economy<\/a> the credit it deserves it has been the most broad based and strongest Global Growth<\/a> since the middle of 2010 actually for the Second Quarter<\/a>. And i think really what central bankers are trying to figure out is how much the economy can stand on its own two feet, how much it doesnt actually need that emergency medicine anymore, right, because were not at that store anymore. The u. S. Is certainly ahead of the pack and that is why were talking about winding down the Balance Sheet<\/a> probably in september, continuing rate hikes. But the ecb is also trying to figure out can the european economy stand on its own two feet, can they get going with tapering here. Our view is that the economy can withstand that removal of central bank policy, especially because its a very gradual removal. But its a doubleedged sword. Look at the yeuro closing in on 1. 18 i would expect morrario draghi o take his time. So i agree, imf came out and said 3. 6 Global Growth<\/a> next year thats a fabulous number, its an increase. But be careful because youre going to get into a currency battle of whos going to win this battle of cheaper currencies, stronger exports and easing and bowieing a balance o the two. We have to acknowledge that the european economy is not growing anymore. The european economy is growing based on domestic demand its european Consumer Spending<\/a> again, European Companies<\/a> willing to invest back in th business so a stronger euro may take out 10, 20 basis points from growth but its not going to derail the entire story. I think you both think that tax reform is so important to certain people in this country that its going to happen in some form, isnt it . Gabriella . Our expectation is thats one of the things that the Republican Party<\/a> agrees on is the need for Corporate Tax<\/a> reform so our expectation is that congress is probably not going to waste too much time on both the debt ceiling as well as theyll get to it so they will probably get to it its probably not going to be the reduction to 15 or 20 , but we are likely to get something and that validates the earnings estimates and the direction of the market so far this year but doesnt provide that much more upside thats why were looking to international. I think a lot will have a tough time watching some of the traditional credits go away. If i said to you, joe, you run a little business, youre not going to get any tax breaks anymore on what you spend. The local businessman is going to look at that and say, wait a minute, youre going to take this away and give me a break of 15 to 20 taxes but what happens when i get a new president and they jack it back up. I think the idea of capping some of the deductions but at the same token dropping rate is exciting for me as a money manager, i think its a boon for small and mid. I dont want you to deduct my new jersey tax. Theyre not going to let you deduct that. Theyre going to phase out the Mortgage Interest Rate<\/a> theres a lot of bad stuff in here thats supposedly sold as some big wish list item for the people that elected trump. Robert chiller said that it wont impact the Housing Market<\/a> if you mess with mortgage deductibility. Hes talking about from a behavioral point of view i dont know he was a little bit about were changing radically demographically in this country. The people that bought houses 30 years ago and the ones buying them today, its a whole different ball game. I think we overlook this demographic angle of housing look at yesterday, the numbers that came out in housing recently are not great to me theres a demographic story we dont tell enough that is so impactful of the Housing Market<\/a>, of our economy as a whole. 80 of the countrys wealth is with 20 of the population that changes everything about housing, how we grow, the success of the economy and the tax aspect is even more important now. If youre a senior and you live on those deductions and are already in a low tax bracket i turned 50 the other day. 50 is the new 20. Im going down 30 years now. So thank you. Thank you so much. All right, thanks. In the meantime, Everybody Knows<\/a> how much i love a jackpot, i love the lottery i know, i know you didnt win again. I didnt play and therefore, i wasnt able to dream. And if you had bought a ticket, you probably would have been the winner, probably. And you know what, now that i didnt play and didnt win, i could think if i had played maybe i would play. You saw the comparison. 1 out of 292 million. Yeah. Getting killed by a vending machine is like 1 out of 100 million. Even you i cant see walking in front of a falling vending machine. Can i talk about the news theres a family in massachusetts. In watertown you dont know if its a family might be a bachelor, a Single Person<\/a> it could be anyone it could be a dog. It could be a dog it couldnt be a dog the second largest jackpot in powerball history has a winner, but it wasnt any of us. A ticket sold in massachusetts snagged 750 million. It wasnt ontessa. Contessa brewer joins us. It wasnt her, it wasnt us. Reporter what makes you think it wasnt me were you in watertown no. Reporter hold up you just no i wasnt but just because i showed up at work does not mean i wasnt a big winner i might do this any way. I would just be a big old pain about it you know whats disappointing . Coming out and looking at the board and seeing it read 40 million. It just seems like, 40 million, chump change, who cares. I dont need that. I dont want that. Anyway, were here this morning. The excitement just dissipated because Everybody Knows<\/a> that person in massachusetts, a single buyer, now the biggest taker of the single jackpot. So there was a bigger jackpot, 1. 6 billion, but this was the first one that hasnt had to be split at 758. 7 million. That was the final tally jim cramer, by the way, says you should take that as a lump sum and do with it what you want with the cash. You should hold on to the cash and not leave it in the hands of the government thats his tip, not mine i dont know, it seems to me like you get more money if you spend it out this morning youve got people coming up here to bobby patels newsstand in new york city we were here yesterday bobby patel, everybody who was coming up had big dreams of what they were going to do with that money but now only one person gets to make those dreams come true bobby was a little late opening the newsstand this morning, i wont lie. It may have been that he just figured, well, whatever, ive got a full day ahead of selling newspaper and packs of gum so what am i going to do. The winning numbers here, can you put them up on the screen. 6, 7, 16, 23, 26, the final number powerball, thats 4 my photographer points out those are all birthdays of people who did not play quick pick maybe were more likely to win and more than one winner in terms of big prizes six people won 2 million. More than 30 winners of 1 million prizes so check those tickets. I checked mine this may be the only time you hear me say this on tv, you guys, but im a electors. Loser. Ialways pick 23 because of michael jordan, i do 7 was like my lucky number when i was a kid. How weird. Theres a chance this could have worked out. I cant believe bobby patel didnt sell the Winning Ticket<\/a> i was sure he was going to sell the Winning Ticket<\/a>. Does bobby also play . Thats what i want to know. Reporter yeah. Oh, yeah. He plays. Reporter hey, bobby, do you play every day the lotto oh, he does. Every day. Every day lotto seven days. The powerball every tuesday and friday, mega every wednesday and saturday. Reporter so yes. The answer is yes. He says while hes selling these dreams to other people, hes got to participate in the dream too. All right weve got to go. Contessa, thank you. Thank you for selling me a dream. Reporter youre welcome. Coming up, what does coal country think of the president s plan for their industry . Were going to ask the ceo of Coal Corporation<\/a> that Company Opening<\/a> its second coal mine since trump took office. Later, pakistan on notice. How the president s strategy in the region will play out in the coming months. Plus the spiked seltzer craze has the attention of Beer Companies<\/a>. Will that latest trend in alcoholiberas c vegepay off . Well find out stay tuned, youre watching squawk box on cnbc adults are just kids with much, much better toys. The cclass sedan, coupe and cabriolet. The thrills keep getting better. Lease the c300 sedan for 399 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment<\/a> for your home. And a new culture built around customer service. It all adds up to our most Reliable Network<\/a> ever. One that keeps you connected to what matters most. Welcome back to squawk box. At tuesday nights rally in phoenix, President Trump<\/a> restated his pledge to bring back the coal industry. Iweve ended the war on beautiful, clean coal and its just been announced that a second brand new coal mine, where theyre going to take out clean coal, meaning theyll take out coal and clean it, is opening in the state of pennsylvania, the second one we want to bring in the ceo of corsa Coal Corporation<\/a>. The company is opening the second coal mine since trump took office. Good morning to you. Good morning. Help us understand how this administration has changed your industry i think its a couple things. I think its economic and regulatory certainly executive orders have helped us eliminating the clean power plan, rolling back the socalled stream protection rule which helps the industry get permits, changing that tone at the top of the government towards coal has been very beneficial thats helped open up the Capital Markets<\/a> for coal issuers, both debt and equity. Its helped us run a business. Hire people, do better with community relations, but also the priorization of Economic Growth<\/a> in this country has been very good in the Steel Industry<\/a>. Manufacturing jobs, the promise of tax reform, Infrastructure Spending<\/a> all of that is good for the Steel Industry<\/a> thats where we sell our product into the Steel Industry<\/a>. Places like ohio, michigan, pennsylvania so President Trump<\/a> has done a fantastic job stimulating our industry. George, how many people have you been able to hire and do you plan to hire over lets say the next 12 to 18 months year to date weve hired 71 people well likely hire another 40 this year. With the opening up of the horning mine in early 2018, well hire an additional 50 people let me also note thats not just 50 people or 70 people, thats 50 to 70 families. These are familysustaining incomes and very much an upper middle class living in pennsylvania. What do you make of the argument theres been a lot of conversation about the Steel Industry<\/a>, how much the u. S. Government and administration should focus on the Steel Industry<\/a> relative to the Technology Industry<\/a> or i. T. When it comes with regards to our conversations with china right now. I think the Steel Industry<\/a> is undergoing a renaissance right now. Globally steel growth is up 4 year to date which is a big move, really an underreported story in my opinion. The Steel Industry<\/a> has such a big downstream effect in terms of economic stimulus with the transportation industry, construction industry, housing, that i think its of National Importance<\/a> in terms of our Economic Growth<\/a> so im very supportive of what the administration is doing. Where do you think the coal industry fits within the larger ecosystem of energy these days well, if you look globally, if you look at the big picture, coal provides about 30 of the Worlds Energy<\/a> a lot of people wouldnt know that thats right up with oil in terms of the top spot, in terms of the Global Energy<\/a> mix natural gas is 23 globally. Coal is affordable, its reliable, its easily transportable. For a lot of people its the only way for them to get electricity. Its the only reliable, affordable places for them to get electricity in places like africa and southeast asia. So its an economic engine, its a driver, its very important to raising standards of living. How do you think about it in the context of the United States<\/a>, in the context of a truly developed nation and whether long term given all of the concerns that people have about the environment and Everything Else<\/a> that we should be pursuing and really encouraging the coal industry . I think we should be pursuing an encouraging the coal industry today it produces about a third of the u. S. electricity in many regions, its competitive domestically in some regions it is not because of the low cost of natural gas. I would note that natural gas is a very volatile commodity. But the industry has really cleaned up the environmental aspect of the industry if you look at sulphur emissions, particulate matter and mercury emissions, theyre down about 90 in the last 15 years as a result of over 100 billion investment thats gone into Emissions Reduction Technology<\/a> in power plants we spend 7 million a year at our company cleaning water in terms of reclamation efforts at our sites. Weve got 20 people focused on that so really the environmental side can be balanced with the economic side. Theres a lot of pesky facts about particulate pollution and sulphur and mercury and things like that. We dont care about that stuff keep that stuff. Im worried about the co2. You didnt mention that. Well, co2 emissions have come down over the last few years. That was just my last we run a little thing that says commentary whenever i Say Something<\/a> like that. But youre right, sulphur, particulate pollution, water, all those things are environmentally horrific we just dont seem to hear much about them anymore with the other obsession. Anyway, george, thank you for being with us this morning coming up, the Solar Eclipse<\/a> causing a fishy situation in Washington State<\/a> details after the break. Check out the futures right now indicated up after being down yesterday, the mket arwas, after being up big the day before that squawk box will be right back. Youre in the match app. Now tap on the new missed connections feature. It says ive crossed paths with kate six times this week. That is a lot of times. Shes cute too yea how did i miss her . You didnt. Match picked it up for you. Check out new missed connections on match. Start for free today welcome back to squawk box this morning, were live right here were live on television, if you can believe that, from the Nasdaq Market<\/a> site. Every day. In times square among the stories that are front and center, two Food Companies<\/a> falling short of street estimates with their latest earnings and getting hit hard in premarket trading. Take a look at this, hormel and jm smucker both missed on the top and bottom lines and both Companies Cut<\/a> their fullyear forecast hormel blames high commodity price, volatility, and smuckers points to weakness in the retail food and coffee segments and the fact that we have not been doing pb j at our house in quite a while. Why i dont know. A Consortium Led<\/a> by Western Digital<\/a> offering 17. 4 billion for toshibas memory chip business, which says kkr is also a member of that group toshiba and Western Digital<\/a> have been in a legal dispute over the sale of the unit since the two are joint Venture Partners<\/a> in a japan chipmaking plant for those chips. Were also an hour away from the labor departments weekly jobless report on initial jobless claims economists looking for 235,000 new claims for the week ending august 19th, which would be up 3,000 from the prior week if the numbers come in that way. A fishy situation in Washington State<\/a> after an accidental salmon release over the weekend. Officials say that high tides damaged nets at this salmon farm, which is just a weird thing to call a place where you get salmon you dont really grow them out of the ground releasing as many as 5,000 Atlantic Salmon<\/a> into the water crews are urging the public to catch as many of the fish as possible with no limit on the size or number Officials Say<\/a> the spill was caused by tides pushed unusually high by mondays approaching total Solar Eclipse<\/a>, so it happened wow, thats interesting. Thats kind of fascinating actually by the way, why do they have to catch all the fish is there some problem with salmon being let out i dont know. Its not like theyre bear that are going to no. But you could send the bears in. You could do that too. To get rid of the extra salmon. They just like to swipe that salmon. They eat them whole that i dont know about. The Kansas City Fed<\/a> holding its annual Economic Policy<\/a> symposium at jackson hole. We should ask steve about the fishing. Thats where we find Steve Liesman<\/a> this morning. Reporter yeah, i think those salmon are genetically modified and they dont want them breeding with the other ones thats just my guess, im not sure were kicking off our coverage of the jackson hole summit its a different one and unique one. Theyre going to be talking about Global Growth<\/a> when many of the Major Economies<\/a> around the world are growing. I thought id share with you the unofficial agenda which obviously begins with the issue of new leadership on the way, maybe the president reappoints janet yellen, maybe gary cohn, we dont know. It hangs over, a bunch of spots still open on the fed board. Draghi speaking friday does he end up announcing the end of european quantitative easing the fed continuing to miss on its inflation forecast and what that means for rates does the fed end up the terminal rate, is it closer to 2 or 3 finally Balance Sheet<\/a> reduction sounds like its set to begin in september or at least announced to begin in september. I sat down with Esther George<\/a>, the Kansas City Fed<\/a> president. Shes the host of the event every year and we began talking about this extraordinary thing. This is a different jackson hole because all the economies around the world are growing. And what does that mean for u. S. Fed policy well, its an important factor as you know, that had been a Downside Risk<\/a> for some time. And so to see the rest of the world beginning to show positive growth bodes well for the u. S. Economy. Has it prompted you to upgrade your forecast for u. S. Growth this year or next not in particular so im waiting just to consider several factors in my own forecast, but it certainly eliminates some of the concern that might have been sitting out to the side. It eliminates Downside Risk<\/a> right. More than giving you additional upside. If i might, what is your forecast this time last year you talked about 2 growth. Are you still at 2 growth im still there youve seen First Quarter<\/a> we see lower growth, it looks like it bounced back Second Quarter<\/a> so when you round it out for the year, i think well be in that same range. How much concern do you have about the Unemployment Rate<\/a> being at 4. 3 . Does it create more concern about inflation for you this year or next well, im delighted that the Unemployment Rate<\/a> is low and more people have jobs, but i do look carefully at how you ensure that you have sustained growth in the long run. And overheating and labor markets can be an issue for you longer term. One of the big issues right now is the lack of Inflation Inflation<\/a> coming down, especially amid the low Unemployment Rate<\/a>. Has the connection or the lack of inflation given the underlying employment rate, has that surprised you i dont know if its a surprise given where gdp is right now. When you have this level of growth and you look at some of the dynamics, look at the difference between inflation in the good sector versus inflation in services, it seems to make sense that youd have low inflation right now. Inflation has not been heading back towards the 2 goal do you think the fed ought to pause here i think we should continue with the gradual rate path while we havent hit 2 , steve, im reminded that 2 is a target over the long term and in the context of a growing economy, of jobs being added, i dont think its an issue that we should be particularly concerned about. Unless we see something change so inflation is running close enough to 2 in my view that it allows a gradual approach. But again, every meeting is an opportunity to reevaluate those forecasts and how were thinking about it. You talk about interest rates. Interest rates have actually gone down while the fed has been trying to push them. Does that cause you concern . You can imagine the fed wants tighter conditions but its not happening. Right. Is that a reason to perhaps accelerate rate hikes . I dont know if its accelerate but i think it means you continue to move forward i think at the point you begin the Balance Sheet<\/a> reduction will give us another opportunity to see how financial conditions are responding to the removal of stimulus. Reporter i also asked miss george about the potential for a Government Shutdown<\/a> and she said it doesnt have an effect on her sense of timing at this time, but shell evaluate the risk as it comes nearer. You can imagine a scenario where it looks like we might have a shutdown and the fed would potentially back off on the idea of reducing the Balance Sheet<\/a>. At the same time, george said the beginning process of winding down the Balance Sheet<\/a> is very, very incremental its a small piece so she doesnt think it would have a big effect. Were going to talk later in the next hour with her about the issue of the Balance Sheet<\/a> reduction and some other issues about new leadership as well coming up about 10 30 eastern time, well have robert cappel, the dallas fed president back to you. Steve, by definition or just by nature, i get the feeling that a lot of fed officials are very cautious. Now were going weve got 2. 6. Instead of going with the forecast for the Third Quarter<\/a> to average it out, they go back to that, what youve highlighted so many times, that skewed First Quarter<\/a> number to get them down to that 2 average now, you dont have to buy the atlanta fed. Thats fine if you dont want to do that. Dont you have a number . Doesnt the all America Survey<\/a> have some number or something . Reporter no, no, joe its nice of you to bring it up. Less nice of you to mix it up with the other survey we do. Its 2. 8 or 2. 9, isnt it reporter its called the wrap it update were the only ones, cnbc, which you also work for, so its your survey as well. Whats the number its 2. 8 or 2. 9 for the Third Quarter<\/a>, isnt it . Reporter its 2. 8. So 2. 6 plus 2. 8 averages 2. 7. So why are they so slow why do they look back . They seem to be backward looking. Do they ever actually need to forecast something to actually anticipate something happening or do they always just fall back on the pat standard answer that were still at 2 . Its weird i mean im hopeful because if we do 2. 7 for second and Third Quarter<\/a> then youre going to have to do another 1 in the Fourth Quarter<\/a> to get back to averaging 2 for the year. Reporter right let me try to answer the question just a little bit first of all, this issue of Global Growth<\/a> cant be understated, i think i think it could add as much as 0. 3, maybe as much as 0. 5 to the global to the u. S. Economic growth. If that continues, we might have an upward shift in the growth numbers. Secondly is what the fed looks at, what economists look at are what they call underlying potential growth and they believe that the economy will hue back to that trend when they add up productivity and Labor Force Growth<\/a>, they come up with the potential of actually below 2 . So unless they change their view of potential, they wont change their outlook for overall Economic Growth<\/a>. I dont know. Theyll be the last to know. Its just reporter if you tell me productivity is on the way up, Labor Force Growth<\/a> will increase, then the fed would change its outlook for growth. Dont look at me for productivity im leaving at 9 00. Anyway, thank you. And well see you next hour, steve. Its still the summer see you in september. Coming up, the spiked seltzer craze bubbling up sales at major Beer Companies<\/a>. Our landon dowdy will take a look at that latest trend in alcoholic beverages and how its boosting sales for major brewers. As we head to break, take a look at u. S. Equity futures the dow implied higher 53. Well be right back. Enturyli to keep their global campus connected. And why a Pro Football Team<\/a> chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network<\/a> streamlined and nimble. Businesses count on communication, and communication counts on centurylink. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment<\/a> for your home. And a new culture built around customer service. It all adds up to our most Reliable Network<\/a> ever. One that keeps you connected to what matters most. Quick programming note you dont want to miss this. A very big interview coming up today. House Speaker Paul Ryan<\/a> will sit down exclusively hes going to be on the program to talk taxes, trade and President Trump<\/a>. 1 00 p. M. Eastern time, power lunch. Squawk returns in just a moment you totanobodys hurt, new car. But there will still be pain. It comes when your Insurance Company<\/a> says theyll only pay threequarters of what it takes to replace it. What are you supposed to do . Drive threequarters of a car . Now if you had Liberty Mutual<\/a> new car replacement\u2122, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. With Liberty Mutual<\/a> new car replacement\u2122, well replace the full value of your car. Liberty stands with you\u2122. Liberty mutual insurance. Welcome back President Trump<\/a> unveiling a new u. S. Policy on afghanistan earlier this week and put pakistan on notice our next guest says its about time hes a former u. S. Ambassador to afghanistan, iraq and the u. N. During the george w. Bush administration hes also author of the envoy. Welcome to you first of all, do you support the president s plans and strategy for afghanistan . I do. I think its very courageous policy im sure it wasnt easy for the president to go this route, but the alternative would have been worse, to abandon afghanistan, so i support it. Well see how the implementation goes, but so far so good is it so far so good . Weve been embroiled in this since 2001, i guess. Its probably the longest war weve been in with nothing to show for it. So is even this commitment that hes lined out going to make a big difference what do you actually think is going to happen here well, first, the situation is not the same as it was 16 years ago. We have a lot to show for it we at one point had 100,000 american troops who were doing the bulk of the fighting in afghanistan. Now we have a large afghan force that is doing the fighting we are there in a much smaller numbers, 8,400, and maybe will increase it by some numbers, but to perhaps less than 15,000. Right but what youre citing, ambassador, is success is weve gone from 100,000 troops to, if you believe the wall street journal, more than 10,000 right now. But that doesnt sound like some sort of transformation on the ground the situation with afghanistan is it a more flourishing democracy . Have we pushed back the taliban . Do we have actual progress on those fronts to show for it . Well, we have some progress, but not as much as we would have liked. There have been reasons for why there hasnt been much progress. The new strategy that President Trump<\/a> has decided on seeks to address some of those issues you refer to the issue of pakistan at the beginning. One of the issues that has made progress very difficult has been our inability by the two previous administrations to deal with the issue of the sanctuaries for the taliban and the terrorists in pakistan its much harder to defeat an insurgency with safe sanctuaries. And i believe that the new strategy seeks to address that by putting pakistan on notice. Well see whether the new strategy will be successful or more successful in addressing that issue, but i think thats been one of the big problems that has made things very difficult for us. So what further pressure should the u. S. Put on pakistan in order to try to stamp out that support for terrorism, as youre describing it and if they can do that completely, do you think that all of a sudden the afghanistan situation improves well, what needs to happen is we have to shake pakistan out of its comfort zone, which it has been in by supporting the insurgency against us in afghanistan and yet receiving assistance from us also. We need to confront pakistan, and i think the president intends to do that, to make a choice if it wants our assistance, it has to cease support for the insurgency we can also put individuals in the Pakistani Security<\/a> establishment who are supporting the insurgency on a black list so they cant travel to the United States<\/a> and we can also carry out strikes against the sanctuaries in pakistan. There are a number of things we can do and i dont think weve done them as much as the new strategy intends to seek but if it works, it will have a Significant Impact<\/a> it wont be immediate, but will have a Significant Impact<\/a> in terms of improving prospects in afghanistan. If we are at war with afghanistan or in afghanistan, what does victory look like . Victory looks like not having sanctuaries for the terrorists who target the United States<\/a> and our allies in afghanistan. We dont want to go back to pre9 11 circumstances in afghanistan in which terrorists such as al qaeda and now isis would like to move from iraq and syria to afghanistan they have already started that we do not want that. And i believe that was the reason for the president to make this difficult decision. Yeah. He doesnt want afghanistan to go back to pre9 11 circumstances with new terrorist groups threatening the United States<\/a> a quick final question, ambassador do you believe that that can be completely stamped out, any of that activity, no sanctuaries as you said is that an achievable goal in afghanistan . Well, its an achievable goal over time. Already with what we have done since 9 11, afghanistan no longer is a sanctuary for terrorists targeting the United States<\/a> but they are trying to come back they have made some progress this strategy is aimed at t reversing that and making sure afghanistan never becomes a sanctuary for terrorists again. All right, thank you again for joining us today. Thank you its good to be with you. Coming up, it is called spiked seltzer and its causing a buzz for big brewers landon dowdy has a preview hey, thats right this is the hottest thing right now, sales of hard seltzer are spiking, but how long will the buzz last . Well tell you who the big ays are and whats behind the trend coming up next on squawk box. So thats the idea. What do you think . Hate to play devils advocate but. I kind of feel like its a game changer. I wouldnt go that far. Are you there . Hes probably on mute. Yeah. Gary wont like it. Why . Because hes gary. phone ringing what . Keep going yeah. laughs voice on phone its not millennial enough. There are a lot of ways to say no. Thank you so much. Thank you so were doing it. Yes start saying yes to your companys best ideas. Let us help with money and knowhow, so you can get business done. American express open. Thats why at comcast were so ycontinuing to make4 7. Ne. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment<\/a> for your home. And a new culture built around customer service. It all adds up to our most Reliable Network<\/a> ever. One that keeps you connected to what matters most. Beer companies are getting a buzz from summer, from summer seltzer sales. Landon dowdy joins us with more on this trend in the industry cashing in good morning. Good morning. Nonalcoholic seltzer sales have soared in the past five years, up 42 now Beer Companies<\/a> are taking notice boston beer entered the market last year acquiring truly spiked earlier this year, millercoors followed launching a line of sparkling waters called henrys hard sparkling now, these acquisitions highlight the pressure on brewers to expand beyond beer, which has been losing share of the total u. S. Market to liquor and wine over the past 15 years. Guys, it is paying off for example, in this most recent report, boston beers truly spiked and hard sparkling water fueled sales rather than the companys name sake product, beer and ab in bevs seltzer brand new 429 from 2015 to 2016 the overall hard seltzer industry grew by more than 3,000 in that same time frame but can hard seltzer help brewers keep their buzz . Well, brad cooper of Consumer Research<\/a> warns while hard seltzers helps drive a nice pop in q2, he doukts tbts the sustainability there hard soda sales soared from 2015 to 2016, raking in 116 million. According to market researcher iri, many industry players rushed to get into that space. Now hard seltzer is the buzz of the industry, but will investors be watching to see if the trend has staying power or will it fizzle out, andrew back over to you. Thank you for that. We have a quick corporate headline to bring you. Facebook reportedly picking veteran executive Andrew Bozworth<\/a> to lead its consumer hardware efforts this comes as facebook is preparing a video calling device for release next spring. He was most recently Vice President<\/a> of facebooks ad and business platform and is considered a close confidant of mark zuckerberg. Of course the mystery video device is that like facetime could be. Or house party . What . The movie you read the story about how theyre obsessed with house party and how its disrupting them oh, yeah, yeah, yeah. That article. In the wall street journal, you heard of it . I only read the New York Times<\/a>. Know the enemy coming up i thought he reading the editorial pages of the journal the rest of the editorial that was too far for you. Youve got to go to breitbart at this point im assuming. Now that my buddy is back, yeah you mean steve now that theyre back in good hands. You know, were kidding about all this coming up we both paint the other person with all these so that we can set up these false sort of things and then knock down. Youre looking at the daily caller caller right now . Fda commissioner dr. Scott gottlieb joins us at the top of the hour well talk drug pricing, Cigarette Companies<\/a> and much more the futures at this hour, the mother jones index up 52 on dow jones. Mother jones . S p up 500, nasdaq up 10. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction<\/a> with full Service Brokerage<\/a> firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. A fed summit out west. Investors counting down to the kickoff of the central bank symposium. A live report from jackson hole straight ahead. Squawk box news maker. The fda takes aim at big tobacco. Commissioner Scott Gottlieb<\/a> joins us on the set. Plus earnings alert. Tiffany beats the street a look inside the blue box retailers quarter as the final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc, live from the Nasdaq Market<\/a> site in times square. Im harold, this is kumar. No, you said were dumb and dumber. Its the only buddybuddy movie that i know. You talked about the rv and you kind of look like jeff daniels nick nolte and eddie there are so many cool buddy movie. Nick nolte . You remember that picture . Im joe kernen along with Andrew Ross Sorkin<\/a> do you think what im talking about . Yeah, that mug shot the futures right now are indicated up about 56 points nasdaq dumb and dumber. Yeah. Nasdaq up 9 i meant it lovingly. But it came out so quickly. And the s p up 3 treasuries now, it looks like the yields may be in another little bit of a Holding Pattern<\/a> somewhere between 2. 10 and 2. 30 as we wait for that elusive 3 youve watched that. Have you ever seen it . What, 3 . Were you in the business when we were at 5, 6, 7, 8 yes, the financial crisis, the tenyear was at like 4 its amazing. We thought if we could get down to 7 or 6 as Stock Brokers<\/a> that that would be my dad said the mortgage on the first house they bought was 12 . Prime rate was 21 at one point. I used to walk to school both ways uphill. You could get 13. 5 aaa taxfrees. My grandfather used to live off of bonds that he had gotten in the early 1980s. Incredible. Okay. Among todays top corporate stories, a consortium let by Western Digital<\/a> now offering 17. 4 billion for toshibas memory chip business kkr also a member of that group. We should mention toshiba and Western Digital<\/a> have been in what is quite an epic legal dispute over the sale of the unit since the two are joint Venture Partners<\/a> in a japan chipmaking plant. Also federal regulators say they dont plan to block amazons 13 billion deal to buy whole foods. Federal trade commissioning that just hours after shareholders voted to approve the deal. They hope to wrap up the deal by the end of next year. Uber reporting a 16 jump in quarterly bookings its posted a loss of 645 million, which we should mention thats 9 smaller loss than the 708 million it lost in the First Quarter<\/a>. Trip requests from riders more than doubled over the past year. Heres some stocks to watch this morning weve had some earnings. Tiffany reported quarterly profit of 92 cents a share that was a 6cent beat revenue also above forecast but comparable sales did decline by a greater than expected 2 the shares have rebounded and are now up 2. 5 . Other retailers reporting quarterly numbers too. Abercrombie fitch reporting a smaller than expected loss look at the share response its up nearly 20 , still trading about 11. 50. Dollar tree also Beat Estimates<\/a> on the top and bottom lines and saw bigger than expected increase in samestore sales. Dollar tree, which has been such a juggernaut, is up 9 this morning. And the white house downplaying reports of a growing rift between President Trump<\/a> and Senate Majority<\/a> leader Mitch Mcconnell<\/a>. This comes after the New York Times<\/a> reported that the two were locked in a, quote, political cold war on issues like tax reform and constructing the proposed border wall in a statement the Senate Majority<\/a> leader says, quote, we have a lot of work ahead of us and we are committed to advancing our shared agenda together and anyone who suggests otherwise is clear low not part of the conversation. By the way, we should mention a big interview coming up on cnbc today. House Speaker Paul Ryan<\/a> will sit down exclusively with cnbc to talk taxes, trade and President Trump<\/a>. Be sure to catch that at 1 00 p. M. Eastern time. There are some interesting dynamics going on in terms of i dont know what mcconnells kentucky approval rate is now. I saw jeff flake i mean its weird. I dont know what 2018 is going to bring. Just to put it quite simply, im not sure what side you should pick. I know, i dont know. Do you stay close to the president , you know, looking for his supporters or go completely the opposite way. At this point the evidence is that you might there still might be a trump umbrella for republicans. This could be a wave election, not just a loss for the gop, but a if you think about how far we were on the other side of the pendulum they have just the races that are up in 2018 dont really arent really going the democrats way and neither is the fundraising right now theyre broke. The fda they havent raised nearly as much. The fda is on a mission to stomp out smoking. The new commissioner setting a plan for tobacco and nicotine regulation to reduce tobaccorelated deaths dr. Scott gottlieb joins us. The state of the industry now, scott, im talking about tobacco, its like 8 a pack i see very few people smoking unless im in europe right now who still smokes, and how much is it i thought weve conquered this mostly in the United States<\/a>. Is that not the case right now smoking rates continue to decline but they have plateaued. Theyre declining very slowly. It still kills about 408,000 every year and you point it its got to be the only product on the planet where half the people that use it, it will kill them. It will kill half of all longterm users. Weve set out a plan to try to reduce nicotine levels to nonaddictive or minimally addictive levels to transition people off of combustible cigarettes weve opened up a pathway to new Product Innovations<\/a> that we think can provide nicotine to people who want to enjoy satisfying levels of nicotine without all the risks of lighting tobacco on fire. So the vape may not be as or its not as bad as a cigarette. We need to put it through an appropriate series of regulatory gates. There are other innovations coming onto the market heat, not burn other things also medicinal Nicotine Products<\/a> that provide nicotine replacement like gums or patches where there could be Product Innovation<\/a> around those as well to deliver the nicotine in better ways that are more satisfying to addicted smokers. Is nicotine a satisfying drug it seems like you sort of you dont need it until you use it for the first time and then you need it. That seems like a crazy thing to induce a need for something that serves no purpose in the first place, does it does it feel good . I dont use it. Its driving the addiction to combustible cigarettes, we know that. But if you dont if you never try nicotine, you dont miss it, do you . Look, its addictive like other drugs we see that are addictive. So it must feel good. Its not a completely benign compound we know it has impacts on youth but its not the nicotine that kills you, its all the other carcinogens in lighting tobacco on fire. There is a raging debate before whether the ecigarettes, the vapes, is like a gateway, if you will, to these other form factors. Well, i think like cigarettes. Look, we see a lot of youth use ecigarettes some of those will transition onto combustible cigarettes. I think thats a foregone conclusion i dont know how many, there is a risk there i think we have to take all the steps we can and were doing that to try to cut down on youth use of those products. At the same time we allow them to go through a regulatory process. Are we seeing more people using combustible products move to ecigarettes than we are either kids picking the habit up on ecigarettes and then moving to combustibles. That data is unclear. Thats why we need the regulatory process to figure this out at the time that we are looking to render combustible cigarettes minimally addictive, we do need to think about how we provide an alternative to smokers who still want satisfying levels of nicotine but arent able to get it through combusting tobacco or lighting cigarettes on fire. Thats what kills people its the carcinogens in the cigarettes themselves. And you think that ecigarettes are relatively safe i think they need to go through an appropriate regulatory process, which is what were doing part of this announcement was setting up that regulatory process. But i think they have the potential to be a safer alternative to combusting tobacco. Scott, profit incentive can be great but it can also cause Drug Companies<\/a> to do things that arent so great. Lets switch to generics, so to speak. Can they slow down is there a way that theyre gaming the system to make generics come to markets slower theres no question they are. What theyre doing is deploying commercial tactics to prevent Generic Companies<\/a> from actually being able to get the doses they need, the physical pills to run the studies to come in for fda approval so they have to run bioequivalent studies to get approval for a generic drug. That takes between we seed Branded Companies<\/a> being able to block them generics are being able to pay full price but are having trouble getting access to the drugs. So they slow walk that process. But the bioequivalency test, thats the fda that requires that it requires the test to prove sameness. Does that need modifying, the way thats written and done right now . It is being modified. Were looking at ways to make that process less burdensome, less costly. Weve seen the cost of doing bioequivalent studies. Thats why the cost of distinguigoods is going up because the process has gotten more expensive. Generics, its a global industry, right . It would be nice if it was all here is it safe from other countries . Generic drugs are just as safe as their branded counterparts the fda is inspecting their facilities even if manufactured abroad a lot of manufacturing is abroad action even for branded drugs. A lot has been moved to ireland and been offshored. Weve had lots of conversations about ep ipens an mylan before where weve talked about the issue of generics and the price skyrocketing for certain things on epipen, what do you think will happen to the pricing of that i dont want to be product specific, as you know. But there are certain issues associated with drug device combinations where Companies Develop<\/a> intellectual Properties Around<\/a> the device itself that makes it hard to copy. I think there are steps to take from a policy standpoint to make it easier to enter generic copies of drug device combinations theres obstacles of companies patent features that correlate with instructions for use that becomes hard to copy the instructions for use on the generic have to be the same as the branded. We could reinterpret our rules in that regard an perhaps provide more of an avenue for generic competition. Just a quick question now that a lot of states are going after these opioid makers, do you think their basis for comparison is legitimate because opioids i guess its not necessarily like a cigarette, where kind of by definition as we said it kills users. But if its misadvertised, if its misused, then that opens up people up to an extremely deadly result. So how concerned is the fda about its role in all of this process and what more should be done look, i havent looked at all the suits. Theyre making claims based on the broad marketing of how these products were marketed historically i havent looked at the details of the claims that these states are making i have a lot of confidence in the current regulatory scheme we have in place to make sure there arent inappropriate claims being made around these products its very carefully looked at inside the agency. We are concerned about how the products are marketed now and i think we have in place good measures. Scott, carl june interviewed in the wall street journal, a university of pennsylvania researcher still sort of grousing to some extent about how quickly you can test new medicine on people that have a humanitarian you know, people that arent going to be around no matter what so that you maybe arent quite as concerned with side effects. Then i read some of the side effects of some of the new technology i mean its a very tough path to choose between killing someone with an experimental drug versus saying weve got nothing to lose. Youve seen some recent legislation. I think the breakthrough therapys pathway has opened up the ability of the fda to take a more accommodative stance. When you look at gene therapy, we have the potential to really transform the face of clinical medicine with some of these applications, but there are side effects associated with them if youre transplanting cells, sometimes you have to immun immunosuppress the patient some of them could have potential to treat the patient in very vexing disorders. I remember there was some gene therapy early on that set the whole field back. Thats right. Out of the university of pennsylvania early on we didnt have the right vectors for delivering the gene thats where weve had the Product Innovation<\/a>. Hiv, right . Weve used attenuated viruses. Now we have investigators that deliver the gene effectively so were seeing some innovation thats really encouraging. I wanted to ask you what your thoughts were about ken fraziers decision, runs merck, to lead the effort by so many of the ceos to abandon the president and the president s councils and if theres any implication if you think for either of those companies or the Administration Im<\/a> not going to comment on ken fraziers decision thats his decision. Theres no implications for any company that does something in its private capacity in terms of how the fda would approach that. I would never allow something that happens in a setting outside of the fda to impact how we think about our process were an independent regulatory agency. And the Administration People<\/a> think or say to themselves, you know, could there be some type of retribution to a company that the president doesnt like or the fact that the government is a huge buyer of drugs. None of that you think will have any nobody has picked up the phone and called me and i dont think anyone would. Okay, fair enough all right im going to if this is we can open it up for all questions. Did you buy a Lottery Ticket<\/a> didnt they announce a winner no. Then youre not a loser and neither am i. 1 in 292 million. Those arent very good odds getting killed by a vending machine is 1 out of 100. But i didnt get to dream i didnt now im dreaming of the dream. The lotto is a nightmare. Its meta scott, im going to read this right now. You were asking, there was one lucky winner here it is follow along someone in massachusetts roughly 759 million richer today after hitting the powerball. The Winning Ticket<\/a> was sold at the pride station in chickapee, massachusetts, not in watertown. See, in the fog of war, you dont know you dont always have the right info so it was in chickapee it had been previously reported it was in watertown. Its not clear who bought the lucky ticket, but they are the biggest single Lottery Winner<\/a> in u. S. History you wouldnt have even cashed yours in, andrew when three people won that billion and a half, youd keep it, right . Because you dont share. Thats what you said yesterday. I was hoping if i have going to play id win the whole thing. You dont share i mean three people, youve got to split a billion and a half. This is better to win the whole 750. Yes and you take the money up front. Take the money up front just like cramer said. Put it in nvidia. I dont know about that. Dont play the lotlottery. No, play the lottery. Loser still ahead, well talk about the infrastructure thank you, scott, for being here. The u. S. Drinking water getting a d in a recent report a ceo trying to change all that is going to be with us right after the break. Plus the road to tax reform. Subcommittee cirn tehamaper roskam will join us at 8 30 eastern time well be right back. For your heart. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement<\/a> in drug stores nationwide. Prevagen. The name to remember. This is some sugar for those of us who have been following this conversation about sugar. Thats beautiful. Did the fda commissioner leave that behind . I was going to have a conversation with him about sugar. We did before we started. But not on the air. He said anything in moderation he told you. Anything in moderate, but not added sugar is not good for you. Of course its not. But what did he say . He said try drinking cranberry juice without added sugar. If you add sugar, its not good for you. But you choose. Its good for your bladder. That is true. A spoonful of sugar makes the medicine go down. Yes, in the most delightful way. But too much sugar is not good for you. Well, we know that. I just want to be clear what about sugar replacements give that to joseph. Oh, its cushioned. It could be a pillow. Thats your new mypillow. Were switching topics. The American Society<\/a> of Civil Engineers<\/a> giving the nations Drinking Water<\/a> a d grade on its 2017 infrastructure report card. Companies like aqua america are working to get that grade up joining us right now is the companys ceo, Christopher Franklin<\/a> it is one of the largest water publicly traded companies. I had no idea that we were getting a d grade. Whats going on . An important distinction. Its not really on water quality, its on the infrastructu infrastructure the infrastructure in this country is decaying. Were very fortunate in this country that we can travel almost anywhere and drink the water, which as we know around the world is not universal. What is the cost to get our infrastructure where we would have an a . Oh, boy the epa estimates between 600 billion and a trillion dollars to get our water and Wastewater Infrastructure<\/a> up to standard in the next 20 years. A lot of money. How much are you spending were spending a billion five every three years, so were making a significant investment. To give you a sense of this, in the early 1990s when i got to the company, if we when we look at our replacement cycle of pipe, if i took the amount of pipe that we were replacing over the total pipe we have, it would have been a 900year replacement cycle. Over that 20 years or so, weve improved it so much that were now on a 90year so we went from 900 years to 90 years over 20 years. How frequently should pipe be replaced really it lasts about 80 to 100 years. Thats about the cycle of pipe. How much of the issue is the pipes, how much is the filters, connections, all of that i would say that if youre a mayor in this country, youve got a lot of priorities on your plate, right this industry is still largely municipal. 85 municipal, 15 regulated like my company. And so those mayors have a lot of priorities in front of them health an human services, police, fire, and replacing a piece of pipe doesnt typically come to the top of the order. Right. And so its really that work. Its the pipe, not the filtration. Real quick, if we get an infrastructure plan, what would you recommend in terms of how water is part of it . I would say this would be my pitch to members of congress. Dont send us money. Let private capital come to work here let private capital come to work and let it stay in the places where its being generated in those particular utilities generate it there through rates and take it forward and make the adjustment. Is there a shift in regulations that has to happen to make that work . No, policy generally has been regionalization of water systems. 85 municipal, 50,000 Water Utilities<\/a> in the country. Christopher, thank you for coming in this morning. Thank you. Thank you for suffering through our sugar conversation. I enjoyed it. We have a trump tweet. The president just tweeting, quote, i requested that mitch m. And paul r. Tie the debt ceiling legislation into the popular va bill which just passed for easy approval he tweeted that four minutes ago. Theres your point, joe, about that you know, the idea that they would just do a clean debt ceiling is something steve bannon was upset about paul ryan will be in for an exclusive interview at 1 00 p. M. Squawk box will be right back. Olay eyes new deep hydrating eye gel with hyaluronic acid born to outperform the 1. Prestige eye cream for better hydration. And your best look yet. Olay eyes collection. Ageless. What happens to the odds of tax reform the story of the year so far has been distraction after distraction from policy. With profits dprogrowing the theyre examined to, this market is fully supported. If it only benefits 20 of taxpayers, why is it so sacrosanct it goes back to the american dream. Member that. It stands for the government is behind the homeowner coming up, House Speaker<\/a> paul ryan continuing his tax reform tour today. We will take you there live. Squawk returns in a moment welcome back to squawk box. Rick santelli live on the cme floor. Breaking news. Initial jobless claims, 234,000. Thats from an unrevised 232 so were up 2k 1. 954 million on continuing claims, which is a bit lower than 1. 95 actually with the revision, its pretty much unchanged. We still have existing home sales to come. Were 2. 19 on tens you know where we were last friday 2. 19 you know where we were the friday before that yep, you got it, 2. 19. Here we are at the bottom of the range and cant seem to break through. Equities, yeah, they have corrections. Were up 300 points from the highs in the dow seems like the music keeps going on kelly, back to you. Rick, thank you very much. We now have the second part of President Trump<\/a>s tweet which clarifies what he was saying in the first. Here it is in full he said i requested that mitch m. And paul r. Tie the debt ceiling legislation into the popular va bill which just passed for easy approval they, dot dot dot, and heres what he followed up with they didnt do it so now we have a big deal with the dems holding them up as usual on debt ceiling approval could have been so easy. Now a mess are you guys following this . I have been following it. But does this make sense . What is his point with these tweets that now hes blaming the house leadership for not having they should have done it then. Which they should have done, raised the debt ceiling with the va bill hes saying . Yeah, tied it to the va bill. But they wanted to do a clean raise. They didnt promise mcconnell a nonpoliticized version. So now hes saying if it doesnt get raised, hes shifting the blame to democrats but lamenting they didnt do what he wanted. Sounds that way. Paul ryan on is tax reform tour today hes going to visit a boeing plant in everett, washington reporter andrew, paul ryan wants to talk about taxes, but as you saw in those tweets, President Trump<\/a> keeps talking shutdown and this is going to be a challenge for paul ryan and for the gop leadership as they try to build energy and momentum around what they have said is one of their signature issues. Now, paul ryan will be talking to employees today here at boeing hell also be joined by boeings ceo and the idea behind this tax reform road show had try to get businesses onboard with this idea of potentially giving up some of their special tax breaks and deductions in exchange for a lower Corporate Tax<\/a> rate for everyone youll remember that boeing was one of the companies that had advocated for paul ryans border adjustment tax, but now that thats dead, its an open question how exactly they are going to pay for big tax cuts. Now, i will be speaking with paul ryan later on today ill be asking him about those tweets from the president as well as whether he thinks amid all of the drama going on in washington, tax reform can still get done later on this year. He was earlier this week over in oregon speaking at intel, meeting with employees there he also at that time talked about the shutdown, saying that the government will likely have to look at some sort of shortterm funding measure in order to put that debate aside to get to more pressing matters like tax reform in their minds but thats the big vision statement for republicans. Thats their feel good message right now. But if they cant do the debt ceiling and they cant do the government funding bill, then they wont be able to show that they can do the basics of governing, guys. Back over to you. All right, thank you. Joining us now with more on this, house ways and means tax policy subcommittee chairman peter roskam mr. Chairman, its good to see you this morning we just had a couple of interesting tweets i dont know whether you saw or actually heard from the president that maybe ryan and mcconnell should have attached the debt ceiling to the va bill and it was a missed opportunity. Did you were you privy to that or do you have a comment on that look, i just heard it just heard the tweet as you guys were reporting it look, theres going to be a lot of continuous drama around a couple of issues i think what the speaker is trying to do is to clear a pathway. There will be drama around the Government Shutdown<\/a> as there always is. There will be drama around the nature of the debt ceiling debate as there always is. But i think what the speaker is trying to do now is to basically clear a pathway and to recognize, look, the Republican Party<\/a>, majority in the senate right now, has really struggled on health care and the notion of going back and not delivering on tax reform is completely unacceptable. So toward that end, i think the speaker is using his office to clear a pathway and to frame the debate to say we will deal with these other things, but weve got a once in a Generation Opportunity<\/a> to have fundamental tax reform, an lets drive as hard as we possibly can to get that done. This could be a transformational poe moment for our country this hasnt been done in 30 years and we have the capacity to do it. We are, as you mentioned, as a transformational moment. You probably wonder why a lot of the public is cynical because at this point they ask whether republicans will stand by the president. I mean obviously the democrats are not going to want to do anything at this point i dont even know about i guess theyll want to raise the debt ceiling, but theyre going to make it as difficult as possible, which is its kind of a cynical view of thing, because we all wanting the same thing for this country, but its all now a won and loss were keeping score on republicans versus democrats i dont know whether anything really gets done with 51 votes maybe. Is that what were going to do its going to be a temporary tax reform no. I hope its not a temporary approach i think we will be far better off if its permanent. You can do permanent with 51 votes. Youve got to pay for it and its got to be you cant do any violence to the debt nor the deficit. You can do it with 51 votes. How do you do that mathematically yeah, 15 maybe 28 or something. Well, you may not get to 15 what we proposed in the blueprint was a 20 corporate rate, getting the seven individual rates down to three, as you know. But youve got to dial these things up and dial these things back as you reported earlier, if border adjustment has been jettisoned, as it has, there goes 10 points on the corporate rate were really interested on the ways and means committee, were really interested in what pro tax reform proponents but critics of border adjustment are offering to mitigate that loss. What are they offering . Well, so far they havent offered anything now, moving forward i just want to speak to this notion of cynicism, though theres no percentage in investing in that in terms of a disposition. And my point is this we as a country theres nobody thats defending the status quo of the tax code its really interesting. People are defending the Affordable Care<\/a> act, people dont like the Affordable Care<\/a> act. Nobody likes the Internal Revenue<\/a> code and frankly nobody likes the irs either youve got this once in a generation Inflection Point<\/a>. And we can rub our hands and, you know, just kind of nickel and dime this thing to death or we can say lets go for it and lets do something thats transformational can you imagine the palpable sense of relief in this country if congress was able to put once in a generation tax reform on the president s desk it would be phenomenal and its really worth pursuing aggressively this fall. Chairman, there is no question that you are right about the way the country feels about taxes in general the question is, whether theres a once in a generation chance to really change the tax structure of this country, but whether at the same time there will be a once in a generation tax to add enormous debt on top of this thing. So the question is effectively how does the math really work . Even if you believe in dynamic scoring, you know, theres not make believe scoring either so you have to figure out what that rate is that actually is meaningful and if you dont have that, for example, if you dont have some of these other things, how do you do it and is it regressive on the individual side is it a giveaway to the wealthy . There are real issues here beyond the sort of larger issue, which is people want to fix it. Yeah, thats right. Look, im not here pumping sunshine theres two fault lines in each Political Party<\/a> that have to be dealt with the fault line in my party on the conservative side of things as a republican is do we want permanent or do we want temporary . Permanent is paid for, permanent is harder, but permanent is better and there are some voices in my party that say, hey, cut the taxes, who cares, dont worry about it i dont think thats the best pathway, i think we should pay for it on the democratic side, they have a different fault line. Not every democrat believes this, but there are voices within the Democratic Party<\/a> that are basically describing the economy as a zero sum game that is its a fixed pie if somebody does better, somebody else is doing worse we reject that i dont buy that i dont think that thats the way the economy works. And so both Political Parties<\/a> really have some sorting out to do theres an urgency to this look, i take your point that if border adjustment is off the table, then that means other things are on the table. But this is a matter of negotiating and trying to come up with some level of balance as were trying to come up with the following things, growth, simplicity, figuring out how to deal with base erosion once and for all, and i would argue the fourth point is make this thing permanent. Lets not have temporary tax policy that episodically will lurch back and forth companies in particular, companies that are doing business on a global basis need a level of predictability and theres nothing more predictable than permanent okay. Im just thinking about all the i think, you know, the latest New York Times<\/a> piece on the relationship with mcconnell. I see, you know, corker got the ball rolling asking about whether the president is stable, so now they can say both republicans and democrats are asking whether his Mental Health<\/a> is a question. The whole thing, mr. Chairman, just i just wonder if all these extraneous things can be put aside and something can actually happen with republicans, much less whether democrats would vote for tax reform i cant see it happening look, the question isnt whether they can be put aside. Its an assertion that they have to be put aside. Theres an urgency to this they have to be put aside. They can bow wie with a level o discipline i bet you dont get a single democratic vote for tax reform unless i dont know. What could you offer them maybe single payer do single payer and tax reform. Yeah, were not crossing that bridge i dont know. All right. Feeling a little less cynical. Mr. Chairman, thank you. Thanks, guys. Well see what paul ryan says today. That should be interesting he should watch, i think its at 1 00 all right, congressman. Oh, coming up, the annual burning man retreat in jackson hole no, its actually not. Its comiccon of the fed in jackson hole Steve Liesman<\/a> is there in all his glory. We will check in with him next glory was one of the jumble words today. You solved that thing. Plasy. Did it eil us more from steves interview with Esther George<\/a> squawk box will be right back. Welcome back to squawk box. The Energy Industry<\/a> is closely watching Tropical Storm<\/a> harvey today. I had no idea how much rain might fall on houston. Its headed towards the gulf coast. It could become a category 1 hurricane by tomorrow. It has the potential to become the first hurricane to hit landfall in texas in nine years and they could face as much as two feet of rain half of the capacity is in the gulf coast nearly a third of capacity appears to be in its path. Not much reaction to Energy Prices<\/a> so far. What kind of preparations could houston make for that if its like what are the odds that its going to be that bad and how is a city like that handling that amount of rain theres flooding, no doubt. That is a lot. By the way, crude pairly lower by 0. 4 of 1 . Get back out to liesman, who i think played a gig in aspen or something. Central bankers gathering at the fed symposium in jackson hole. Steve liesman is there and he spoke to a very special guest. Have i got that right . Were you showcasing your talents in colorado . Reporter yeah. I was in another conference in aspen earlier this week, joe ive got a band that i play with there every year i go out to that conference and i played a gig with them monday night. In aspen. People were tweeting it out, sending it to me, saying that you were not awful. Reporter did they send it to you . They did. Reporter you know, thats probably a good way to describe it, we were not awful. Joe, as you might imagine, after some drinks, we sounded better and better. Yeah, you thought you were great. Reporter at least to the people who were drinking joe, the proceedings of this jackson hole retreat this year began officially this evening, but yesterday i got to sit down, as you said, with Esther George<\/a>, the Kansas City Fed<\/a> president. Shes the host this year and the topic is Global Growth<\/a> but i did get to ask her some detailed questions about her views on the Balance Sheet<\/a> and when, by the way, that Balance Sheet<\/a> reduction might actually begin. Well, you saw the minutes of the last meeting markets are expecting any time now, looking at september and out. That is always a function of what issues are going on when we meet to make that decision but i think the setup is there describing how that would happen and the approach that the committee would take, so now its just a matter of the committee agreeing that the forecast would be supportive of that. You talked about putting the Balance Sheet<\/a> reduction on auto pilot. Can you explain what that means . So for me auto pilot means you communicated clearly the approach, and that approach is to be gradual in the approach that we take to lowering that Balance Sheet<\/a>. Once you explain that, then i think it makes sense to say that isnt going to be a meetingbymeeting decision, that you will lay out the path and go with it the Unemployment Rate<\/a> has come down, but wages have not really gone up especially strongly does that tell you theres more slack in the labor market and maybe the fed should be more gradual to see how many people we can bring back to the workforce . I think thats a risk if you wait too long. So wage pressure relative to growth in the economy and relative to inflation i think looks okay do i wish it was higher . Yes. I wish every worker had higher wages. But relative to a 2 growth economy, wages are staying ahead of inflation and i think that helps the purchasing power for consumers, which is important to our growth. What about your expectation now for fiscal stimulus . I still today i would not incorporate it into my outlook again, hopeful that some of those steps could betaken. Id love to see new roads and bridges, but for now im waiting and seeing. But more so than roads and bridges, what you expressed last year was interesting, that you wanted to see the fiscal side take up more of the responsibility for the economy than the monetary side, take pressure off Monetary Policy<\/a> so you have to feel a little disappointed looking at whats not going on in washington these days. It could be the prospect of getting higher growth in the economy would be wonderful. But in the meantime, the Federal Reserve<\/a> with its tool of Monetary Policy<\/a> i think understands where the economy is allows us to begin to take the steps that weve been taking. It looks like theres new leadership perhaps coming to the Federal Reserve<\/a>. Youve been in the Federal Reserve<\/a> system for a long time how do you process the possibility the president perhaps appoints a new fed chair, new fed governors how does the system process that how do you process it . Well, theyre all important positions, as you know we know markets watch for it it matters to our institution. These are important jobs they affect policy, not just Monetary Policy<\/a>, but supervision and regulation policy, our role in the payment system. So you want people that understand that full mission and are prepared to roll up their sleeves and come to work reporter thats a big issue here on the unofficial agenda for jackson hole this issue of new leadership janet yellen speaks friday could it be her last speech at jackson hole or could the president reappoint her. Well ask those questions and others to the dallas fed president coming up at and then i can announce that later tomorrow afternoon well have the fed governor. A lot of fed speak on the official side and here on the cnbc set here at jackson hole bachblth back to you guys. Youre a one man show out there steve. You know its an awful lot of fun and used to be more fun. I dont get fishing time anymore. Well see you later thank you. When we return well find out what jim cramer is fired up about this morning and how he would spend his lotto proceeds he joins us when we come back. Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. I love you, droolius caesar, but sometimes you stink. Febreze car vent clip cleans away odors for up to 30 days. Because the things you love can stink. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Not a dreamer. You did. But you lost. I did some people as we know in that great indianapolis speech talked about that right do you remember that were you there for that speech we won the lottery already though jim havent we in life absolutely. Were the luckiest people on earth. But i tweeted out a chart if you bought it a couple of years ago with 790 million youd be worth 6 billion or something. I dont think thats wrong. Its my favorite stock. Thats why i said it. Thats why there was no smirk. You dont change the name of your dog unless you think its for real and initially you had to have a bone in your hand. Now it is like a bell. Maybe we should are you following it at all. Is andrew following . I am and you have been right on the money the whole time. What can i say when you open up the devices that know anything about your life, its nvidia and they know more about your life than you do. L they know what youre going to buy tomorrow. Will you give it to me from three years ago. You dont do that do you i still like sales force. I think salesforce had a remarkably good quarter. 10 billion in sales. 15 billion in preferred revenue. I liked that one too. Beautiful. Jim we will see you in a couple of minutes. And obviously you would buy a sports franchise with the money thats left. Thats the next thing. Andrew is a sports fan. All of those things. Hes right. Are you . Well im interested in it im fascinated. Does not like sugar. I like to inject ingest sugar. Aitst power on the Advisory Board<\/a> well tell you who the start up recruit is thats next. Last year airbnb was in hot water after users spoke out about discrimination using the platform we can take a quick look at where things are going to set themselves up. Dow higher nasdaq up 15 points higher s p 500 up about 5 points higher. Thank you. Thank you for having me. When are you on next week if youll have me back. Well try to carry on. Well try to carry on. It will be tough. Make sure you join us tomorrow squawk on the street begins right now. Welcome to squawk on the street looking for some mild gains at the open jackson hole begins. A relief rally of retail the president s twee","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600406.us.archive.org\/35\/items\/CNBC_20170824_100000_Squawk_Box\/CNBC_20170824_100000_Squawk_Box.thumbs\/CNBC_20170824_100000_Squawk_Box_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240628T12:35:10+00:00"}