♪ joe: we are moments away from the closing bell. i am joe weisenthal. u.s. stocks rise. confirmation of a strengthening u.s. economy. and confirmation of a strengthening economy. joe: but what did you miss? the opposition party is poised -- and why are places across the world gravitating towards radical leaders and what does it mean for the markets? betty: and more intervention

could increase risk. joe: and a ticking time bomb, we are talking intervention in a most storied city. betty: it a lazy friday afternoon. before today, the s&p 500 had closed on friday 10 times, positive only two times, so it might reflect uncertainty as we head into the weekend. joe: today was the most summer friday of summer fridays, very boring. we did get news that they finalized the greek bailout, but that was expected. betty: everyone left for the beach already. this is a continuation of a trend we have already seen. in the s&p 500, groups or higher.

joe: let's look at in interesting nugget. the university of michigan released numbers, there was one sub index, this is asking people if now is a good time to buy a home for an investment, but this is surged to its highest level since 2006. people want to speculate in real estate and that is a sign of a rebounding housing market. betty: demographics play in favor of this. millenials are starting to move out of parents homes and baby boomers are looking to downsize and sell big homes and maybe move into the cities. joe: a lot of positive housing stories. betty: joining us now is daniel davies, he is an advisor and is usually in london, but he is

visiting us in new york. welcome. >> thank you. joe: one of the big stories we have talked about, the rise of jeremy corbin, he could be the next party leader in the u k, where people gravitating to him? >> there is a question about why the labor west is making a big challenge and why jeremy is personally. it was inevitable that this would happen. what has happened in the u.k., basically this is a guy from the 1990's, or from the thatcher years when we had the wall street booming all over the city, but it was also the time of billy elliot when you had strikes and huge battles for effective leaders in the labour party.

there was a list, and an equal split -- an equal -- un equal split. you had tony blair's party that took them up in the early 1990's and 2000. then we had the financial crisis, the labour party lost, and they had five years out of power. everyone assumed that five years out of power means he will go for another century ist in a sharp suit, but what we are now seeing across europe is not necessarily what people expect. betty: this captures peoples attention. many people say that -- here is what he told us.

>> everyone thinks that he is a lefty and some people say that he is almost a communist, but there is a sensible thing that he is saying, which we take fairly seriously, which is that -- about the monetary financing. it is an investment program. betty: quantitative easing, if the mechanism is flawed, wouldn't corbin's suggestion solve that problem? >> it is interesting, because actually you are right. people's qb is surprisingly mainstream. it is basically helicopter money. corbin is -- joe: that is the idea of raising money and dropping it on people. >> yes instead in this version, you give it to the government to spend on infrastructure. it is basically printing money to spend on things.

that is something that should be in the bank of england, it could be helpful for everyone if there was a letter on the file saying, this is the sort of thing you should be considering when it is necessary. the controversial thing obviously is giving this kind of power to a guy like jeremy corbin, whom everyone says is a bit of a lefty, because he is. not practically a communist, but very much left of the social democratic party, particularly since he -- those close to him that the idea is a good thing do right now, when the bank of england is in -- is not even proposing this.

so there is a debate of should politicians be second-guessing the bank of england, and then that intrinsically gets caught into a load of personal opinions about jeremy corbyn. joe: do you think that he and trump are part of this new phenomenon? >> jeremy himself, it shows how politics can make us all stupid. we saw the sky as the basically the ringo starr of the left. this challenge was, galloway has been sent out, hello there is jeremy. he hasn't shown up and caught fire and everyone is surprised him. like everyone has been surprised by trump. everyone was surprised by nigel harris, you are right, we have got to stop being surprised by these allegedly unelected people getting huge amounts of support and thinking that maybe the world has moved on.

betty: whether they are on the left, the right, in terms case, the radical, they have come up with plans because they need to win over a set up constituency? >> they do. they are also open to new ideas. you saw that in greece, you see it with corbyn, he does not have ideas of his own, so he is open to ideas that people suggest. often, they are just -- they have the advantage that they were not around in the 2000, so they don't have apologies to make before anyone will listen to them. betty: we will shift to greece. we got the second quarter gdp report. it was backwards looking. what does that mean for greek banks?

even those that are well-managed? they have nonperforming loans increasing in this environment. >> if we take a look at this chart, we have real gdp growth, we also have nominal gdp growth. you can see that once the revisions are in, the great disaster, which a lot of people were worried about, never really happened. it doesn't show up in the data. what you see is it is basically stagnant, the economy. and underlying, there is real growth. we then look at the formation,

or like off the bank -- all of bank -- alpha-bank. they have this smaller spike up to 14 -- spike in q4. in q1, it was barely contracting. when you see this, that is strategic behavior. it is people looking at the household finances, watching the news, and realizing that the economy may leave the euro. and there will be a potentially better friendly change in making laws and decide that they have better things to do with money man make mortgage payments back to the bank. when you get the q2 numbers,

those the ones that will assess for capital, they will be doing terribly. this will increase -- but if i am right and what we see here is a change in willingness to pay, rather than ability to pay, it looks like greece could be in the euro zone for a few more years and of the laws will change and it will be a more credit friendly manner. you can get that under control quickly, that makes me more optimistic. joe: daniel davies, you will stand desk stay with us. betty: we will talk about the auto market. it is heading for the slow lane. ♪

joe: when you miss, before the break we asked which auto market is coming to a halt, the answer is china. it is growing and accelerating. the slowdown is linked to the overall economic contraction. scarlet: this is a huge deal. there is a lot of room for growth, a lot of that will be in the third and fourth tier cities were domestic carmakers work more favorably. joe: at a lot of these talk about how china was going to be the huge growth story. scarlet: that is another thing to keep in mind. let's move on and get to top headline. cisco is writing the most in more than a year after it was disclosed that there was -- stake in the company. and seeking representation --

joe: hedge fund billionaire nelson is taking over care ago. he has 21 million shares. mylan has a $33 billion offer to buy it rival. the shareholder advisory firm is recommending that mylan ancestors built against the purchase. >> and jcpenney posted losses that were smaller than estimated. sales were boosted by 2.7%. this is after an attempted reinvention that drove customers away. top headlines. joe: and daniel davies is with us. what do you make of this evaluation? >> it looks to me like it is partly a panic move. it has to be seen in context of

the gradual collapse of the shanghai compasses and equity values. we have seen statements going out that today i think they believe they have got misunderstood to control to allow the markets to find its own level. but really, what you have here is a great big that level built up in china, which everybody knew. they also knew that they are reasonably well placed to handle that, because they have a huge stock of reserves. that is the rainy day fund. and they have to go about getting those reserves into the private sector economy, another way to look at it, the chinese

corporations and individuals have got a few tens of billions of u.s. dollar denominated debt, where will the dollars come from to repay that debt and to large extent, where they are now, which is in the reserve accounts of the people's bank of china. moving downwards is how they can control the pace and price at which they supply dollars in exchange for other currency. we are seeing that over the course of the week. they are devaluing, it has an effect on the trade balance. this is unusual. never in your life at the scene a currency crisis anyplace that has massive trade surpluses. scarlet: i like that you connected the dots. switch gears, what keeps you up at night come outside of greece, china? >> what keeps me sleeping less

easy, is the fact that this is turning into an el niño year. over the course of the year we have started off with as a meteorologist saying it was not an el niño, but that it is and it is week now they say it is probably the most powerful one they have seen. and weird things happen in el niño years. it affected grain subsidies that kicked off the arab spring, not long ago. it is impossible to trade on these things, because you do not know how the weather will work out and you do not know how it will affect prices. but it is the thing i think about, because no one is looking at el niño and every time it has happened in the past, it has

proven joe: to be crazy. -- and china devalues currency, which country will be hurt the most? ♪ joe: what did you miss, before

the break we asked which country was her the most by the chinese devaluing of currency. scarlet: the answer is south korea. china imports more goods from south korea van any other country. -- than any other country. that is 10% of the imports to china. more the and imports from japan and the u.s.. i would have thought australia. australia is only number five,

$90 billion of imports from them. this is awesome, for anyone wondering, you can go on bloomberg terminal and check, but they import medical equipment and technological equipment from south korea. so the equivalent of a stock ticker, down for the third straight month as these are unwilling to take on new projects. and we are joined by kate. money is cheap. it is about to get less cheap. why are states and cities putting projects on hold? >> this is a trend we have seen for a couple of years. it is a longer trend. it has been from years of all levels of government, federal, state and local they are trying to rein in the budget after the recession. they are looking for ways to cut costs, the great way is, do we

need to fix this right now -- no. joe: so they are not coming back and spending and borrowing? >> know this is a shrunken market. it shrinks every corner -- quarter. joe: let's talk about puerto rico, we've heard about them and detroit, there's interest in chicago about pensions, what is your read? >> pensions are the driving factor behind chicago's troubles right now. but there is a larger issue then market giving credit. it is easy issue to ignore. you have puerto rico with a default. pensions are one of those things you have to look out for. with chicago, their issue is that illinois sales on every

level to pass any reform, to be able to help those pensions. that trickles down to localities. pensions and chicago are a big issue, this is the third largest city in the country, but they are at 30% for pensions. scarlet: that is a gap. these are only issues like it negotiated after the city runs into financial problems, like bankruptcy. joe: you would -- >> you would think that they could be helped with bankruptcy. but no.

detroit was the only one that was able to do that. even though legally pensions are almost always junior to investors, as the politician how can you possibly tell, if someone grandmother was there, you have to live on only this percent. it is political suicide. so the bond holders and get the ax. scarlet: is chicago becoming the next detroit? where else are we feeling this? >> sharks him of might surprise you, but the second worst is connecticut. scarlet: because of hedge funds. >> yes, but what people do not realize about connecticut is it is high highs and lows lows. they are some of the richest, those towns, but what you might not know is it is home to some of the poorest towns. historically, connecticut has had a budget these on taxing those very large bonuses you saw in the hedge fund community. they were able to benefit from those. since 2008, you have seen this bonuses get rained in. companies are less likely to do that any public domain. so connecticut is not really getting the funds they thought they would get. scarlet: you said chicago has 30%, where is connecticut? >> 40%.

healthy pension, that is 80%. joe: wow. scarlet: thank you so much. joe: we will be right back. ♪ joe: what did you miss?

scarlet: next week we have the release of the fed cost minutes -- fence minutes. every word. it is semantics and you are comparing words and he will get caught up in the fed it uses the words, several, many, and others. they are not changing anything, but everyone is looking at what these words mean. joe: i love trying to figure out what these terms mean and obsessing over everything. this is the most economic -- import economic body in the world. something all scum lots of manufacturing data coming out next week. that's the u.s. trained -- manufacturing data has been weak this year, so we will have a nice look where that sector is. scarlet: it will catch up.

joe: that is all for "what'd you miss?" -- thank you for watching. ♪

♪ our studios in new york city, this is charlie rose. hamilton islexander the unlikely founding father who wrote his way into the pages of early american history. get a roosevelt called him the most brilliant statesman ever lifted he is the subject of the musical which opened this week on broadway to rave reviews. writer and composer takes hamilton's legacy to new heights due to hip-hop, r&b, and rap music. he calls the play the story of america