tv Squawk Alley CNBC March 23, 2016 11:00am-12:01pm EDT
a long holiday weekend and we're continuing to watch developments out of brussels. good to have you back. >> thanks. good to be back. >> but let's get you up to speed and with that we turn to sue. >> here's the latest at this hour. investigators found 33 pounds of tatp explosives at the house from which the suspects in the brussels attacks left for the airport. a cab driver that drove the suspects to the airport lead authorities to that house. by sanders were helping before the wounded at the scene. vice president joe biden visited the belgian embassy in washington signing the
condolence book for the victim of the attacks. he promised full u.s. support for the people. >> we are prepared to provide any and all capability technology. anything we have that can add value to their fight. they will prevail. >> about 270 people were injured in the airport and train station bombings. this is the latest at this hour. we'll have updates at the top and the bottom of each hour throughout the day. back to you. >> thank you. we'll talk to you soon. meanwhile, let's take you out to brussels where michelle has made her way. what is the latest there? >> we're a block away from the train station which is behind me. on the mood you might expect
subdued here in brussels. there was a raid underway where they are looking for the third suspect seen on closed circuit television at the airport we see more and more calling for open boards. it's very easy to cross borders. there's normally no checks even though that changed right now. in germany, he is with alternative for germany. no it's not like other times. it's enough in the u.k. which is surrounded by water. they don't have an issue with borders or people crossing borders but they do vote in june on whether or not they'll decide to stay within the european union and a member of the party that's the independence party advocating for an exit for that
vote cameron says we're in the eu and it doesn't feel very safe. the concept of open boarders was conceived in the peace dividend post the cold war. no one anticipated a borderless war and they're coming to grips with those two things coming together. there's going to be an intense amount of debate about the future of europe on the wake of this attack on top of what we saw in paris on november 13th. >> don't go anywhere. >> good morning to you. >> thanks for having me. >> i'm like to talk to you about the degree to which congress may
start to consider changes within border protection and profiling. the things that ted cruz talked about this week. >> we have been talking about all of our counter terrorism authorities and protection of the homeland. >> what do you make of where we are in this fight outside of the belgium attack. we had that the paris attack that seemed to be coordinating involving multiple groups of people, i don't know what your take is but it seems to me this may have been coordinated or may have been, who knows, the final move of a group that felt like they were being closed in on and had to do something. is it possible that the fight is actually been taken to this group more than we can see here
as people react. >> certainly people were on to this group and this was a reaction or a plan, certainly some plan went into it. there was a measure that went into it but the more troubling thing is what's going on in syria and we have long thought maybe we could just avoid that problem and have it not spill over into the west. whether that's europe or the united states and it's there and it's coming. we have to deal with the problem of isis and syria out in iraq. >> one of the stus in that fight -- >> if i can just weigh in there kayla. the issue of back in 2011 it wasn't just obama that stepped back from syria. it was all of western europe, germany, the rational was we shouldn't get involved in syria. if we do it could create a wider regional conflict.
it could grow out of that rion and become bigger. it's about the question of what do we do about the defense policy within the united states. staying out of those areas, did that actually work? i'm not saying that i have an opinion on that but that's going to be another question. >> look, the reality is our policy has been a failure. we tried air strikes and it doesn't work. they control a large amount of land and there's attacks in the u.s. whether in europe or the united states and we have to deal with that and recognize that what happens there has a correct impact on the safety of americans and europeans at home. >> is this a fight that at this point the united states and europe can fight with diplomacy or does there need to be greater and greater coordination? >> diplomacy is not going to
solve this problem isis controls a significant amount of territory. strategically we are not defeating them and we have to do more. diplomacy will not solve the problems. >> the question is how far you go to syria sustained armed conflict. it wasn't too long ago europe and the u.s. were talking about fatigue when it came to oversaes military conflict and the question now is whether there's a renewed appetite to go harder on the offensive at where isis is centered. wouldn't you agree? >> way back when syrian civil war started the idea was let's not get involved. it could cause repercussions for
us if we get involved but not getting involved also caused repercussions so there has to be a rethink. whether or not you can get pop dwru lagss to go along with it that's another question. i think carl, the closer it gets to home where you live the more willing you are to put your soldiers lives at risk. >> the line of thinking not long ago was isis wants to draw us into boots on the ground. that that would be a great image for them. you seem to be advocated for doing more than air strikes. are you saying that that point of view is proven illegitimate or were you never agreeing with that anyway? putting boots on the ground in that area would play into isis's plans. >> there's no doubt isis wants to draw us into this fight but we don't have much of a choice. if we're going to be safe at
home we have to take the fight to the enemy where they live and the policy is leading from behind and waiting for the enemy to attack us or thinking that air strikes will defeat them. it's a failed policy. we have to go out there and we have to address this cancer where the root is and we haven't done that yet and what it takes to build that political coalition. it takes leadership and we need leadership to assert that and whether that's going to come from this president or the next president we have to recognize it's not just a fight abroad. it's going to effect us at home. >> how do you have that fight here at home? what do we do? >> these people are being inspired from abroad so i think the notion is we're worried about patrolling neighborhoods at home. we should be taking the fight to the terrorists where they live and operate and going after them.
we have been successful with al qaeda and safe since 9/11 and we have taken the fight and put them on the run. if we put them on the run and take their safe havens away and take out their security we'll be a lot safer at home whether that's in europe or the united states. >> no one would be upset about doing to isis what we have done to al qaeda. michelle we'll talk to you soon. john harwood is in washington as we wait for speaker ryan to give his speech on the state of the republican party and john whether it's cuba or brussels more cross currents in politics than in awhile. >> that's right. he has a difficult job. trying to hold his party together.
he's trying to say we need to lift the tone of the campaign. a more optimistic vision and inclusive vision. how republicans maintain their unity and then take the fight to hillary clinton is the big challenge they face. >> we mentioned jeb bush endorsing cruise. would you expect that today? conventional endorsements have not had much value at all and paul ryan needs to stay above that process and that's what he has tried to do although he has said as he told me last week when we sat down for an interview he's going to speak out where he sees the party taken in a dangerous direction. he will work with donald trump and make it work if trump is the republican nominee.
fine line to walk. >> it does bring to mind a piece in the washington post today that looks at trump as an instinctive politician and not an ideological one and then john they try to make the point that the differences between a trump nominee and overall they're not that far apart. >> his are deeper than anyone else's and therefore being attacked by his rivals in the race for increasing debt and deficits which is something the republicans are also concerned about but donald trump said he doesn't want to touch social security and medicare benefits. it's been a staple of republican thinking for quite sometime. he has a different attitude toward trade.
much more hostile than paul ryan. different on immigration. that makes a lot of republicans uncomfortable. certainly there's areas, health care taxes where the prescriptions he has outlined once he is forced to give policy prescriptions match that of those of other republicans but the emphasis is different and tone is different and there's some clear differences on pollty like entitlements. i'm sorry, paul ryan has just taken the lecture. >> thank you for your indulgence and your patience. we have votes on the floor right now. she is inspiring.
i also want to thank all of you for coming here today. i want to thank kevin brady my friend. the chairman of the ways and means committee for hosting us here today. i had the privilege of joining this committee in my second term. my seat was right behind these flags and it's the perfect setting for what i want to talk with you today about because it is here in this committee that we debate some of the biggest most consequential issues. we debate our tax code, health care, trade entitlement reform, welfare reform. this is a big deal to be on this committee. people strive to get on this committee and understanding the privilege and responsibility that came along with it, we took our jobs very seriously here on this committee and we always held ourselves to a higher
standard. we disagreed often fiercely so but we disagreed without being disagreeable. i speak of this in the past tense only because i no longer serve here but it almost sounds like i'm speaking of a different time, doesn't it? it sounds like a scene unfamiliar to many in your generation. looking around at what's taking place in politics today it is so easy to get disheartened. how many of you find yourself shaking your head at what you sees from both sides of the aisle today. i see myself in each and every one of you. i came here as a curious college intern. trying to get a sense of everything. trying to figure out where to take my own life. i would always ask older more experienced people, what do you know now that you wish you knew when you were my age? well, here's my answer to that question.
here's what i know now that i want you to know. that you cannot maybe see yourself today. and it's a message for all americans. our political discourse, both the kind we see on tv and the kind that we experience among each other, it did not used to be this bad and it does not have to be this way. now a little skepticism is really healthy but when people distrust politics, they come to distrust institutions. they lose faith in government. >> speaker ryan in the hearing room of the house ways and means committ
committee. >> echoing narratives that the trust in institutions is a dangerous thing. >> he is the polar opposite of what donald trump made in this campaign so what he is trying to do is say okay. let's lift it. let's raise our sights. that's going to be good in the long-term for the republican party whether or not it helps an alternative to donald trump or ted cruz or somebody else it's going to be good for the party long-term because we have seen the image hit during this campaign so far. >> but let's not pretend that ted cruz is mr. establishment
just because jeb bush endorsed him, right. both of the front runners if there are two for the gop said things that are going counter to what paul ryan is saying now? both are making a big deal over being hated in washington as if that's a good thing. >> ted cruz called mitch mcconnell a liar on the senate floor this has been a problem for the party. the nature of the discourse. some of it is ideological but a lot of it is the affect and the tone and and spirit within the republican party you have the violence and fights at donald trump campaign events. that's very disturbing. paul ryan condemned that last week and called on candidates to
condemn the possibility but he's taking it a step further today. >> thank you as the headlines come from speaker ryan we'll get those to you. the president will hold a joint news conference with the president of argentina. that's expected to start in 30 minutes. a live shot of the first lady finishing her own speaking engagement. dow remains in a tight range for an 8th consecutive day. down 33 points. back in a moment. know your financial plan won't keep you up at night. know you have insights from professional investment strategists to help set your mind at ease. know that planning for retirement can be the least of your worries. with the guidance of a pnc investments financial advisor, know you can get help staying on track for the future you've always wanted. i'm spending too muchs for time hiringnter. and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job
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>> phil joins us with another first on cnbc interview. hey, phil. >> hi, john. i'm here with the ceo of mercedes usa. i have to ask you, you showed the glc coupe last night. the cross over market is red hot. >> you're right. it's red hot and we saw a tremendous response from the consumers, the car is doing extremely well and we're equally excited about the new glc coupe. >> where are you bringing those buyers over from? are those from other luxury brands or are you bringing people that said i always wanted to do luxury and now i see the cross over. this is the time to move into a mercedes?
>> it's a mix of everything. half of the customers come from another brand. but there's others going to the cross over segment right now because they like the performance and it's great news for us. >> you know the criticism out there right now. especially for the luxury auto makers. you're too aggressive at the leasing and it's going to come back to bite you in the next couple of years. are you worried about that? >> not really. we're going to stay consistent with the strategy in the past which is about 50% leasing. and we believe the secret is to be consistent. no wide swings or this or that. just a con sis tent offering in the marketplace. >> that's one thing that we watch carefully and provision and a lot of preowned cars coming back we need to keep an eye on that. no question about it.
>> you're at max capacity in alabama. you'd love more capacity wouldn't you? >> isn't that a great problem to have? the biggest issues for our engineers is how to get more out of the factory. that's a great spot to be but it's something that we're working hard to get more out of our factories to bring more cars out to our dealers and more suvs out. >> guys we get them right before they go on stage. they corner them and they have to talk to you. >> thank you. >> phil, you're good at that. that's why we love you. phil at the auto show. we'll talk to you soon. let's turn our attention to the markets. stocks are in the red but the nasdaq is quitely eyeing a positive week. that would be it's 6th week in positive territory but for now joining us is jeff what do you
make of the resilience of the markets this week. the dow is down but much is nike and earnings and not fear in the markets. >> i think from the macro perspective and the tragic events in brussels have been a challenge but we're coming off a period where you had a lot of risk in the markets and central bank activity. whether it was the ecb with historic expansion in terms of the bond purchase program and greatly overdelivering relative to market expectations and followed up by the fed in terms of giving a much more dovish assessment of the outlook and bringing down to a pretty good surprise relative to market expectations. their forecast for how quickly they're going to normalize. all of that sort of helped to ease a lot of the con serns around the global environment. the impact of oil prices in emerging markets that really weighed on financial markets in january and february. so you have a lot of risk in the markets and central bank action helped to push some of the risks
into the background so in this environment financial markets have been able to do better with respect to some of the challenges that you mentioned. >> we were dovish last week but the commentary this week is hawkish. >> we focus on the dots plot. we have a little exercise in the bond markets and pin the name on the dot where we try to know exactly which dot is whom but what we focus on is really the core of the fed and that's yellen and fisher and to another extent bill dudly, president of the new york fed. these commentaries coming out of these members tend to have more weight in financial markets as to the direction of where policy is likely to go and while
everyone's opinion is of course focused on and is important the market tends to put greater weight on policy makers that have a greater influence on where the course of interest rate policy is going to go. >> unfortunately jeff we have to leave it there. >> we get you developments out of brussels after a break.
good morning, everyone. i'm sue herrera and here's what we know in the brussels terror bombings. officials are searching for a suspect pictured at the brussels airport with two suicide bombers prior to yesterday's deadly attacks. police made one arrest in raids overnight but that suspect's link to the event is not clear.
several people that may be linked to the attacks are still on the loose and the country's threat level remains at its highest level. raids overtonight did uncover 30 pounds of explosives. police were brought to a home by a cab driver that brought some suspects to the airport yesterd yesterday. they paid their respects in washington and were greeted by the belgian ambassador and spent a few minutes writing notes in a book of condolences. pope francis urged followers to condemn the acts of violent extremism and remember the 31 killed and 270 injured. i'll sue herrera. squawk alley is back in a moment.
>> there need to be more unpredictable airport screenings. joining us is john pistole. how exactly would that yield a better result in airport screenings were more unpredictable? >> well, there's two aspects to it really. one is the deturnt effect of a potential terrorist who might have done some preoperational
surveillance to see what the normal or the standard is and if they come back and see something different, a different posture it may cause that person to postpone that plan for that location or a different time and the benefit of that of course is it gives law enforcements and intelligence communities the opportunity to detect and deter them through other means. the other aspect is the notion that enhanced security protocols may catch a potential her rist who is trying to get through security to get on a plane to blow that plane up or it may be a bomb sniffing canine or behavioral protection officer or any number of seen or unseen protocols. so those are are the two aspects that would result from enhanced ramp up screening at the 450
airports here in the u.s. >> john, what's the balance between that and allowing commerce and travel to be as smooth as possible? we have situations here at u.s. airports, newark being one of them where even with the screening process being supposedly stable, wait times can range from 2.5 hours to 20 minutes just sort of depending on who knows what. if you were to change those sorts of things up, do you need to tighten up the entire tsa security apparatus dramatically? >> so that's the dynamic tension that exists between facilitating the free movement of goods with what you hope is world class security to make sure that you're doing the best job of buying down or mitigating risk because you know that you can't eliminate risk other than not traveling and that's not an acceptable outcome and we know that for example previously al qaeda did the two cargo bombs sent from yemen, destin for
chicago back in the fall of 2010. even those devices being detected because of good intelligence, because of that those devices did not go off blowing up the two cargo planes but they were in inspire magazine, an online magazine where you know it cost us $5,400 to construct and shift those devices and yet the economic harm to the global economy was in the hundreds of millions of dollars and they were right there on that. so that's the challenge. how do you balance the security with the facilitation. >> well, john in the belgium
situation, the attackers didn't even get to this security. they do a lot of their security screening as passengers get out of their vehicles and before they enter the terminal building so the question is what is the best approach in the old adage, you know, if you have seen one airport, you've seen one airport, each is unique so how you taylor those security protocols to that airport, given the resources that you have and
of course in israel, for a passenger, they spend ten times what we spend here in the u.s. for a passenger. is it increased passenger fees or government mandates so those are things that security professionals have wrestled with over the years and how best to present the best security while facilitating the free movement of people and goods. >> thank you for that perspective. the former administrator for the tsa. >> meanwhile, breaking news on yum brands. >> so, kayla, we have shares up by about 2.5% on relatively heavy volume. about 2.2 million shares thus far this after dow jones headlines that yum head talk with kkr and possibly others about a sale of its stake in it's china business according to sources. now those sources say they could sell roughly 20% of the company, the china operations that could
value that china business after roughly about $10 billion. so those headlines crossing on yum brands is what is shooting the stock higher here. >> a lot of m&a bubbling today. thank you very much. the president in argentina today and is expected to hold a news conference. when that begins we'll take you there live. meantime, dow down 50 points. we're back after a break. environment, in an g companies must adapt. but one thing should remain constant - a financial relationship with someone that understands and cares about your business. pnc corporate and institutional banking offers strategies tailored to your company's needs. know that our dedicated teams of local experts offer insight to help you achieve your business objectives. see how working with pnc can help your company grow at pnc.com/ideas ♪
he won an award last night and now has five stocks you should own right now and nike shares are selling off after earnings but is the street getting it wrong today? that's all coming up top of the hour. we'll see you in about 15. >> thank you very much, scott. let's get to the cme group in the meantime. rick has the santelli exchange. good morning, rick. >> good morning, carl. we all know there's a lot of current events going on. this peace entitled established leaders versus current events. let's start with the financial side, shall we? central bankers versus fundamentals in markets. it's what we're dealing with on a daily basis. the markets seem fairly content given all the news of the day
whether it's what mario draghi and the ecb did or what janet yellen didn't do. but the markets seem to be status quo. let's look at some charts. these are the ones you need to pay attention to. if the market is going to change any viewpoints. the spread relationships are narrowing which means it is a risk off environment. the second thing we want to look at, our 10 year note yields. if status quo changes you'll first see it show up in risk on, risk off but in terms of yields keep it real simple. first let's look at a year to date chart of our ten year which of course is hooked into all the other highly developed economies fixed incomes, sovereign markets. the high yield for the year is 227. let's round it out to 230 and put that off to the side.
lest look at a chart beginning in january of 2013 because that means all the issues of the day are upsetting the status quo and of course terrorism is horrible. nothing good to say there but it's not really a lot different than what the markets are dealing with, is it? consider. look at our own political class and landscape. it's about politicians versus the people just like central banks versus the fundamentals. the politicians in this country and around the globe are having a hard time because trying to hold the past together on the performance whether it's central banks or politicians just isn't what the people want. now the type of change we may see, the problem with change is it can be better or worse and
they're trying to hold something together that isn't going to hold together. on one hand it's going to be the markets and on the other hand it's going to be political newcomers like a donald trump but in the end i'm about markets and i think that risk and yields at a time where we're assuming debt and pulling forward a lot of activity that somehow pleased the market can go on for awhile but if it doesn't, one of those four if not all of those four dynamics will change and they'll change quickly. carl, back to you. >> we'll see which of those two relationships converging first. thank you, meanwhile the president is expected to take the podium shortly in argentina. we'll take you there live in just a few moments. don't go away. man 1: i came as fast as i could. what's up?
man 2: this isn't public yet. man 1: what isn't? man 2: we've been attacked. man 1: the network? man 2: shhhh. man 1: when did this happen? man 2: over the last six months. man 1: how did we miss it? man 2: we caught it, just not in time. man 1: who? how? man 2: not sure, probably off-shore, foreign, pros.
man 1: what did they get? man 2: what didn't they get. man 1: i need to call mike... man 2: don't use your phone. it's not just security, it's defense. bae systems. >> president obama will be holding a joint news conference with the president of argentina in a few moments. expected to focus on trade, citizen security, human rights, drugs, john is watching this with us in washington d.c. and the president's agenda is going to get clouded by current events as we saw at the baseball game yesterd yesterday. >> no question. i expect it dominated by the question we have seen coming up after paris and san bernardino are you doing enough to combat isis and the islamic state in the region and the homeland and
in europe. that's the dominant question hanging over the last few months of his presidency and i expect it's going in the wake of the brussels attacks to dominate the press conference. >> it's clear why argentina's newly electedth would have an interest in meeting with the united states president. the first standing president to visit argentina in more than a decade. he wants to return argentina to the global economy but what's in it for the united states? >> well, the united states has an interest in good relations across the hemisphere. one of the reasons, the justifications that the president cited for his opening to cuba was that it was a step supported for people throughout latin and south america. now that you have them making market oriented changes in their
economy he wants to highlight those as well and not simply have himself be portrayed or have his administration be seen as simply leaning toward the left side of the ledger. >> michelle, you were assigned to go to havana and watch the event and then got rerouted to brussels. your thoughts on the challenges for the president today? >> well, we all asked the question yesterday is he still going to go to the baseball game? and you end up with that same conversation that you have over and over again in the wake of terrorist attacks. do you react strongly or do you live your life as normal. don't let them win is the mantra that you constantly hear but i'm not surprised to hear the right in particular to demand that he come back to the white house and back to washington d.c. to deal or do whatever he could when it comes to these events. they're having the same kind of intense discussions here about what exactly to do about terrorism and the issue here is
so much closer to home as you suggested because it happened here but they can move across boarders easily because they carrie eu passports and they're that much closer to the syrian conflict which is where all of this begins which forces the migration issue which has been so dramatic. the greatest since the end of world war ii and then the terrorist fighters as well. being trained there and being able to move back and forth. the political discussion is getting very very intense. >> i would also expect the president to be addressing the reiterated calls we heard from donald trump and ted cruz to control the border. to stop the muslims from coming into the united states. ted cruz is talking about securing and petroling muslim neighborhoods. that's very controversial. we heard this morning, the former bush cia director saying
that was exactly counter productive. i would expect the president to be asked about those steps and to do what he thinks he can to smack them down. >> michelle, after the paris attacks though we remember there was a very warm weather when the president did make a visit there. he was in town for a climate conference but it was a symbolic visit. he visited a memorial there. in the wake of the brussels attacks do you feel the same sense that a visit from a figure like the president would be meaningful or is the conversation different? >> i'm not sure. i mean, that was a very convenient moment, leaders from all over the world to descend on paris because it was preplanned. it had already happened. you remember charlie hebdo was widely criticized for not going and sent the attorney general and that was seen as not enough.
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breaking news, we take you live to argentina and the president of the united states. >> welcome mr. president. we are very happy to have you visiting with your whole family. i would like to take a minute to share with you this grief all of us around the world have felt in the face of this new cruel and devastating attack. i would like to convey my solidarity to the families of the victims and once again it's a good opportunity to reflect with you on the fact that fanaticism brings intolerance, aggression and violence that leads to nowhere. so argentina, once again
condemns this kind of terrorist attack which we deeply regret. but allow me to say once again that this visit, mr. president, has a special meaning for us. we see it as a gesture of affection, friendship, at a time when argentina is embarking toward a new horizon and is in the process of changing. we feel that our countries share profound values and respect for human rights, for individual freedoms, for democracy, for justice and for peace. and i feel that with you i also share a few on the 21st century
which presents challenges and opportunities. this is a century of the society of knowledge of the development of science and technology, of innovation, entrepreneurship, that is what will clearly allow us to get the best jobs for our people. and at this point, i would like to stress mr. president your leadership which has been very inspiring for most leaders. you emerged proposing major changes and you showed me were possible that by being bold and with conviction you could challenge the status quo and you achieve justice in your country and around the world and that was also a path of inspiration for what our dear country is now going through. so thank you very much for that source of inspiration. i would like to briefly review some of the many things we have
agreed on over the course of these weeks of work which lead up to this visit. the first one, consistent with the pillar of the commitment i have entered into with my teams. we want argentina to have zero poverty. so the first agreement we sign seeks to boost exchanges in scholarships and teacher training. deepening work and development in science and technology and as regards, the creation of work which is something we touched up on this morning too, let me stress the importance of increasing trade between our two countries. argentina has a lot to offer and right now it has a very low level of trade exchange with the united states. it is very important for us to work together to enhance investments by your companies in
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