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tv   Squawk Box  CNBC  October 2, 2009 6:00am-9:00am EDT

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good morning. working for a living. the september jobs report, the talk of the town today. general electric ceo jeff immelt speaks. he says the company is holding discussion else on partnerships or an ip or for its nbc universal unit. and a gold medal decision, the international olympic committee naming the 2016 summer ghosts host city today as
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"squawk box" begins right now. >> good friday morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with joe kernen. becky is going to be back on monday. our top story this morning, the september jobs number. forecasters predict the economy shed about 175,000 jobs last month. the unemployment rate seen jumping to 9.8%. ahead of the jobs number, futures have been in negative territory. asia and europe will follow wall street's lead from yesterday and traded down about a one-month low on asian indices. the dow, the s&p, the russell all suffering their beggist one-day declines.
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>> we're starting in october. there's no witching, triple witching or quadruple witching, but it's a witchy month, ending with halloween. it's never been good for the stock market. >> people said the same thing about september. >> great third quarter. but all these guys that are measured by their performance, hopefully they matched the averages or not, but this was a different story, especially as a lot of these number numbers, we kept pointing to the improvements o that couple of friends. >> you say say three steps forward, two steps back. but in the back of your mind, there's always that question as to whether we didn't solve all
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the problems that got us here. and it's more than just going back and giving back 5% or 10%. >> the great part of this job st i sort of read you where you are. and you were so bold in calling it in february, you were a little early, 796. so now i'm hearing you say maybe we're seeing key reversals are here. bear market is back. >> no. but anybody who has been july dlat is over. so what is that krb 450 points? >> that's right. >> so we're not quite back to 5 in the pullbacks. let's see if it goes five and then ten. >> since the 23rd, it's been --
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>> that crummy wednesday where we got some key reversal, i think that was the day the fed decided to keep the spigots open and people thought they might do the opposite. it's funny the way things happen and then the markets -- they all team so sort of -- we have this, not that it will affects, but jeff immelt was speaking at a conference in new dehli, responding to a question about whether ge was you can taing to gm. he was one of the companies to negati negative. so he was going to spend $50
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billion on aceny within i guess they're worried that they've got all these more pipes, really, than content. and they like to bolster the content. if the internet starts shipping away at cable distribution, you would want to have content. content is still king. >> you wouldn't need us for the golf channel, would you? >> no, i wouldn't. >> although you would be good at stavrting fwofl. some of our leagues, have gone to fios. so she didn't leave comcast, but i mean, i've been a loyal comcast -- >> if i didn't live in manhattan -- >> you should see my monthly bill to comcast. i mean, i'm part of this. >> really? yes. as far as putting up the money that -- i'm part of the -- i
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have likes six tvs with double dvrs. this looks like a mortgage bill, not a cable bill. so bien, if it happens, it's very confusing. like we said, who is the sis at this important. >> meantime, cit group is launching a planner hoping its restructuring efforts will trend about $7.5 billion to atrord rededication plan. meredith whitney says business is contracting for small businesses. she argues the government needs to provide more support. whitney expects another $1.5 trillion will be removed from the system by the end of next
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year. 82% all small. >> did you see her on that one shot of hers? it looks like she was headed into the academy awards or something. >> really? >> it was a red background. there she is. what is she up for, best supporting -- amazing. the "new york times" says that the gooft will effectively have veto power over whomever the board chooses to replace retiring b of a boss ken lewis. interesting piece in the journal today about, you know, it's -- the government didn't limb out, ow, but he had to leave. it's for the good of the country but, you know, keep it quiet. if he is in the wrong here, there's a lot of entities involved. >> ammunition.
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>> yeah. it's just that he had a lot of -- he wasn't making all those decisions in a vacuum, i don't think. the gocht is a coconspirator, i believe. >> we did ask -- i forget which congressman if they felt like they're the ones that basically drove him out of the job. but they didn't cop to that. >> the government and the media. >> yeah, we had him on the in the streak. so i think 11% of the deposits, including me -- i don't know about you. >> comcast, b of a, yeah. >> i live, i do -- you do? you have a live life now. >> let's gets a check on the markets as asia and europe did go down. japan at a two-month low, down 2.35%. the biggest weekly job for the nikkei in about three months and we'll see what happens later on today. the jobs number out at 8:30 a.m.
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eastern time. oil down 92 cents. some of these talks where he had with iran seemed to be bur ring the fruit trying to understand wbl does moving the fuel to a third party -- yeah. >> does it make a difference? >> yes. >> i happened to catch the president's speech yesterday about, look, we have patience, but it's not unlimited. and we want to talk, but you know, something has to come from it. >> 10-year note, look at that,. 162%. we saw a lot of people move into treasuries yesterday both with a market sell-off and bernanke's system. the dollar, mostly down to 1.45 45.85. finally, gold has been holding
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close to the $1,000 level west side 998.0. overseas, let's check in with steve sedgwick on this friday. >> good morning to you. of course, we're in a different quarter now and it seems a very different atmosphere on these markets. we've had three days of successive losses for the major european bourss for today and we've got another loss of losses. everyone is waiting for the josh records last week. . covenant deals should neither, noor nor, it would be one of the most biggest copper and zinc and regulator authorities will put a bit on the table. this is what angelo american wants to hear.
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it doesn't want to anything anything about the merger. >> otherwise, the we've been told that european lawmakers on transatlantic routes may well have violated eu anti-trust rules. this is part of an ongoing investigation. not surprisingly british fran's group has welcomed them into into this edition. we're looking for the payroll on this side of the atlantic, as well. now out to chloe to see it was going auto in singapore. >> a very difficult session here in asia, as well. china as well as soukt accuracy took a look tb on cop of alternatives on what that knobs somebody yib the president coming out today saying japanese
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companies simply can't return to profit at these levels. a lot of japanese companies have set their benchmarks at between 923 and 94 yen. not a pretty picture. we had a lot of sell-offs in the exporter stocks changing from autos to consumer electronics. we have daets out from japan, as well, auto employment ticking lower, but job slablt is a record low. only poor but short stories. moving on to hong kong, weaker, down by about 2.8%. concerns about ipos. today we had not a glorious debut at all for glorious property. actually tanked by 189% upon itsdz debut in hong kong, but managed to pair back losses by the end. it choefd down dau.
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and it's friday. happy friday. >> happy friday. it is friday. chloe is at happy hour right now, she's going to go straight to the bar. >> well, you know, do you know that for a fact? >> no. that's what i would do. >> right. what is it? transformance. >> commercial gerard and rich steinberg, president and chief investment officer, this is perfect because first i'm going to ask commercial about some of these economic data that seems like it's been important for the stock market start to go wonder about whether -- is this surprising or is this all part of the plan? >> first of all, we've had so much sentiment, it doesn't take many in 2er78s of last month to get the markets worrying. oh, it isn't sustainable.
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the beginning of the double dip, it's too early for that. for the most part, we keep saying that the data have much much done what they're toefd to do. some months look stronger than others. but the shift in sentiment from the marketplace from the green shoots optimism in the spring and then we had that disappointing june reports record set anything back, then we got optimismic again. now we're thinking again that maybe there wasn't anything behind it. >> right. and i just think that the economic data is pretty much unfolding as it should. it's bouncing aren't. it doesn't anywhere, sort of in my opinion justify just the incredible swings from optimism to pessimism that we've now seen, i think, again in the marketplace. >> all right. so now that is good because now
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we can talk about equities, rich, and are we in the correction people have been waiting for, rich? yes or no. i think it's to be determined. i think the couple first of first of people will tell it. what has to happen is you have to see news go from less worse to per or much better. we have to watch what happens during the day today if there is a sell-off if you see money coming back in. the world is awash with activity and we have to see how much staying power those ininvestors have had. if it doesn't stay, yes, we could correct 5% or on 10%. >> rich, a lot of times the numbers, some are good and some are bad. what is the chance thatted with we had a good number like down 100 or less than 1%.
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everything we've seen indicates that it's going to be 175 or more. >> it would surprise me to be much better than 175,000. i think consensus is down 200,000. if you come in better than 1785,000, this market is going to rip because you're going to have short covering and you're going to have people on job loss necessary a year region right, michelle? >> right. but goldman last night upped their count. >> that's right. to show a bigger loss. >> well, they have connections with the government, too, right? if they do that, the government sacks. >> we've seen some disappointment in some of the more recent data. they showed a -- you know, a little bit of a backtrack, the claims figures yesterday. none of this, in my opinion, causes us to be fine tuning our
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employment estimate. but you can see that, you know, some months you come into the day and the market whisper number is a lot higher than it was a week ago. and right now i think everybody is expecting a downward surprise, a bigger job loss. and the truth is, the employment numbers have been a bit of one step behind. we never saw the deceleration in job losses to match the improvement that we saw in all of the other numbers and the job story has lalgd here. so i still think that there is room, even though we've had some of the recently not as upbeat, i think here the employment has further to go if you will copy up with the deceleration. we till feel pretty confident. >> it has accelerated a little. >> would have been improving. we were up over 700,000 job
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losses, of course? >> three-month average is 318, i think. >> less improvement? >> well, right, because for example, the ism has swung almost 20 points and moves back into sxang territory. there have been so many other companies that have gone from declines to gains and employment has not yet made that turn. although we think we're going to see an outrain gain by the end of the year. when you say na to people, they say, my dposh, that's totally optimistic. when we think about the fact that you could be growing 200 or 300,000 next year. and the contrast of the decline -- >> witch region with it doesn't continue down, a market worked
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so hard to keep everything out, is it going to give anyone another opportunity to die below 8500. >> ju quarterback tirp if i were noo those numbers, rink 90 lz things fact to work. >> they've had huge run in their portfolio. they've been rewarded by taking the risk. even with the hour clients, wee just siptd out new investment policy statements to make sure people are in line with where their risk is now. risk can be a four letter word as well as going up. >> thanks, rich. michelle, good to see you. thanks for coming in. the president, barack obama, in copenhagen today making one final pitch for chicago to host the 2016 summer olympic games. other cities in the running, of course, tokyo, rio and madrid.
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the 100 plus voting members of the international committee will make a decision about mid day today east coast time. our ross westgate is on the ground and watching this horse race take place in realtime. ross, what's the latest from there? we're hearing that maybe this is coming down to a two-dog race, between chicago and rio. that seems to be the feeling here, but never know until the final soundz souts have pointed. but history was made here this morning, the first time that the u.s. president has ever made a pitch for an almost vote because normally, of course, it's notice a pearl backing. chick website out with a contact. they've sorted out author funding inches.
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what they needed was the passion and the personal touch. that was provided by michelle obama talking about how she grew up in the south side of the city and then the president himpz coming in and giving the flourishing touch, as well. i think it was probably needed for the bid. and he got a big ovation at the end of it. of course, he's only here for 4 hours, 10 mints. so we asked pat ryan how much tekd make during that amount of time? >> he can show his tremendous beliefment, support of the olympic involvement, shaurt of the sperd temperature. he wants to show and will show and i think he'll achieve all those goals. >> well, hopefully he's already achieved it, because by my
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calculations, he's already in air force one and back into the air flying to the united states. so chicago, a very good day today, especially one of the presenters on that. we did the best we could possibly do right now. it comes around 6:30, 7:00 intern time. the cherns has been him haven't been. they probably wouldn't be too upset if it was rio. it's a fast-growing media support, as well. brazil by 2015 will be the world's fifth biggest economy and will provide opportunities to get into a fast growing economy that has a lot of reserve and is resource rich. so whether it comes down to chicago or rio in the end, i don't think commercial partners, either way, will be tooup set. >> and we've not the world cup
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and would sponsors in that xwhaer be committed for that. ross,ene you'll it to you. good will h luck today. some of the others making the pitch in copenhagen, nadia komeniche, oprah, along with michelle obama, and the president. >> isn't it winter in brazil when it's summer here? wouldn't that -- >> they would do it in the summer. >> i mean, it's winter down there. i mean, are we doing apples and ams here? am i wrong? >> they are on the southern hemisphere. >> have they thought about this?
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>> they had this problem with sydney, but they worked it out. >> you know what snm people are going to write in and say, you are so stupid. >> we'll take a break and get your week dwrend travel yofrt as we get back. xwxwxwxwxwxwxwxwxwxw
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welcome back. let's get a check off our business traveler's forecast on this friday. scott williams of the weather channel is here. morning, scott. >> morning, carl. as we focus in on the forecast for friday, we will be watching this frontal boundary moving over the great lakes. back down to the deep south, a broken line of scattered showers and thunderstorms throughout the day today. chicago, quiet for the now, but we will see the chance for isolated showers wrapping back around that area. the motor city into pittsburgh, look for scattered showers. moving through louisville, as well. look at the heavy rainfall around the i-10 corridor around new orleans and houston. showery as you move around the great lakes. fairly quiet into the heartland and the deep south. another system moves back into the midwest by sunday, back
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through tleef port and nowhere else for your upcoming sunday. quiet as we move around the great lakes and back through the mid-atlantic. back to you. >> scott, thanks. when we come back, we'll get the real story. staffing giant adecco will tell us what the labor market looks like in this country when "squawk box" continues.
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more than just money moving across markets. it's about exchanging ideas across cultures,
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opening up to the world- continuing to innovate. you need to have a nimble organization that can innovate rapidly and constantly is willing to learn. speed has become so important. every aspect of business has to be able to demonstrate flexibility and agility. collaboration is the name of the game. we have at least half a dozen relationships giving us new products, new opportunities and wonderful new therapies. a great place to be is at the intersection of content and technology because from the creative side-- the possibilities are endless and the ways you can reach people are extraordinarily exciting. our partnership has a long history. the new york stock exchange is where people look for companies held in high esteem around the world. nyse euronext powering the exchanging world
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♪ come on baby don't you want to go ♪ ♪ come on baby don't you want to go ♪ >> good morning.
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welcome back to "squawk box" here on cnbc. i'm joe kernen along can carl quintanilla. becky quick is off today. we're altogether again on monday, right? >> we are. >> next week's guest list is out of control. have you seen who is on the show? >> yep. that's good. that means the onus is on us to prepare things, right? >> yeah. we'll be ready. how do you balance preparing and being spontaneous with your questions? because i err on the spontaneous side. >> yes. i would say you do. >> never mind. the. >> the 2016 olympic committee will make a decision on the 2016 summer games hosting city. we decided rio was close enough to the equator -- if you try chile for the summer olympics, you would need the winter olympics, right? it's cold. >> if you tried -- yeah. >> so i wasn't totally wrong. and who knows about when you
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flush the toilet whether it goes -- >> that could be a concern for some athletes. >> our top stories, the jobs report polled forecasters predict the economy shed 175,000 jobs last month. that's still not a great number, by any stretch. and 9.8% is what is expected for unemployment. that is an awful number, too. and who knows, we could have a surprise there. we could either have a surprise, we're not as many or lost or we go to 10%, something like that. either one would set us up for a volatile day in the stock market. >> might be good for the dollar. we're watching the average hourly earnings. >> we are going to get some more inside sight with ted gillum. good to have you back on the set. >> good to be back. >> we're not far from 10%, but you don't think it will be hard to get there? >> i think we'll get to 10%. but the theme is, we're getting better and better a little bit
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each month and we're losing less jobs. i think we could very well see a temporary employment growth number either this month or next month. that's usually a good indicator that some are getting ready to -- >> i think the temporary number leads to the overall number in terms of growth. peel probably start losing jobs by the end of the year. a lot of that is going to be driven by how many people come back into the workforce because we have quite a few people on the sidelines saying, you know, the job market is not great, i'm not ready to get out there and actively look right now. >> right. are clients asking you for ways to go more contemporary or are
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they asking you to fill their ranks after cutting them last fall? >> a consistent client theme is, look, we had to cut much deeper than we thought we would, and as they come back, they want to come back into the market to achieve a good work and move when you need it. that could bode well for temporary contractors and employees. >> sometimes, these numbers come in and you get a couple of good ones, get a couple of bad ones. i said, you know, we've had some bad ones, maybe we get a good one today. and, you know, i have a fantasy that it should be nice if it was less than 250. are there an ek total or is there he that an upside for me
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to predict a positive outline? >> really, the it's anywhere in that range. you know, you know b i think we shouldn't come come in and expect a great number. 100 to 200 is what we should probably expect, and then it will get better. >> you know, leading the pain in the last couple of months has been small business, right? 100,000 i think at the last print. they don't have access to capital markets. bank credit is limited from all these regional banks. is that a problem? >> that's most of the job creation in the country. >> usually about half the jobs are in small and medium business webs those with 500 or fewer employees. and usually about 75% of growth will come from that segment. we had our entire adecco management team in washington three weeks ago and we spent two
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days on the hill meeting with reaps and their offices to talk about this because i can we need to consider the total cost of employment. we have states spending an enormous amount of money insurance and that will have a direct impact on employers in those states. and the more we pile on to employers in terms of the cost of employment, the slower the job recovery will be. >> so there are small business owners who would like to hire, maybe think they need to hire, but they're facing regulation, taxes and it's just not doability in the near term? >> yeah. there's the uncertainty aspect of it. when they get over the uncertainty, they make need five
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minutes, but maybe we have three. other headlines this morning, ge's ceo jeff immelt says the company is holding discussions on partnering for its nbc universal unit. he responded to a question about whether ge was talking to comcast about buying a stake in nbc. >> and investco is reportedly the front-runner to buy morgan stanley's van campen business for $1 billion to $2 billion. the leave would probably leave morgan with a majority stake in that. >> ibm will tet bare bones to workers across the bow.
6:39 am is our address. we will take a quick break and get news making headlines outside the world of business, get the early trading picture from the futures pits in chicago. grocery store customers like to shop where the products are best. especially for beef. consumers will go out of their way to find a better cut. so to round up more business, smart grocery chains have partnered with cargill who supplies stores with a line of top quality beef hand selected and specially prepared so grocers can sell beef so appealing
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it will have more shoppers blazing a trail to their store. this is how cargill works with customers. eeeeeeeeeeeeeeee
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time now for a check on the news outside the world of business. monica novotny joins us with a roundup of the headlines. hi, monica. >> hi, carl. good to see you. the 2016 summer olympics, they're years away, but the competition is hot right now. madrid, tokyo, rio de janeiro and chicago all vying to host the game. world leaders making their last ditch appeals, aware that reputations and economic incentives are on the line.
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president obama and the first lady were on hand to take part in the u.s. bid to bring the coveted games to their hometown. in indonesia, rescuers still continue to search for missing people. on a much, much lighter note, this is an artist in omaha. he thinks his portraits are priceless. he created over 30 interactive parts of pictures using bar codes. that was warren buffett. what do you think? >> i kind of like it. i'm wondering what he can do with joe. are there enough bar codes to do the hair? i don't know. he might run out. so there is warren buffett. he says all those bar codes are representing the companies where
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berkshire hathway has a stake. >> really? >> yeah. you can scan and see what the bar code represents. >> the man is his business, he literally is the face of his business. >> where commerce and art collide. >> the journal does dots. but bar codes? that's kind of cool. >> i think we should request one for joe. we'll put a call into omaha and ask him. >> you know, when you say joe -- >> oh, monica, you were home free. >> did you mean me or -- i mean, when your lips say joe, i just assume that you're talking about that other guy who you threw me under the bus for whose name isn't even joe. >> painful, painful. >> you got her good. but it's so stretched. you've got to connect so many dots. you have no idea. let's get to the markets on this jobs friday. ben lichtenstein is standing by at the cme.
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i'll just ask another guy, ben, if this is the beginning of what everybody has been waiting for. do you think it is? >> well, i think it is definitely a bit of a correction here. it's a stopping point that we've seen in the market right now at levels with the s&ps reaching that 10,075 level. we've come basically 50 handles off of that extreme high. whether it's the beginning of a correction or not is anyone's guess at this point. we had a huge week right now in terms of numbers, data that was released and the market reacted very negatively do it. a lot of concerns out there are still looming, the dollar, housing data and the only, you know, real positive thing that the market was able to get its hands on this week was some of the m&a activity which was short lived and we saw some of that selling coming off. but we're in a narrow range right now ahead of the jobs
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data, which is in my opinion bulis considering that the unique high right now is at two-month lows. this scenario hopefully will find a bit of a bottom to the recent sell-off that we've seen. >> so you figure that the -- i'm trying to rectify the notion that the market likes to keep everyone out and a lot of people didn't get in. how do you correct without letting all these people late to the party, how do you correct without giving them an opportunity to get in? do you think we have some sideways choppy action that causes people to get bored? >> yeah, or we could see a strong rally coming in, an unexpected rally right now which means most people are expecting a bit of a correction here. you know, again, the strong run up that we've seen, this extreme element that the market has been in has to slow at some point. it's unprecedented, the rate that we've been seeing it and probably unsustainable.
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and so, again, it was anyone's point it would happen. but i agree with what the you're saying in terms of not get routed out. >> you know what it could do, ben, what it's done before? it gives you a real sharp break where the people that aren't in are like, i'm not going to catch a falling knife and it scares people and they get a chance and they don't take it, but then it goes back up before they get a chance again. >> yeah, yeah. >> because that's the classic bull market correction, sharp breaks, scary ones so much that they don't buy. >> we have a lot of information coming up, too, in the coming weeks. we have earn pgs season coming up in addition to looking for a dismal outlook into the holiday shopping season right now. and so our second time around,
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obviously, again, a lot of fundamentals just not adding up to the recent rally that we've seen. we need to see if they can start to come around a little bit. >> thanks, ben. >> see you later. when we come back this morning, we're on our way to the chairs.
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more than just money moving across markets. it's about exchanging ideas across cultures, opening up to the world- continuing to innovate. you need to have a nimble organization that can innovate rapidly
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and constantly is willing to learn. speed has become so important. every aspect of business has to be able to demonstrate flexibility and agility. collaboration is the name of the game. we have at least half a dozen relationships giving us new products, new opportunities and wonderful new therapies. a great place to be is at the intersection of content and technology because from the creative side-- the possibilities are endless and the ways you can reach people are extraordinarily exciting. our partnership has a long history. the new york stock exchange is where people look for companies held in high esteem around the world. nyse euronext powering the exchanging world
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i'm a generous sort. i was going to mention "toy story" and the 3 d. you picked that story, too. actually i had already decided to do something to generate more mail and something controversial. we'll talk about that in a second. are you telling me "new york times" op-ed pages, my favorite place to go to find things to motivate, gayle collins laughed for ten minutes. she grew up on my street in cincinnati. >> she wrote about obama. >> she tries hard. fantastic writer. david brooks saying he represents the conservative side of things. >> "new york times." >> this is trying to explain the
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o'reilly, hannity, glen beck, rush limbaugh popularity. david brooks is really writing it off and saying limbaugh, these are imaginary millions he supposedly has that believe or identify with some of his ideas. same with beck, hannity, o'reilly. these people really aren't out there. the imaginary millions -- republicans at this point are willing to believe they aren't there and represent middle america when it's a wizard of oz behind the curtain. >> i think it's a reasonable view. the cable tv is so fragmented, numbers on a relative basis look big. republicans are looking somewhere, they are looking farther right from the center. >> can't you see a theme here. everyone at these town hall meetings was a plant, a nut
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case? everything is written out -- >> don't carry it to the extreme. that's why people are upset. >> how can fox news double ms. and cnn combined. >> we're a nation of 300 million people. fox news gets a million a night, 3 million. >> you can't sell an ad. >> i'm not saying liberal programming is -- >> let me guess. liberals are so cerebral and erudite they are at the opera. they don't watch tv. david brooks is a conservative? you tell rush his 100 million a year aren't real. >> he's well paid. >> is he a wolf in sheep's clothing? >> he's a conservative. >> he is a conservative for the
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"times." >> who is on the other side. >> paul. >> "toy story" released in 3d. it's going to make $25 million to make back the conversion. you can convert all these movies, titanic, lord of the rings, harry potter, make them 3d, put them back in theaters for a few weeks. get some money off the inventory. they are already produced. there aren't that many screens. that's why it's coming out now. they call it the shoulder season before the big movies for the holidays. we could see a whole new round of 3d movies then 3d dvds once 3d television becomes available. >> i saw -- not cloudy with a chance of meatballs. we didn't need 3d to watch toy
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story over and over. going back to the theater it will run true. this reminds me of the remix beatles songs. will it be listening to eleanor rigby. >> i don't know. >> i know what's going to happen in both of these. i can tell you line for line. >> the girl from "lucy in the sky with diamonds" -- >> she was only 46. >> from lupus. big jobs friday. david gross, david malt pass, markt mark zandi. you're watching "squawk box" on cnbc, first in business worldwide.
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it's employment friday. investors focus on monthly jobs report increasing worries that the economy's rebound could be facing a setback. >> a season for earnings. third quarter results begin to roll in next week. we have names you need to watch as earnings central gets ready to kick into high gear. >> not in a good moody's. whistleblower tells us more. "squawk box" begins right now.
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good friday morning. welcome back to "squawk" on cnbc. i'm carl quintanilla along with joe kernen. becky is out but will be back monday. the company's whistleblower says they continue to increase rates on capitol hill. jobs number 90 minutes away. forecasters believe economy shed 175,000, unemployment going to 9.#, average hourly earnings expected to rise .1%. cit hope to trim $1.5 billion from the balance sheet. asking bond holders to preapprove a reorganization plan in case it is forced to file for chapter 11. the company is holding discussions on partnerships or an ipo for its nbc universal unit. speaking at a conference,
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responding to a question whether ge was talking to comcast about buying a stake in nbc. all right. we begin with a look at futures. who is going to do anything before 8:30. you have to be crazy. are seen down 19 points as far as some downward pressure. and every day is interesting, but we are at a little bit of an inflection point here. what do you think, 4% somewhere from the highs. everyone looking for 5 to 10% correction. some of the economic numbers that have been coming in have given the bears renewed vigor to state their case. we'll see what happens at 8:30. usually bad numbers then an outliar of positive numbers. maybe barber, a will know what to expect for today's number and what to expect. there are data points to look at that would definitely throw out the case for less than 100,000.
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>> the thinking on the data overall is that it would take some pretty bad data to knock the bulls off their perch. we seem to have gotten hit with jobs numbers, housing, has it all added up. >> mostly noise rather than signal. i think the data will improve. true the people look at short-term timing for the stock market, talk about a correction of 60 days. to quote a technician friend bill roth, lots of times the market gives birth to forecast. so if we're into a correction mode here, we may be able to decide that the numbers are starting to look shaky, rather than the numbers actually being shaky. i still think we're on track. this morning's number is because of september with all the teachers coming back, all the summer help coming out and the timing of the survey, we're fraught with a lot of volatility for this number. i don't think this is the number
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where, you know, it would be wright to radically change your view. a lot happened that's positive and i think we're on track for recovery. >> do people know that? in studio for the remainder of the show is bob barbera. how are you? nice to see you. welcome. we have a book. >> yes. "the cost of capitalism," have you read it? >> i've got it. >> they are both number one. >> i know. >> anyway, our senior economics -- >> i was making a point. i do things -- sometimes i channel things, not necessarily the feelings of this host or anyone i know. >> we should call you sybil. >> steve liesman joins us as well. steve, tell me, i would like to see down 80,000. i don't think that's impossible. >> you look at the lefl level of
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claims. >> claims aren't in the number. >> it's not but it's something that indicates where we're going. look at ism indicators, the debate, it's a breather if you're a bull. it's a stall in the recovery if you're a bear. i don't think there's a lot of ammunition for the bears. i think it's a little more noise. i think what we have, bob, and you know better than i would, pretty robust august. some numbers were really, really good in august. that 1.3% increase in spending we had. i think bounceback in september is not out of the question. i think what you have is probably at the end of the day a breather. you're just not getting a confirmation. i think the recovery is like an insecure teenager. it needs affirmation every day. come in, we're on the way, we're on the way. >> i wish my dad would have thought about that. >> but talk about the teacher, education situation. i went back and looked up. we have never had layoffs in
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local education that we've had right now. if you look at the year owned year, it's 70,000. we didn't have it in 2001. that's my no more teachers. down 70,000. i'll be looking closely whether that continues. it may bump up because of seasonal. that's a real issue, get down to local, community level. other thing i'm interested in is health. that's improved. it's on the way back, less negative. see that checkmark at the end of the screen there, that's kind of indicated. maybe a little underlying strength. the one issue i have is this, it's small business. i think forget the level we're going to when it comes to taxes or health care, i believe the uncertainty about what's going to happen in things like health care and tax is something that might give small business pause on a higher level. >> we just chatted about that. >> i heard that. the level is one debate. the uncertainty i think is a
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much better slam dunk. >> think about the uncertainty six months ago, you thought it was the end of western civilization. if we were going to channel uncertainty, it's a lot more uncertainty today than six months ago. in terms of the rate of change, you could look for some improvement even in small business. i think you made a very good point, the consumption number. 1.3% up, that was more than two-thirds the auto line. we know the cash for clunkers was a one-time event. we know it clunked in september. some fade in the day because of that bounce is reasonable. nevertheless, it did take an enormous stock of autos out of the system, which is going to list production through the end of the year. in that net it does drive the economy but it's going to make for a choppy august and september. >> i'll be disappointed. i've been disappointed in the jobless numbers. i would have expected by now
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those numbers to have more than just leveled off. they have come down from extreme levels. >> we've talked about this i remember back a year and a half ago when people are saying it can't be a recession, look at the employment data. i'd say wait a minute. wait until you see the revisions. you had the auto companies all go into bankruptcy proceedings and production collapsed. then they came out of it and they had to begin to do some production. it was at odds with seasonals. so the claims had a wild decline. wait. wait. they went down like this, okay. then they came back up like that and it looks flat. i'll bet you two years from now when they redo the seasonals, look like a reasonable trajectory down and won't have this uh-oh it's gone flat. >> they aren't going to revise the claims number. >> seasonal. >> if i look at the non-seasonally adjusted numbers, a better picture of where we
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are? >> you can't. the fact of what i'm saying is -- what i'm saying is you had all the layoffs typically that you get in august. you got them in may and june. >> "times" piece, six job seekers for every opening, which is the worst they have had since they started keeping those records. are people coming back at least? are they looking for work? >> that's why we all say and actually last time i was on zandi made this point emphatically, that's why the unemployment rate lags. when the economy gets better it's a phone call. do you have a job? no. are you look? no. do you have a job now? no. are you looking? yeah, i'm looking now. even thought person was sitting unemployed in both instances. >> bernanke said, which was interesting, when you get into that six months of unemployment
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people get detached from the workforce. i don't know if it's permanent but longer than temporary damage to the workforce itself when you have unemployment going up for as long as it has been. >> that you have phelps, nobel prize winner arguing if you look at the european situation you permanently change what the resting state for low level of unemployment is. i hope that's not the case. if you look at europe the big rise from unemployment they never backed that out. >> i never looked. not seasonally adjusted weekly claims number. just real quickly -- >> no, no, no. >> my wife is turning this off now. >> no. it's down in the 400,000 range. it's in the 440. the seasonally adjusted, they add 100,000 to it. maybe that's right. they come back and revise it and is better than we think. >> i mentioned the nobel prize to them. i think it doesn't work. you have to mention the other
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people. >> unfortunately i checked, there's no way to take them back. >> i know we've got a couple of prizes to take back. we'll hear more from you later, steve. you were listening. you did weigh in. you're of the notion there's a small group of wingnuts that are triple and quadruple count -- >> absolutely not. absolutely not. i think the people who are part of the right wing in this country is a very, very large group. >> you do. >> i don't think it's as -- i think it's a third of the country. i think of the country as a third, a third, and a third. i think of national politics as fighting for the middle one-third plus one. >> brooks column, we argue -- >> i just don't think it's representative of the entire country. it's representative of a third of the country. >> if you read, there's people who run from house to house and turn on fox news in order for
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them to get those ratings. >> exactly. air america -- >> nub ex communicated david brooks. >> he's a "new york times" -- >> i think he's a smart guy. >> stop the presses. look at me, i'm falling to the left. the whole chair is skewed. comments, questions, anything you hear. >> how much do you listen. >> e-mail us at >> carl said he didn't have to do anything yesterday, just look pretty. the sound of my voice. the earnings season around the corner, will third quarter meet expectation. we'll look into the "squawk" crystal ball. you have to do things, please. later a look at how you can, jon will have the names to add to
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closely followed financial analyst says credit is still contracting for small businesses. in an op-ed piece in the journal she argues the government needs to provide support. expects $1.5 trillion of credit card lines removed from the system by next year. 82% of small businesses do use credit cards as a significant
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portion of their overall. earnings kicks off next week. joining us to talk about it, michael thompson, longtime friend of the show. market credit and risk strategies. welcome back. >> great to be back. >> the thinking is then once we got past the lehman anniversary, comps will be easier. probably too early to expect q4 to reflect that. q4 will reflect it. it's will be a huge growth number. q4 expected to come in at 330% growth for s&p. >> i'm referring to earnings in the third quarter for q3. >> perhaps. let's take a look at where we are, carl. right now q3 earnings we're looking probably for an 18% loss if you look at cap iq estimate. extract out financials and you're down 27%. there's really not a lot of
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great news in this number outside of financials, which you can't have a better situation for financials. they lend you what they want to, have loads of policy accommodations. the only positive earnings growth is coming from the consumer discretionary sector. you've got 35% growth there. the problem was it was all auto. everything else is negative, energy, materials, those guys are down north of 60%. >> industrials down 40 plus. >> that's right. >> but then things get a lot better in q4. >> that's really where you'll see the inflection point. i think what's interesting, again, you're going to see -- you don't have a number, negative earnings last year but the financials will be a big driver. however, extract out financials in q4 earnings go down to negative .5%. you go from 330% growth in earnings q4 estimate to negative
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.5. no earnings taken out. look at it like this. fiscal year earnings for calendar year '09 are probably going to be about $60 a share for etf. probably talking about $560 billion in net profits. i think what you want to look at is next year where you're probably going to see something on the order of $76 and close to $700 billion in net profit. i think one of the things that realm jumps out at me, carl, multiple expansion. >> i was going to ask about evaluation. >> i guess i'm the dummy out there. i should have been buying when we were trading next year's fourth quarter of '08. nobody did. everyone was running and hiding their money under a mattress. subsequently on the quarter went 14, 15, now trading 16 times next year's earnings. okay. love this expression. historically go back to the '50s over any decade the average
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multiple is about 15 times earnings. we're trading at 16. there's a lot of good news facing this number. >> if you look at the post-war experience with tough recessions, we've got two, '7, '75 and '81, '82. over subsequent years, what did earnings do? >> a big jump up when you go from negative to positive. you don't typically get 330%. >> excluding special factors. if you look at a tough recession you get a surge in earnings in the subsequent year which would explain a high fee. >> there's people -- when coca-cola can trade 10 times or 50 times, if it's trough earnings then it's infinity. if times are good it's cheap because the earnings are good. it's a full gain. you've still got a p. in your name.
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takes it out so it looks like you're with the company. >> i'm not representing the company anymore. >> discounted future net value. i've seen a guy, the guy a few weeks said -- >> basically what it is, the yardstick to look at the current price valuation on a forward-looking marketplace, estimates from the shops contributed. valuation is a sticky thing. here is the bottom line, what's the true price of any asset? what the market says it is. >> but your house doesn't trade -- isn't worth somewhere between 50,000 and $4 million hope fully. i can show you some in l.a. >> usually it's not like a stock where it's just so dependent consentmeo conseon
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sentiment. >> i agree but what's your house for? what the market is willing to pay for it. same as equity investor. time we looked back, what is google worth today? what people are willing to pay for it. >> sure. >> i think what we're trying to do is give people guidance. i would say there's a lot of good news baked into next quarter's earnings. actually we're going to start another double digit earnings, consecutive earnings quarter q2, q3, q4 right now according to the cap iq estimate. so interesting times. got to be careful. i'm concerned about, you know, how much is it all tied into -- also what's going on with financials. >> although the story would change if growth did catch up to the multiple, right? that's what everybody -- >> we're still looking for -- $700 billion in net profits according to the estimates right
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now in calendar year 2010. 76,000. >> michael, good to see you again. thanks. >> and coming up we're going to head to the futures pit in chicago to find out what traders are expecting from today's job numbers. then the battle of credit ratings. whistleblower is back with us saying moody's still inflating some of the ratings. moody's i disagree, non-sense. yesterday's winners and losers. this is "squawk" on cnbc. very close if not the top -- first in business. we're right up there. right, carl? remember the anticipation of hearing the ice cream truck?
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traders in today's job reports. ben lichtenstein -- back to bat? he was so good last time. let's go -- i would watching futures waiting for the numbers. what's going on? what do you think the numbers will be? >> we is that right here in whispers yesterday after we saw the weekly numbers that today's jobs report might be worse than expectations. and we saw a rally in bonds, some selling in stocks that made its way through yesterday.
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so i think it's maybe as bad as negative 250 for the non-farm number. >> have we already sold based on a number like that? >> yeah. i think there's some other things plaguing stocks. we always talk about october being a tough month. daylight dwindling. in addition to that, people want to redeem from funds. people who are using stocks to pay their lifestyle. the demographics in the country would indicate some people are going to sell stocks here to pay for their lives, their savings. those redemptions come in at the end of the year, usually have to fill out forms months ahead of time then the selling starts. i think the timing of it coming in in october indicates it's not just market sentiment but more technical. people are actually redeeming things. >> i don't know. the savings rates are going up. >> it has to. people want to -- still want to retire. given you can only earn 2% on your investments, you've got to
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save more. >> i guess if you look at the weakness in stocks recently, it's pretty consistent if you've got weakness in stocks, bonds do very well. so it looks more like people selling stocks or buying bonds rather than selling stocks to subsidize their lavish lifestyle. >> i wouldn't draw a connection between every market move and draw too many correlations. what you've seen for the last year, bonds rallied enormously and those lower rates fueled a huge rally in stocks. we've just recently added a disconnect over the last few days, actually. so it does seem to make you wonder. >> we've got to go. we have ten seconds to a hard break. talk to you later. have a good weekend. >> thanks, guys. >> counting down to the big jobs number. up next chicago standing tall for its olympic bid. the president is now on air force one on his way back from copenhagen. cnbc will look at what the games will mean for chicago when we come back. don!
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welcome back to "squawk box." among my top stories, an hour away from september employment report. economists are looking for non-farm job losses of 175,000, unemployment rate rising to 9.8. goldman had a loss of 200. they ratcheted that up to 250. so there's always these numbers on the most current consensus. semiconductors rose 5% in august from july levels, according to the sia. semiconductor industry association. sales have been spurred by energy efficient products as well as growing sales of portable pcs. listen to this, carl. over the distribution of information about its popular botox treatment, the company is challenging a government policy that prohibits it from talking to doctors about alternative uses of approved products like
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botox. all allerg, an is testing for treatment of migraine. >> you should be able to talk to your doctor. talk to your doctor, ask your doctor. >> because you do nightly news. you hear that over and over again, every commercial break. >> let's not bring that up. >> if it lasts for more than four hours, call your doctor. >> call your doctor. >> call the er. >> it is not certain whether discussions about nbc universal's future will result in a deal with comcast, a story first reported by our own david faber thursday. ge's chief executive was asked by reporters if vivendi's potential sale of it's nbc stake means a deal with comcast is on the horizon. >> we've had a partnership with vivendi for years. if for some reason vivendi decides not to stay -- they have been a great partner. not to stay in the venture.
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we've said for a long time we'd consider an ipo or other partnerships and opportunities that would strengthen nbc for the future. that's the context of any discussion. and that's really where it stands. >> spoke at a conference in new delhi, india. nbc universal is the parent. ioc will decide on a host city for the 2016 summer games. in a few hour's time chicago, rio, madrid and tokyo all considered. our darren ravel in chicago not surprisingly with more on what this means for the city and what our chances are. darren, good morning. >> good morning, carl. i've got to say, everyone is talking about oprah, everyone is talking about how other nations will vote, but i've got to say what people haven't been talking about is money. if i listen to the presentation by chicago, the word money, the word tv rights, the word advertising was not brought up. the reason why chicago is number
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one favorite going in is tv rights. u.s. tv rights. they pay -- whatever it comes down to, they are going to pay ten times more than any other nation network will pay. so that's number one. number two is advertising dollars. u.s. companies with headquarters here i'm told will pay 30 to 50% more in advertising. so i mean those are just a couple thoughts. i've also had some insiders tell me that the tv rights are worth probably 200 to $250 million more if it goes to chicago over, say, rio. those are just a couple thoughts from the financial perspective that we haven't really heard much about. >> darren, most of the thinking this morning is that this is narrowing down to a two-way race between chicago and rio. there's never been an olympic games in latin america but rio also has commitment with the
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world cup. mcdonald's, big sponsor, as we know, based in chicago. what's your guess? >> it's a very weird game, and anyone who watched the presentations know that. i will tell you that a lot of it has to do with voting and how it goes down, because there's a shift of votes. you win with a majority vote and it goes as many rounds as it does until there's a final majority vote. so if it goes tokyo out 49ers, then madrid, that might be a problem for chicago, because that means the latin vote will then get later. so everyone who votes for madrid will now switch to rio later in the game. that could pose a problem for chicago. listen, anyone who has tried to guess, carl, over the last couple of olympics would be wrong. people thought it was definitely going to be paris and it was london. there are a lot of people, although i talked about the financials before, there are a lot of people who just, you know, have to pay a favor back. so some of it's a science and
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some of it is just real guesswork. some of it might have to do with the voting and how it goes down. >> yeah. some have pointed out at least from an infrastructure standpoint chicago might have a leg up orneryo, right? everything would be close together. we don't have to do a lot of work with roads. there have been some commitments to keeping the budget under control but historically that hasn't gone so well, right? >> no, it hasn't. if you ask athens and their $11 billion overrun, china $40 billion, we don't know how much they made, although i do believe they said they made a profit somehow. the chicago bid is $10 billion less in terms of infrastructure and what would have to be built than rio, so there's a lot more built. that being said, again, i tell you these presentations are very weird. the first question out in the chicago presentation was from former olympian sergei, who asked whether the cyclists would be comfortable being in a separate village.
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again, if that isn't strange, if that isn't weird, i don't know what is. >> we will see what happens later on today. you expect the vote around noon, 12:30? >> yeah, 12:30, about five hours from now. at 10:00 a.m. eastern time they will be coming into daley plaza here to celebrate. if something doesn't happen, it will be incredibly awkward. >> the president, wheels up with the first lady on air force one. we think they are going back to washington. we'll see if they did any good along with oprah and nadia comaneci and everyone else. >> you'll be there, ravel and quintanilla, so success fully ignore fireworks. >> hallmark of your career where you pretended nothing was happening behind you. which one do you want to go? we have to go to chicago? >> am i still in? am i still here?
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>> yeah. >> i think after beijing i need a good eight-year rest. i'd go with chicago. >> chicago. >> there's no jet lag when you go to rio. >> they are an hour off. >> one hour. >> so nbc has the rights to these two are darren. >> new york city no, no. that's what i was talking about. the rights are up for bid. >> oh, cost more. okay. >> we'll be talking to you soon. darren. good to see you in chicago. >> we'll see. we'll know today. we'll be watching on "power lunch." up next, he testified on the hill. now the moody's whil blower testified to "squawk box." his concerns about credit ratings and what he says is still happening at the former company. this is a return for him. we asked him to come back after we spoke to him before he testified. we'll talk to him when we come back. >> next week, a supersized star
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studded "squawk box" to kick off the forth quarter in style. corporate icons henderson and mike jackson. wall street legends. mario kavell issuing, byron wing, martin, and top money men unveiling the firm's first ever model portfolio. first on cnbc. political power players. new york governor david paterson, top inspector general, former white house top economist larry lindsey. "squawk" is in seg with an exclusive summit of congressional leaders live from the house of representatives. industry heavyweights. t. boone pickens, donald powell, bill rudin, stephen roth. newsmakers and news breakers all in one week, all in one show. "squawk box" where business turns first.
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the new york stock exchange is where people look for companies held in high esteem around the world. nyse euronext powering the exchanging world . they knew the ratings were incorrect and they still went
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forward. >> former moody's executive eric kolchinsky. he's the author of this skpof 14-page memo that blasts moody's for practices he says broke the law. he joins us on the set. good to have you here. >> thank you. good to be back. >> what would you say your reception was. >> it was fine. a lot of these hearings the past few years i was watching them. it was exactly what i expected. >> for those that haven't read or seen the memo you wrote, give us two or three of the biggest charges you're claiming. >> i think there's just one big charge, the fact that they broke the law when we assigned ratings in january of '09. they knew the ratings underlying the structured note were wrong. they had just determined they were wrong yet they stillw that
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knowledge, rated it with a high rating. >> the company is claiming they have their own investigation going on, given unfettered access to records. they met with 20 some-odd employees, although they have not met with you. is that your choice? >> it was my choice because -- well, i was given a choice, i was brought into the office of hr. they gave me a choice. either meet with the attorney immediately or you're suspended. given the fact i provided them with a memorial okay, which is very detailed, everything is spelled out. given the fact i spent nearly an hour on the phone with attorneys, i was suspicious. i said, thank you, i have an attorney. you know what, thank you -- >> what do you think would have happened? would you have disappeared or something? >> you know, i'm from the soviet union, you never know these things. you walk into a darkroom. >> tom cruise would not go near
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wilford brimly. >> there's nothing to gain at that point. that memorial okay is posted on the house site. it's very detailed. i made it very detailed. it's all documented. >> you wouldn't connect the dots last time. i think you were saving a lot of stuff for testimony. at this point are you willing to say they didn't change the rating because they wanted to keep the fee for rating the securities? >> i don't want to speculate. i don't know if it was -- they knew at the company. i don't know if theta the fees. they may have. >> you can't say for sure. i can't see any other reason if they knew it was incorrect, unless they are lazy. is that possible? >> i don't want to overstate. but years and decades of saying we have first amendment protection has created careless ignorance of the law. i don't want to overstate this,
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not willful, but people don't even ask the question, is what i'm about to do illegal. it's not considered. that's a cultural problem in the rating industry. there's very few things they can do to violate the law. this is one of them. the ironic thing, this was nearly identical to something in '07, what i was kicked out of the ratings industry for the first time. it wasn't the first time they had knowledge of this sort of practice that can open you up for securities. >> would you say the bigger problem is this careless or willful ignorance or is it about ratings analysts who are overpowered by subject matter and companies, what? >> i think, you know, the biggest problem, biggest benchmark of the whole thing are no incentives for rating agencies to say no, absolutely not. >> no to a good rating.
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>> no to anything. what you want to do is have a good rating. what you want to happen, some rating analyst who makes their money off ratings fees, when they get in a deal they just don't like, they can't model, they have doubts about, you want them to look and say no thank you. take your fees and go somewhere else. that can't happen today. if moody's say no, there's ten other ratings agencies that will perhaps say yes. there's nothing back stopping. you're on an honor system. >> where do you think the committee is going to go with this? >> i don't know. i don't know. i think hope fully you'll have some real rating agency reform, real capital markets reform but i'm not sure. e-mail not -- as i think me, i learned last week, i'm a washington newbie.
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>> what does this mean for you? does this put a damper on future? >> i'm currently unemployed. some friends have reached out to me. right now i'm looking for work. >> like a lot of other people. >> like a lot of other people, yes. >> $9.8 million we'll find out at 8:30. >> eric, appreciate the time. eric kolchinsky, moody's does say moody's investigated each claim at the time they were raised and in each instance found them to be unsupported. as to mr. kolchinsky's latest claims which cast aspersions on the internal review, an outside law firm will conduct a review of assertions. when we come back, we're gearing up for the jobs number. david malpass to review that number. reaction from pimco's bill
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gross. up next on "squawk box," don't make a trade until you know which stocks are making headlines. joe tells you all the pretrade news you need to know in "stocks to watch" right after the break.
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so the producers have -- the inmates are running the asylum. >> let's take a look at stocks to watch. intel was upgraded to outperform from regular perform at oppenheimer. target $28. that's been a long time. believe pc market is poised for continued growth in 2010, continue to see positive buy from intel's estimates and views. recent pullback is an opportunity to share. comcast upgraded to outperform from market perform at wells fargo. the firm believes the deal to acquire a stake in nbc universal makes strategic sense and should not result in additional equity
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issuance or downgrade of the company's investment grade rating. the target for the shares is raised 19 to 21, from 15 to 18. costco upgraded to outperform to neutral. target increased 65 to 53. apple was upgraded to buy from neutral at ubs. target increased to 265 from 17 $0.the firm expects improved iphone revenues, potential for consensus estimates going up based on gross margins. bank of america initiated an outperform at bernstein, target is 25. there are some near-term uncertainties according to bernstein, valuation good. upgraded from outperform to market perform. target increased 33 to 28. uss bank corp. upgraded out perform to market perform by the
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same firm targeted 28 valuation cited here. a couple more pnc downgraded from underperform to outperform. cmt with to -- >> as you look around from business spending to consumer spending, i see you wrote down while joe was speaking. do you have feelings per sector. i know you have a strategy. >> on the consumer side we took an extraordinary hit. i agree with most people, five-year view, not a cycle in the lead. on a recovery basis, third quarter consumption up to 3, 3.5%. on autos, 2.5% consumption.
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tech and industry, i think that's the big story right now of the history of the last several hundred years is that innovation trumps scarcity. you're not supposed to worry about running out of something. you're posed to guess what you in vent to not use it anymore. when i think of technology for the whole transportation system, i think that's an exciting dynamic. i think jo should by the tesla. >> the volt maybe? >> he's the tesla, i'm the volt. >> 0 to 60 in 3.9 seconds. >> it's expensive. >> you're the big money guy, $109,000, what's that? >> the day you pull up -- >> 240 miles on one charge. >> i do have a long commute. i mean, i do. >> 240 miles on one charge.
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actually the second car they are alleging will be $49,000 bucks, go 300 miles and seats six. and there's no gas. think about this. you're driving to the west coast. you drive 300 miles. you pull into a day's inn. you ask for a room in the back on the first floor. you take an extension cord. you take it through the window and plug it in, go all the way across the country. it won't cost you anything. >> three people from walmart. >> when we come back, about a half hour left before the jobs numbers. we will get the numbers live from the labor department after a few minutes. bond king pimco's bill gross ready with instant reaction, perspective on what's happening in the markets right now. you saw some flows into bond funds. we'll talk about that as well. you're watching "squawk box" on cnbc, first in business worldwide. fithe same tools the pros use,
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it's employment report friday. this is a special presentation of "squawk box." the focus turns to the nation's labor market for signs of economic recovery. our team is ready for action. mark zandi, bob barbera, david malpass and the bond king, pimco's bill gross, his take on the economy, markets and best next move. the final countdown to the numbers is on. "squawk box" begins right now. welcome back to "squawk box," first on business worldwide. i'm joe kernen with carl quintanilla. becky will be here monday. we'll all be here. bob barbera, chief economist. a one-armed economist. >> harry truman has been looking
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for a long time and i decided to deliver. >> he's here to help us with the jobs report. the forecast predicted the economy shed 175,000 jobs last month. david faber over my left shoulder coming up there walking quickly. don't worry about us. although goldman sachs -- >> on radio. >> he's here to impart information. i know he's going to have some. it should be interesting considering we work for him. >> having learned to say the word comcastic. >> i have never left comcast. some people went toi fios. i've been loyal. anyway, the upper end of the range. >> speaking of which, ge ceo says the company is in fact holding discussions on partnerships or an ipo for its
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nbc universal unit. speaking at a conference in new delhi responding to whether ge was talking to comcast about buying a stake in nbc. >> got a partnership with vivendi for many years. if for some reason vivendi decides not to -- they have been a great partner. we've said for a long time we would consider an ipo or other partnerships and activities that would strengthen nbc for the future. so that's the context of any discussion and that's really where it stands. >> cnbc, of course, want more details on the developing story. as we got this time yesterday from david faber who brought us a lot yesterday. we have more. >> when i was here yesterday, i have to admit hadn't made a lot of calls. ultimately here yesterday at this time on "squawk box" led me to something i had not previously believed which is simply ge is ready to consider
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nbc universal and non-core assets of the company and is ready to essentially say good-bye. you can parch words if you want to, after a lot of reporting, speaking to people on all sides of this, it's clear a decision has been made, whatever that decision might be and why it was arrived at that there is a willingness on the part of ge to sell nbc universal and no longer have control of the asset. that is quite significant. of course over time as well, that ownership stake would go down. yesterday we did bring people all the details of exactly what is going on at about 1:00 yesterday. we broke that story. that is where things stand right now. i said many times in my reports, of course, that it's unclear whether any of this is going to happen, despite a high bar here. it is difficult to get this deal done. but i will add having spoken to people who continue to emphasize the decision has been made, it
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would seem the highest levels of ge, that it is no longer a non-core asset, nbc universal, that one has to wonder if this deal doesn't happen in some way, there will be another deal that does happen, whether in fact this is the best deal, the best road to go down if you have made a decision that you ultimately want to pair down your own stake in nbc universal or frankly eliminate it. trying to get an idea on that, joe, and not getting a lot of answers. >> what's the cost basis? >> hard to know whether a lot of the assets were revalued around the time of the vivendi deal in 2004. and so it's not clear that there will be. >> there isn't? >> no. unless you've heard different. >> no. only what i read from people that are trying -- i know it doesn't say a lot -- wouldn't
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say a lot for rca back in the day, right? >> no. i haven't got exactly what a tax bill might look like. i can tell you without a doubt on the part of ge to do this deal where it would be a sale. therefore one would imagine tax bill can't be high enough. >> it's not -- what is it, 10% of profits or something? okay. so the -- once again our financial unit would take a large -- >> the way it has been described to me is ge capital is being potentially continued to be downsized. we'll become a smaller part of the company and ge will focus on industrial operations, growth it believes it can attain from this. again, just to repeat the story we brought you yesterday, they are valuing nbc universal at $30 billion. the deal under consideration would involve spin-off from nbc universal to a new company.
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comcast contribute the assets. higher than it should be. a decent amount of cash, ultimately own 51%. ge for its part would be able to transfer a lot of debt to the entity and therefore almost create cash on its balance sheet. >> would be a privately-held entity. >> fully private. vivendi would have been cashed out previously and then over time comcast would increase its ownership stake in this joint venture. enormous though it might be but that is essentially what it is. >> he must be trying in his mind to decide whether the possible decline of cable, in terms of the distribution platform is overcome by having content, because you've got to take on the internet, i guess. but when does he look at the problems that all companies have with analog versus digital. that's declining, too.
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seems like a huge gamble. >> it is. his shareholders have not always been behind him in this long held desire to obtain content. >> can't charge the internet for content. >> also have people do over the top, a broadband connection as opposed to a cable connection. then that poses a question -- >> are you ready for a slew of media deals if this happens? >> i think we'll get a lot of people talking. certainly i would -- speaking of people who are not involved here but know the area well, they ask the question -- frankly they think comcast if they get it done is a good deal. assets marked up, contributing cash, but they are getting control of nbc universal. that being said, one has to wonder whether ge might not consider if there are other opportunities out there if they are willing to pursue -- we'll hear if that's the case. the bar here is fairly high.
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one thing to keep an eye on, comcast stock prices. will it decline today? any number of people watching the situation says things will calm down before we get to the finish line. that meant largely comcast stock -- >> would we merge cnbc and the golf channel, synergies -- we have a putting green in the lobby. michael moore pointed that out. said it would be a perfect spot for baskin robbins. anyway, sorry. >> you would look good in a gold jacket with a huge crest on the lapel. >> i'd like to hear you whisper. >> yeah, brian roberts, are you working on that? >> i know brian. good man. young guy. >> very young. family man. >> low-key. >> thank you, david. have you? you know him?
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>> i have. >> tell me his likes and dislikes off camera. let me know -- >> sure. >> thank you, david. >> we better wait. >> never too early. >> start early. >> the jobs report, september numbers less than 20 minutes away. here with a preview, david malpass. carl, you said it pretty well, malpass, pmalpass. >> like mall. >> coming along now. >> doing well, thank you. appreciate my clients out there. >> moody's economist mark zandi who is everywhere. his notoriety continues to balloon. and band from the set. our guest host bob barbera. david, i'll start with you. we'll go clockwise.
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what's your number today? is it a bump in the road? >> i'm looking for 225,000, something above, worse than consensus. we've got some corroboration adp number weak on wednesday, jobless claims was not better on yesterday. we've seen the ism came in weaker yesterday. there's some corroboration. government tax receipts crashing. the established conservative will see what they call the non-farm payroll has a lot of flaws. they just go to establishments and ask them how many people are employed. you're not finding small businesses in that. in the hemorrhage of jobs from small businesses, what's happening is government is adding employees. they are borrowing money from producers and taxing producers and hiring government workers. puffs up the establishment survey. it comes all the government workers and none of the small business workers like llc, they
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are not doing to count. what's happening in the economy is this big shift from the private sector to the government and the establishment survey tracks that. so we'll see strength, even if it's 225,000. let's say it's a better number. remember, look at how many government numbers get picked up in that survey. >> mark zandi, does that all make sense or do you have different ideas? >> no, that's roughly right. consensus is 175. that's what my models say. my foolproof models say. my gut says david is probably right. the data flow has been pretty disappointing over the last week. including last night we got worse than expected vehicle sales. so i think if we were down 225, 250, i don't know that i'd be surprised. one statistic in the report i think is going to be very key is average hourly earnings. that's been relatively strong the last couple of months in part because of the minimum wage hike. we need to watch that carefully because i think there's a risk given the high unemployment, of
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course that could be a problem. >> bob, you weigh in on all these? >> just, again, take a step back. we're losing jobs no matter how you measure them at an extraordinary rate late last year and this year, look at the progression from down 700,000 to down 200,000, it does look like a trajectory that leads you to sort of flat numbers late this year in job growth by early next year. that i would say is going to be true whether we print 172, minus 172 or minus 238. >> i agree with that. we've seen the worst. it's almost to recovery. the problem is a lot of companies are below break even. they can't borrow. so their reservoirs of liquidity are getting drained fast. there's not enough profit to keep them up. the thing about small business, go to the bank, can't get a loan, put money back into their small business. the reservoir is gone. >> the flip side of that is, six
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months ago nobody could borrow. and right now you've had an enormous change in the ability of a medium or large company's ability to borrow -- corporate bond market is explosive. borrow at a 6% rate. you couldn't borrow but the nominal number was nine and a half nine months ago. big change for the media and large companies. that's a big change. >> david, did you see meredith whitney's speech? >> i did. >> a lot of the problems of small business. >> they need to unstick that part of the market there. i think some of the things the fed has done has been kind of helpful a little bit at the margin. but i think the fed has not addressed the issue. i think what the fed has done is kind of step in to replace what's happening in asset-backed securities but not try to figure what's wrong, how do we restart so the private sector does it on
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its own. the small business administration tries to do a little bit there. it's an important issue. i do think there is a debate i think we're talking about in the economics community. everybody says small business creates jobs. does small business create jobs in reaction to large business? are they a leader or follower? one of the things we saw in the adp, job declines in large businesses have kind of ended. i think we see reasonable profitability returning to the s&p 500 at least through cost controls, if not a little bit of top line growth that we may expect here. so i think the way to look at job growth here is let the large businesses get their act together and then i think small business will fall. but that's a debate that's out there, how these things sequence. >> we've got to go. what's that new guy's name? do you know how to pronounce it? do you know what i'm talking about? >> the guy in minnesota? >> yeah. >> i'm still trying to pronounces minnesota. >> i'm working on someone that's been in cleveland for 20 years.
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>> i know minnesota has a really good economics department. i know a bumpl of professors there. i don't know that one. >> this guy has supposed by got some pretty interesting ideas that's coming on board, right? >> yeah, i think so. but we'll first learn how to pronounce his name. >> i was going to you for that. >> baby steps. >> everybody stick around. we're going to get the numbers in about 15 minutes' time. next, going for the gold. president making his pitch for chicago to get 2016 summer games. he's already on his way home. we'll talk about that topic and more coming up on "squawk." don't go away. the final countdown to jobs report. "squawk" is live at the labor department with the numbers. pimco's bill gross will give "squawk" the instant reaction. you're watching "squawk box" on cnbc, first in business worldwide.
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live picture of downtown chicago where they are waiting to hear the results of ioc's vote, whether or not chicago will get 2016 summer games. we're expecting that vote sometime around 12:30, 1:00 east
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coast time. the president along with michelle obama, a bunch of athletes, oprah winfrey. now making his way back on air force one with the first lady. you can see him there in copenhagen. back this afternoon where iran, health care reform, afghanistan, troop levels await him. david gregory, moderator of meet the press. david, it's interesting, in the midst of the ceremony, mcchrystal joined him to talk about afghanistan. >> not at all. the president said he can be in the middle of other things, and it's pressing. this will be something that defines the presidency and defines what people will talk about for years to come in this presidency as well. this is critical. you've got general mcchrystal outspoken in his advocacy for his plan for more u.s. forces to fight in afghanistan at a time
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when there's significant pushback from within the white house. he's out there taking a real stand and getting more time with the president today. this is high-stakes stuff here in terms of what we're fighting for, what kind of sacrifice the country is committed to making, eight years plus into a war in afghanistan that our commanders are saying is deteriorating. the situation is not going well. >> he's got mccain on one hand, hurry up and make a decision. john kerry saying you have time to make a decision. >> white house, according to top advisors, wants to make the decision, the president does, within the next several weeks so they can move through the process. senator mccain i spoke to yesterday is adamant, there's no choice but to support the effort in the way it was supported in iraq. detractors say first of all, it is far from clear iraq will be a successful conclusion. and the amount of time, the sacrifice, resources necessary in a place like afghanistan
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could be much more than the american people are willing to sign up for. those close to president bush, who felt that afghanistan would be a much more difficult position, a much more difficult conflict than iraq ever was over the long-term, the president said a war of necessity. does he have that much maneuverability to deny commanders when he said this is a war that has to be fought. >> secretary gates spoke yesterday, i guess if you believe he's become a really trusted adviser to the president. that was a little bit surprising, at least the tone of that piece, that he may not have the same view as generals on the ground in afghanistan. is that -- would that be accurate, you think, that you might think a consider insurgency surge is not the right way to go. >> no question in that view. two defendant camps here. mcchrystal side and the side led by vice president biden that says there is a way to fight this war with a lighter
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footprint. we shouldn't get involved in nation building. we should keep our focus on pakistan and focus on taking out and diminishing the capacity of al qaeda and that would be a successful outcome. this can be argued lots of different ways. the reality is what's going on now is not working. there is a real political problem for the president. not just the philosophical differences about how you fight a war like this within his national security team but the political problem, which is the president's party does not want to commit more forces. eight years into the war there's a backlash. >> between vice president richard holbrooke. >> where does he come out on this, sort of a veteran of vietnam? >> i think he's more partial to developing certainly the strategy that was developed in march of a wider nation building effort, counter-insurgency effort, you protect, maintain allies, not necessarily popular
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among the afghan people but you don't have a central government that can be trusted as far as the u.s. administration is concerned. as long as that's the case, you don't have a partner here. the u.s. is at it alone. >> david, a lighter note, we mentioned olympics at the top. john boehner said he's the president, not mayor of chicago. downside if the bid doesn't go our way? >> this can be argued different ways of the feeling in the white house is if the president didn't put himself out there and chicago didn't get it, maybe there would be a price as well. he's putting prestige, using political capital. the argument they make, he can do all these things at once. this is important not only for chicago but for the country and that he ought to be out there advocating for it. >> see what happens in a few hours. david, we'll see you sunday. all right, gregory. tune into meet the press sunday. check local listings for times. >> the chicago machine, $20 billion in chicago.
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that's going to be fun to watch when you throw that much money in chicago, right? hope fully it will happen. coming up, the jobs report and the instant reaction, the bond king pimco's bill gross, numbers and outlook for economic recovery. "squawk box" coming right back. tdd#: 1-800-345-2550 t where i can find it. tdd#: 1-800-345-2550 anything that makes trading easier. tdd#: 1-800-345-2550 i want to be right in the middle of the action-- tdd#: 1-800-345-2550 you know-- i have to see what's going on. tdd#: 1-800-345-2550 and when i pull the trigger... tdd#: 1-800-345-2550 ...i've got to get the best price out there. tdd#: 1-800-345-2550 (announcer) try the new tdd#: 1-800-345-2550 for yourself. tdd#: 1-800-345-2550 call 1-888-4schwab tdd#: 1-800-345-2550 or visit today. tdd#: 1-800-345-2550 'course a trade doesn't always work out my way. tdd#: 1-800-345-2550 but when it does... tdd#: 1-800-345-2550 do i love that feeling.
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when we come back, the moment the market has been waiting for. jobs number for september released. we'll get the number live from the labor department when "squawk box" comes right back.
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all right. we're moments away from the release of the september jobs number. ahead of that the futures have been relatively weak. it was a pretty miserable session in asia at a two-month low while in japan, europe didn't do to well so far either. consensus minus 175, that is the dow jones estimate. unemployment looking to be 9.8, looking at a 2/10 rise in earnings. live from the labor department with those numbers, hampton, good morning. >> carl, minus 263,000. september non-farm payrolls declined by 263,000 jobs. the unemployment rate is 9.8%. average hourly earnings increased 0.1%. job losses way above the consensus forecast as you mentioned for a loss of 175,000 jobs. 9.8% unemployment rate is the worst since june of 1983 when it
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was 10.1%. the july-august revision, net loss of 13,000 additional jobs from what had been previously reported. widespread job losses across the entire economy. construction down 64,000. manufacturing down 51,000, retail down 39,000. government down 53,000. most of that at the state and local level. health care one of the few sectors to eke out positive, up 19,000. 21 straight months payroll decline, 7.2 million jobs lost during that same period. 15.1 million down unemployed doubled since the start of the recession. 5.4 million persons employed out of work six months or longer that is up four fold from previously. also, the actual workforce in september shrank by 571,000. back to you. >> hampton from the labor department. appreciate that.
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want to get reaction from rick santelli, mark zandi, bob barbera, our guest host. walk us through how some of the numbers react. >> it's pretty straightforward. the numbers are worse than expected obviously and we see interest rates moving down. i'm talking with some vinegar on this. you're at a three ten-year-old on the tens. about to breach 390 in the long end terms of the bonds. you know, it's a uniform move because they built in some obviously delusional expectations of any type of tightening. so they are trading the bathtub almost as quick. equities down from minus 35 in futures and down about 100. it really is straightforward. of course you look at the dollar on moves like this the context of equities. down equities up dollar already coming in a little better. what's notable, of course, is to pay attention to the yen.
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all the other major currencies are down against the buck. the yen is not cross currents in the japanese currency at the moment. >> so many questions here as we've been launching the numbers with goldman. we're going to say stimulus isn't working. where do you want to start? >> adp was good. adp more optimistic. i think very surprised claims numbers haven't been better. yesterday ism not show too much growth in the job market. i'm not surprised to see a number north of 200. once north of 200 250rks, it's within the margin of error. the one good thing i think is the amount in the work, 32.1. that's important. so the underlying, it hasn't gotten worse but it's just not getting better. i know that's the issue. i know john boehner was out with another myth about this stimulus
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isn't working. of course he didn't look at the amount of time george bush to create any jobs in his administration. be it as it may, they are the opposition, that's what they are doing now. >> steve, there's a big difference in the 2002, 2003 recovery small business was creating jobs. there wasn't a credit crunch. in this situation, i'm sure you agree, they are going to establish downward the jobs. over the next years more revisions. i think it will be downward because they are not picking up small business yet. this number we see today is a survey of big companies, how many people do you ploy. >> actual unemployment in the economy is much bigger than is being picked up because we're not picking up who establishment survey small business. >> job changes are much bigger. >> unemployment is a bigger survey. >> i think the elemental question is do you think you have a trajectory here where you're going to flat numbers, then job growth next year.
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i think straightforwardly notwithstanding this minor hiccup that's where you are. i think you agree. >> there's a fourth quarter slowdown i think coming, and it's in all the data we're seeing. >> can i make two technical points. first in today's report, they will give you a sense of the provision. it's probably pretty small. they have gotten good at sampling small businesses. i doubt major revision. >> they are sampling llcs. >> benchmark. preliminary numbers this morning. >> second point, i don't mean to color this positive. one other technical note, problems seasonally adjusting school numbers. >> it is unbelievable. state education minus 15.6, government education, minus 13.4. i would chalk them up to seasonal adjustments except for the fact that we've had this consistent layoff during this recession to teachers. it's been incredible.
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the government number, this is the government you think would add numbers during a downturn, minus 53,000. it's worth saying in a loud volume, the government. >> i want one other point. stimulus, job cuts would be measurably worse. state government would have a huge hole. they would have no choice but to shed more workers. >> cuts from small business, you're taking money from small business and keeping state and local workers on the payroll. >> how are you taking money from small businesses? >> at least make them think. >> how? >> leaving on the table raising top marginal rate. >> that is not a withdrawal right now. >> that is not a requirement -- >> no. but that means you're not going to hire a worker when you're facing the prospect -- >> it's the uncertainty. my taxes are going up as a small business owner, i'm not going to hire the fifth person. >> uncertainty for business is they can't sell anything.
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that's the uncertainty. the reason they are aren't selling anything because they mostly sell to u.s. consumers and consumers aren't spending. >> we also ought to talk about regulators basically red lining small businesses. around the country, small businesses are getting cut off and they can't hire workers without some prospect of credit easing, which there just isn't right now. >> i've got to say, within the context of a deep recession and the trajectory we've had over the last eight months, what's striking about the numbers is how normal they look rather than how shocking they look. we're losing 700,000, they revised the previous months down to 201, you've got 50,000 or so that could be associated with seasonal judgments on the futures side. it looks like a trajectory. that's the news. >> if stocks want to take this, we want to talk about this earlier this morning. stocks looked like they wanted to go down. this is perfectly set up for
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that. the bond yield is 310, if they go up 10%, fixed rate mortgage if it goes down 30 or 40 more basis points. >> that's a good thing. >> that's a good thing. >> rick, i see you shaking your head. >> the first time rick disagrees with me? >> no. i'm not going to disagree with any of our esteemed panels. they won't find silver linings and i respect that approach. i'm looking at market down 104. that's the reality. the equities didn't go up on the back of fundamentals. trying to glue the activity back into the fundamentals is going to be every bit as difficult. >> mark, we're all knee jerk here. >> no me. i'm well reasoned. >> whether it's right or wrong, are we moving into a chapter where people argue government stimulus is ineffective have more ammunition to work. >> more losing jobs, more ammunition, that's clearly true. i think the reality is that if
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we did not have the stimulus, if we did not have tax cuts, extended benefit, state governments didn't get help to fill 2010 fiscal budget, we would still lose 500,000 plus. >> make the one point this does not decide the debate about whether or not the recovery is taking a breather or has stalled. what this is, this is emblematic of all the data we had this month that kind of went flat. i still think september could be seen as maybe something of a breather from the better numbers we had in august, then october could be more decisive. i think there's plenty of juice here for both sides on this thing and still decisive. >> can i say one thing? i agree with steve. when i talk to business people in all kipds of industries from retailers to transportation companies, wall street, everywhere, you don't get the sense they are going to start hiring any time soon. really to go from negative to zero, you have to see a little bit of hiring and i don't sense it yet. >> why is that, mark?
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how do we get there. >> washington says a weak dollar policy, cutoff, it makes sense. >> dollar is up today. >> today it is. people are worried about the future. >> david, steve, thank you. rick, we'll talk to you later. bob is going to stick around. >> more reaction to the jobs report from newport beach, california. pim pimco's co-chief investment. to be the bond kirk you have to do things like this looks ridiculous buying a ten-year at three six, three seven. i look down and shake my head. you bet on deflation in the face of the biggest fed action and government fiscal spending in history and you're still going to be right on these bonds. >> well, it's not exactly a bet on deflation but certainly a bet on inflation moving down closer to zero. i mean, our models show the core inflation rate over the next 12
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months moves closer than we could reasonably have forecast six months ago. you know, the actual cpi number is negative. so a 4% long bond or 310 ten-year doesn't seem unreasonable in that context. >> you did it as gold was surging to 1,000 and all the other commodities were going, commodity part of the stock market was going. we were asking ourselves who to listen to. we did say at one point the gold market is smaller than bond market. ten-year looked like an outliar. are we going under three? would you still buy this thing? >> well, those things are hard to predict. what you really want to try and forecast is how long the fed stays at zero. to our way of thinking, the longer they stay at zero, the more 3% or less than 3% on ten-year or 4%, less than 4% on a 30-year begins to make sense. zero percent is a prohibitive rate relative to what can be earned elsewhere in safety, in
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the safety of the treasury market. i think there's a possibility. it all depends on what the market perceives in terms of inflation going forward. let me give an argument to the negative. the treasury programs that have bought $250 billion in treasuries, $250 agencies, a trillion and a quarter will be faced out. to the extent that demand flow longer exists going forward, we may have a supply problem. let's not be totally optimistic. >> believe what the feds said, it would stay zero a long time. the other guys, what's that, just -- >> i'm not sure what that was. different governors and policymakers have different opinions. i think for the most part they are working as a concerted whole with quantitative, low interest rates and will not move off of that for the most part before
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they begin to see economic recovery. the staggering thing in terms of unemployment you notice we saw today, typically the fed does not move in terms of tightening until unemployment has been going down for at least 12 months and job creation has been at the 200,000 level or more. they were obviously a they go tiff 250,000. we've got a lot of jobs to create before the fed even considers raising interest rates. >> david malpass, what's the impact of this on the dollar, then? if we're going to stay loose that long, what will happen? >> well, i think that's part of the administration's plan is it's obviously not announced. the strong dollar is always the policy. so one of the ways that a country gets out from under a debt burden is to devalue. that happened in the 1930s, countries selectively devalued one by one.
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united states was a little late. but when they did, they came out of a depression. so yes, i think policymakers really want a weak dollar because that basically means they are manufacturing exports become more competitive and the country begins to edge up. >> bill, under that scenario, u.s. companies will borrow as many dollars as they can and move them abroad to grow their businesses elsewhere. isn't that a really slow growth outlook for the u.s. economy? >> well, we have a slow growth outlook. we think a number of model vs been broken. we're in a phase of delevering, reregulating, deregulation. those forces basically mean the world has changed going for and we're looking at a growth rate in the real xi of 1 to 2 as opposed to 3 to 4 persian. >> the bond market cooperated. you guys el-erian talking about the sugar high the stock market has been on.
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the day of reckoning didn't come in the third quarter. more money moves into bonds. >> isn't $40 billion enough? >> yeah. but i figure, you know, if you can talk about the stock market that way, some of it might find it's way into your long positions. you guys might be right about the equity, too. >> let's be fair, the stock market has gone up by 50% since march. that's the increase. certainly can expect a rational pullback, if anything, based on that, to the extent the economy slows down again and these numbers are evidence it might not be as rosey as some suggest. not treasuries, high quality corporate of 5 and 6%. take a look at stocks moving to 2, 2.5. >> give me a 10% correction, bigger rally in the bond market. interest rates lower, mortgages lower, did go up.
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my gdp for the third quarter is 4%. i think 1 to 2 is unlikely and bearish. >> one to two is unlikely in the third and fourth quarter. we have an inventory correction, we'll see three to four to five different types of numbers. for 2010, '11, '12. >> one to two -- you've got the unemployment rate at 14%? >> no. >> how do you grow one to two and not have the unemployment rate going up the whole forecast. >> one to two percent rate of growth, incorporate one percentesh the report. job creation. >> you've got productivity then collapsing. >> it's not collapsing, not growing in the way it used to. >> what do you consider the real rate to be on the ten-year? what kind of inflation the real rate? >> the real rate now is
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evidenced, at least, steve, 1.7, 1.8%. if we got core going down to zero, at least momentarily, the real rate is closer to three. that's a high, real interest rate an onerous type of burden for the economy. that's one of the reason why rates are moving down. the treasury can pay the bill but corporations can't necessarily pay the bill. so it's treasury come down, corporate rates come down and the burden so to speak of paying high interest is removed. >> we've got to go. thanks, bill. say hi to mohammed for us. see you. thanks, by. >> futures as you probably can guess down, jobs number much worse than expectations. already called a reality check in some corners. weaver been down for 21 straight months and the jobless rate in the country 9.8, the worst since june of 1983. when we come back, we'll get the traders edge on jobs friday, what's happening in the market now. "squawk" continues after a short break.
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october is starting off with a blue chip tumble. is this the start of a bigger correction? we'll get the trader's edge with art cashin when "squawk box" comes right back.
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time for the trader's edge. art cashin is director of floor operations at ubs financial services. in front of some kind of wood background, art. it's good to see you this morning. >> they're doing a lot of renovating down here. >> make it look pretty. the market didn't go down on ramadan, it didn't go down on the sun spot, the equionox.
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>> since the all-time, it's been nice. we've had a series of lower highs and lower lows. we've at a kind of critical point here. yesterday's sell-off was severe enough that we're at least temporarily over sold. the next trading days will be critical. you have elliott wave types talking about certain types of trading over the next couple of days could lead to a very dramatic drown leg, while others say, no, you're going to get a couple of days down and then reverse and rally to new highs. the coin is in the air. we don't know where it's going to quite go yet. >> where do you come down? >> actually, i come down on the confused side because i'm really going to need at least about three days to clear this air. this is really an important juncture here, i think. and if we do get to higher highs, then i think we can get a different elliott wave count which will lead to that dramatic down leg.
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but for now, you know, the game is at hand, and i think we're going to have to wait and let the market tell us rather than tell the market what to do. >> if there is something dramatic in the cards, do you think it will come in october? >> it usually has. i mean, that's been a tradition going back to as long ago as we were a society. used to have to do with money changing hands for harvest and for spring plantings, before there was a federal reserve. but it's continued after. and just one thing on those payroll numbers. while the numbers were bad, the thing that disturbed me worse of all was the average workweek, the number of hours worked dropped again. that's not a good sign. that's a real concern. >> some bears are going to do some victory laps today, art. do they deserve it? >> no. not at all. i think they'll deserve it if it becomes far more acidic. >> it will be -- it could do five today from the highs,
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right? 5% and everybody says 5% to 10%. then you don't know whether it goes -- then everybody will be talking 15% to 20% at that point, right? >> there are two ways to surprise this. either you don't get chance to get in or you get in and find out it was the wrong time to get in. so we'll have to wait and see. >> or it scares you so much you're afraid to pull the trigger down ten because you think it's going down 20? >> that happens with some frequency. conscience makes cowards of us wul. so does fear. next week will tell us a lot. >> a lower -- we'd like to get down to about 30 average hours a week, right? that's what i said, right? you didn't respond to my france comment. it's a good thing over there. >> oh, in france, yeah. >> right. >> thanks, art. >> all right. off to marinating. thank you. coming up, parting shot on the economy from bob. we'll be right back.
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