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tv   Squawk Box  CNBC  October 9, 2012 6:00am-9:00am EDT

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joe mentioned greece. demonstrators were back in the streets of athens yesterday protesting against government austerity cuts. pensioners clashed with riot police and burned an eu flag. german chancellor angela merkel is scheduled to arrive in athens at about 6:30 eastern time today for a six hour visit. police banned protests in most of central athens and 6,000 officers are trying to keep control. this is merkel's first stop will greece since the debt crisis kree resulted back in 2009. and carolyn roth will be joining us live. and both president obama and mitt roy in will be in ohio today. voters in the swing state are getting their last chance to register for next month's election. the polls are now all over the map. pew has romney up four points, but gallup says the positive jobs report gave president obama a five point boost. among our guests, ken langone
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and donald trump. and focusing on issues of foreign policy and national security, we have senator john mccain. and by the way, if you went to sleep early last night, the texans beat the jets 23-17. this win brings the texans perfect record this season to 5-0. we will have more in squawk sports. first andrew has the morning's other top stories. mr. sanchez had a chance to win that close to the end there and he didn't. the imf, though, this morning warning that the global economy has weakened further and now predicts slower growth for the next year. the advanced economies like the u.s., imf saying growth now too slow to make a serious dent in unemployment. meantime the imf predicting growth will begin to slow down in emerging economies such as china. the global forecast now at 3.3% for this year. by the way, that is down from the july estimate of 3.5%.
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>> you can call it general feeling of uncertainty about the future. worries about the ability of european policymakers who controlle euro crisis, worries about the failure of u.s. policymakers to agree on a fiscal plan. >> as for greece, the imf sees athens missing that five year at the time reduction target that underpins the euro bailout. so they could have problems. and also warning that spain will likely miss its targets in 2012 and 2013 and debt will jump to more than 90% of gdp as it recapitalizes its banking sector. joe. >> i'm looking at an interesting piece on the imf. what got me is that it will slow to 3.3. and what that shows you is the
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contribution from developing nations. >> china. >> well, yeah. and we'd do anything for 3.3. we would cut off our right arm for 3.3. >> i was a little tired when i first read it, and then i went is that the world, and i thought it has to be because the number is so high. >> the world did 5.1 in 2010. that's the way it can grow. >> you know what's frightening is the assumptions they put into this. they assume congress will take action to avoid the fiscal cliff. so even this level may be a little high. >> when they say a global recession risk rises, does it have to go negative to be called a recession globally? >> good question. when's the last type time the g went negative? >> if they're actually forecasting negative, then you can imagine how negative that would actually have to be. but the contribution of faster growing less developed countries is amazing. because europe is flat basically
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except for determine agermany a 1.25, 1.5, something like that. >> you can explain the stock market? >> money has to go somewhere. >> but if this is true, it doesn't make any sense. >> even though the stock market is ahead of where it should be, that it doesn't come crashing down. fundamentals catch up. in other european new, eu finance ministers are meeting in luxemburg dealing with issues that some see as crucial to ending the debt crisis, among them creating a banking union and implementing a financial rks pact. as of now, there is no sign of eu wide agree on either issue. and germany and france are stepping up diplomatic drive to convince other countries to join them in setting up that
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transactions tax. they're two short of the nine needed to push ahead with the plan. malta is also tough. somebody was just meeting in luxemburg, which is a small place. i don't know if it's bigger or smaller than liechtenstein. >> have you been to luxemburg? >> no. you? >> no. >> several considering a transactions tax separately because an eu agreement appears impossible at this time. wow. i should say becky and then are you supposed to say thanks, joe. >> i was going to skip that part. >> at your own peril. >> thanks, joe. >> french man and american for developing and inventing methods for observing tiny particles without destroying them. which is nice. you don't want to while you're studying something destroy it. ground breaking experimental
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enable measuring and manipulation of individual quanti quantum subpoenas. not maybe the latest stuff with the god particle, very close to the unified theory, but very exciting. you need a big, big -- >> interaction between light and matter. >> how do they not break it? >> hard to believe that they're -- light is the coolest thing. and it's the duality. it's particle and a wave. two, two, two thing this is one. duality of light. this is you still. >> yes. we have news out of asia, joe, chi nna injecting into money markets boosting speculation that it may do more to support slowing growth. also tim geithner is in new delhi, he's meeting with his indian counter part and other government officials. ben bernanke is also there and this comes after india's
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government announced several economic reforms. geithner and bernanke are participating in the third annual meeting of the u.s. india and economic partnership. and japanese car makers reporting tumbling sales in china for september. toyota sales were almost cut in half. it was a drop of 49%. this news confirms the impact of the territorial fight between the two countries. we've heard a lot about violent row te protests. it broke out last month after japan nationalized two of the east china sea islandses by purchasing them from their private owner respect. the question was just how deep these cuts were going to be, but again toyota sales down 49% and honda sales down 41%. so this is a very severe event. >> i'm still focused on physics. sorry. >> how do they do it without breaking them? >> if they're going to smash them? i don't know why it would matter. there's so many. i mean, there are. literally you think about each
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at tomorr atom has all these particles. >> a guy went around looking for the oldest living tree. and he killed it by boring the hole in it. >> now, that he understand it. or unfortunately, sometimes if you're doing animal study, you have to sacrifice the animal. but i don't spend a lot of time -- >> does this solve that? >> no. and i don't think a lot of time about destroying particles, unless it would cause the universe to end. that would be bad. you don't want to -- oops! wouldn't even get the s out. >> in which case it wouldn't matter what the futures are doing today. >> no, but that's the thing, the futures fell when we found out the world was going to end, but they rallied after the fed said it was going to go to qe 4. >> dow futures down by close to 20. s&p 500 futures off by 1. imf concern coming the day after
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the world bank lowered its growth forecast for china. so there are still a lot of lingering concerns about what's happening to the global economy. take a look at what's been happening in europe this morning. you will see that barely bud budging. the cac off by over 5. in asia, you did see some positive arrows in shanghai where the markets opened again, up by about 40 points. hang seng was up about 112. japan and korea both had down days. oil prices down by seven cents. this is key. those oil prices still hanging below $90 a barrel. $89.81. hopefully you'll be getting some relief in california. they have agreed to start bringing in that winter blend gasoli gasoline. the ten year yield at 1.698%.
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dollar has been a big story, too, because of the stories about the global economy. euro at 1 .2933. dollar down against the yen at 78.28. gold prices this morning are barely budged. $1775.50. >> and now time for the global markets report. kelly evans standing by in london. kelly, good morning to you. >> andrew, hi. i was actually back in the states last week. i'm here in london, though, of course. and what's happening, markets are selling off. i'll try not to draw too much cauti cautionation there. 7:1. all of the major bourses are pretty much in the red. not a lot of positive news out there. ibex 35 down about 0.8%. all those it was down more in trade earlier. cac 40 has flipped into the
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positive. we'll keep an eye on clues as to whether the rest of the market can follow suit. the ftse 100, down a quarter of a percent. bae down in flaur.75%. reports that these two companies bae and eads will be meeting later today to talk about the terms of the potential tie up and discuss what they want to do with it going forward after key shareholders have expressed concerns. let's flip back to the bond wall. spanish ten year a little weaker. up to about 5.77%. italy, though, now seeing its yield come down a little bit. so we started off with the worst tone certainly to markets and we're seeing more recently kree mer emerge out of this. what's interesting against this backdrop, this greece we still have protests happening because of who is visiting, angela merkel, coming to town.
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and you can look there at live pictures of the square. there are reports of up to 7,000 police in the area and i think even some snipers on the roofs to make sure to keep an eye out for violence there. she was expected to be in that area any second now. so there may be some news flow there to to keep an eye on. as we're discussing all of this of course, we have george papaconstantinou coming by the show this morning, we had him on cnbc. he said looking back on his ten uhe, he wouldn't necessarily have done might go differently when it comes to austerity. and this is in fact what he had to say about the possibility which still creeps up from time to to time of greece leaving the eurozone all together. >> i think will is no suthere i things as an orderly exit. any exit would be extremely disorderly. no way it can be any other way. not just for the country itself, but also for the rest of the eurozone. so chancellor merkel i think has
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been convinced of that and has now changed her rhetoric and i think it's very good to actually admit and appreciate the effort that's been done. >> that's something certainly to come in mind. greece now one small example of something we're confronting. and i'll send it back over to you. >> we were trying to figure out where you were. and we know that there's a new bond movie coming up. we were speculating that maybe you were involved in that somehow? >> no, although i was walking around in my trench coat of course i have to wear over here every day. i had about three different people tell me i look like a spy. >> you are a bond girl. kelly, thank you. we're glad you're back. >> thanks. >> do you know why this is important now? >> what, the nobel prize? >> yeah. because if you you destroy the particle, they didn't think it was possible to measure particles without destroying it, it could usher in the age of
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quantum computers. and the quote here is perhaps the quantum computer could change our every day lives and in this century just as much as the -- >> cha'swhat's a quantum comput? >> a computer based on sub atomical particles. which would be faster and -- what more do you need? >> plugged in to my brain. >> that is possible. >> if i could think and it would just -- it would need a process they're probably a quantum processor. >> think also if it wases a super computer like the ones that we've been trying to develop that are so fast -- >> artificial intelligence, too. >> you could plug in like one of my insults to you and you could plug it in instead of just sitting there, you know, with no response, could you plug it if and actually have something to
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come back with. >> that would be good. i would like that. >> this is like siri on steroids. >> i guess it is. but think of quantum and then of course you get to that tv show. what was -- >> are you comparing your brain to a quantum processor? >> at this point do you think there's any computer that rivals the brain? >> are you suggesting my brain is like a 486 pentium or whatever that is. >> in, commodore. what was before commodore? >> i don't know. when we come back, a crisp october evening and that means football. and baseball playoffs. we'll have your morning sports report. first, though, a fearless jump. that daredevil felix baum gardner goes for a world record, he's attempting a 23 mile sky dive free falling over new
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mexico. the expectation is that he could break the sound barrier. who knows what happens when you do that. this was an earlier jump back in march, but today's the day.
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welcome back. take a look at u.s. equity futures. we have some red arrows. dow would be off about 20 points. s&p 500 off, as well, as would
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the nasdaq. some of the headlines outside the world of business. jerry sandusky will be sentenced today from his jail cell, he practice a surprise plea proclaiming his innocence. it aired on penn state radio last night. he was convicted of abusing ten boys over 15 years. the former penn state assistant football coach offered no apologies, only a vow to fight whatever sentence he receives. in other news, there are more cases and more deaths caused by the meningitis outbreak linked to tainted steroid injections. the center for disease control and prevention says the number of confirmed infections is now up to 105 in nine different states. the death toll is now eight. really terrifying. >> they need stricter controls on some of these pharmacies. >> spinal injections. >> and anyone who around you can get the meningitis. highly contagious. >> some sports news, texans beat
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the jets 23-17 in monday night football. the win brings the test ans perfect record to 5-0. and st. louis hammered the nationals.xst ans perfect record to 5-0. and st. louis hammered the nationals.t ans perfect record to 5-0. and st. louis hammered the nationals. ans perfect record to 5-0. and st. louis hammered the nationals.ans perfect record to 5-0. and st. louis hammered the nationals. pretty cool. especially a catch in center field. unbelievable. full speed, ran into -- maybe that's it. there it is. watch this. comes down with the ball. fantastic. anyway, series now tied at one game each. and i'm kind of shifting my allegiance a little. because washington had the best record. here's baltimore beat -- >> yeah, baltimore beat new york. >> orioles beat the yankees. that series also tied at one game. i'll tell you why. number one, tonight the reds are going to play and homer is pitching tonight. the not homer simpson. homer bailey. i'd like this to end tonight. detroit leads oakland by the
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same margin. >> why are you switch something. >> harwood is this big washington and i see all the belt way libs are >> harwood is this big washington and i see all the belt way libs are >> harwood is this big washington and i see all the belt way libs are >> harwood is this big washington and i see all the belt way libs are >> harwood is this big washington and i see all the belt way libs are >> harwood is this big washington and i see all the belt way libs are washington.hi >> harwood is this big washington and i see all the belt way libs are >> harwood is this big washington and i see all the belt way libs are washington. it's starting to represent to me big government. >> all the more reason you should want them to win so you can beat them in the world series. >> i thought about that. but as long as somebody beats them. i don't want them to go too far. >> well, it's more crushing if you let them get all the way to the world series. >> no, that would mean they got past the reds. so it's okay if they beat st. louis, although last night, didn't look like they were ready to beat st. louis. a lot of home runs. beltran had two. >> i don't really have any thoughts about the nationals. >> washington. harwood loves them. you know. >> so he'd be grouchy if they lose. >> he will be. he will be. he'll be a lot grouchier if
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somebody else loses, though. >> let's get to the forecast. alex, what you can tell us? >> we have more cool conditions to deal with across a lot of the eastern half of the nation and a few showers, as well. you can see it showing up on on the radar. not heavy rain, but enough of a bit of a nuisance oig. middle much the country also seeing some showers. all lines up this storm system moving away, but then at front coming in and bringing with it another cooler air mass. so for today, we have some of the sto showers coming to an end. new york city, only reaching 58. farther south, 60s around atlanta, tampa, you'll see some dry skies. florida has been dealing with wet weather over the last several weeks. a little drier for today. some of those lighter showers moving across the upper midwest into the western great lakes, but central southern plain there is to texas, looking pretty
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good. the big d 82 and partly sunny skies. and then the western half of the nation is all is fair. seattle right around 68 for the day. we have cooler conditions moving in across the northern tier. that's all coming in behind this front which by wednesday will be closer toward the eastern lakes. so now we have a little bit of rain to deal with, rochester, buffalo, syracuse on wednesday. that front heads east as we move into thursday, but makes way for yet another frontal system and that will reinforce the cooler air and also bring us a few more showers to the great lakes. back to you. subpoe&p 500 earnings proje to decline in the third quarter, first time since 2009. here to share her outlook is stephanie link, the she's also a cnbc contributor. i saw 78% or something had warned results were below expectations. has that got us set up for what
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we always see people beating? theys always beat, don't they? >> third quarter expectations have come down dramatically. the worst pre-announcement season since you 2011, 91 companies have negatively -- >> worst pre-announcement since when? >> in 11 years. excuse me. sorry about that. >> because since 2011 would have been one year. >> yeah, that wouldn't have been so impressive. >> no not at all. >> see, i listen. >> thank you. so anyway, the expectations are definitely low. now, fourth quarter, it's all about guidance for 2013, as well. i don't think you'll get much 2013 guidance. i think you'll get a lot obvious roy 4obviou obviously 4 q. if you dig into the sectors, some sectors look pretty good
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where the risk reward is attractive. materials and industrials. staples actually expectations have come down. >> industrials have come down because they've been warning. they won't make these numbers. >> but that sets you up pretty well for the fourth quarter and also discretionaries come down. and especially energy and financials where expectations actually have gone up is still not looking for really impressive numbers. energy in the fourth quarter expected to be town 14%, financials up 3%, so i don't think it's very heroic. so i think you want to be involved in some of the cyclicals like industrials, like materials. i like staples. particularly as expectations come down. some of the discretionaries that have come down. financials we continue to like. >> what's your number for the s&p dropoff in this quarter? >> for this year, for the fourth
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quarter, we're looking for i think 1.4%. >> third quarter versus last year's third quarter? >> negative 0.6%. >> down less than 1%. >> yeah. >> okay. >> i don't think that's -- >> you'd call that flat, wouldn't you? >> sure. >> where does the s&p end for you? >> i think it ends higher. i think you have performance chasing that p happens. and i think you have let's get through the election, let's get some sort of understanding as to what will happen with the fiscal cliff. but i still think earnings will not be as bad. i think the setup is pretty good. valuations are attractive. and i think we'll learn a lot from alcoa's number. they give a lot of good information in terms of end markets. we'll learn a lot about autos and aerospace and the consumer. and i think that will be interesting to hear and see how that plays out. >> thank you for coming on the program. coming up, angela merkel
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arriving in greece. we have a live report from athens. between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
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welcome back to "squawk box." i'm joe kernen along with becky quick and andrew ross sorkin. german chancellor angela merkel landing in athens just minutes ago. this is a live picture of what's happening on the tarmac in athens. >> is that her private plane? >> i would assume she's not
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flying commercial. if you don't, she wouldn't i wouldn't think. carolyn, what's the latest is this. >> yeah, she's just stepping off the plane as we speak. i'm just watching the output here. she should be stepping off the plane in the next couple seconds. but the reception here by the greek people certainly isn't a very friendly one and this is a very difficult trip for ms. merkel because for the better part of the last three he years, she's been a very, very popular hate figure for the greeks. they blame her for the seemingly unjust austerity measures and the hardship. but the message ms. merkel wants to send to the greek people today is one of solidarity and one of respect and support. she will tell them we want you to stay in the eurozone. of course that's only if you continue your reform efforts. for the seven short hours that ms. merkel will be in athens for, the police force here has put in place an unprecedented
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plan of security. this is the tightest security since bill clinton visited back in '99. 7,000 police officers are on duty, they're lining the streets. and we're here at the square where the violence and riots have usually taken place. the square is very slowly but surely filling up with people and i'm guessing there's around 1,000 to 2,000 protesters here. the public unions and private sector unions are staging a three hour strike for their workers to be able to established this rally. right now it is very peaceful, but we'll keep you updated on what's happening the next couple of hours. back over to you. >> i thought that they were banning protests today to try and keep the situations from getting out of control. >> you're absolutely right. but these protests by the two busiest unions, the private and the public sector unions, they have already been confirmed. so will he can actually go
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through. but of course they want to block off the city that there will be any impromptu protests over the next couple of hours and they can't rule out that there will be clashes with the police as more and more people are trying to stream into the city center. >> carolyn, thank you very much. ap tha we'll check back with you later in the morning. in the meantime let's turn other attention to what's happening in the stock market. we had a low volume session yesterday. but take the bond market gets back to work after a three day holiday. and by the way, in case you didn't remember, take is the fifth anniversary muof the dow d s&p 500 reaching an all-time high. kevin ferry joining us. we've gotten back near the all-time highs, but what would you say just in terms of what's happened over the last five years and where you think this is setting us up for. >> hard to hold, right? heading in the right direction, but difficult to stay on board. so in the near term, we talked
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about last week silver getting hit, it lost about a dollar from there. and you did reach 1465, 66, in the s&p on friday, but again what we were noticing last week continued and that's these midday session dropouts where it seems like the enthusiasm in the air just comes out of the market. but it doesn't necessarily turn negative. and i think that's what we're looking at again. support in the s&p future between 1448 and 1442. it's held in there last night. and as you were pointing out, becky, what i was going to mention is there will be a little bit of a disjunction as the bhond market fears back up because the futures were trading and the bond was up a point yesterday on its own. so a little bit of arbitrage as they bring supply to the market this week. >> kevin, we've gotten that imf report about how the global economy looks like it's in real trouble, downgrading hair their
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assessment again, world bank downgrading their assessment of the chinese economy. how much is that a factor in what's happening on the trading floors, how much of it is it a factor of the election, how much of it is fiscal cliff? how do you mix all that up? >> that's a good point because those type of stories really resonate with the tone from the floor trading. and that is an already negative tone. and it kind of peaked friday when this massive burst of disbelief. and so i think that you have to watch that. but i would take a more sectional type of trek and say who can benefit and who can't. even as you talked there toor colleague in greece, the fact is that the german economy is doing quietly and very well compared to everything else over there. and so behind us, you have this competitive advantage made by other people's problems.
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and so the imf thing is definitely something thattrades. and that's a lrolling negativit. but you have to be where the action has been better and that bean at home. >> kevin, thank you very much. great talking to you. if you've got comments, questions about anything you have see here, still ahead, the game of risk and we're not talking about the board game. it's real life and big money is at stake. we have that story next. hooo...! oh...there you go. wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy? happier than a witch in a broom factory. get happy. get geico.
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#. foufr years after the financial crisis, is wall veal
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still rolling the dice? kate kelly is here to kick off a very special game of risk. first up, how banks have changed. risk management on wall street. it's something you you hear a lot about when things go wrong. like earlier this year when a badly managed position cost jpmorgan nearly $6 billion. the rest of the time, though, it's regarded as a back office topic for lawyers and accountants. and yet risk management or the lack thereof was in fact a major culprit in the bank failures and losses of 2008. in its wake, former citigroup chief saying keep cansidancing the music stops became the tag line for everything wrong with arriving. so have deflated stock prices
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and new regulations done anything to help? >> all the large banks have come can a long way since the financial crisis. capital has doubled. liquidity is 50 abo% to 100% hi. but you have to remember this is from deep in the pit of some terrible risk mismanagement. >> but issues remain. technology is one especially for large universal banks whose being a wi significants left messy legacy systems. jpmorgan overhauled a key trading an risk management software system after finding widespread inefficiencies. a process that's only 70% complete. and while bank hierarchies have changed so that risk officers report to the ceo or cfo, the culture of challenge is not always there. and risk managers may still be afraid to confront traders even when they find a problem. of course there are also plenty of external problems to investigation tests including political dysfunction at home and the fear of an israel/iran
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war. on "squawk on the street," i'll tell you how one bank is navigating these treacherous waters. >> here's my question. is the bigger risk today computer systems that go wild and crazy or is it a risk manager, a trader making a very bad bet knowingly? >> it's hard to choose, but if those are my options, i would say the first one. because despite all the reporting, what is it in terms of a risk management failure? i was told it's about risk manager empowerment. you basically had a situation whereas much as we've heard about how respected and knowledgeable she was, you had a handful of traders who kind of outmaneuvered the risk managers if you will andle ri l risk man were cast aside. so that is a key issue.
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but the other thing is the risk managers themselves either need a trading background or they need to be working closely with managers who do trade so they can say you think this is liquid? go to the market and sell a piece. >> i'm assuming the real risk now is in this so-called shadow banking system, all the smaller firms that we're in tnt not spe time focusing on. >> nonbank financials. i think that's a good point, but also to be fair, some of the regulations, and i know you'll jump on me, some have been effective. a couple things i would imagine. the fed stress test starting in 2009, they forced even goldman sachs to raise hits game in terms of technology. they're known for being on top of this relative to a lot of their peers. the other thing is i think dodd flank and basel iii have
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improved things. even on the street, some critics would say it's a bit better. >> so just give us one surprise. >> how jpmorgan came out. despite the headline issues comes out as one of the better risk managers in the eyes of analysts that we talked to. granted their view is impression miss ti miss tick. but their perception is it's a tight ship. >> we have to go to the chairs. >> you don't want to rail against regulation? >> chairs instead of dodd-frank? >> we're going there next and i had to have something to talk about. >> why is mitt romney not making more hay with the problems of dodd-frank on the stump? >> i think in the debate -- did you see the debate? >> yeah, but it hasn't been as huge of a talk point as i would have expected. >> maybe they're watching. >> to see if it works? >> no see that kate kelly thinks
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that there -- there is no doubt that small banks are a part of the problem here. and small business is not being able to get loans right now. >> someone put to me yesterday, they're getting out their pitch forks and torches against what dodd-frank will do with them. >> there's more than five, that was the point made yesterday. >> more than five banks who became systemically important and beneficiaries of all this. >> so you're a little monster, are you going to talk in chairs about -- >> you want me to talk about -- >> to spell gaga, you have to first spell gag. that's a tease. >> we'll talk a little lady gaga after the break. still to come, guest host ken langone will cover the economy, candidates, education. and then this morning we'll invite you to "squawk box" office hours. a chance to talk with us on facebook. andrew will host today's session. check out our facebook page.
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>> getting a little air brushed. >> you'll beat the record for last time you did it. "squawk box" is on facebook. like the show and get update, commentary, news and much more. add us to your pages and keep us with what's happening on the show. "squawk box" on facebook and cnbc. short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.
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eastern on "squawk box." as you can see we are in the chairs where we get to talk about things irrelevant to the stock market which we would never do at the desk. i was just like -- okay, all right, got it. ♪ is that still going on? okay. what's going on here? nothing. i'm ready to talk, i'm ready to go. is that what they want to do? >> is this from, what is this from? >> is this a hangover? >> huskies, send it up, talk about it, go. >> going through page six and bradley cooper and that zach gallifianakis guy. >> you're looking for me to
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pronounce something? >> call him zach g., apparently it's going to happen again and it happened once in vegas, happened again and they're in nogales in arizona because they're pretending it's tijuana. anybody that goes to tijuana you may never come back. >> the first one was good. >> i liked the second one but they get grocer and sick things happened and i don't know whether -- can you get the tattoo off, i don't know whether he was able to have it removed but how does it happen a third time. how can it happen -- they never made -- >> sequence. >> someone else is getting married, but they never made a "crying game 2," right? they thought about it but it's not going to work. you know what's going to, you know, you know what the surprise is going to be at the end, but how do you -- for this, you have
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to really suspend disbelief to think that "hangover 3" could happen. >> that any of these guys would be allowed out of the house again. >> i wonder who is getting married this time. >> do you have a cameo on this one? >> no, but i'm excited that it's coming. >> i saw the first one, didn't see the second one. >> the second was not as good as the first one. the first one was great. >> i liked the second one. it was in thailand. i've never been. lot of things can happen there. >> living vicariously. >> not with ed helms. >> i found a story we keep hearing about the aftereffects from the drought in the midwest, one that i hadn't heard of before but is in the news today is the bees, bees were greatly affected by this. >> you don't have any puns? >> i don't have any puns. >> no, they got stung by the drought. >> you could not bee serious.
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>> that's good. i don't have any puns. thank you for coming up with one quickly. >> i'm sure you could think of some of them. >> no, i like the honey one though. bees have had serious troubles after we knew the bees had troubles a few years ago. because of the drought a lot of the pollen wasn't able to percolate, the bees can't get anything out so there's not enough honey for them to live through the winter. in michigan a lot of beekeepers are sending their bees to florida or to california, in fact i think we have some pictures of them taking some of these to beekeepers, driving some of them down there, 10% of the population is believe to have been affected -- whoops, that didn't go so well. >> did you know this was coming? you got me. i really thought you had some people loading up -- >> it is a serious story. 10% of the population of bees is gone. >> we can't live without bees.
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you can't cross-pollinate about it. 10% of the population actually died off according to some beekeepers. >> chris farley, what was that from? >> "tommy boy." >> i don't remember the scene with bees. i remember the deer scene. >> two stories, one serious, one less serious. one is for you, joe, guy was in paris last week. >> 75%. >> 75% taxes but more importantly 60.5% capital gains taxes. >> if there ever was any. >> people are furious. all of the wealthy executives petitioned for higher taxes and said please, it was warren buffett like in some ways, we deserve to pay higher taxes, we get it, want to do it and they're freaking out, real estate prices are plunging. >> what did they expect taxes were going to go -- >> their highest marginal rate was 41%, they thought maybe it goes to 45, 50, 55. >> went to 75. >> but it's the capital gains
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which is killing people. if you're an entrepreneur you're not starting your company there and they're already starting to backtrack on that and the other piece of it is hollande's administration -- >> starting to backtrack. >> 75% is just for two years or they say just for two years. perhaps the more interesting story though this morning -- >> instead of the bush tax cuts. >> swan vomit lake, that is what lady gaga is calling it, this is sort of gross. ♪ people are eating their breakfast now. do not look, if you want to look, see it on the internet yourself but we're not going to show it. lady gaga in spain at a concert, apparently had a flu, but she was out there three times she turned around, she, you know -- >> regurgitated. >> spewed, what do you want to call it, vomiting, and then she got up and danced. >> all i can say is you two, if
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you're sick, stay home. nobody is essentially personnel. >> but she tweeted it herself writes "praying nobody saw but quite a good laugh if you need one." >> except if it was in her hair. >> there was a little -- it was chunky. >> stay home if you're sick, don't bring it to the office. >> who knows. >> she said she did it for her fans, she was so sick she stayed on stage. >> bleh. when we come back, no holds barred, ken langone, co-founder of home depot is our guest host. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race.
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no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.
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getting the job done. >> you need to understand what it takes for people to take risk. >> and the fiery founder of home depot and our guest host, ken langone shares his thoughts on the markets, business and opportunities, as well as the presidential race. >> focussing in on foreign policy. >> it is our responsibility and the responsibility of the president to use america's greatest power to shape history. not to lead from behind. >> arizona senator and former gop presidential candidate john mccain on what it takes to shape america's influence abroad. >> and the name that's making waves in the national debate. >> donald trump. >> trump. >> the one and only donald trump sounding off on what's working for mitt, the state of the global economy and more. the second hour of "squawk box" begins right now. good morning, everybody.
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welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. our guest host is ken han again to, the co-founder of home depot, chairman and president of invemed associates. he'll be joining us in ten minutes' time, studying and prepping, i can see him reading up. ken is never one to mince words. stick around to hear what he has to say when it comes to economy, the markets, china, the fight for the white house and much more. at the bottom of the hour, donald trump will be joining us on the phone with his latest views on the race for the white house and 7:40 eastern we have senator john mccain on foreign policy and american values. we'll get his thoughts on the upcoming presidential debate and much more. at 8:10 eastern time the leader of the united kingdom independence party will join us to talk about the future of the euro elections and much more. now we'll kick things off with andrew and some of this morning's headlines. take a look at futures that was columbus day yesterday worth mentioning, dow would open up 17
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points lower, nasdaq off some and s&p 500. german chancellor merkel will be to a decidedly mixed reception, she'll talk with antonis samaras about the country's fiscal outlook and more than 7,000 will be on hand to keep protesters at bay, you are looking at a live shot at athens as crowds and protesters build. separately the imf is cutting its global growth forecast for the second time since may and urging u.s. and european policymakers to deal with their fiscal issues or face a prolonged downturn. the world economy will grow at 3.3%, down from a july estimate of 3.5%. earnings season getting under way with the release of alcoa's latest earnings, we'll get that after the closing bell. jpmorgan chase, wells fargo, both out on friday morning and of course we will bring them to
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you as that news hits. >> also we have a new study by mckinsey says banks remain scarred from the worldwide crisis and years away from developing new business models that will produce sustainable profits. the study says despite progress and meeting regulators requirements to build capital, revenue growth is slow, costs are rising and new competitors exploiting digital technologies are emerging. this report also sends a pretty ominous message about bank's central role in the global economy. it says that a 30-year trend where the national average bank revenue has grown faster than gdp is now being broken and we're not sure what that will mean for the economy. >> rio tinto cutting its growth forecast for china. it's expecting growth to be just below 8%, that's in line with the imf's revised forecast. rio tinto saying prices partially recovered after a
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period of rapid decline but will remain volatile. >> let's get to london for the market overseas. ross, you want to to the 7:00 every day in this country and kelly can do the 6:00? we enjoyed having you last week. >> yeah, that was good. it's always good to talk to you guys. you know that if i'm here we'll do it. it works for me. we are, joe a little weaker this morning. 7:2, decliners outpacing advancers. weaker session yesterday, ftse down 0.5%, and not quite at the session lows as you can see, meandering along with slim losses on dow jones stocks 600. the ftse as we wade our way towards earnings season in the united states down ten points, the cac a little bit stronger, and the ibex up 0.9%. we had comments from mario
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draghi, reaffirming really how this bump outright monetary transactions may take place. what was interesting was reiterating how you stop it effectively, that they would launch it for a couple of months and then if there was a review program that went in to see how they were doing, they would then stop it before potentially restarting again. it all sounds rather difficult in terms of the access. as we focus on angela merck until greece, the pictures you've been showing and you'll be going out there this morning this morning talking to mr. papa constantinos, i asked him the debts in greece do not stack up so surely we need larger debt forgiveness. this is what he had to say. >> clearly the numbers are not viable and clearly something would have to be done and this would be done by the official sector. >> by the official sector he
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means the likes of the institutions and especially the ecb. he thought one of the ways is 50 billion for the bank bailouts could be taken off the table and enter a program in the same way spain is trying to do it at the moment. ecb would view that as monetizing nation's debts which they don't want to do at the bundes bank. second former greek ministers came out saying we need to write off a bigger portion of greek's debt and the private sector has already done it. that's the stage we're at, whether we can get political consensus remains to be seen. spain 5.76%, ten-year bunds 1.48 and no big movement as far as debt yields are now. back to you guys. >> ross, thank you. we love talking to you so thank you for sticking around for the 7:00 for us. we appreciate it. >> okay, no problem. if you have any comments or
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questions about anything you see here on "squawk," follow us on twitter, @squawkcnbc is our handle. up next, ken langone on the markets, education and much more. hello mr. langone. ken will be joining us for the remainder of the show. by the way, take a look at this live shot we have of athens, crowds are growing with the arrival of german chancellor angela merkel. we'll keep you up-to-date on the meeting and let you know what's happening with the crowds, too. right after the show check out the "squawk box" facebook page. andrew will be hosting a chat answering your questions about "squawk." no holds barred, he'll answer anything you want to know. logon to facebook and like the show. "squawk" is back in two minutes.
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welcome back to "squawk." checking futures now as we got that news from the imf that growth may slow with 3.3%. dow looks like it would open down 13 points, s&p 500 and the nasdaq would also be off. >> we're 28 days away from the presidential election. ken langone is home depot co-founder and chairman and president of invemed associates. he joins us now his view on a lot of different things. wow, nothing like getting --
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ken, welcome. nothing like getting all the panties in a bunch by mentioning just the idea that some numbers might be skewed a little bit on the jobs, which jack did. ken, it's okay to say bush lied and people died, but if you just point out, you know, that the birth/death model, usually you need 200,000 or 250,000 jobs per month to make a dent in the unemployment number. >> right. >> we know it's come down over 10% to 7.8% and we know that on that day, we were supposed to get 140,000. it was disappointing from 114,000. now i'm not saying the bls, you can't say that because if you say that you're impugning the idea that any government number could be wrong at that point, but remember the cbo report on obama care? it's going to save $1 trillion in the first ten years, going to save $10 trillion in the second ten? that's what the cbo was given. the cbo was given those numbers. all they do is crunch it. they were given the numbers by the obama administration and those are the numbers that come
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out. >> that's a pretty volatile number and it may get thrown out. >> let's say the government, say in september the government hired 187,000 people and in august the government hired 417,000 people, that's 604,000 people the government hired in two months, that's the highest change in government employment since 1948. that's not the bls doing something. that's the government hiring people and then there was part-time, you saw how many part-time people there were suddenly in the report. >> it's people who want to be full time people. >> it lowers the unemployment rate. 114,000 was not a good number. >> no but wait a minute -- >> and jack is like being crucified for just tongue and cheek comment. >> this discussion you're having is over the heads of most american people, including me, okay? >> that's not a high bar for you. >> no, that's not a high bar but let me say this to you. there are people out there that haven't got jobs. there are people out there --
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>> they know how they feel. >> exactly, and let's go beyond that. whatever the number is, it vastly understates unemployment. why? because arbitrarily they say if you stop looking for a job, you're no longer unemployed. well, let's make this practical. you still aren't getting a check. you still don't have purchasing power. unfortunately, you still can't go to home tdepot and buy paint and brushes and things you need for your home. they're out there. they know what's going on. i can tell you firsthand, i have a full service truck leasing business in north carolina, i have a major investment in the textile business. things are only tepid and have not improved in the last year, they've gotten worse. >> it's like a 40-year low on how many people are in the workforce. >> if this number is going this way and the unemployment number, the business is going that way, it doesn't fit. my response -- by the way i give jack a lot of credit for being
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there and standing out. now it makes it easier for me, because he and i have the same point of view, but i give him a lot of credit for saying publicly, damn it, these numbers don't make sense. >> he looked at it as a tongue-and-cheek comment, he has a million followers on twitter. >> 88 economists had nothing, not one of them, not a single one had below 8%. it wasn't above 140,000. it's not like you did 200,000. it was a 114. why didn't anyone know? it was surprising. >> joe, you turn this into an intellectual discussion that doesn't give credit to the point that people are out of work, that people aren't getting checks, that people are going to home depot and buying only what they have to buy, because the roof leaks or the pipe leaks or they're worried about a draft around the window when they start paying the fuel oil this
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winter. the worst hasn't happened yet. the worst hasn't happened yet. the problem is we are not yet, we haven't begun to address the problem. this dodd-frank is a nightmare. it is already impeding economic growth in america. now to me let me be blunt, barney frank is a wonderful chameleon. he says look at what the bankers did to the system. he was the biggest and staunchest advocate of letting freddie and fannie do whatever the hell they damned pleased. look at the mess we have. this guy dodd now representing movie actors which is probably an appropriate job for him in california after he got freebies on his home mortgage. come on, these people are hypocrites. these people don't tell the truth. it's an axiom if you want to win in politics you better be able to fib, and they do a great job at it. have i opened it up?
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>> i got two questions. >> go ahead. >> i want to go back to jack for a second. we all love jack around this table but just to clarify. >> when you say that, you're going to say something that indicates you truly don't love him but go ahead. >> i love jack and i don't believe the numbers made sense and i think you said it, too, i'm not sure we're all convinced they were being manipulated. >> i didn't say i think the bls manipulated it. >> that's what i wanted to get. >> i'm not accusing anybody of anything. all i'm saying is i look at what i know in business, and this is all i do every day, i talk to companies, i look at ideas, i try to find out what's going on. i can tell you there is a major discrepancy but what i'm being told anecdotally at the business level and these numbers. what do i say? they're fishy. let me say one thing about jack welch that can't be said enough. there was no better ceo in america in the last 100 years
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than jack. he did it all. look at what he created, look at the value that was generated for people that own that stock. i'm biased. i sat on this board for six years but i can tell you right now i watched jack run a company. there was nobody better, nobody. he was all business. jack expected the numbers for what he said, not for what he wanted them to be. he was a realist. he's being a realist now and i think i am, too. these numbers don't square with what's going on in the economy. say what you want. >> jack had this, got this brand and never been hammered with criticism before. it's like, are you kidding me? you never heard of pcb, neutron jack, you've had -- he's had to put up with criticism. you do something the liberals their panties get in a bunch, but you can say, thisser' the
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sa they're the same ones that said bush lied, people died, which is a more heinous allegation to make. the bls, maybe they're massaging. they weren't cooked, they were broiled. >> it's easy to argue the numbers don't make sense and every month by the way the numbers often-times don't make sense or don't feel like the way reality feels to so many americans. that's different than saying that they're manipulating. >> i know that the guys from chicago might -- how about the obama care. you like the obama care numbers for the cbo? how'd you like those? how do you like that they're using the numbers from that partisan tax policy group where they made all the assumptions -- >> that is not as partisan as you think. >> and they made up, those are all assumptions and andrea mitchell who asked them to take it out of the campaign and i saw it again last night so they're running it repeatedly. >> by the way, i know an elderly
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couple, i'm elderly, too, so don't be offended. i know an elderly couple in their 80s who received notification from the federal government they better find a way to get insurance because their medicare is going to be stopped, from the government. now, the big problem was web he you look at this document you can't make sense of it. it's the most complicated thing and if anybody wants to challenge me, i have the documents to prove it. so this business that people aren't going to get binged -- let me say one more thing before i forget. romney said something the other night that none of you people caught or didn't care to comment about. i mean the media. when he talked about cutting back on government, he made it very clear he's going to do it by attrition, because he understands, if he does it any other way, he will only aggravate the economic problems we have. so as people quit and retire, but one more thing i would urge
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you, if you work in the department of commerce and they have, they don't need you, and you, the department of transportation and there's an opening there, whether you have whatever the hell it is, gs number whatever it is, you're given the chance to go to that job or you're told you're being exited. there's a lot of ways that can be done and it will be done. the thing i feel confident about is this man has the experience of having done it many times before. >> and watching it, it seems like it's what it seemed like, too, didn't it? >> what? >> watching the debate. >> of course. well one guy didn't have the crib sheet, he didn't have the teleprompter so he was in trouble automatically. the second thing is, i don't care what you want to say about his performance. it was clear to me his work ethic was lacking in preparation for that debate. >> he didn't look like he had planned for it. >> am i right or wrong? >> you're thinking it will be different next debate? >> he had habits. he knew there would be something
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he could read. >> none of the people challenged him around him for the last four years. >> two problems, one was he didn't plan for it and two, i think he had been told and advised not to be aggressive. i think the next time this comes around -- >> you don't think so? i think he had an awful performance. i'm not suggesting he was good at all. >> let me say something. >> even you. >> he will still not do well in the second and third debate. for four years he's had the benefit of these devices that he read from and you know what? it's like a drug. it's hard to get away from. >> he did better -- >> in front of audiences that just clap and nod. >> of course, bobbing heads. >> it was very telling. >> he did better in the debates four years ago. >> really, when he said -- >> not to hillary, that was a big -- >> like five guys, eight guys, how many were in the debates. >> in the pre yes. >> hold on. he has nothing else to talk about. he has a horrible record for four years. look at where we are.
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he has us on travel, education and adventure because he can't point to the benefits of this plan or the recovery of that. >> ken is our guest host for the rest of the show. also when we come back the mlb playoffs in full spring and last night bird was the word. the highlights after this. and donald trump sounds off on the race for the white house, the housing market and much more so don't fly away. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate.
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we're back this morning and if you haven't heard, bird is the word in baseball. the orioles tying the american league division series with the yanks last night with a 3-2 victory, in the national league division series the st. louis cardinals crushed john harwood's washington nationals with a 12-4 victory, series is tied at 1-1. monday night football the early super bowl favorites the houston texans versus the jets. our jets not doing so hot. the texans remain undefeated. foster running for 152 yards, houston won 23-17. tomorrow on "squawk," jets owner and romney supporter woody johnson will join us for a very
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special interview. if you have -- >> orioles, cardinals, that's the -- >> we can have big bird on the set if you want to give it a little bit more political -- no? ♪ everybody's heard about the bird ♪ >> you got the jokes? okay. >> ken, go ahead. >> i still think we're going to win by a major margin. i really believe this. >> yankees? >> no, romney. >> jets? >> i wish i felt as good about the yankees as i do about romney. >> we'll talk more with ken in a few moments. if you have comments or questions about anything you see here on "squawk" e-mail us at up next, we have trump calling, the billionaire real estate mogul's name coming up several times in last week's presidential debate. we'll get his thoughts on what he heard. time for your "squawk box" history lesson. "squawk box" was on the air when the dow crossed 10,000 for the very first time. what was the date? logon to facebook and "like" the
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"squawk box" fan page to find out. we're posting classic moments all week long. to receive updates and post comments about your show, "squawk box" on cnbc, and on facebook. ♪ [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it. boring. boring.
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[ jack ] after lauren broke up with me, i went to the citi private pass page and decided to be...not boring. that's how i met marilyn... giada... really good. yes! [ jack ] ...and alicia. ♪ this girl is on fire [ male announcer ] use any citi card to get the benefits of private pass. more concerts, more events, more experiences. [ jack ] hey, who's boring now? [ male announcer ] get more access with the citi card. eering, mouse clicks ]
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welcome back to "squawk box" on this tuesday morning. let's get you through some of the headlines. wholesale gasoline prices are plunging in california and analysts say that retail prices should soon follow suit. this follows governor jerry brown's move to allow winter blend gasoline to be sold earlier than usual to ease supply disruptions. yesterday marked the third straight day of record pump prices in the state. and british bank barclays taking over the uk savings and loan business of dutch bank ing. barclays gets about 16.5 billion euros of deposits and loans. ing has been divesting assets to repay dutch aid. stanley's black & decker sells unit off for $1.4 billion in cash. it sells lock sets, building
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hardware and plumbing fixtures under quickset, baldwin and fister brand names. >> thank you, andrew. our next guest is never at a loss for words either, joining us on the "squawk" u.s. in line is donald trump, president and chairman of the trump organization. mr. trump, if you were listening to the debate the other night and i know you were because i know you moved your trip so that you could be listening, i think your name may have come up more often than big bird. what'd you think of that? >> i was of course very honored, it was a great privilege. i was honored by watching the debate. i thought obama, i don't know what happened to him, frankly. he wasn't there. something was wrong and i thought obviously mitt romney was fantastic. he did a great job. >> what do you think that president obama has to do coming back in these next two debates? it's a tricky test to try and come back. you can't tack too hard and go on the attack immediately afterwards. >> i think he's really under a lot of pressure, because everyone thought he was such a great debater but he's never really been tested and now he was tested and tested with four
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years of bad record which is even tougher. i think it's very tough and the next forum, the next type of debate town hall is tougher for him to do a really good job in my opinion. >> i think this debate format was an interesting one. jim lehrer got a lot of heat for it, but to me this was a debate where you got to hear both candidates have more of a conversation and talk back and forth, which as a voter i like seeing something like that. >> i sort of liked the job that jim lehrer, i liked the job he did because he let him go at it a little bit and it showed a lot. if you remember the cnn disaster that they had a while ago and i won't mention who, but somebody kept interrupting, interrupting, you couldn't say a word, it was always interruption, this was almost a better, it was more flowing, and it worked out very well. but the next debate is going to be very tough. i think obama is under a lot of pressure. now as far as jack welch is concerned, you're all sitting
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around talking about jack welch, a great legend in business, a very smart guy, he's 100% correct, 100% correct. >> wait a second, in terms of the chicago political guys manipulating the numbers? >> how does it go down to 7? there wasn't an economist in the country and after the election they'll do a big correction but jack welch has it right, there's no question 100% and a lot of the numbers that they're using are given by the obama administration. >> i know ken has a question for you, but my only thought on this whole thing is, i don't know that i buy that 7.8% number. i don't think that's real. i don't know that it was politics necessarily. >> nobody buys it. >> he's saying it's the numbers given to the bls by the obama administration. there's a lot of assumptions. obama care, the cbo, you can't impugn the cbo for coming up with $1 trillion for obama care. it was the numbers they got, double counting taxes, all of these bells and whistles in obama care to get it to work
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out. >> right. >> hold on. for the past year one of the talking points that's been said on this show many times was that the unemployment rate was worse than when obama started, right, that was the point. now that the numbers have switched and i'm not suggesting the numbers were right to begin with. i'm saying there is an irony to it. >> the irony is that it happened the month before the election. it gets to the first time in his presidency it's been below where he started. >> every month there's a question whether the numbers are right or wrong. >> it's been all participation rate going down. they didn't do the participation rate this time. >> hi, ken. >> how are you today? >> good. >> anecdotally i said earlier every place i talk i see the economy not getting better but
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almost stalling. is that your read as well? >> absolutely. that's why when you and i and we have our eye on the economy very much we're involved with the economy. it's not getting better. it's getting generally worse. there are pockets are strength, if you look at manhattan it's good but outside is not good. look at miami it's good and outside of miami and almost 98 prgs of the country it's not doing well. you look at it, and for that number, i watch so many shows and i'm seeing the different economists because i do get a kick out of watching it, i love it, and nobody, nobody, not one, not even the biggest obama fan predicted 7.8 and out of nowhere, ken, comes the 7.8 number and everybody was shocked by it and it was today news for obama in a way but it's not a correct number. after the election they will put in a correction. if you notice for the last year every time they put out a number they're correcting it a couple of months later but the correction will be a massive correction and they'll say guess what? we made a mistake but in the
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meantime let's see what happens with the presidency. and i have to say this, i watch cnbc, and i love nbc, and i have "the apprentice" and it's your big, hot show on sunday night but i watch like sleepy eyes chuck todd knock the hell out of jack welch. i look at him and watch him, your political reporter who is extremely average and i watch him and ken, you understand this very well, i say, i wonder how he would have reacted to jack welch five years ago when jack welch was running general electric. you understand. but i watch these guys at nbc knocking jack welch and i sort of have to smile to myself because i say that's unfortunately the way life works. >> absolutely. you're right on spot, my friend. >> although, donald, do you agree with the argument that's been out there that people will look at polls and say that they are terrible polls unless they're going the way they want. >> yes. sure. >> no matter which side you're
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on. >> sure and i look at the way the polls are taken. i went to the wharton school of finance and studying polling and statistics. i could take an unpopular person and have him come out ahead in a poll if i address it the right way and in some cases they do polls where they're polling mostly democrats and owe babama leading and they put a footnote at the bottom, mostly democrats were polled. the polls have been great since the debate for romney. anybody who watched that debate really has second thoughts about obama. >> chuck talked about the enthusiasm gap, did some things that were very positive for romney as well. i think your point is that if jack was still the ceo and if ge owned 100% you're just making a tongue-and-cheek comment. >> if jack welch was still ceo
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chuck "today" would be walking into his office shaking and sweating. >> he try iz to get in the center a lot of center. >> i don't think he does. >> terrible in football in picking miami. >> on "meet the press" he was talking about the enthusiasm gap where republicans have a stronger enthusiasm this time around than the democrats. >> i just think the reporting is nothing unique. i think the reporting is very unfair when it comes to the republicans. >> check out some of the other networks. you'll see. >> i'll tell you something i see firsthand almost yesterday almost the whole day, i spent working on people to contribute to the campaign. >> right. >> the money is coming in, in incredible amounts. >> obama did $18 million. >> i don't believe that number. i believe it was cooked. >> you don't believe that? >> i don't believe that number. i will tell you this, though, the passion for people who want to support romney has gone through the roof in the last week. >> since the debate and you're
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speaking as somebody who is raising money. >> a tremendous amount of progress has been made, ken, since that debate beyond what anybody ever thought possible. >> you got it. >> let's see what happens. i keep spending a fortune at home depot in the meantime and i don't like it. >> he'll be calling you up for some money later on. >> come up, senator john mccain of the armed services committee and former presidential candidate will join us with a preview next and this is a live shot of athens, greece, german chancellor merkel meeting with officials there, to a decidedly mixed reception, more than 7,000 police will be on hand to keep protesters at bay. we are watching the situation, we'll keep you updated throughout the morning.
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let's get some thoughts from our guest host ken langone, talking about a lot of issues related to the election and the campaign and the debates. i wanted to get your thoughts in particular, we always go back to taxes. one of the things romney has said and it's still a question in my mind, he says i'm going to lower the rates by 20% across the board, and i'm going to reduce deductions and make sure it's deficit neutral, but i'm not raising taxes on the middle
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class. and depending on how you look at that, it's hard to make that math add. >> said one other thing, people that are now on entitlements will not be affected at all. >> right. so if all of that -- whether it's the tax policy, i know we've talked about there's a view that it's biased, but everybody who has looked at these numbers i have not found somebody who said the math adds. >> baked into those -- >> it doesn't say the math adds, no, only at 100,000. if you consider -- you're making over $100,000 your taxes are going up. you consider those people middle class or not? >> taxes are going to go up on certain people when the deductions go out. >> but you can't say at the same time that not raising taxes on the middle class -- >> stop. he said something else, which is equally important. if we get rid of some of these stupid regulations that are
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impairing jobs. >> right. >> let me give you one -- >> that's an argument i accept to some degree. >> david farr, the ceo of emerson electric had two plants in states that were not good for busine business, because of what happened in south carolina with boeing, now catch this, had he moved the plants to right-to-work states, he'd have been sued. what did he do with those plants? he sent them overseas, 900 jobs. believe it or not, if we get rational about -- look, with he need regulation. romney said we need regulation. it's important. it is, because if you're going to run a bank, there's got to be some level of accountability to make sure that if i put $100 in the bank as a deposit, i can feel good it's going to be safe. so there's no issue there. but some of the regulations that are -- nlrb it's a joke. so you got that, so it's a
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two-pronged effort. you get that, because bernie and i both feel strongly. by the way my partner, bernie marcus, let me tell you about an american, open heart surgery five weeks ago. >> i didn't know that. >> here he is now around out working on making certain that we have an environment where we can create more -- bernie hasn't got to work a day the rest of his life, bernie and billy are having a wonderful life, god bless this man, he's spending his time and his money getting the message out. we know how to create jobs. we've created them. the point i'm making is the taxes will go up when you have a bigger work base. >> right, and that -- >> that's what he's betting on. >> it's a supply side argument and anyway, we got to run because we have mr. mccain coming up. >> oh, good. >> we do. mitt romney says the middle east has become a more dangerous place during the obama administration. he made his remarks in what his campaign called a major foreign policy speech yesterday in virginia, joining us now is
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more, senator john mccain, joins us from raleigh, north carolina, where he's campaigning for governor romney. in a nutshell, senator, summarize the points that governor romney made that you think are most spot-on in terms of talking about the middle east and where we are right now. >> well, first of all, could i tell bernie now that he's recovered to send some money to the romney campaign. >> i'm working on him, john, i'm doing that. >> good, thanks. let me just say that i think that mitt romney's speech was reaganesque in that he emphasized that america should lead and if america doesn't lead, then who will? he emphasized the fact that we have seen a deterioration throughout the middle east. the president likes to say the tides of war are receding. the only thing that's receding in the middle east is american leadership, and i could cite you
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example after example, but i think that mitt was trying to get the point across that he can lead the way ronald reagan led, and that is with america in front and not from behind. >> well said. well said, senator. >> i'm wondering, senator, whether we start to see some shift in sentiment, this has been a strong suit for the president i guess after the death or killing of osama bin laden, most people thought that maybe governor romney should stick with domestic issues. you think this is a fertile field for making some gains? >> oh, i think so, and if you'll indulge me for a second this libya debacle where five days after what was clearly an al qaeda affiliated terrorist attack, they send out our u.n. ambassador to tell everybody, on all major news shows that this
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was a spoon stainio iospontaneo demonstration bred by a hateful video. you don't have spontaneous demonstrations with mortars and rocket-propelled grenades. look, iraq, because we didn't leave a residual force behind, al qaeda's back and iranians are exerting their influence. in afghanistan because the president overruled his military advisers time after time we're seeing this terrible afghans in uniform killing americans in uniform. the palestinian/israeli peace process moved forward, not at all, and the iranians continue on their path to nuclear weapons and 30,000 people have been killed in syria and we do nothing. it's really a failed leadership that i think that mitt romney will be able to capitalize on. finally, t"the military times" s
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a newspaper for the military men and women, they took a poll of the men and women in uniform, guess who won by almost 3:1, mitt romney, those people know about national security. >> senator, we hear time and time again there will have to be cuts across the board, that defense is one of the big areas, bowles-simpson targeted defense i think something as the third biggest issue that needs to be addressed. do you think that we can cut the defense budget or at least maintain, keep it steady, not increase that budget, and still keep the globe safe? >> well as you know we've already been implementing $460 billion in defense cuts. there are other savings that could be made in defense. cost overruns in these weapons acquisitions is a scandal, the least noticed enormous scandal there is in america today when you look at the costs of things like the f-35 and our latest aircraft carrier with these cost plus contracts, but there are savings, but it can't be done
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with a medax which is what sequestration does. the secretary of defense said it would devastate our national security. senators, republican and democrat, we have asked the president to sit down with we tried this super
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committee and that's how we got sequestration. everybody was so sure that they would come to an agreement on that. look, the approval rating of congress is 11%. i have not met anybody in the 11% category. i'd love to, because i'd like to ask them what they approve of that we are doing. and so -- maybe their blood relatives and paid staffers. >> the fed seems like it does its job i'm referring to trying to figure out what really happened in benghazi and libya.
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we're seeing jake tapper, there are people that are going to get to the bottom of this and what actually went on and whether somehow there was any type of trying to change the story in hindsight but it doesn't seem to be with the same zeal that you look at someone's tax returns from three or four years ago. in fact a lot of the "new york times" reporters i think are still trying to work on that story, go through the tax returns but maybe they'll get to benghazi later but does it matter that it's not, that it doesn't seem to be the same amount of zeal, depending on which party you're looking into? >> well, if you're digging for the pony, maybe one of the reasons why the president did so poorly in the debate was because he's been in a bubble four years surrounded by an adoring media, and the first time he got challenged on his record, he found it very difficult to respond. by the way he'll do much better in the second debate. you got no place to go but up. as i said if it had been a fight, they would have stopped it. but there's going to be a
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significant improvement in the president's performance, but still he's going to have great difficulty defending his record. i mean i think there's a great example this morning, did you see the new ad put out by the president's reelect obama campaign? big bird. big bird. what is that all about? you know? so i think that we've got some momentum, but i think it's still going to be very close and i think that mitt's got to do a lot better. >> senator, thank you. good to see you this morning. thanks. >> thanks for having me on. >> you're welcome. up next a check on the markets, the futures are pointing to a slightly lower open on wall street this morning, also check out what is still to come on today's program at the top of the hour, uk independence party leader nigel farage. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.
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coming up next the leader of the uk independence party, nigel farage on the global economy and the fate of the euro. speaking of europe here is how markets are faring overseas. take a look at the board right now. "squawk" coming back in just a two-minutes. [ horn honks ]
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into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it. a man never shy about speaking his mind. >> these numbers don't square with what's going on in the economy. >> one more hour with co-founder of home depot ken langone. and nigel farage is a member of the european parliament. >> really, you have the charisma of a damp rag and the appearance of a low-grade banklark. >> that insult addressed directly to the eu president earned farage a fine of $4,000. we'll get his take on the
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european recovery and the greek bailout. >> we continue our "what's working" series with another top portfolio manager, morningstar named david herro, international stock fund manager of the last decade, he'll join us with global stock picks. the third hour of "squawk box" starts right now. >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick, and that's a tannish -- >> cream. >> you wore black, two in a row for rutgers for some -- >> yesterday was green actually. >> yesterday was green, the color of money. and andrew ross sorkin. you're in the united states this week, think is good.
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you were gone for 24 hours and your life is like -- >> would you expect anything less? >> no, that's what i'm saying. our guest host this morning ken langone, co-founder of home depot, chairman of invemed associates, much more to come from ken because we just promised it. you see the whole hour is about you. >> let's get you caught up on the morning headlines. the imf is cutting its global growth forecast for the second time since may and urging u.s. and european policymakers to deal with their fiscal issues or face with aprolonged downturn. it says the global economy will grow at 3.3% this year down from a july estimate of 3.5%. earnings season getting under way today with the release of dow component alcoa coming after the closing bell and the highlights of some of the big profile companies later this week we'll have jpmorgan chase, wells fargo, both of those coming out friday morning, of course while "squawk" is on the air so we'll talk about that.
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let's get a quick check on the markets, u.s. equity futures at this hour, i want to say mixed but the dow looks like it's off almost eight points, nasdaq off about five points, s&p 500 up marginally. overseas in asia as things are closing or closed there, shanghai composite up 40.8, that's almost 2% so that's actually, well and then the nikkei though down a percent, all of this on the heels of this imf report and then in europe i would say, what are we going to say, we'll call it mixed marginally across the board. >> german chancellor angela merkel making her first visit to greece today since the debt crisis erupted in 2009. greece's two largest unions taking to the streets in protests of austerity cuts. fortunately michelle caruso-cabrera is here and able to talk us through that and has a special guest. >> let's show everybody the live pictures in honor of angela merckal rifg in greece. thousands and thousands of protesters in front of parliament.
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angela merkel going into the lion's den, from the lead company germany providing the most bailout money to greece, receives hundreds of billions of euros as they try to balance their budget and reform the economy. it's gotten ugly this morning. she arrived a couple of hours ago, greeted by the prime minister who has been in charge only for a couple of months, antonis samaras, she's there to show support to the greek people and also to encourage them to condition their reforms of which they've been very slow at doing but also probably to lay down a little bit of the law saying they have to get it done. here she arrives at the parliament. let's show you some video. there's been a lot of anti-german sent nimt greeiment. i find this emotionally disturbing, i look people dressed at nazis with the nazi flag, the hitler salute going through the square to protest. >> wow. >> angela merkel and her arrival there. i want to bring in nigel farage,
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one of the biggest euro skeptics out there, the founding member of the uk independence party and member of the european parliament a representative of the uk. >> good morning. >> what do you think when you see the pictures on the ground in greece? >> i just think this european project which if you remember was designed after world war ii to bring europe closer together to make us all love each other and look what it's doing. it's actually making the north and the south of europe hate each other. yes you've got those people dressed up in nazi uniforms, in athens but don't forget the tabloid press in germany are writing every day the greeks are usele useless, lazy and they're not worthy of their money. the symbolism of angela merkel turning up in greeps at a time like this is horrible. if i was greek i'd say here i am living in a country that invented democracy, and now we have a series of foreign leaders and foreign bureaucrats telling us what we can and can't do and frankly, what you're seeing on the screens with these protests can only grow as time goes on.
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>> nigel you're in a tricky situation there. the greek people need the support that's been given them, and the loans that have been coming their way. >> no, they don't. >> just default and go back and forget it all? >> the greek people are imprisoned inside a currency they should never have joined in the first place. >> you're saying they should default. >> i think they should default, devalue and give themselves an opportunity to trade their way back to prosperity and they'd get back their democracy, their ability to govern themselves and perhaps some sense of hope, because what i get in my mail bag from greece are people who literally feel hopeless, they cannot see any light at the end of the tunnel. >> i need a little help here. the german people work like hell, have a solid economy, it's their money, they've been carrying the greeks by virtue of the debt they bought. explain to me why these people feel they have a right -- and let me preface this. every greek i know in america is
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smart, ambitious, they work like hell, they have a great work ethic. what's the right of these people to look to the german people and say give us more. you should give us more. i agree with you, greece should never have gone into the union but we are where we are. but collectively for a nation to say to a creditor, i want more money, because this is what this is all about. >> that's what the government's saying but it's not what their demonstrators are saying. >> but if in fact germany was more forthcoming, the likelihood of this kind of demonstration would not be very high. >> but you know, we've bailed out the greeks now three times effectively. there is no growth coming back into the greek economy. the greek economy will contract this year by 7%. we've got youth unemployment now touching 60% in greece. the situation is hopeless. >> the bls calculated youth unemployment at about 9% over there actually. no, i'm kidding. >> that's a little bit out
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there. >> our bls 9%. >> it's not too far away in spain either. frankly, frankly, we are sending greece by keeping them imprisoned inside a currency that doesn't suit her with an austerity package that is pretty harsh and with no compensation. the mystery to me is why is the imf supporting all of this. >> i agree. >> that's a mystery. >> you don't think the euro should exist generally? >> there was an optimal currency in the northern area and quite arguable half a dozen countries could have worked together inside an economic and military union. >> right. >> but i was there, i was in brussels when the euro was launched and i tried to ask the economic questions. i was told nigel, go away. don't bother us with detail, we're building a new state. and that's the point, it was political from the start. nobody thought about it. but i think in the end, the whole thing will fail and i'll tell you why, because right at the heart of this, of course, is the franco-german pact that is the basis of the european union
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and with a no one noticed there's a competitiveness gap opening up between france and germany. the french have got a new president. the first thing he did was reduce retirement age from 62 to 60 and second up the minimum wage and the third thing was to introduce a hate tax of 75%, which says if you're an entrepreneur left in paris, leave now. >> there's a lot of merit to that, you have the northern european bloc which people work and manufacture and do things and then you have the southern european bloc where it's all vacation places and they have a different currency. think about it. italy, wow, spain, costa del sol, greece, the islands. where does france fit in? because they don't work and -- >> well, that i think is the fault line that lies at the heart of this, that ultimately i don't think france and germany will survive together in the long-term. >> i agree. >> inside an economic and military union and that's why i think that the death of the eurozone is going to be a very
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long, slow and painful process. >> long and slow. >> greece being the first one out? >> greece will be the first one out and portugal or spain afterwards. >> they can devalue their currency, get back to being xet competitive. they don't need to create that many jobs with 11 million or 12 million people. >> when do you think this happens? >> if i knew the answer to that, i'd be down at the bookmakers right now. i just don't know. >> we had this conversation a very long time, right? >> so many of the elites, if you will, in europe, are so tethered to this idea of making it happen, right? i was just in paris and it was so clear to me that every single person thinks we have to make this work. so what is going to be the straw that breaks that back? >> well i think this whole thing will take much longer than is should. economic logic says it should break up quickly but the political will, i would describe it as fanaticism. they think the solution is more of the same. i think it will take many, many years. what will break it up in the end i think will be one of two
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things, it will either be a democratic revolution in countries like finland and the netherlands, where they get governments who say enough. >> right. >> or it will be violent revolution. >> you said something to me before we came on, you see the fanaticism equivalent to the fanaticism that once existed for communi communism. >> i did. >> if you look at the plan they've outlined for greece it's a path towards capitalism, reform your labor markets, these are liberalizations of these countries, very different. >> but at the same time they're saying that the greeks have to introduce green taxes and ridiculous carbon emission targets, how on earth is greece going to get manufacturing going with the co2 lunacy around their necks. whenever the european union talks about liberalization, be success sishs. what they mean by liberalization actually is central demand management of the economy. >> wow. >> anarchists have arrived on the square so if you see a lot of running. >> i was wondering where they were. >> they finally arrived. >> michelle, we were talking
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about how the protests were banned for a while merkel was there. >> yet they've allowed them to happen. i think it was going to be ugly if they really tried to force tens of thousands of people to not show up. did you really want to have hand-to-hand combat with generally speaking when the communeists show up to protest and that's who is driving the vast majority of these protests they are quite peaceful and they're usually the ones beating up the anarchists trying to prevent them from arriving so -- >> so you want these people here to keep people calmer. >> exactly. >> nigel, are you following this country and our histrionics with the election coming up? >> very much. >> you want to stick arched for another block and take a break. >> yeah, i'm fascinated about it. >> will you say crazy stuff about what's going on here as well? >> i must say i am surprised there is not a property debate about what's going on in america about the debt.
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>> this conversation will continue in a moment. the next half hour we'll continue what's working now, picks from another top portfolio maker. david harris is going a herro os will be here at 8:40 eastern. check out the "squawk box" market indicator, you see modest gains and i mean really modest gains. "squawk box" will be right back.
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let's continue as we look at pictures from athens live, that's what's the reception that the greeks have planned for angela merkel, who is visiting today, we are going to continue our conversation with ken langone and nigel farage, and michelle caruso-cabrera continues with us, our international correspondent who brought nigel along and it occurred to me you've got such incendiary, but some -- >> strong words. >> it's hard to tell the truth in this day and age at times and
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you have opinions about the eu but also about what's happening here in this country and we went to break with you say that we are talking about the debt here. we are talking about it quite a bit but we are, too, and people disparage the tea party and say they're obstructionists and 2010 ushered in the horrible period of divisiveness in this country but they were elected for a reason and for every tea party member that's in congress there's a constituency that elected this emto try so say stop to the spending that we're doing. so we're at least talking about it. can we avoid this fate that we're seeing in europe? >> i must say i was an obama skeptic from day one. he is the worst kind of politician we have across the western world. people get to the top who have no experience in business or life at all, the classic career politician. i've always been skeptical about him. i think the american spending levels are hopelessly out of control and frankly you are no better here than in europe. romney did very well in the tv
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debate last week. i would just like to see romney be a bit less ashamed of who he is. it's as if he wants to hide from people the fact that he's made lots of money and been successful. i would have thought he should come out all guns blazing, i've been a success in the commercial world, i'm the man that can make the tough decisions that america needs and be more upbeat about himself. >> there are shareholders of bain capital, you're going to benefit from my expertise and knowing how to -- >> why not do that? why not say that? >> absolutely. >> there's something else here, the private equity world is inhabited by limited partners in the state funds. they're the biggest investors for good reason, the returns there are better than what they're getting. >> so pensioners are benefiting, lots of average americans. >> the fact of the matter is, if i give you money and you're going to make me 5%, you're going to charge me 50 basis points, i give you money and you're going to make me 20% and you take 2% which brings me down to 18% and 20%, which brings me
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down to 15. take it or leave it. >> the commodities trading business. >> i remember the reaction with some of our colleagues in the uk to the 47% remarks of romney and they looked disgusted by those remarks. it's not like the uk, it's not like you're in a position to throw stones. >> our problem in the uk is 53%. it's a bigger problem. i think the problem with that was if we'd heard romney say that a lot of that ez people es trapped by a system not creating new jobs and i'm going to create enterprise in america like we did in the 1980s to get these people out of that mess, that would have been okay. >> expressing -- >> but it didn't come across that bay. >> expressing empathy for people that have not and lifting them out of the position that they're in are two totally different things and i'm tired of hearing someone tell me how empathetic they are when they have no idea how to help those people. >> that was a clumsy statement
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and it did not say what nigel just said and he has admitted that himself, it was a clumsy -- >> let's not make mitt what he's not. mitt is a very modest man. he's a very decent man. what you see is what you get. i think we need more of that in america today, where you can connect with the problems of the american people in the middle and he made it clear the other night. the thing he's going to make certain is that he protects the middle class. obama wants to spin them, this is very interesting. mitt's being called a liar by obama's camp because mitt is being mitt. he's not being what they want him to be or what they cast him to be. this guy is, look i'll tell you one thing, if this man is elected, and i think he will be, i think by a substantial margin, this man is going to go down as one of our great presidents. he's going to get the job done, and he's going to bite the bullet. i think we have a great chance of addressing our economic issues, because we will be like europe. if we don't get off this path we're on, all we're seeing is a
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hangover of people still believing in our currency. but once they lose faith in our currency, game, set, match. >> and what do you think about the federal reserve and what they're doing? you used to run a commodities trading business. how do you feel? >> i'm horrified. we've already mentioned the imf but i'm horrified at the way central banks are acting. even keynesian economics was not supposed to be perpetual. it was a short term problem in a downturn. we're trapped with quantitative easing and massive deficit buildups every year. someone has to grip it and if romney is the man, good. i'd like to see him give more leadership and say i'm the man, i've done this in private business and can do that for the country. >> i think he did that the other night very clearly. >> in the debate. >> back to what you said earlier, our current sitting president if you were to look at his resume, which we can't see because he won't let us have it, seriously, we don't know what grades he got, don't know where
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he went to college. >> don't we know that for romney, to he? >> absolutely. i have a trade for romney. i'll give you eight more years of tax returns, you unseal all your records that you won't let us see. tell me why you surrendered your law license in illinois and why did your wife surrender her license in illinois. let us know why. you're running for the presidency. you don't have a private life anymore. it's gone. you made that decision when you said i'm running for president. what i'm saying is, we know one thing about mitt romney. he's got 25 years of solid business experience, most of which has been very successful. and he's a decent man. by the way i'll say it again. i'm going to feel very good when this man is president in january because he's going to make, i believe he'll bite the bullet, nigel. i really believe this guy -- >> nigel, you were there for gordon brown. what was that like for you? >> well, he was a man, it was awful really, not only --
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>> scars. >> i want this guy on the show every time. >> not only did he sell 400 metric tons of gold at an average price of $258 an ounce, we can all make bad calls. what he did he announced to the markets the 17 days on which he was going to sell the gold and the quantities. i mean, we just had a moron in charge. it was disastrous. >> like i said once again your glass house dwellers should not -- anyway, thanks to nigel farage and michelle caruso-cabrera, ken langone will be with us for the rest of the show. >> hope to see you again. when we come back gas prices in california setting records but relief may be in sight for west coast drivers. and on our "what's working" series, david herro will bring you global portfolio picks at 8:40 eastern time. as we head to a break take a look at the pictures of the protesters in athens, again things have turned a little more violent. you can see things being thrown back and forth, we saw fire being thrown last time we were
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looking at these molotov cocktails. you can see right now this is what's happening, angela merckle is visiting from germany for the first time since things went south in 2009. "squawk" will be right back. ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.
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...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. welcome back to "squawk box," everyone. wholesale gasoline prices are now plunging in california, and
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analysts say that retail prices should soon follow suit. this is coming after governor jerry brown moves to allow winter blend gasoline to be sold earlier than usual to try and ease the supply disruptions after that shutdown at one of the refineries in southern california last week. yesterday though marked the third straight day of record pump prices in the state so that relief can't get here soon enough for california drivers. when we come back, we've got everything you need to know ahead of the trading day. we'll head to chicago for a look at what traders are watching in the pits and morningstar named him international stock fund manager of the decade for 2000 to 2009. we'll get global picks for your portfolio from this man, david herro, chief investment officer at harris associates.
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welcome back to "squawk box" on this tuesday morning. let's look at some stocks to watch, stanley black & decker selling its hardware and home improvement unit for $1.4 billion, that unit specializes in door locks and bath fixtures. ken langone knows something about that. the buyer spectrum brands that makes remington shavers and
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george foreman grills. goldman sachs downgrading johnson & johnson to sell. edwards lifesciences is lowering its fiscal third quarter outlook saying sales of its flagship heart valves are hurt by economic weakness in europe and the u.s. >> bingo. >> bingo what? >> hurt by the economic issues in america and we have our unemployment number going down. every place i look i'm seeing the same thing. things aren't robust. not enough to get it 0.3 improvement in the unemployment rate. >> steve liesman is here. we were going to talk about the markets and we have rick santelli in chicago, both of them as well but steve, since you were talking during the break with ken langone. >> let steve talk to rick. >> hey, rick, how are you? >> good morning. >> so we talked. is that good? >> no. >> no, i just want to say, ken, if i look, guys could you put up
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the chart of the payrolls? if i look at the payroll chart and i talk about what i think is the number you guys actually believe, which is the 114,000. look at what happened, we've revised up the past couple months, we had that swoon in march, april, may and june, okay, the unemployment rate stayed about the same. look to the left, we had a couple months above 200,000. let's focus on the number you believe. and let's talk about what jack welch said. when i looked at what he said there was one number i think jack had wrong. jack was saying we need 150,000 to 200,000 jobs to lower the unemployment rate. that is, was old thinking. we've changed that number over the past i want to say couple years to think it's more like 100 to 125. so ken, we had been talking about the number that you believe, we have been in and around the number that's required to keep the unemployment rate either the same or to bring it down a couple ticks. inside this very controversial household number you had a couple months of negatives.
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this represents catchup and probably some exaggeration that just happens all the time. the same economist that you guys say, hey, none of them had a number of 7.9. guess what, ken? none of them are saying that this number was cooked or otherwise the subject of a conspiracy. they say it happens and it's not out of line with what's been going on, for example, in the payroll numbers. >> look, look, you're living with this chart room and these numbers. >> right. >> the fact of the matter is i call up our truck leasing company, our miles are down. the used truck market is okay. >> yes. >> great line corporation is offering us deals because they've got gaps in their production schedule. the fact of the matter is -- >> i don't disagree with you. >> hold on, 39 months into a recovery, your number. >> right. >> and we still have 7.8% unemployment. >> agreed. agreed. but what are we talking about? >> hold on. on top of that arbitrarily we say if you stop looking for a job, you're no longer
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unemployed. >> always been the case. always been the case. they have not changed the rules, ken. ken, let's just, you and i agree more than you're making out. i'm saying this is a 1.5 to 2% economy. i'm not saying this economy is growing gangbusters and i'm also saying the change we've had over time in the unemployment rate not inconsistent with the -- >> rick, what are you saying? >> i haven't changed one bit. >> let me ask, rick, what are you saying exactly? the bls, they get numbers from somewhere, right? >> two numbers. >> why would you ask rick that question? >> because i'm tired of listening to you. where do you think some of these numbers would come from. >> that's pleasant, that's good stuff, joe. >> give him a chance. he said he's here and then you talked for five minutes. go ahead. >> as opposed to you? >> we could argue about the process, we could look at how the bls outsources to the census bureau, we could look at how the census bureau operates, where their jurisdiction is, what shifted in '09 but we don't hey need to go there.
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everybody is protesting too much. here's what i will say. we have a stock market at multiyear highs, we don't have an economy at multiyear highs. you can put any jobs level 100, 125,000 you want and put it forward and say it's going to be the new benchmark because that's under the guise of this shrinking labor force so that number isn't really viable either. all's i can tell you is, there was no doubt in my mind a month ago it would be under 8%. there was no doubt in my minutes five minutes before the number it would be 8%. take it any way you want! >> rick, what you're implying with your comment -- >> why, i'm not implying anything. i'm a market whisperer. i'm telling you and it turned out that way. >> why say it? it was the same point jack welch made. >> i like people to get the benefit of my 32 years in the market. there was no doubt it would be under 8. it is under 8. >> why did you have no doubt, rick? >> because i have no doubt! because i've watched the market and i can tell you that the
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current trends -- >> be honest, rick. >> -- there's no different than the current trends of other numbers. >> this conversation is going nowhere. >> i'm not nigel farage. i don't want a $5,000 check to write. i'm telling you there was no doubt in my mind. >> why was there no doubt. >> draw your own conclusions, steve, connect the dots. >> i am connecting the dots and asking you to be honest. >> i am honest! under 8, it was under 8?! what else do you want? what else do you need? >> either way. >> a fact is a fact is a fact. >> make it up. >> we know the unemployment number is a pretty volatile number that can swing around. >> right. >> would you guess that it gets revised higher? >> no, they don't revise. everybody's wrong about that. they do not revise the unemployment rate. it comes back and revise the population estimate, they'll come and revise the payroll data because they get more data that way. >> we go back up on better jobs number. 8.1 back to 8.3. >> there say lot of interesting stuff that goes on inside
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unemployment. >> what happened with the part-ti part-time? >> that's the other thing. >> 20 to 24-year-olds, 20 to 24-year-olds that are in school kicking up the student loans, look at the sally mae research, they had the biggest drop in unemployment 64 years that was out early. but you no he what? if you weren't looking for conspiracies -- >> as i roh reported that morni and the past three septembers. i also reported by the way -- >> u6 was 14.6%. >> they said that you had this surge in -- you can look that up, they said u6. why wouldn't you fudge the whole thing while you're at it to make it something believable. >> why? come on, you can't get three people to agree on a car accident description. if you were going to pull it off, you would do it by a 20 to 24-year-old, or by the polling or by the questions you asked. >> joe, rick, there's been the
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last three septembers they've had this number surge, part-time for economic reasons so if this is a conspiracy rick it goes back three years. >> i didn't say it was a conspiracy. that's all your words. okay, you want to talk about next month's number, too? >> it's a little bit too cute by half, rick. >> if somebody tells you you're going to win the lotto tomorrow and you win the lotto tomorrow, that's a good call. leave it at that. >> let's leave it at that if we could, steve and rick, we thank you for perspective this morning. >> ken? >> let me give you a number, a hard number. i just sold a business to a company called dice holdings. dice holdings among other things has an online employment agency. in the last year there have been 85,000 jobs in their offerings of jobs that they can't fill because the kids aren't qualified. let's address the issue over the long-term, which is we are destroying ourselves with our educational system in america,
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and unfortunately, steve, unfortunately the teachers unions have the current administration in a hammerlock. there's a gal in california flamed gloria romero, an article written about her, she's a democrat elected to the legislature and term limited out. her five terms are up. read that article about what's happening in california to these kids that are being deprived of a future. the issue to me is not that number. the issue to me is how do we get these kids equipped and prepared to get those jobs and succeed in those jobs? >> it's not just lower education, though, too, it's higher education. >> absolutely. >> tai was talking to two womenn the makeup room whose kids are in college or on the way to college. if you don't qualify, the loans you qualify for are 6.9% or 7.9% interest rates and you have to start paying immediately, not even when the kids graduate.
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>> one more thing romney said in the debate. good schools, good teachers. the fact of the matter is, like it or not, we've got to figure a way out to elevate the standards of these people that are, that have all the precious assets, our children, our grandchildren, okay? guess what? this is not a political issue. this is a long-term economic issue that will destroy this country and our civilization, if we don't educate -- >> the math scores are terrible and the only place you can get higher at bls at this point. >> got you. coming up, we continue our what's working series with portfolio series from another top manager. yesterday steve romick. today we have david herro. i'm saying it. is
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all this week we are gathering portfolio picks from top fund managers. david herro joins us to talk investments outside the u.s., he manages the five-star oakmark international fund which celebrated its 20th anniversary. david has been with the fund since its inception in 1992, named morningstar's international stock fund manager of the decade from 2002 to 2009. we wanted if you're a fund manager why not say it's hero? >> i got teased jukebox hero,
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billy don't be a hero. >> you're going with herro, even though these are heroic returns. do we have an annualized return on 9%? >> i think it's closer to 10%. >> 9.9%? >> 9.9 over how many years? >> 20. >> wow. >> pretty amazing. >> it's madoffian, i'm not implying anything but i think he was doing 10.5. >> you could solve our pinching problem. >> you could solve a lot of problems. so i guess you had good years in 2009, 2008, you have to have really good years to offset what happens in those years, right? you haven't had all positive years, right? >> that's right. we had three outlier negative years probably versus eight or nine outlier positive years. if we could keep the ratio 3:4:1, what's important to us meeting long-term performance and trying to win over three, five, ten, 15 years. >> you're long only? >> long only, boring deep value
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investors looking for business. >> around the world? >> anyplace outside the united states is my mandate. >> okay, so it seems like there's a lot of places outside the united states that aren't particularly -- >> doing well. >> -- good places right now, right? >> that's exactly right and this is where you make money when the macro economic situation which tends to be very cyclical allows to you buy quality businesses. remember a business is something that produces a long-term stream of free cash, and if you could look beyond say a couple bad quarters or a couple bad years, and buy quality at a low price and have the discipline truly to be in there buying these quality companies, then you could make money over five, ten, 15 years. >> so then there is opportunity where there's a lot of flux and tumult i guess. where are some of your favorite areas and give us some actual names in those areas. >> okay, i mean here is one area that's been out of favor for quite some time, anything in japan really looks very cheap on
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paper. that doesn't mean it's a value. it means it's a reason to go look. the japanese equity market today trades at less than one times book value. that market peaked in 1989, close to 40,000, and today it's at 7,800. so again not everything that's low in price is a value, but we're able to find some good, quality businesses that have been caught up in this downdraft, something like a daiwa securities, which will not only rebound eventually when the japanese market rebounds but it has been growing its asset management business. over the last decade or so, japan has kind of deregulated what you can do and cannot do in terms of individual investing and daiwa has done a great job increasing their market share in funds under management and asset management. >> we'll go to japan, look around, might need your help with what to buy. where else? >> you look at europe of course its bean a macro economic
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disaster. parts of europe have been a macro economic disaster for about the last year or so, southern europe is the part that's really been bad. northern europe and parts of western europe have not been that bad, but you could look at companies based in europe, whether it's a company like daimler, which of course makes mercedes automobiles and it makes commercial vehicles, or even some of the luxury good companies, like ppr or richmont, anything that's kind of consumer discretionary, based in europe, has been transfompled, even tho those are good for the long haul. >> you don't say southern or northern. you don't just go germany or north? >> exactly. we own a company called fiat industrial which is a spin-off of the fiat group that is the owner of case new holland and evekor trucks, they're based in italy but have a good balance sheet, good competitive products. >> yep. >> these are things that just because they're based in italy
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or based in europe, investors don't want anything to do with them. >> you get to visit the headquarters and go to italy instead of freezing up in finland. >> what about the bric countries? >> the problem with the bric countries is, if you want to buy quality businesses, they're really expensive. i just spent a week and a half in brazil and in chile, and you know, certainly there's a great deal of economic activity occurring in these places. now china is slowing down a little bit. russia is doing okay. brazil is supposedly going to pick up again. by the way brazil is really a country that lives beneath its potential, it's strangled with regulations and taxes and corruption still and yet it really does have a lot of potential as they slowly begin to lower their grip on these things, but the quality is expensive, the minors are cheap, the market looks cheap but it really isn't. >> how much is in the fund now? >> just over $9 billion is in the fund.
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>> been there the whole time? >> not the whole time. we started with zero 20 years ago. >> but you've been there the whole time. >> i've been there the whole time. >> we'll have you back and talk more. >> thank you. >> you're a hero to us. >> thank you. >> it's an amazing that return. >> it really is. >> that's something. >> rule of 72 doubles every year. no, doubles every 7.2 years. >> so like you said 20 years, right. doubles in seven, quadrupled in 14, he goes up eight-fold. >> next year. >> yeah. >> programming note for you, by the way, we're going to continue our "what's working" series, tomorrow at 8:40 eastern time with dan fuss, he is portfolio manager at loomis sales. his bond fund has a total annualized return of 10.25% since it was launched back in 1991. >> i think the market is
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anticipating romney winning. >> 21 years. >> adam parker said a while ago. >> what's that? >> same thing. >> i believe it. i think the market -- >> that's not hurting. >> qe infinity. >> not said a month and a half ago. >> i'm telling you a year ago, in my mind, i came to it, but in my mind, people were getting -- >> it does an economic analysis who have is going to win and had romney ahead all along. >> lilly may have something in the alzheimer's drug. >> i'm saying the market guys are intrade -- >> we're going to continue this conversation in a moment we also have stocks on the move ahead of the opening bell, we'll check in with jim cramer at the new york stock exchange and right after the show, make sure you check out the "squawk box" facebook page, andrew's going to be hosting a live chat, answering your questions about "squawk,"
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jim kramer at the stock exchange. what you looking senate. >> i'll tell you what the retail investors is doing. bank of america totally disagreeing with the upgrade yesterday. netflix has a driven fix on the dot com saying the same thing, this is the biggest battleground other than eli lily. the alzheimer cure is what people are buzzing about. >> where do you think netflix goes? >> i have to tell you, if bank of america is right, this thing gets cut in half. they do a peak and then netflix is done growing, there's no way the stock can stay anywhere near $70. >> jim, are you looking for a national league team with red uniforms not based in st. louis to root for this year since the phillies are out? >> it is rough. >> i have a suggestion for you if you need a team. >> look, i like the reds. i have always liked the reds
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because we don't compete directly. >> i didn't feed you with that response. >> i like the reds very much. have always had a big respect for them. not enough time, we talk about the unemployment number, not enough of that time was in atlanta. nobody cared. it was an amazing disgrace. >> they were the real refs. >> can you believe that? also, can i just mention in terms of disappointment and unemployment, sanchez? sanchez? sanchez? >> woody is on tomorrow. you can give him hell tomorrow. >> he wants to talk more about the election than the jets. >> when you go into the end of the half and you do that, sanchez, i have to tell you, i don't know how you live with yourself. >> i can't believe you saw that and are up tweeting -- >> this was a game that i thought the jets were going to take, 5-0. >> kramer, we have to run, but i saw your tweet with verizon.
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>> i'm going down all the time. my verizon tweet was going to be on al roker's show this morning. it went down. that's unusual for verizon. >> i have always loved al roker. >> now you do. >> i grew up with al roker. >> tell me what you think. >> a childhood hero. >> okay. don't overdo it. >> tell me what your big concern is. >> we'll talk about it a it have break. >> our guest host has the last word right after this. politics, education, jobs, which one of these words are we going to talk about? we'll tell you what's keeping him awake at night. tomorrow on "squawk box" we'll get a realty check from richard lefrak. plus politics and football with new york jets owner woody
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johnson tomorrow morning on "squawk box."
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♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it. back to our guest host today for the last word. instead of closing shots, the last word. the word you picked, this is free association here, it is
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education. we throw out education. what do you say? >> i say that we have a serious crisis in america in educating our children in public schools. if we don't address it, all the problems we see now are minor to what the problems will be 10 or 15 years down the road, but i have a great belief in the american people and truly believe we'll address these issues. i think we'll get to them a lot quicker if we have a change in the white house. that's why i'm enthusiastic and so aggressive in doing what i can to help the man get elected, mitt romney get elected president. >> what does he do immediately to fix things or that immediately starts the change in the works? >> well, i think we have a more objective look at what needs to be done in education. i don't mean to beat up on the unions, i don't want to do that, but the fact of the matter is that we have to hold our teachers to a higher level of accountability if we are going to move the needle for the kids. the


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