Largest cash bid on record. We have both ceos joining us live in just a few moments. Our road map, return of volatility. What investors like carl icahn said how to navigate this market at yesterdays delivering alpha. Wells fargos ceo telling jim cramer he will not resign over abuse of account activations. Apples new operating system out and update getting mixed reviews. Also, tim cook out defending the new iphone 7. The stock saw a nice boost yesterday despite some big losses in most of the market. What will today bring . But first up, futures moving higher after three straight sessions of triple digit swings amid some falling oil prices, concerns about a potential fed rate hike despite tuesdays selloff apple was in fact the bright spot up 2. 4 for the best day since july. But then late yesterday at delivering alpha carl icahn offered that blunt assessment of this market environment. I think there are tremendous risks. But i think anyone thats going to tell you its going to go down tomorrow, next week, even next month or next year, its sort of guessing game. But you can look at the environment, and i think its very dangerous. In other words, youre walking on a ledge and you might make it to the end, but, hey, you fall off that ledge youre going to really see trouble. And i think that could well be. That theme, guys, whether it was carl or singer or any others, fairly consistent message from people who manage a lot of money. Yeah. The script was to say dangerous. I dont like that. Because its wrong . Its been dangerous now for four years. I like the conference a lot. A lot of macro guys making big decisions, have nothing to do with what we do for a living. Bill miller, stock picker, okay, maybe thats out of favor. When you take these markets, you say the dangerous, what does it mean . Boston scientific last night, you listen to these guys. All these Central Banks they pump up all the stocks. How about if you have innovation . How about if you do the right thing . How about if you make a deal . How about if you change your coloration . Danger, danger, danger. Go listen to bill miller, 9 long bond versus 6 short rate. Weve got a short rate thats very low. A 10year oh, my god, im shaking the 10year is at a price if i could have got that mortgage like the g. I. Bill when my father got back from world war ii. So when i hear the word danger, i think one thing, these guys must run so much money that they cant possibly own a Boston Scientific because its only like 28 billion and theyd have to own the whole company. It is dangerous to run that much money because you are then not able to be able to maneuver among stocks and have to focus on bonds. And are bonds dangerous . When they get into a negative yield, yes. And theyre saying i cant help you because i run billions, and billions, maybe i should give some back if its so dangerous. Well, it can be an opportunity for marketing purposes. And theyve been very successful at raising assets. I would draw a clear distinction between some of the people we mentioned earlier who raise a great deal of money and have succeeded in doing that and putting up okay numbers. Right. Sometimes good numbers this this tough environment, but maybe benefit from that idea that were going to protect you because we see the end of the world coming, or not really that. No, not the end of the world. But, mr. Icahn stephen king. To give him his due. Hes not marketing to anybody, carl icahn, thats all his money. Youre right. When he comes to stock picking, hes also a great stock picker. Thats what i like him for. Hes been talking that way for a while now too. But at least i can push out the, well, hes not marketing or anything else. Hes telling you from his gut how he feels. No, thats not fair to carl. Carl say dangerous but say dangerous to like netflix. Im just regarding danger as being overall theme of fright, of scare, of Central Bank Intervention that frightens all these guys. And i come back and i am a jack bogle say when you run that much money, hay, youre just the market. Well, theres a difference between saying that theyre just plain wrong, that their macro view is wrong, and saying there will be opportunities even if theyre right. A lot of markets they have to play in are dangerous. I mean, i would not own a german bond. Theyre dangerous. But what they play in, and i use the word play, is what bill miller says. He said, listen, these guys are in markets, and theyre playing markets, and if they looked at individual opportunities, and let me give you an example of the most plain vanilla in your face opportunity, i would tell you the same thing this morning, amazon. You can say hes simplifying things. Im saying the markets they are in are not necessarily indicative of what we talk about. Okay. But what about this market right now coming off a particularly a bad day . I think accentuated the decline. Youre right. May have exacerbated some fears. I feel its always interesting to listen to that point of view. And ive been hearing it for many years. I used to attend this conference down at my friend kyle bass ranch, a lot of the same things. The basic idea you cant keep adding debt to solve a debt crisis. And one day im sure it will end badly, but of course were in the here and now, and investor want returns. Yes. Its been ending badly since i got in with dow 100 jim, it doesnt mean it wont. I got to be alive long enough yes, there was a 30year bull market in bonds. I am just saying that in the long run as we know from the great advisor are dead. I think when we look at this market we are faced with a situation that is not as dangerous as many other markets that i have seen. Sure. And thats what i am faulting these guys on. I mean, 87 was really dangerous. That was a very dangerous market. In retrospect we can always say that. The Systemic Risk is not as great now. Theres like price risk. But im just trying to put the danger in perspective. When the dow can go from 12,000 to 6,600, dangerous. I mean, like when youre worried about my paycheck, am i going to deposit my paycheck, maybe i should take my money out of j. P. Morgan and put it in treasuries. Thats a moment. I did that. It was dangerous. Short term youve been saying build cash, sell into rallies. Yes, raise some cash. Are you now saying sell into anything . Sno, no, what im saying is dont like this particular market. It could be a down 7 market. Ive been overlaying december over and over again on mad money. But i think the word dangerous is like the word crash, okay . Dangerous is sell everything. I went on the today show once and said sell everything you need if you need it for the next five years, the dow was about 10,800 and it went down to 6,600, and that call i regretted, even though i was right i regretted that call because it was so visceral. But then i listened to yesterday and its like, wow, its dangerous, its dangerous, its dangerous. It is. Though we should point out those guys say thag are still actively engaged in these markets and in and out every single day. They werent necessarily talking about the equity markets. Well, thats theyre too big. They run too much money. I mean, its like the only guy who has a solution is musk. The biggest short position. I know. Biggest short position real estate. Musk is dangerous. Lets get to wells fargo this morning and the fallout over those alleged abuse of sale practices. Last night on mad money john stumpf, ceo apologized, he held himself accountable, expressed regret about any situation where a customer received a product he or she did not request. Stumpf also told jim he intends to stay on as ceo. Take a listen. Some people say you have to resign. Well, jim, i think the best thing i can do right now is lead this company. And lead this company forward. In fact, today we made actually an announcement about Product Sales goals. We never intended for Product Sales or any dynamic or any part of a Management System to be misinterpreted. No plans to exit. The journal today says they dont get it that theres no guarantee it cant happen again. Boy, i tell you, i disagree with that. I didnt like the journalists headline which said he blamed all his guys. Thats certainly not what i heard. First of all, lets start at the very beginning. He came on. He came on mad money and spoke for longer than probably give him in front of the senate, thats a little facetious, but you know what i mean. So you dont come on you know, i think its i think it shows standup that he came on and didnt dodge. I also think there were the key points in that interview versus what i heard or read is that he said the board several times, the board. So now you look at fredric fredrico pena, former department of energy head, but look at James Quigley and ceo of deloitte on the audit committee. You say if its the board its those gentlemen that will have to speak up before the september 20th hearing. You wont get a press release from them. But the board is making up decisions right now and thats different from Everything Else i read in the paper. What about the stock . 47 down from 50 not a few days back. Heading into what given the performance of our equity markets is going to be a higher rate cycle whether its next week or december. Thats a good thing. Second biggest money after bank of america. As opposed to all of the concerns that have been raised as a result of this scandal . Thats why my chapel trust owns it but also because of the cross sell. Because the cross sells been so magnificent. Now, we didnt, if you like the cross sell and you listen to the change in policy, perhaps you would be like piper jaffry yesterday saying this Retail Market could stagnate. I asked Warren Buffett, he is very important to this story, if Warren Buffett ever were to sell this stock would not be at 47. It has more than a 3 yield. Still high quality bank. I do not believe its reputation is so in tatters from this that it will stop opening accounts. That said, i think this was one of those things where the company, i believe, initially misunderstood how powerfully negative this story is. I think they looked at the amount of money that the feds, that bank of america, j. P. Morgan, citi paid to the feds and they said this is not that much and that was never the story. I think they misjudged the power of the numbers, the large scale numbers, new yorker wrote an article saying 2 million admitted fraud, which is not true by the way. It was not 2 million admitted fraud. It was 2 million identified but they couldnt be sure. But it doesnt matter. The fact is that juggernaut against wells fargo is going to plague a cloud over that stock not unlike the whale even though its not really i think as bad as the whale, the whale is j. P. Morgan, there will come a moment when john stumpf will buy stock and the world will decide and a clawback let me just say last thing the clawback, the person directly in charge, her conversation has to be clawback, period, end of story, must be clawback if people are going to stay in their positions. Adds another story for next week, thats for sure. When we come back, ceos of bayer and monsanto on their 66 billion deal. A first on cnbc interview. Take another look at the premarket. More squawk on the street from post nine in a minute. S been crl being back so were constantly going over our data limit. Oh, well, now all of our new plans come with no data overages. Wow, no more overages . So that means. Go on. Say it. Well finally be in control. And were back. Introducing new at t plans with no data overage charges. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. Monsanto agreeing to be acquired by Germanys Bayer this morning for 128 a share in an allcash transaction. The deal values monsanto with 66 billion. That does include the companys debt. Werner baumann is the ceo of bayer and hugh grant is the ceo of monsanto. Mr. Baumann, let me begin with you. Of course the marketplace has known about the possibility of this deal for some time. And thats given your investors an opportunity to make their opinions known. Many have been supportive of the deal, particularly as youve sort of talked to your investor base, but there are those who say this is empire building, this is taking the company in a completely different direction. Why is monsanto the right transaction given its size for bayer to be doing and doing now . Well, thank you for the question. And the most important thing and that is what weve really been looking at is what it takes in order to serve our customers and to grow us better in the future. And the great combination of monsanto and us is doing exactly that where we can bring Better Solutions, faster to the growers so they can help contribute to feeding an ever growing world. Thats what this is all about. And you believe that is going to bring stronger growth obviously then would the previous strategy of your predecessor . Well, this is going to enable both companies to combine their innovation efforts early on in order to develop better integrated solutions for the pharmas rather than doing things conventionally. And thats where the power of this combination lies including the significant competencies we have in both organizations. And that is exactly what is going to be needed in the market Going Forward. And this is going to be a thing that is going to become more urgent as we move along into the next phase of farming. All right. Were looking at the stock prices of the two companies and yours is doing well this morning. Perhaps because you paid 128. Mr. Grant, there are those who believed you would be able to get more for monsanto, more than what i think is about 18. 5 times current year ebitda, about 16 times 2017 estimates. Why take 128 in cash . Why was that the right price . And why was that the right consideration . Why not also have gone for some stock, perhaps, to give your current shareholders an opportunity to benefit from some of the things that mr. Baumann just identified . Thanks for the question and the invitation today. So were really pleased with the deal. It took a long time. The board thoroughly evaluated the whole range of options. And this was the strongest option. Its an allcash deal. Its a 44 premium. Its 18. 5 multiple. So as we looked at the opportunity, its very strong for our shareholders. And as we look at the future to werners point, we think the combination of taking the monsanto stable biotechnology seeds and data science and combining that with chemistry we unlock future innovation growers desperately need at the moment. So its a great deal for today. And i think a real opportunity for the future. And to those, mr. Grant, who say youre selling really near the bottom of a challenging ag cycle. Yes, youre getting a multiple certainly in keeping what some of the others paid, but we thought there was a greater opportunity ahead here and youre selling too cheaply. What do you say . Yeah, i dont agree. I think its really hard to time ag cycles. Weve been through 40 years now of depressed crop prices. Tenyear low for corn, fiveyear low for wheat. When you look at a deal like this, you cant try and time these things. You have to take the longer view. And i think when you look at the technologies and the opportunity ahead, agriculture needs some of these new products. So i think this is a strong deal. I think its a good deal for our shareholders. And i think its a mistake to try and time commodity markets. Weve seen a fouryear trough. Who knows how long this is going to take to turn. Mr. Baumann, certainly there were some questions as we might expect about the Regulatory Environment and what this deal will face both here in the u. S. And the eu. You got some of those on your Conference Call with analysts earlier. And you actually said youve gotten at least an initial reachout to some regulators. I think i heard you say you had some encouraging feedback. But its early. Yes. What gives you the confidence that this is going to be able to pass the muster both in the u. S. And the eu when farmers right now are looking at the opportunities in front of them and seeing dow and dupont get together, singeta and now you two together. So this speaks to the combination of the quality we have in front of us. We have very, very little overlay, that is of course going to enable a very, very lets say constructive discussion with regulators about their concerns on where we do have these overlaps, but its substantially less than in some of the other cases where there are significant product overlaps. This whole transaction and the whole vision we see is driven by growth and innovation and not necessarily huge cost cutting. This combination is going to be driven by highly complimentary product portfolios, and based on the analysis we have done, each of our companies on our own with our antitrust council and advisors we together during the contract negotiations you can certainly see that a lot of the activity surrounding antitrust is all about the uncertainty. We developed a joint level of comfort that the antitrust disposals that might be required can be managed with a combination of our two businesses. Have you made thats what i meant. Have you made commitments to divestitures in the commitments you will undertake in order to receive antitrust approval or simply your best efforts . Well, we have made some specific inclusions in the merger agreement to also provide the monsanto board with a necessary level of comfort. We feel comfortable with it. You and his team feel comfortable with it, so we believe we have a base that is stipulated in the contract that we can jointly work against. I would just add, i think what makes this unique is a clear view of a pathway to closing this deal because the two businesses are so uniquely separate between chemistry, data science, thats the opportunity on closing this in a 12, 15month period. Mr. Grant, ive had any number of ceos ive interviewed for deals who also believe strongly they were fine on the antitrust front. But its been a tough environment both here in the u. S. And in the eu. Some unexpected things have occurred. Do you feel like youre being compensated enough . Should you not get what you want on the antitrust front, the 2 billion reverse break fee, the Company Comes out on the other side and be independent is not the easiest thing. Are you comfortable monsanto will be well positioned if it doesnt go your way . We are. But were focused my personal commitment to this, the commitment of my team is to do two things. Number one, during the the 12 to 15 months well see two springs and one harvest. So were going to focus on serving and growing customers around the world. Number two, were going to get this deal closed. And i feel confident when t