so we brought in scott wapner. who else? it's friday, august 15th, 2014, the 45th anniversary of woodstock. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. happy friday. i'm becky quick along with joe kernen and scott wapner in today. andrew ross sorkin is on vacation. we're going to have a lot of cuts throughout the show. first let's get to the morning's top stories. wall street waking up to green arrows this morning after stocks closed at august highs yesterday. u.s. equity future at this hour look like they are indicated quite a bit higher. dow futures futures up more than 52 points above fair value. we're going to check out today's

docket. we'll be getting july's producer price index. we'll have august empire state survey. geopolitics once again dominating global market headlines. here is the latest on the situation in ukraine. ukrainian officials are inspecting a russian aid convoy parked just beyond its border. the developments suggest easing of tensions over the shipment, but it could be short lived. nearly a dozen personnel carriers showed up. nuri al maliki stepping down amid pressure. the it's still plans to target terrorists on the ground. soda giant coca-cola buying a major stake in monster beverage. price tag, more than $2 billion.

monster had transfer its nonenergy business to coke. rare news in the retail sector lately, a winner. jcpenney posting better than expected same store quarterly sales. the department store had a loss, but there they are in the premarket. allibab alibaba's first used says it is going to work out. alibaba completed its purchase of a media unit less than two months ago. thank you, scott. >> good to see you. if you can't get carl icahn, the next best thing. >> that's why the other networks -- >> yeah.

>> are you calling him this morning to get him on our show? >> weren't you at hit house this morning? especially on a thursday. what is -- have you had monster? because 2 billion, that's a lot of money for a company, i guess. but if i were coke, and there were upstarts that had some new ideas and stuff, wouldn't you just buy them? he was just on and this is -- if this is something with a lot of potential to take business away from coke, then -- >> well, this that universe. >> especially as americans are drinking less soda. >> i understand this completely. first, green empty.

>> now you're going to need a memory. i can talk about what is happening today. what happened? did they buy green mountain? >> well, they have a stake in it. >> let's look at the markets this morning. did you see yesterday? >> things that happen on the show, apparently -- wait a minute. did you get a haircut yesterday? >> i got them all cut. i did, yes. nothing like yourself, duty. that is -- and that's been growing for a while. >> that's right. you didn't get that caught this week, right? >> no. >> every two weeks, a haircut? >> every three weeks. >> but you do the high and tight. you can be in like "an officer and a gentleman" basically. >> let's check on the markets. 167 on the dow. and it's been a slow, steady increase for this week and the last week after that retrenchment week which people

thought might lead to a 10% pullback, you about did not. at this point, i don't know, i think you might have to think we go to new highs before -- i don't know if we go back down. >> this is going to be the best week in six weeks. that's what you thought. you said you were going down. >> here is our guy. military vehicles, intersxe sxi. does he not think about our portfolios? >> no, he does, very deliberately. >> the portfolios did get messed up. >> let's say he loses 20% of his net worth, putin pep goes from $100 billion to $80 billion, right? >> russian stocks. >> his neglect worth is $100 billion.

>> the richest man in the world. >> i don't doubt that. >> and you can't get some people you don't like. torture and kill them -- no, he doesn't do that. let's take a look at the oil markets today because that's the one area for all the geopolitical tension where it all for us, where we try and watch it. 95.47. the ten-year has been -- how long have we been between 2.4 -- 2.3% and -- >> another note this morning pointing out, 2.4%, it's on its way to 2% he says this morning again. >> that doesn't mean for a better economy. it just means europe is the worst economy. >> comparedive speaking, very briefly yesterday, where would you rather put your money? >> it's august and i missed the boat. the chevy chase european vacation, because you could go now at 1.33 on the euro.

it's better. people think that he's going to do full blown qe. >> full below qe. >> will we have time off at this point? then are you available to -- do you like this gig now? can you get up? you don't mind getting up early? >> it's okay. the shock hat worn off at this point. >> i like you. >> thank you. >> you're welcome. in a manly way. >> i don't know if anybody was trying to figure out how -- what quality of like you were referring to, but -- >> it's like funny how. >> all right. doug, quickly. >> nothing happened there. the world is falling apart.

right now, the aid convoy, ukraine is being inspected by customs and border officials. and the 280 trucks are parked just beyond the ukraine border with red cross and russian representatives taking part in this effort. who better to ask than jack jacobs? he was rolling his eyes when i asked scott about getting up early. you used to sleep -- yeah. >> you would be up and watch all night long. >> you'd be out on a patrol, come back, go to sleep. invariably get to sleep for about 45 minutes before somebody is attacked at base camp and you have to fight all night. not a great deal of fun. >> scott and i are looking at each other -- >> we play ping ball.

>> yeah, it's a little more serious. >> but if you see sleep, you can't even get to sleep in the thatter? >> oh, yeah. a lot of times if you went to ranger school, for example, you would be out on a five-day patrol with extensively no sleep. you would have to make sure the count got sent up to make sure you had everybody. >> and might be must be shooting bullets at you every minute? >> that's the kind -- talking about the guy who was supposed to be watching is falling asleep and you see the guy coming through and he missed. >> nothing will get your attention and wake you up more quickly than somebody arguably trying to kill you. >> it's good to have you here.

in your heart of hearts, what do you think is happening here? >> i think putin is trying his best to squeeze as much as possible and see if he can get ammunition and weapons into the ukrainian levels. and i think you might succeed. >> i think what is happening is he will be able to drift into the ukrainian levels. having a high degree of confidence that nobody is going to do anything. what are we going to do? when the mh-17 went down, people are saying russians are terrible people, kill all of our countrymen. this is in the netherlands.

killed our country, let's stink, let's paralyze him. and somebody said, yeah, yeah, except we get our natural gas from russia and by the way, winter is coming. and it all dried up. none of the restrictions that are on the world. he knows not even the united states nor europe is going to squeeze him. >> colonel, i know getting natural gas from the united states would take years. we haven't exactly jumped on the stick and moved forward with this. if we were to do something like that, would that greatly diminish putin and russia's power? absolutely. no doubt about it. and right now, we're not moving fast enough. it's interesting. we think about the military instrument of power. we think about if dm diplomatic

instrument ooh power. we never think seriously about coalescing them all into one enormous capability to sympathy ewe rate events. >> can i ask you about iraq for a moment? >> the significant avenue the discussion, what is going to happen and what the ramifications would be. what do you think now? >> img this is a very big deal, indeed, and extremely positive. i don't think it's going to change very much the difficulty iraq has in the north. isis is going to continue to try to take over that area, is going to continue to harass the kurds.

we're going to continue to have to drop bombs on small units of isis to keep them away. >> the key note is maybe that's all we have to do. if he leaves, does it not take some of the pressure off the president and the united states to have to do more? >> the short answer is you're right. but it really means that the iraqi army has to get serious about defending the entire country. earlier, you've got the whole social problem between sunni and shia. there has to be a resolution to that problem politically in baghdad. meanwhile, stuff is going to continue to happen up in the north. we're going to continue dropping bombs. we're going to have special forces there to train, assist, getting them back up to speed.

we've gone to have selected raids on arths up north. not to say it won't be forever, but for a long period of time. >> and there is afghanistan, too. that is not the most -- we don't like any of our guys getting killed, but that is like -- did that shock you when you saw it? when was the last time a general was killed in -- >> the last time a general officer was killed in the -- was -- well, you could argue that on 9/11, in the pentagon, general maud, the three star, the only get chief of staff for personnel, that was killed when the plane crashed -- >> a couple before that, would have been vietnam? >> vietnam. so we're talking about 47 years ago. >> and that wasn't common then, either.

>> by the way, including somebody wod been a medal of honor recipients in the first world war who is the first commander in the first infantry decision. just as a note, you can't just say wow, afghanistan -- either. that is unbelievable. that is the country that's -- >> afghanistan is the least fixed place in which we've been involved recently. i mean, the whole reason is afghanistan is a mess for a different reason than iraq is a mess. >> do you want to talk about gaza? that's on the back burner. >> yeah, at the moment. but those guys are not going to stop. where did they get all the cement that they used >> it was coming from egypt. >> that's one of the reasons hamas started to shoot at israel because al cici took over the sealed that border off.

that made hamas put hamas in big trouble. that didn't work out well for anybody. but you're right. that's still not over yet, either. >> but we're on top of that. >> we're on top of this, yes. >> but pick up that putt, will you. >> so to both of you, the point about oil, steady and maybe even falling today on iraq seem glg comi coming. >> humanitarian aid, you think? >> no, he's doing a great job. some weapons, some ammunition that will be in there and i don't think the ukrainians are going to find it. >> awesome. thank you. >> thank you for having me on. >> i like talking about you, don't you?

we are a soft, wimpy generation. i don't want to take up too much of you're the people out there defending us that was 40 years ago, 140 years ago, are all kids. literally, they are kids. that's why they call it the infantry. they're infants opinion young people out there defending the country and we should keep them in our minds and our hearts. >> if you really want to get depressed, reading about the ultimate question of whether they're taking your life or not. in hindsight with robin williams, they were talking about guys coming back here per day. i thought it was a misprint. >> that take their own lives. 20 a day or something. >> posttraumatic stress.

when we come back this morning, the kite will give the worth a clems more. the 45th anniversary today of woodstock. futures are indicated higher this morning, dow futures up by about 50 points. "squawk box" will be right back. don't just visit san francisco.

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welcome back, everybody. ra new milestone for warren buffett's berkshire hathaway, closing above the 200,000 level for the first time ever. berkshire reporting portfolio updates for the s.e.c. let's get to kate kelly. >> buffett announced a number of new or increased stakes yesterday as part of a rash of quarterly investment filings with charter communications being the biggest mover. berkshire took a 2.3 million stake in the company. berkshire raised its stakes in a handful of prior holdings, including verizon and gm. berkshire reduced its holdings in directv, where it sold about 11 million shares and conco philips, where it sold off 9.7

million shares. allergan, the drugmaker that has become a battleground in recent months abdomen it is pursued by a hostile bid. now other institutions are piling in, including blue mountain, paulson, viking, york and saralond. finally, carl icahn making news with an activist filing on the media company gannett. and arguing that the company is undervalued and should be split up. unsurprisingly, since some of icahn's activist targets have performance so well, it spiked higher this morning. >> what surprises you the most? >> gannett is interesting.

anytime icahn gets involved, he's calling for management changes or structure changes, you tend to see a pop. activists in general have raised the price of shares, what, 6% i think over the course of five years or so. carl is a perfect example of that. buffett, as you well know, always moves markets. always interesting to see what he's doing especially with his new position. >> suggest a vote of confidence that this deal may come together. >> with the berkshire stuff, who is doing the portfolio moves? >> very good point. ackman has had a great year. >> he has. i don't have a defibive list, but of the hedge performances i've seen, 25% through the end of june. it's remarkable, this allergan

has been a huge winner, but also berger king, canadian pacific. >> you have to be careful. i know we talked about this yet at some point during the day. these are different kinds of investors? you know, buffett, icahn, they hold things for a locker period of time than maybe some others that you've seen. it came out yesterday i guess that in a 13f koocherman of omega, there were able to report that he no longer has a position at all. >> so over longer periods of time the. >> right. and you always have to make that caveat. i'm happy that we at least have a new batch. until two days ago, i was using like end of march numbers.

>> it's impossible with some of the big money managers that do momentum training. who knows what they're holding at any given time. come in and talked about how to do an arbitrage on things. >> and one other thing we'll talk about in the 7:00 hour, david tepper. some interesting moves there. he said it was nervous time during this quarter where we're now seeing the filings. and it looks like he rm was. he pulled back on some financials and auto related companies. that's interesting, too. >> that is maybe later, as well. coming up, a positive report from jcpenney, a power shift in

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good morning. welcome back to "squawk box" here on cnbc. i just -- i remember sorros -- >> what do you want? >> i just remember his huge bet on s&p puts. >> he increased it. >> 2013. august of 2013. so it's 16 -- and i think he had done it prior to that. let's just do 1632 with 1955 now on the s&p. so what is that, 3 -- >> 1632? >> 1632 and 1955. >> 323. >> deviced by 1632. >> 323 divided by 1632. >> so he's -- >> 19%. almost 20%. you round it up to 20. >> so he's -- right now, he needs a bear market to get even. i'm joe kernen.

he said it in august of -- who cares if he's saying it now? >> i just -- >> we're going to -- >> because you don't -- >> it's 13f. >> it's within a 13f and why do we listen to any -- >> if he was bearish 20% ago, maybe he has a chance to do more right now. >> i'm joe kernen with becky quick and scott wapner. anyw anyway, andrew is off today. >> yes. he's on vacation. >> and you graciously accepted to come in for this. >> aren't you glad. >> making headlines, "the wall street journal" reports that the s.e.c. is widening its probe of technology to include the company's auditors. the social media company was more than $6 billion before its

shares plummeted. where is what's his face? >> cynk takes on a whole new meaning. >> who did this? is someone back in here? i mean, you know, how does that happen? seriously, wapner, please. something is going on. that's just purely -- i don't know. the company made a lot of news in june when trading volume soared and the stock skyrocketed, even though the company had no revenue. it was described as development stage. regulators want to know whether reuters or accountants are involved in penny stock fraud -- duh -- having about different questions. now they have to move tight a new state to get a fair trial, right? >> maybe. >> seriously, look at that. >> it's outrageous. >> it's route rageus, thank you.

>> she's around. paypal is currently in talks with bitcoin exchanges to integrate the currency in its exchange systems. that currency has been slowly gaining acceptance with businesses. >> now, sprint's new ceo says the company will introduce what he's calling very disruptive prices next week. he says his first order of business is cutting prices. sprint's new leader is telling employees, he wants to make sure every customer in america thinks twice about signing up with a competitor. josh, good to see you this morning. >> good morning. >> we talked earlier, we're working on the best week in six for stocks. how long do we continue that? >> i think short terms, stocks are going to continue to melt higher here.

you know the back drop outside of geopolitical headlines which are awfully tough to price, the back drop for stocks remains higher. you have a number of fund managers. almost 75% of equity fund managers that are underperformed the benchmark this year. and with the fed remaining in this slow, deliberate interest rate policy they currently have in terms of tapering and maybe tightening in 2015, you're still going to see a dry return. the trade of most pain, which is what traders in slow markets are always most sensitive to, the trade of lowest pain here is probably going to be higher equity prices where, in fact, maybe later on in september and october b you could ee a beta chase by equity fund managers that are underperforming. >> these people are talking about who has it right, right? is it the equity market that has it right as it continues to creep higher or bonds? 2.39. the ten-year yield is as we see. >> i would suggest yes. the bond market is a tale of two cities here, scott.

we have a long end of the curve being driven by domestic asset managers, domestic pension fund managers that need longer term assets. it's the shorter end of the curve. right now, there's a huge short base in the two to five-year sector, but was anticipating perhaps the fed becoming more active. now, given the inflationary back drop, given the wage and income backdrop, now it looks like the fed can maybe go a little more 2015 and the risks are until later in 2015 which means a short covering trade on the front of the curves is only going to bring those yields lower. >> speaking of risks, are you bears -- i mean, are the bulls being too naive to what's happening over in europe? >> you know, europe is a risk. but i think what the bullish trade is in european equities, european equities are building in a form of aggressive stimulus by the ecb.

as you know, the ecb has been here for the better part of a year, a year and a half. but european equities you would to build that in. at next week's jackson hole meeting, draghi's speech is more important than anything yellen will say. >> thank you so much. up next, are jcpenney's worst days in the rearview mirror? same-store sales are growing, margins are rising and they are losing a lot less money. >> there's something to be grateful for. price check on jcp, up 46 cents. we'll talk more about it when we come back. first, though, a quick check on what's happening in european markets. germany up almost 1%. "squawk box" will be right back. ♪ ♪ over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening.

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welcome back. u.s. equity futures at this hour are indicated higher again, 57 points. i don't know why. putin seems sincere and nice, i guess. so -- >> things have tamped down. they don't think it's going to be a weird incursion. although did you see what michelle caruso cabrera sent in? there were like 20 convoy trucks that went over the border last night. and there were concerns about whether he's moving more equipment. >> he's not on our side. >> no. >> and i hate taking sides. you take the village. i want to be friends with everyone and we're all exceptional and everything.

but if you were to watch the clinic and the way he does things, the last three years, has he not been just -- that's why he has a 90% approval rating. if you're russian, you're saying, this guy is awesome. this is amazing. >> completely confound your enemies. >> and he does it so incrementally, that we go back to whatever it is we're focusing on here. >> why? because he can, that's why. >> even about europe which supposedly is on watch with what he's doing. even they rolled into this thing where he's devious. you sort of just have to admire just the pure evil. and stay on guard. you need to stay on guard. >> do you remember the alien in alliens? it was a horrific thing. acid for blood and everything. but you had to admire what it was able to -- right? >> alien like sigorney weaver

allien? >> now we're back to -- >> i'm with you. do you know what he told me the entire time i was pregnant? it will pop out of your stomach. >> do you remember when that -- that's right. game over, man. >> it was in there and you didn't know it was in there, what was that guy's name, william -- not william, john -- anyway, you see it trying to get out and it pops out. we have to go, but they didn't tell anyone what was going to happen, all the actors there. stuff wam came out, it splattered. the reaction on the faces, it was classic because they didn't know what was going to happen. forget about the other news of the morning.

jcpenney -- >> in the meantime, let's talk about jcpenney turning the ship around, essentially. the retailer losing more money than expected. joining us right now to break down the numbers, paul trussel. paul, how do we look at this? i know things are better, but you're still talking about losing money. >> absolutely right. we certainly give management credit for the progress they have made in this recovery. the second quarter results were strong. there were a few items in the print that raised our eyebrows have have us concerned about the imaginin gains. >> what was that? >> frankly, the expenses which have been down now for the past year are now plan to be up year on yeefr in the third quarter. that is a concern. gross margins are no longer planning to rise on a sequential

basis. penny's turn around began in the second half last year. we're worried about their ability to do 60% plus comp growth and actually up 2% rise in sales in the fourth quarter last year. >> although, i will say when you watch a retail disaster, it's really hard to think about how you stop something, how you turn it around. and i think you have to give them some props for stemming the tide at this point, right? >> it's no question. they've made a substantial progress and we do credit management for that. and we have a $10 stock price and, frankly, it's there and we just think that stock is appropriately valued. at this point, it's not a profitability entity. we do have them working there way back up towards 900 million in ebitda by frankly, this is a that has over $5 billion in debt

on its books so i think you have to balance out the fact that they're making progress with the evaluate of the valuation. >> you go back to expensive. i wonder if you have any more insight as to what they're spending their money on. sometimes you don't want to see your expenses go up, other times, you need to invest in the business. you don't want to be some retailer that starts looking threat there along the way. what are they spending their money on? >> the company cited they're going to have higher advertising, expenses in the second half. in addition, higher salaries and wages as they continue to add bodies to the door, especially for the holiday season. and then also they're planning on paying out incentive compensation for the first time in a while. >> where do their sales increases come from, paul? >> the home department has really been -- >> no, excuse me, i'm sorry. i should have been more specific. we heard macy's this week deliver a disappointment.

is jcpenney taking some sales away from macy's after losing market share? where else could it be coming from? >> jcpenney is taking share from a number of retailers in our view. macy's certainly is probably one of them. but i think sears, i think target. if you think about the fact that the off prior to price retailers benefited substantially during jcpenney's decline. couples like dsw and other specialty retailers. i think there's a little bit of, you know, sales coming from all of the above, quite frankly, that's helping jcpenney's. but penny's has a private label focus strategy. we're seeing a consumer that is preferring the brands. that's a much smaller part of penny's business.

we don't know about the sustainability of it as we move forward, especially into '15. >> paul, thanks a lot for joining us. >> thanks for having me. >> i watched this, by the way. >> isn't it great? >> the chest burster. >> you guys are missing the point, though. try -- when you're pregnant. when you're waiting -- >> but you can see a baby kick. >> i know. >> it looks just like "alien." it is an alien in your stomach. >> oh, brother. >> coming up -- with a paint ball. you have a scar. >> i know. i showed the girls the other day. >> you're on the team. >> i still have it. it's right here. do you see it? >> wow. >> do you know whose fault it was? that guy on my team. >> charlie. >> charlie gasparino. i turned into charlie. coming up, 45 years ago, woodstock kicked off. the beatles final concert has

the fab four where? at candlestick park. so paul mccartney says the last concert the stadium will ever hold. plus, we head to some top stories heading into the weekend.

so lucky. >> welcome back, everybody. we're in chairs this morning. we've been talking about a great park. >> we have. candlestick park. you want me to read this? candlestick park going out rocking last night. paul mccartney closing the venue that was home to the san francisco 49ers and the giants. so-called stick will be demolished, replaced by housing, retail, and entertainment development, and you asked have we been in there. i haven't been in there. >> it's cool when you see it, right? >> there's certain reasons why i'm glad i'm old and i'm going to tell you why. number one, if i wasn't old i wouldn't have seen the moon landing. did you see the moon landing live? >> no. >> i saw the moon landing live. i went to crosby field in cincinnati which was similar to one of these old parks. then river front. now that's gone. candlestick, do you know who played there? do you know who the giants were then? did you get to watch willie mays? >> ron mare shall. >> you're with me there. >> i'm with you on all of that. but i didn't see it. >> but candlestick. so this is the end of an era

where those are the names that i think of, when we do. but, i'm going to miss it for the 49ers. i mean so many great memories. >> the catch. >> no. >> those aren't great memories. >> yeah, they are. >> no they're not. >> what are you a cowboys fan? >> no i'm a bengals fan. >> oh, that was the awesome super bowl. >> yeah, wasn't that great? thank you. you know the 49ers. joe, joe montana -- wasn't it dwight clark again that put a dagger on -- >> ken anderson. kenny anderson -- >> it was great. >> kenny anderson. >> great cook. >> anyway, all right. >> that was a great super bowl, man. come on. >> do you know who the greatest -- >> wasn't it great? >> yeah, i am feeling good about the '75 and '76 world series. >> big red machine. >> mini golf as a career. this is -- i did not know this, in "the new york times." there is the greatest female golfer in the world is this czech lady named olivia and her

work ethic is incredible. she wins all the majors, you know there are majors? >> not until this morning. >> wins all the majors in miniature golf. she has diagrams of every possible bank shot that you could make. that's what you would need to do. >> it's like playing billiards. like being a really good pool player. >> there's huge competitions in this country and around the world. >> in this country, too? >> yeah. >> that i didn't realize. >> and around the world. like i said when you play, scott, don't you -- sometimes you can hit a perfect putt and it does not go in because it -- you know, they're not made perfectly and they're not standardized, are they? >> they mustish -- >> the ones must be regulation, right in must be regulation fields that they play on. >> i can -- you know, i can yip putt. i have to do the claw. >> do you get the yips in mini golf, too? >> i have to do the claw at miniature golf. >> say what? >> and you know what? i used to use one of the long putters at miniature golf. >> you never use that at miniature golf.

>> do you go around, walk the hole, walk around? >> lay down -- >> before you putt? >> oh, you know it is vacation season and as people are going on vacations for the end of the summer, some of them are starting to wonder if it's actually worth it or not. because, all the work is going to pile up when you come back. >> a baby -- >> what? >> it's much harder when you have a baby. >> joe wondered why i was doing this story today it's because i'm getting ready for vacation and unpacking from maine that we just came from -- >> but you're not going on a plane are you? >> no. but i have so much to do. it's nuts. it's nuts. there's a lot to do. it's stressful. >> you could even do it, you know, you're staying sort of close. we don't need to tell anyone. you could be going to the poconos. you could be -- >> i am staying close. i'll be around. >> so you could make a couple of trips. >> i don't want to make the trip unup and down. i need everything done and you're racing to beat traffic today. getting out of town. so that's the big deal. >> speaking of traveling. i thought this article new tactics in the fight against

stolen luggage. >> oh, yeah i want to hear this. >> was interesting. what the tsa is doing to try and keep workers at the airports from stealing stuff out of your bag. they're now sending bait bags through, and leaving like things like, you know, mont blanc pens around or fake things to see if people will steal it. >> how does it work with the bait? >> they're sent through 3500 times, bait bags, ten items were stolen. those agents were fired. in one case a ten-year veteran who had received commendations pocketed a mont blanc. >> wow. >> and i'm missing a mont blanc, by the way. >> you are? >> i have been for like two years. >> they steal detergent pods. >> oh, boy. when we come back, everybody. a monster move for monster beverage. will coke's big bet on the energy drinkmaker set off a frenzy of deals? how does pepsi respond? we have a top analyst on set to break it all down. don't just visit san francisco.

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a monster deal. coke taking a stake in the high octane beverage company. who needs this deal more. the monster or the giant? >> breaking records on the auction block. this 1962 ferrari just became the most expensive car in history. but should that price tag actually raise a red flag for car collectors? our robert frank gets behind the wheel. >> and changing the world one ice bucket at a time. millions are pouring in als awareness at an all-time high. so how will this windfall and all the publicity impact the race to find a cure?

the second hour of "squawk box" begins right now. >> good morning, and welcome to "squawk box" on cnbc. it's friday. i'm joe kernen along with becky quick and scott wapner. andrew is out today. while we're playing this version jimi hendrix' version of the star spangled banner because today is the 45th anniversary of the start of woodstock. three days of peace, love and happiness kicked off on the state in 1969, and -- >> you didn't go to woodstock, did yono, no. no, no. >> i was 13 years old. i tried to get my parents to let me go to i think it was creedence, three dog night and some other band. and i was -- >> they said no way. >> no. >> shot down. >> good call by your parents.

>> i forget who the third band was. some unbelievable 1969. but this was amazing. just legendary and the whole counterculture and when you look back, if, of course, you know what they say, if you remember you weren't -- >> you weren't there. woodstock, joni mitchell who was not there and you know why, she's supposed to go, and she agreed to appear on the dick cabot show instead and didn't go. >> said i can't miss my opportunity on the dick cabot show. >> really? >> then she had a show on cnbc. >> wow. >> but i digress. the futures are up about 50 or 60 points. 58 points. so we'll take that. good week. best week since when. >> best week in six. >> best week in six, judge? >> that's right. >> you checked into that? >> i did. >> is that including today? or what do we have to do -- >> as of yesterday because we ended at the august highs. back in positive territory for the month.

for the year. >> we'll take it. the ten-year probably had a pretty good week, too. unless you're a saver. and then you're going -- you don't know what to do at this point. >> hello 2.4%. >> hello 2.4. >> where were we 2.87 something. but then it -- remember we did the terrible gdp number we were at 2.43 and that wasn't the low. >> nope. >> went back up to 260, 265. and here we are back to 2.4 but nobody knows why. >> i didn't hear any theme music but i'll read anyway. >> you're asking for it. >> this is your -- >> are you in at all next week for -- >> it's the judge. >> no. >> you're not in at all next week? >> i am. but on the halftime show. >> because she's off for two weeks. do you want me to -- do you want me to -- >> put a good word in. >> it's all good. >> you can only be andrew? you can't be becky? you're unable to do that?

you got to be multi -- versatile here. >> i'll work on that. thank you. in the headlines this morning it's the busiest day of the week for economic reports. in about 90 minutes we'll get the july producer price index. it's expected to show slower inflation than we saw in june, and also out this morning, the empire state survey industrial production and consumer sentiment. check out shares of jcpenney. the retailer's stock jumping in premarket trading after it reported a smaller than expected loss for its latest quarter. and keep -- you can keep doing this. improvement in sales at stores open at least a year. and consumers are snapping up the newest video game consoles like the play station 4 and xbox one. industry sales were up 16% in july compared to a year earlier. driven by hardware purchases, sales of the actual games declined with npd saying sales of new generation games weren't enough to offset a decline in games design for the older machines. >> why would you be distracted?

you spend an hour a day with delta house like your otter with those guys. belushi and d-day on halftime. >> you really feel like that? >> those guys? >> yeah. >> yeah it does. they throw food. don't they? >> might as well. >> and you're otter. you're the guy that gets dean's wife. >> hello. >> no, wasn't it his daughter -- oh, it was the other way. yeah, yeah, yeah. >> mayor's daughter. >> oh, yes. she was in caddyshack, too. >> all right. coca-cola's spending over $2 billion to buy nearly 17% stake in monster beverage. that move is putting a jolt in shares of the energy drinkmaker. check that out, up 21%. joining us right now on set to talk about the deal is senior beverage analyst at jpmorgan. john, thanks for coming in today. >> thanks for having me in. >> so is this a desperate deal for coke? because that's how "the wall street journal" is papting it, a risky bid to jolt sagging sales. >> i'm not sure it's desperate.

what i think is the carbonated soft drinks industry has been sluggish for the past several years and will continue to be. people are concerned about obesity, artificial sweeteners, what have you. coke needs to do something. >> this deal makes sense to me. i'm surprised to see it described as sump a risky bet. >> i don't think it's risky. i would question whether coke should be going all the way in this. you know, why are you buying a 17% stake when you could buy the whole company. because coke has a growth problem like most consumer companies do. if you buy it, you integrate it into your operations. you gets benefit on the revenue line. the operating profit line. and the earnings line. this will be modestly accretive but it's not a jolt to the financials which is what coke they'ds right now. >> you'd like to see a bigger deal take place? >> i've been saying all along i think coke should be buying monster. i've got an overweight rating on monster and new on coke. >> what is vitamin water meant to coca-cola? it bought the whole kit and caboodle, so how -- you know much more about it than i do. so how did that go? >> i think vitamin water has kept them from making a big

acquisition. they paid an absolute fortune for it. a couple hundred times trailing ebit when i bought it. so what happened is they went in, basically blew it out through all the walmarts in the country and when you do that the brand losses its cachet. >> but you're just suggesting that they should have bought monster. wouldn't you call into the same trap? >> it depends on how aggressively you push it. i think what coke has learned from this is that energy is an entirely different category with an entirely different consumer. what monster has done so well is they know their consumer. they're not out sponsoring dale earnhardt jr. they're out sponsoring motorcycle races. they're sponsoring radio, things like that. coke has a troubled -- coke has trouble talking authentically to those consumers. monster can do it. if you buy monster, keep it separate. let them talk to their consumers in the right way. it can continue to be successful. i think that's the big lesson from vitamin water. >> so you said you're neutral on coca-cola right now. what would it take for you to actually change your rating to a

positive rating? >> i've been saying all this year that coke needs to do more m&a. and that's not just from a stylistic standpoint showing that they're focused on the troubles for the category. but it's also a question of the financials. getting the growth moving again. so this is kind of a half step there. i would say we need a couple of things. we need europe to get better. because they've got a huge profitable business in europe. and i think i'd like to see them actually buying in some total businesses, integrate them 100% into the financials. that will get earnings moving again which is what they need. it's an expensive stock to work you've got to grow earnings. >> they have the scale and the distribution to buy whatever everybody's drinking now, that's what i was saying earlier. you're taking market share away from coke. why don't you buy the company that's much smaller than you are. you've got the money, just buy it. >> it's exactly right. and i think part of the problem is, they are loathe to make a big turn, i don't want to say away from carbonated soft drinks -- >> they're proud because they're coke. >> and if coke doesn't stand up for the category nobody will. pepsi is not doing it. dr. pepper is not doing it.

i think they're loathe to admit that problem. i think they kind of realize it. between green mountain and monster, what you're seeing is a tacit admission that they need to shift focus. >> john, thanks a lot for coming in today. >> thanks for having me in. >> the market's been taking a cue from geopolitical headlines to some extent. ukrainian officials are inspecting a russian aid convoy parked just beyond its border. the development suggests an easing of tensions over the shipment but reports do say a dozen russian armored personnel carriers showed up this morning near the aid convoy and joining us now rebecca patterson, bessemer trust managing director and chief investment officer and ed keon at qma financial a unit of prudential financial. anyone that has decided that the world is just too volatile so i need to go to cash, that's just not been the case. i mean it almost makes you -- it almost makes you want to ignore this stuff and say unless it affects oil, it's not going to

do anything. really. so, i'm fine. is that -- is that okay? is that a false sense of complacency to do that? >> i mean, i take your point. stocks have been sloppy this summer. but we're still looking like we're grinding higher. >> anyone who sold is not -- is thinking, why did i do this? >> and we haven't. we stayed overweight and ridden through a sloppy summer. but you do see something going on in europe, clearly. we got gdp reports for the second quarter out from italy, france, germany, all disappointing. and germany in particular, you know, this is one-third of the euro area. so this is important. this is a big anchor for that region. the business confidence is turning lower and you wonder how much is russia affecting psychology. >> so the geopolitical stuff can affect the european economy which can then affect did >> the euro area economy is still one fifth of the global economy. so it matters. so for now i'm keeping a close eye on it. we've got underweight developed european equities to try to protect ourselves from spillover because i can't predict what's going to happen there. i don't know how bad it might get. >> what about draghi?

>> well, draghi is -- >> that's the danger of being -- >> a colleague of mine put it really well. he sure talks pretty. and i think that sums it up so nicely. he's good at talking down the euro, talking about what they could do and they have taken actual steps but euro area monetary policy is still so tight, versus where it needs to be. >> what does that mean though? >> who said that? >> a colleague of mine. >> that sounds like deliverance. he got a pretty mouth. >> where was this person from? >> my colleague david. he was doing deliverance, too. >> he was doing deliverance, too. you got a pretty mouth. >> he doesn't actually talk like that. >> when you say that he sure talks pretty he sounds like he's -- >> okay. >> we were just talking about nascar. >> here we go. >> the tangent begins. >> wait -- >> seriously though the danger of being -- i'm just going to move it back to where we were. >> yes. >> here's the problem. you've got germany -- >> full-blown -- >> germany is still pushing france to do more fiscal tightening. france is saying forget about it. the whole euro area is slowing down. they can't do more fiscal

tightening in the very short term if they're going to do an more trick ural form fiscal tightening they've got to have easier monetary policy to help offset it. >> that's what i'm saying. he's going to do full blown qe. >> when, when, when? >> i bet you it's going to happen. >> it's a choice. >> i think we're headed that way. >> oh, yeah i thought you said that. what would you -- you basically said we're not going to go gang busters, right. but we're not out of the bull market. >> we would get returns roughly equal to earnings growth plus the 2% dividend. hold about 10%. and we're halfway through the year, roughly on track for that. >> you know we just had the 100 year anniversary of world war i. so over that 100 year period of two world wars, the korean war, the vietnam war, numerous smaller conflicts of different types and yet stocks gave a 10% return over that entire period of time. so, it doesn't mean that we should ignore what's happening in ukraine, or in iraq or elsewhere. but as long as you still have the economic engine working, and you still have companies generating profits, the stock market is going to want to go

higher. so i think what we'll see this year is valuations will be roughly the same at the beginning of the year and the end of the year. and you're going to get returns -- >> you don't think stocks are overvalued at this point? >> i don't think they're cheap. so if you look relative to long-term history, they look maybe a little expensive. but over the standards of the last 20 years or so they're actually maybe a little cheap. i describe them as fairly valued. i don't think earnings -- i don't think that the p/e ratios are going to change all that much. what you'll see is the earnings will drive the bus. >> and we've started taking down small cap u.s. stocks just a little bit, because the valuations stretch is a little greater there. where -- >> yeah my former colleague recovers a small cap for merrill lynch has been signing a little cautious note all year and i think he's been pretty much right about that. we have moved money the same way you have a little bit out of europe, a little more towards emerging markets where we have the caution last year. the united states is kind of like a growth stock. you're paying a little bit of a premium but you're getting greater suredy of earnings and i think you have a better overall

macro economic background. >> it's interesting, too, you know, we've gotten some kind of slightly scary news out of walmart out of macy's the last couple days raising concerns about the consumer again but when i take a step back to me that's part of the bifurcated economy we have the bigger picture yields down below 2.4% the united states borrowing costs go down, home prices still rising alibeit at a slower pace. gasoline thanks to brent crude going down 11% in two months. that's a big move. >> gas prices are down 6% over the same period. so the picture for the u.s. consumer going forward into the fall, right now, you know, knock on wood, is looking very good. to your point on where the growth stocks so to speak. >> we think over the next few years. a lot of it is going to depend on how consumers behave. are my children going to behave the way i did? home ownership rates have gone down a lot for younger people. even car ownership. things like that. is it just deferred? or are they never going to go back. >> is it a structural change. >> that we don't know yet.

>> okay. thank you. >> you're welcome. >> have your husband on later. >> mm-hmm. >> talking about ferrari. >> driving fun cars. >> driving fun cars. >> is your wife going to be on? >> i don't think so. >> okay. be honest. >> i'd be happy to have her on. she'd be much better than i would be. >> good answer. >> okay. >> happy wife, happy life. >> all right. >> up next another possible data breach at a retail chain. >> another member of the club. >> a new investigation of hacking earlier this summer. plus the ice bucket brigade rolls on. cramer took the plunge among a long list of others. so is this viral video sensation actually bringing big money to the cause? we're going to talk to the als foundation just minutes from now. stay tuned to vote. which home is the best bang for your buck? place your vote for the winning home. go to cnbc.com/vote right now. what if there was a credit card where the reward was that new car smell

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welcome back, everybody. another national retailer is dealing with hackers. supermarket chain super value is investigating a potential data breach. more than 1,000 stores could be impacted. "the wall street journal" reports that the breach appears to have taken place in late june or early july and could be due to malicious software installed by hackers on the retailers point of sale network. that was what happened with

target and that was a huge concern. >> coming up, cnbc's popular million dollar homes challenge is back. this time it's bigger and better than ever. we're putting a price tag on steroids. legally. and stick around and get ready to vote for your favorite house. >> i'm sitting behind the wheel of the most expensive car ever sold at auction. we'll tell you why coming up after the break. ctricity and i just figured that it's time i do something about it. what we're doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. i think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when it's needed by the consumer. a smarter energy system is made with the ibm cloud. the ibm cloud is the cloud for business.

cnbc's popular million dollar home competition is back. this time with a twist. we're going to blow the roof off the $1 million price limit and take you inside some the most expensive houses that we could get into. six multimillion dollar homes are battling out to see which one is the best bang for your buck. you get to determine the winner. here's how it works. the first two homes are about to face off in round one. you can go to cnbc.com/vote right now and choose your favorite. but hurry because the polls are only open for a few minutes. one is the pious pad. one is the pop star glam. the winner that you select gets to move on to the next round. the loser is eliminated. to add to the fun we're keeping the location of each home a secret until after we get a look so get ready to vote because here's the first match-up. >> hallelujah.

this 1924 tudor estate set on nearly 3.5 acres of land was built as a convent. ♪ but converted into a residence a quarter of a century ago. walk through the hand crafted front doors, into 15,000 square feet of heaven. the spacious three story mega mansion boasts five bedrooms and seven full baths. and experience a piece of eden at the luxury pool house or laze around the inground pool, tennis court or hot top. list price $3,995,000. >> located on three quarters of an acre this ultramodern home was once the residence of pop star rihanna. there's 11,000 square feet, including a kitchen that leads into a wide open living and dining area complete with a bar. there are seven bedrooms. and eight bathrooms. but the outside takes center stage, where the inground pool and hot tub steal the spotlight.

yours for $14,995,000. >> okay viewers. voting is under way. it's up to you to select the winner. which is the better bang for your buck? is it the pious pad for just under $4 million or the pop star glam for $15 million? you can vote right now at cnbc.c cnbc.com/vote. let's bring in real estate super broker dolly lenz. first of all, dolly, tell us where the two homes are located. i would guess l.a. for pop star glam. >> pacific pal sides, you got it. >> and the pious pad? >> is in columbus, ohio. great house. really terrific house. >> yeah, it's beautiful. >> i love beautiful. >> and of course, it's drool worthy. >> that explains the price differential, too. >> yes, exactly. but the taxes currently are the same. who would have thought? in the $60,000s per year each. >> 6-0 thousands? >> yeah. >> even the columbus ohio one? >> yeah, 3.44 acres on the

columbus ohio. the other three quarters of an acre. >> palisades. >> that was on sale. it will go up to $150,000. both houses are amazing. the big big surprise is that rihanna has slept in the pacific palsides house. >> so that jacks up the price. >> are we allowed to ask how that happened? or maybe that might be -- never mind. >> maybe it's never mind. >> okay. all right. >> and interestingly -- >> oh, it was her house. well, that's -- you know, i didn't know what you were saying. >> i was with you. >> you were with me? >> was like, well -- can you go into that? was there a walk of shame involved? >> exactly. >> and that house rents -- >> okay! i didn't know it was her house. >> we did say it was her house. >> this is a tease here. come on. 65k a month it rents for. where the other house would rent for about 10k a month. these are big differentials also. there's a lot to consider here. >> which do you think is the

better bang for your buck? >> i think it's really hard to overcome pacific palisades rihanna house. that gorgeous, modern, beautiful structure. it's really hard. so i don't know. which one do you think? >> i -- location is always everything. location is everything all the way on this. >> can't wait to see what the voters think. that's what's exciting. >> we do have the pious pad looking like it's winning. >> looks like we just throw that up. pious pad got 69%. >> oh, my gosh. >> pop glam got 31%. >> wow. >> how many votes did we get on this, guys? >> nobody's awake in california. >> we're still -- >> they couldn't vote. >> pious pad is the winner. >> pious pad is the winner by 10,000 votes. >> wow. at this hour? nobody from l.a. >> is that in the neighborhood? >> it's not far. really. >> yeah. >> it's a small one in his neighborhood. >> yeah, right. >> les wexner the founder of

limited -- >> throw in a muirfield village membership. >> on that block. >> how far? >> let's do a google. >> all right, dolly looks like pious pad is the winner. >> and speaking for pious pad lauren bacall's apartment should be coming on the market very soon. >> do you play golf? >> do i look like i play golf? >> no. >> stick around. we'll be right back. >> thank you. have saved with progressive,oe so i get invited to quite a few family gatherings. heck, i saved judith here a fortune with discounts like safe driver, multi-car, paperless. you make a mighty fine missus, m'lady. i'm not saying mark's thrifty. let's just say, i saved him $519, and it certainly didn't go toward that ring. am i right? [ laughs ] [ dance music playing ] so visit progressive.com today. i call this one "the robox."

welcome back to "squawk box," everyone. let's take a look at some stocks to watch this morning. shares of applied materials getting a boost this morning. the chip equipmentmaker posting getter than expected results. among the catalysts here, contract manufacturer spent more money on technology used to make smartphone and memory chips. that stock is up by about 3.75%. apple's new iphone will r0r9edly have a screen made out of glass instead of plastic. the "journal" says the first sapphire display screens will come off production lines this month. they'll be featured in the larger iphone and smart watch.

and a bunch of news on chiquita this morning. get it? a bunch. a brazilian juicemaker say they are extremely disappointed that chiquita's board rejected their takeover offer. yesterday chiquita once again said it is backing a merger with an irish tropical fruit company. check out chiquita shares, down by about six cents. >> one of those is an inversion. there's inversions -- >> maybe that's the irish -- >> would be the inversion. >> we need to peel away some of the -- >> really bite into it. >> can't bite into a banana. >> i guess you can. but you don't have to bite very hard. i mean, it's -- >> well, moving on now before this takes another weird turn. >> only you would think it was headed there. really. >> i was -- >> it's just a very soft mushy -- it's not like an apple where you -- like that, right? >> right. >> pervert. go on. >> there's a reason why we get along. >> yeah, right. great minds.

>> the ice bucket challenge taking off with the business community. tim cook the latest executive to take the plunge. tweeting out a photo at apple hq and challenging disney boss bob iger and dr. dre. it's all the rage on social media and it all started right here at cnbc when i challenged dick costello who in turn challenged carl quintanilla and the list goes on from there as you know. jim cramer doing it yesterday as well. the challenge isn't just about making a video and posting it on your facebook page. meg tirrell joins us with a look at this amazing public awareness campaign. amazing really it has become. >> yeah, it's really, really incredible. the als association says it's an unprecedented amount of attention being paid to this disease. so let's talk about what als actually is. it stands for amy trophic lateral sclerosis. also known for lou gehrig's disease. it's neurodegenerative disorder where you lose the function of

your muscles over time. it's progressive. the prognosis from the time of diagnosis usually is two to five years life expectancy. about 5600 people a year are diagnosed with als in the united states. about 30,000 americans at any given time have the disease. and there's really nothing that's been shown to work for it. we don't know what causes the disease so efforts to treat it have been really difficult. the latest high profile program in this was in phase three and the program failed. several other drugmakers tried to work in the space. really there's not much out there for it. we did talk to biogen earlier this week and they said they were still working in this space. >> there's no real effective therapy available today. and what biogen is trying to do is work with a number of investigators to really try to understand what goes wrong in als so that we can develop rational approaches to developing drugs for that disease. >> so one is the ice bucket

challenge. this took off in the middle of july, it involves dumping a bucket of ice on your head, posting it on social media and issuing the challenge to more people. the whole goal is to raise awareness, and funds for ls. and it's done just that. the als association says they've raised 7.6 million dollars since july 29th through yesterday. compared with just about $1.4 million in the same period last year. now that's the national -- plus the chapters. so it really having a huge impact. it's brought in 145,000 new donors to the als association. so it's really making an impact. >> it started because of this baseball player, young baseball player in massachusetts pete frates so we should definitely remember his name when we talk about how this all started. as we're all talking about celebrities that are doing it. this was because of one young guy who was a star baseball player, i believe at boston college. >> at boston college. >> i should tell you, too, that number was just updated this morning. it's $9.5348.

that's great news. >> he -- >> how old is he? >> 20 something. >> 29. >> he's 29. >> diagnosed two years ago. yeah. >> they have no idea yet what causes -- i mean you can't look for a gene to try to fix until you figure out what the underlying -- >> right. and biogen is working on that actually. >> do you know -- >> it affects the nerves and the brain and the spinal cord which is where the nerves are. but also what biogen is doing a huge genome sequencing project trying to figure out what is causing this. >> go backwards. find out where the anomalies are and the geno type for people that actually come up with because it's not strictly hereditary. >> right. >> it may run in families. >> but they don't know. one thing that's kind of odd about it is it does seem to strike folks who are very active athletically. they don't know if there's a real correlation there. but you just see that a lot very athletic people, they -- >> look how long stephen

hawking -- >> that's true it's very different -- >> and you can get it when you're old. my mother got it when she was like 84 years old. >> oh, gosh. >> and when you're 84, i mean it's a scary way to go, because you feel helpless. but the life years loss compared to someone 29 or 30 years old, it's not -- you don't look at it the same way. even cancer should be expressed not if you kill someone who is 95 you should look at years taken away off a person's life rather than just, whatever you know, because we live to 130 we'd all die of cancer probably. let's bring in -- >> yeah, meg, thanks a lot. >> let's bring in lance slaughter from the als association. lance, welcome this morning. >> good morning. it's a pleasure to be here. thank you for having me. >> can you currently put in your own words of just what this whole phenomenon has meant for what you guys are trying to do? >> well it means a lot to the als association and other organizations involved in finding the cause, finding

treatments and a cure. but i think during this time we're probably most pleased and grateful for the impact that it's had on people living with this disease. you know, three weeks ago, there were half the population really didn't have an understanding about what als is or lou gehrig's disease. now, millions of people do. and that's generated hundreds of thousands of contributors to this cause. so not only are we fortified with resources to continue our work, which is important to us, but it's more important to people living with the disease and their families. and if you speak to any patient or person living with the disease or a family member, you'll see the excitement. and their spirits lift based on, again, this kind of recognition and awareness. >> we're just looking at video as you were speaking of apple chief tim cook, and mark zuckerberg of facebook, and phenomenon really is what this has become and you've got celebrities and people of all walks of life now doing this.

are you shocked at how this has caught on and the kind of money that is now pouring in? how would you describe it? >> well, i'm surprised but pleasantly. i don't want to say shocked because when you're doing this kind of work, you're waiting for this transformational moment. and you work hard year in, year out to ensure that it happens. and i can assure you, this is the kind of transformational moment that we hope to arrive at when we have an effective treatment and a cure. so, i never want -- you don't sit in this work being shocked about anything. but tremendously pleased. you know, when i look the ice bucket challenge about two weeks ago i think we had raised on additional $50,000. and as you reported earlier, we're now at $9.5 million over the last two weeks. so, i am i guess somewhat shocked about that. but you know, equally important like i said is the number of the millions of people that are more aware about the disease, and the hundreds of thousands of people who have invested in this cause, and are eager to be involved.

>> you know, programs like this one have spent an hour of programming time, if not longer, talking about brain diseases over the years. with experts here in new york city. do you feel as though, you know, so much of the attention and dollars over the years have gone towards cancer research, and rightly so, obviously. but that not enough focus has been on these terrible brain diseases that we're all talking about now, whether it's als, parkinson's, things like that? >> well for sures quite frankly decades we've been mobilizing the als community to generate support with the federal government. and we've been extremely successful with that. the federal government basically earmarks $80 million toward als research. part of the reason is that we've discovered, scientifically, that veterans are twice as likely to get als than the general population. so i would never want to

articulate that we're underfunded from the standpoint of the amount of prevalence. having said all that we do need more private funding. and there are vital services that need to be provided to patients and their families with the disease today. so in that regard, this is where i think we can make progress. but there's more people talking about the disease. you know -- >> i'm sorry. twice as likely? >> yes. military veterans are twice as likely to get the disease. >> why? >> we don't know. so the department of defense is investing about $7.5 million each year to find that out. >> is it -- and that's the statistically significant too because what is your normal chance of getting lou gehrig's disease, if it's only -- what 50,000 -- so the normal rate is like 0.00 -- something so to double is it is that really statistically significant? >> it's significant as it relates to what things may be exposing you to the disease or what activities may be helping to trigger a diagnosis.

so it's important. i can assure you, though, while we have so many military veterans that are currently in service, or have served, it's a disturbing trend for the department of defense. and they're willing to invest in it. >> that's really strange. they're exposed to all kinds of stuff, obviously, but -- and you wonder whether there's actual behavioral or psychological component to it. that's very strange. isn't it? >> we don't know. and again, that's why there's urgency to find out. as you pointed out earlier, though, people that are active get it, so there's been, you know, a disproportionate number of athletes, high profile athletes in football and soccer, so, again, we don't know, and that's where the urgency sits. >> it's very weird. i wonder if it's autoimmune because it's just weird for the motor neurons just degenerate and you have -- we don't have any idea why at this point? >> not at this point we do not. >> really weird. >> we're working hard to find that out. >> good. >> good work that you're doing. >> thank you so much.

>> we'll talk to you again soon. lance slaughter. >> thanks for having me. >> okay. >> all right. you've spent -- you guys have done hour-long programs if not more on these types of issues. >> coming up. we are whale watching. the latest filings for investing titans are out including paulson's big stake in allergan. then at the top of the hour we cook up some ideas on how to fix what's ailing the restaurant industry with bobby flay. i don't know we were showing a whale -- we may be getting a recipe for killer whale. i'm not sure -- did we talk about the sea world thing? >> no, it's whale watching as in the 13 fs, the big investors. >> also a story about guys getting out of sea world or at least anyway iron chef advice on how to turn stuff around. whale is delicious by the way. what would happen... if energy could come from anything? or if power could go anywhere?

or if light could seek out the dark? what would happen if that happens? anything.

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you rip some guy's bumper off. so, here are your choices: take the bus. or get liberty mutual insurance. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. see car insurance in a whole new light. call liberty mutual insurance. welcome back to "squawk box," v. it is shark week but this morning it's a crocodile grabbing the headlines. check out this video. a swimmer in mexico getting a little too close for comfort before escaping from a big crocodile -- holy cow look at that thing. >> that thing is huge.

>> whoa. >> an onlooker standing nearby on a bridge threw an object at the croc to throw it off. but my goodness. that guy is lucky. >> hmm. >> and it's -- >> it's chasing him, too. i didn't see the video at first because i was reading. look at that. oh! we were just talking about jaws and sharks. >> it's shark week, too, on -- >> watching it. >> all right. >> scary. >> launched steven spielberg's career. >> kate kelly is croc watching, whale watching. sifting through quarterly filings to see what's grabbing the attention of major investors. >> nice to see you, scott. an interesting period with lots of activity from appaloosa hedge fund manager david tepper who shifted his holdings pretty dramatically. you'll recall the second quarter which is the period yesterday's filings cover was the quarter where tepper famously noted that it was quote/unquote nervous time saying unless the central banks in china and europe especially chose to ease monetary policy, and the growth picture in the u.s. improved, he was keeping more of his money in cash and taking off some of his

long positions. that bore out in his 13-f filings where he reported yesterday as of late june he had reduced his number one position which was a spider by 3.5 million shares leaving him with 1.3 million of those. he also drastically reduced his stake in citigroup, cut the qqq and sold off delphi automotive. as a result of all that his holdings as of the end of june had totally changed to american airlines, gm, citigroup, priceline and google. and speaking of technology names where tepper now appears to have some big exposure, lots of interesting action in apple stock this past quarter. tepper decreased the stake in the tech giant by 67,000 shares for a total of 1.7 million making that his 16th largest position. leon cooperman of omega advisers, who's been a fantastic stock picker in recent years and remains largely bullish at least as of delivering alpha a month ago, even as tepper had moderated his outlook a little bit took a stake in apple of 1.3 million shares. at the same time however david

einhorn who has been bullish apple several years now reduced his stake from 9.5 million shares to close to 14 million. a story i think was misreported by some others yesterday. but it was a decrease in >> as you were reading that i thought i saw it's an increase. it's a decrease in >> some other news services didn't take into account the stock split. so there was some miscalculations. but it was a decrease as it turfs out. >> all right, cool. >> thank you. >> coming up fast food and restaurant stocks giving investors heart burn lately. red robin, noodles and mickey d's splumping big time. we're turning to bobby flay to get his recipe for how to fix what's ailing some of the nation's biggest food chains. plus the big weekend in monterey, california. the woodstock for billionaire car collectors getting under way. robert frank is there for us. >> ferrari price getting fast and furious. last night a ferrari became the

most expensive car ever sold at auction. going to tell you about the price and whether ferrari booms can be turning into the ferrari bubble. [ male announcer ] don't just visit miami. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better.

welcome back, everybody. pope francis is in south korea today. and kia could be finding a pitch man. the pope's been seen riding around in a locally made kia soul car. he often makes official visits in a fiat. >> from cheap kia -- from an

inexpensive kia -- >> there you go. >> why are you being so judgmental? >> cheap is a bad word. to a new record for the most expensive car ever sold at auction. that record was broken last night at the pebble beach car auction, where people are loaded i'm sure. cnbc's robert frank -- are you out there joins us from the monterey peninsula. you've done other ferrari stuff for us, too, robert. those are the cars that sell the most at auction. >> it is amazing. i mean they're almost a class unto themselves. joe, as you know the big spectator sport here in pebble beach is usually golf. last night it was car prices as those four days of auctions kicked off. and last night we had a new all-time world record. a 1962 ferrari was sold for 34.6 million. or $38 million when you include all the auction fees. now this was a gto. and bonhams, which sold that car as well as the previous record

holder a $30 million mercedes that sold last summer, they say basically prices are just going to keep going up as the wealthy love these top cars. take a listen. >> i'm absolutely delighted that we've sold this car. and i'm delighted that it's made the price that it has. >> now joe as you mensed ferraris are really a class unto themselves. and gtos are almost sort of mythical in the car world. the most desired. the most expensive car among the wealthy. this one was a 1962, and when you buy gtos, there were only 36 ever made. it's a very exclusive club. some say the most exclusive club in the auto world. people like ralph lauren, we don't know who the buyer is. it's sort of a mystery buyer at this point. but the under bidder was a person from thailand. this is truly a global market. collectors from all around the world in what used to be really an american sport or collector's world, and again, no sign right now that prices are going to go

down. but we'll see. we got three more days. that was just the beginning. >> it's weird, robert. >> $38 million for a car. >> and it's an old car that's old. the technology is old. what does a brand-new top of the line ferrari cost? give me that, robert. i don't understand. there's two kinds of people in the world, right? >> you know, you could buy over 100 brand new ferraris. over 100 brand new ferraris for what it cost for this car, which is over 52 years old. >> yeah. >> so -- >> now the good news here -- with age everything gets better, right? >> that's what -- no. that's what -- well there's drugs for that. that's what happens. these people have too much money. >> there's no bubble in collectible car market? $38 million for a ferrari? >> yeah. >> that's coming up in the next hour, i'm told. >> oh. >> which would you rather have, robert, a brand-new -- >> also by the way, joe i want to mention one thing. this car was actually expected to sell for up to 50 because in private sales gtos have sold

pore more than $50 million. so people were disappointed and jay leno told me last night pebble beach the only place in the world where people would be disappointed for a $38 million sale. >> wasn't that car in an accident? >> we'll have more from jay leno coming up in the next hour. >> wasn't that car in an accident or did i confuse that with another car sale? >> no. you're absolutely right. and that is probably why this didn't go to $50 million, because again another gto sold recently for $52 million. a person was killed in this car in 1962 when it first debuted. this had a great race history until then. so maybe that spooked some people. maybe that's what held the price down. >> all right, robert. we will see you again in the next hour. mean time after the break, fixing the slumping restaurant sector. tim love of cnbc's restaurant start-up is here to tell us why so many food chains are having a hard time. he'll be joined by celebrity chef bobby play. be still my heart. also fraud investigators taking to the internet to find out possible information, facebook,

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frothere's no reasonn average 17 we can't manufacture in shuthe united states. here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. we knew we needed to grow internationally,

we also knew that it was much more complicated to deal with. i can't imagine having executed what we've executed without having citi side by side with us. their global expertise was critical to our international expansion into asia, into europe and into canada. so today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that american made bag within a few days in singapore. citi has helped us expand our manufacturing facility; the company has doubled in size since 2007. if it can be done here in san francisco, it can be done anywhere in america. restaurant stocks giving investors heartburn.

>> get in my belly! >> celebrity chef and restaurant owner bobby flay and the host of restaurant start-up tim love are here to tell us what's ailing the industry and how they would fix it. >> what is the soup du jour? >> it's the soup of the day. >> mm-mmm. that sounds good. i'll have that. >> using social media to find fraud. investigators turning to facebook, tumblr, twitter and others to crack down on perpetrators. companies are fighting back to protect their users. ♪ we represent the lollipop guild the lollipop guild ♪ ♪ and in the name of the lollipop guild we wish to welcome you to munchkin land ♪ >> and lollipops gone wild. the sweet treat getting a makeover and going high end. as the final hour of "squawk box" begins right now.

welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen, along with becky quick. scott wapner is also here. andrew is off. he'll be back on monday. that's the good news. bad news is, they're leaving. >> for a little break. >> very nice break. >> you took two weeks. >> who takes two weeks off? >> you. >> oh, that's right. futures at this hour -- forgot. i've been back a week. i need a vacation. up about 50 -- 52 points. >> what's that? >> it's been good. up 52 points. or so. and it's going to be the best week since when wapner? >> best week in six weeks. >> okay. i've put that in my -- >> with me now on that? >> i put that in my memory. best week in six weeks. >> making headlines 'tis morning. this could be the start of another soda war. giant coca-cola buying a major

stake in monster beverages. it tries to expand into faster growing categories. the price tag, more than $2 billion. and we talked to a beverage analyst earlier this morning. let's listen to that. >> i would question whether coke should be going all the way in this. you know, why are you buying a 17% stake when you could buy the whole company? because coke has a growth problem like most consumer companies do. if you buy it, you integrate it into your operations, you get the earnings line. this will be modestly accretive but it's not sort of a jolt to the financials which is what coke really needs right now. >> another stock winner jcpenney posting better than expected quarterly same-store sales up 6% in the department store reporting a loss but a smaller one than many analysts had expected. the retailer desperate for a comeback posting shares of gwinette are also getting a boost today. activist investor carl icahn has reported a near 7% stake and also revealing he supports the media company's plans to split

print and broadcasting. >> there is a food fight taking place between shareholders and fast casual restaurant stocks. shares of noodles, mcdonald's, pot belly and others slumping as sales come up short. jane wells joins us with a look at the sector. good morning. >> consumers willing to pay more for fresher food that takes a bit longer to make without traditional table service has proven a winning recipe. fast casual sales grew 11% last year and forbes reports traffic has grown faster there than in any other restaurant segment for five straight years. so everyone wants in. but how many gourmet burger joints does america need? the shakeout or steak and shakeout in fast casual has started. the clear winner is chipotle. where same-store sales jumped 17% last quarter. the company raised prices and still saw more traffic. the stock is up significantly for the year, 27%. the only other one doing better is el puyo loco. which just started trading and is up 33%.

most are losers. concepts that seemed hot are struggling. pot belly, noodles, red robin gourmet burger, panera all struggling to show growth. so what do people like? obviously they like fresh next but consumer reports asked readers to rate chains and burgers, the habit was in first but you had to go down to 10th place to see one that's publicly traded, shake n shake. mcdonald's was last. el polo loco was second. taco bell was last. and naturally, taco bell has just opened its first experimental fast casual restaurant in southern california called u.s. taco company. look at those. decidedly upscale foodie tacos like one with fresh lobster, garlic butter and slaw called the one percenter. it's reportedly for people who wouldn't be caught dead in a taco bell. guys? >> thanks, jane. stay with us. with us now to sprinkle their culinary genius are two masters of the kitchen in studio bobby

fwla the owner of fast casual chain bobby's burger palace which has grown 18 locations across the country additionally he's a restaurateur behind mesa grill in vegas, new york city's hot new spot gotto, and i didn't say it to you off camera and you had an affair with ari gold's wife an entourage. >> the affair did not actually consummate. i tried very hard. >> that was classic. and they called you -- remember what what's his name the actor, my agent. >> jeremy pifen. >> when he found out it was you, see i would have been insuited. he called you a ginger what did he call you? >> i didn't write the script. you know it's not a reality tv show, right? that's not real. >> excuse me? >> there was no offer -- >> i got in trouble one other time with that pretending that aquaman was real. also, tim love restaurateur and co-star of cnbc's restaurant start-up. maybe you'll be in the entourage

movie, tim. he's the owner of five iconic restaurants in texas including fast casual joint love shack known for it's dirty love burger. can i say that, really? i guess it's cable. >> some of the stuff you've said -- >> oh, yeah, because -- so first of all i'm overdressed. you guys are queue relaxed here. i look ridiculous. >> you can take that off. >> okay, i'm sorry. i didn't get the notes. but i will next time for sure. >> i was wondering if you were going to wear a suit, bobby. >> i'm ready. >> it's a business network. >> yeah, exactly. >> and business is good. i would -- >> business is great. i opened bobby's burger palace about six years ago. we started now we have 18 of them as you said. and you know, it's an old-fashioned business story. two guys, myself, and my partner lawrence krech mar, i'm a chef, he's a restaurant professional real estate expert, and we like burgers. and we decided to open this place, bobby's burger palace. >> they're great. >> yeah i mean we, here's the deal, we put up all our own

money. we didn't take any investment. they're all company owned. we haven't franchised one of them. and business is good. you know, we're cash flow positive. and we have been since the day we opened. and it continues to rise. and so, we feel like we're just beginning to grow this business. it's only been six years. you know, and we're trying to get people what they want which is great food. people in this country, as you know, they want better food every day. and as a chef i feel like we can help deliver that. it's not just some story that got made up in a conference room one day we think we should do mexican food. we think we should do italian food. this is something that really stems from something we do every single day of our lives. people want better food. they want value. and there's this sort of buzz phrase fast casual. chipotle is a great exam of that. we feel like we're fast casual plus because we also give you some service. it's not full service. but we bring the food to you. we take it away from you. so you're not just standing

around waiting for somebody to give you something to go. >> would you franchise it? >> it's possible. anything's possible. it would have to be the right situation. because obviously the brand and what it is is really important to us. so control is important. >> tim, do you know for a fact that if bobby came in on the show on restaurant start-up and had this idea would you have definitely said that's -- we'll do it, can you spot talent like, does this guy have what it takes? >> well, i mean, you know, with clearly with bobby's reputation that puts him ahead of the pack right off the top. >> no, but if no one knew who he was you think you could tell? >> maybe from the suit, right? >> you know, i'd have to taste it. you know it's all about the food like bobby said. he's building a restaurant. bobby's burger palace is built around quality and like he said he's adding a little bit added service. which, you know, elevates his concept a little bit more than the others. that's what you're seeing happen in the fast casual realm is you know in the last seven, eight years, there's been a 300% growth in the fast casual

segment. it's almost a $500 billion business now. and if you're a restaurant professional who knows what they're doing, why wouldn't you want to get into that segment? it's the only place where you see double digit sales growth. i mean year after year after year after year. and it's clear that people want high quality ingredients, and some speed in their food. especially during the lunch hour especially. >> i'm thinking, too, we were just talking about mexican food. i always use that expression that the worst mexican food is great. i think about demographically what's happening and i think that anyone who finally tries mexican food you're going to eat it, that will never -- that concept will never get old, will it, guys? >> you know, i think that you know people talk about the burgers being, you know, has it had its day. >> and it never has. >> burgers, it's one of the great american dishes. period. people in this country, and in other countries as well now, want to eat burgers. in any economy. >> so it's mexican food now? the great american food -- >> people are looking at red robin this week and see what happens with that and they're

like, yeah, maybe tastes have shifted now towards el pollo loco and you say that's not true, people still love burgers. >> they do now. they did yesterday. and they're going to tomorrow for sure. and i think that companies like red robin who have done so well, they look to people who are independent restaurateurs to see what the trends are at that very moment. we basically take a look at what our customers are saying every single day, and adjust in that way. the thing i love about bobby's burger palace is that every time i talk in i feel like every single customer is smiling. i'm not really sure why. i don't want to ask them but i feel like they're having a great time because they feel like they're getting value and they feel like they're enjoying their food. quality of food is more important than ever at every level of the food industry. we have to eat every day but we want to eat good food. >> are those your colorado locations they're all smiling? >> we don't have any in colorado. >> oh, you don't. well that's an idea. >> very happy in colorado. wait a minute. that's going to be the burger of

the month. i just got it. colorado burger. >> tim, like five years from now is there something we'll look back on and say why didn't we see that coming? you're constantly trying to figure out what that's going to be, right? do you know? >> right, well clearly i don't know but i can tell you when you're looking at a trend like what happened at red robin yesterday, and oodles when they came out their ipo exploded and then you just see it kind of fade off. people get really excited about restaurant investment because it's a sexy investment. it's really you have this mind-set you think oh, i'm going to invest and be a partner in a restaurant and i can go sit down and order a bunch of champagne and all my friends are going to show up and it's going to be the greatest thing ever so people get a lot of excitement around having the ability to own part of a restaurant. and then you know, as bobby touched on i mean it's just two guys that started his business. i'm independent with everything that i have. and it's a passion that goes behind the business, which in turn translates to quality of food and things like that. and when you see a restaurant

company go public a lot of times that passion gets dispersed throughout a bunch of people and you have false money that allows you to expand quicker than maybe you should. and so you start losing quality, and you choose that over sales, and eventually it bites you right back. and so, what i think you'll see in the fast casual segment looking forward is going to be more ethnic foods. you know chipotle does well. mexican food is doing well. you'll see some asian, you know, like their new concept shop house. i mean it's going to be -- it's going to do well. because it's a little bit different, the food is a little punchier. i mean the burgers and fries are never going to go away. it's an american food that we always want. we always crave. but the ones you're going to see really making big sales jumps are going to be the ethnic side foods. and you look at panda express. >> i agree. >> can i ask you guys, though, i'm just interested because what you guys are talking about is great food. there's always going to be a market for that but we have heard from companies like mcdonald's who have stalked about the broader troubles with the broader consumer at this

point. bobby have you seen that with any of your businesses? >> you know, not really. i mean, and we attribute it to just being good at what we do, and adjusting. >> you're more price conscious. >> we're very -- look, i've been to your new restaurant many, many times already. >> we've got -- >> okay. >> you could probably charge more for that food and you know that. >> and we'll be raising the prices today. >> you know where i'm going. >> exactly. people have even said that. value is incredibly important. the last thing i want anybody to think about when they come to my restaurant is, is it too expensive. ever. so the idea is kind of to be on that bridge. great quality, great ingredients. and not too expensive. and then everybody goes away happy. i always say, like, my message to the restaurant analysts out there, and i'm not a public company. i'm private. but, don't get caught up in the hype. this is food. take a look what's behind the curtain, and see who's actually making the decisions and cooking the food. and that's important.

>> when how do you is it hard to get a table there? do you say you're do you say you're judge one nra and they think i'm going to walk in -- >> no is it hard to, how do you -- have you ever used the term do you know who i am? >> no he says i know joe kernen. >> all right. >> in the door. >> all right. >> i haven't had to say it before. >> you can get in that easily. tim love -- >> good being quiet. >> new show is going great. you're, you're, there's a picture of you on the west side highway that's so big that you can see every you know, blemish, i mean it looks good. it looks good. anyway on -- >> thank you. >> it's a close-up of -- but you got the other guy with no hair next to you so you look a little better. bobby flay, is here -- >> thanks. >> you know -- what about bobby fillet. >> f-i-l-e-t? >> oh, yeah. >> sounds good to me. >> have you never thought of that? >> well -- i have, actually. >> i knew it! i knew it! see. you're a little late to the game but we can still change his name.

>> all right. >> thank you, bobby filet, thank you. >> medium rare. >> medium rare. >> yeah. >> bobby i want to tell you, i want to tell you congratulations on the new restaurant, buddy. >> oh, thank you so much. i hope you come and visit us soon and congratulations on your new show. >> did we say when it's on? we talk about restaurant start-up. >> yeah. >> okay. >> never mind. >> can't do it too many times. the fastest growing network in prime-time. >> that's right. >> we are. >> i've heard that once or twice. >> there it is. >> up next -- up next how far should social media companies go to protect your privacy? investigators turning to facebook and others for information. now companies are fighting back. the ceo of reputation.com joins us after the break. and check out the "squawk box" market indicator. you're driving along, having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! you've had your first accident.

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all right. welcome back to "squawk box." for 9 first time apple has started storing personal data of some chinese users on servers in china. the company says the move will help it improve the speed and reliability of its icloud service. many tech giants including google have refused to build data centers in china citing censorship and privacy concerns. becky? >> facebook in a dispute with a

manhattan district attorney's office over government requests for users posts, private messages and other data. foursquare, kick-starter, and tumblr now backing facebook raising the question how far should social media companies go to protect your privacy. joining us is michael fertik, the ceo of reputation.com. and michael, this is a really interesting time to be watching how this all plays out. what should these social media companies be doing? how worried should people be about using them? >> so i like that social media companies are trying to stand up for your data privacy, your data security. i like that facebook is doing it. i like that other companies which are smaller are also helping. the smaller companies have a harder time because it's so expensive fighting warrant requests and subpoena requests. i like that. in this particular case it's not really a good example of facebook's fighting the data requests. i think facebook has a loser on its hands in this case. here's the story in this case. the manhattan district attorney has gone after some police officers and firefighters who

have claimed disability. they say they can't work. and yet they're living their lives, they're fishing, they're hunting, they're doing sports, martial arts, and they and their families are posting the activities and photographs of the activities on facebook. and so the evidence under which these officers and firefighters are being charged actually lives on facebook. and so, the district attorney sent warrants for just almost 400 warrants which were approved by the judge to facebook to get evidence cultivated and accumulated back to these cases. and 134 people have, in fact, been charged based on the evidence that has been cultivated. >> why do you think this one is a loser, though? >> well, because the warrant process was served. the warrant was served. the evidence has actually been successfully accumulated and collected by the district attorney. and by the way, the evidence lives on facebook. they weren't going on a fishing expedition. they're subpoenaing the people themselves, and their families who are posting these pictures. so it's very important evidence

in this case. it feels a little bit like a pr move by facebook. feels like window dressing. but i think what they're trying to do is send a signal, trying to send the signal that now they're going to increase the costs to government to try to surveil you. i think facebook's come under a lot of pressure for the way it handles data. the way it's been forking over data. >> i would say the problem that most people have had with what facebook has done to this point is what they've done with that information themselves, not about handing it over to law enforcement agencies. >> that's where i fully agree with you. i do have reservations about how social media companies use the data themselves. i think what your point is to quite correctly is concern over not big brother but the proliferation of little brothers. the companies that have our data and what they do with it. that's why i started my company reputation.com to protect against that particular set of problems. i do have a strong agreement with you on that point. i think people are very, very worried about it. so that's why i do think this does feel like a pr move by facebook. >> is this a pr move that is

more than a fake? they may be signaling they're going to fight back against outside law enforcement agingensies and part of that is what we've seen with the nsa and all the problems that have come out of that. do you think these companies are getting more careful about what they themselves are doing with the information? >> you know, i think that they are trying to toe a line. when you're a social media company, what are you? you're a media business. the only product they have to sell is data about you. that's all they've got, right? so they have to toe a line between revenue and the pressure about privacy. the companies are run by good people typically and the people who work there are good people typically. there's sometimes a real debate internally about whether they should handle data one way or another. on the other hand, there's a little bit of a religious conviction. this is important. there's a religious conviction among a lot of the people senior and junior midlevel in these companies, they're investors, that the opposite of privacy is something called transparency. and people should just stop worrying about something called privacy. >> that argument drives me crazy. >> it drives me crazy!

it also drives me crazy because it's so consistent with their economic imperative, which is you don't need your privacy anyway, and we're selling it. >> and i've had hard times michael where i've canceled my facebook account, i have pulled back from all social media at different times. i ended up going back on because i wanted to see pictures my cousins had posted at different times. so i've gotten back in -- >> i bet you behave differently once you got -- >> oh, sure, yeah. >> i do. but yeah -- you kind of participate -- >> i post next to nothing. i watch. i'm more of a voyeur when it comes to a lot of this stuff. >> it turns out a lot of people on social medias are voyeurs. there's a 1 -- 190 rule. might be interesting. a 1-9-09d rule on the interin the 1% of people post everything. 9% of people repeat everything, and 90% of people observe everything and consume everything. so 90% of people on the internet are basically just lurking anyway. they're watching. they're consuming. they're looking at their friends' pictures but they're not actually posting much. one of the strong bre haf yore changes that we are seeing is that a lot of the people who

have been on some of the longer legacy social media sites they're basically letting their sites go moribund. i do have a facebook page. i basically don't post. i show up to see what's going on. what i have a hard time with around facebook, twitter and others, that facebook button, that like button that is on all the web pages you go around the web, the twitter tweet this button, that button is like a super cookie. it's following you all around the internet. en. >> becky is not lurking on the internet. >> i kind of ham. >> you're not chris hansen "dateline." get a -- she's observing. she's not lurking. >> there's a different word than we use in silicon valley. >> lurking? >> it's not salacious. just means i'm in lurk mode. i'm watching -- you got to get with it. this is the hip language of silicon valley. lurk mode means you're just watching, you're consuming the data. >> michael we'll have you back soon. thank you. >> talk to you later. >> okay. >> love that. scary. i'm scared of you.

lurking -- >> not very often. >> san francisco saying good-bye to candlestick. then is there a double brewing in the classic car market? monday on "squawk box" international paper ceo. plus, we talk property prices and the state of housing. with the host of hgtv's hit show "income property." squawk box starting at 6:00 a.m. eastern time. right here on cnbc. kid: hey dad, who was that man? dad: he's our broker. he helps looks after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not? dad: it doesn't work that way. kid: why not? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab

welcome back to "squawk box." it was reminiscent of a scene nearly 50 years ago. fans packing candlestick park to see paul mccartney last night. the stadium is as famous because it's the home of the san francisco giants, and the 49ers, of course. but it's also known as the venue for the last concert by the beatles in 1966. >> what happened? why did you stop? >> because he told me to stop right there. >> that bothers me. >> that's because we have producer prices coming up. we really want to make sure we're here for that. "squawk box" will be right back. ♪ ♪

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welcome back to "squawk box." breaking news. august empire. 14.69. just a tad under 15. we were looking for a tad over 20. last time it was a tad over 25. a little light. let's look at july. final ppi. and that is up 0.1. pretty much exactly as expected. it's not as high as the last

look which was up 0.4 which stands on revised. you strip out pretty much everything i buy every day food and energy it's up 0.2. as expected same as the last look. if we look at year over year on head line it's 1.7. ex-food and energy it's 1.6. miles away from 2%, right? yields, under 2.40 in the ten-year and of course, the big story continues to be things like the dax overtakes 9300. boy they should hope for more strong ji gdp data, right? back to you. >> all right, thank you, rick. let's bring in peter boockvar, chief market analyst at the lindsay group and a cnbc contributor. and just overall every week when i read, and i really like that, that you do that. and you do that, you get paid for that? >> some people do. >> they do -- >> you guys look at that? -- >> the positive things that happen. usually 10 or so that you find and the negative things you can

usually offset them with ten things. >> pretty much. >> you can figure out where we are based on that. where are we but do it for the last three months? >> i think the global economy is choppy. i define choppy as, some areas of strength, and other areas of weakness. europe obviously is having its issues in actually growing. they're not necessarily contracting but they're not really growing. asia is a mixed bag. hong kong reported its first contraction in q2 since 2011. china is obviously challenged with their property markets. the u.s. economy is showing some signs of recovering. but pockets of issues with housing and retail spending and wage growth. so, it's overall a mixed bag and i think that's reflected in this continued drop in yields. and a continued desire of central banks to try to bubble blow us to a better place. >> you didn't mention japan. >> right, japan of course. >> it's a big looking for a windshield. is that your view? >> japan i think is dealing with the lack of wage growth at the

same time they're generating higher inflation and higher taxes. so, they're going through another grand experiment of their own. they're bank of japan's balance sheet will be double the rate of gdp than the u.s. and they need wage growth to offset higher inflation. and hopefully they'll get it. but right now they're pretty challenged, too. >> so in this country do we just keep plodding along here with no wage growth, with, you know, the people that own assets doing pretty well, feeling pretty good. everybody else sort of stuck in neutral. get no help from washington on either getting out of the way, or doing something that might actually help. so this is what we're stuck with, janet, and her friends just sort of helping us along? >> yeah. i'm in the camp that janet is at this point not helping. >> hurting? >> yeah, i think they're inhibiting a natural recovery in the economy. >> that's part of the problem you think? >> yeah -- >> that's hard to connect the dots to most people that free money doesn't help somewhere. >> well, i have this unconventional view that if you just let the economic cycle run

its course we'd actually be okay. >> yeah. >> and that the u.s. economy just needs population growth and productivity and we'll actually grow. without the constant manipulation of the distortion of markets that the fed brings. >> did jim grant send you a copy of his latest book? >> no, i haven't seen it. >> it was about a potential huge recession or depression in 1921 that they did absolutely nothing to, and it went away immediately, versus the one that we reacted to strongly in 1929, and the one that we reacted to strongly in 2008. making the point that, you know, you flesh out -- let it just occur, let markets set prices and you recover more quickly. >> the northern economy has this amazing ability to regenerate itself if just left alone. but this belief of doing something on the part of politicians, whether you're a federal reserve bureaucrat, or you're someone in washington to always do something distorts, and alters the natural course of an economic cycle. >> when do we break this malaise that we're in. is it elections that do it?

>> unfortunately, it's going to actually have to be a rusting away of policy from the fed. we need actual normalized interest rates to see the proper allocation of capital. i know there's this belief that low rates good, high rates bad but there's 8.5 trillion of savings out there. for every 100 basis points of short rates that go up, well that's an $85 billion interest income increase in people's pockets. so there are some benefits for higher rates. it's not just black and white like this. and unfortunately i think it's going to be the bond market at some point it's going to be the inflation figures. the job figures that are going to force the fed's hands to do this. but the fed is afraid of their own shadow. here we are still with zero interest rates i think is pathetic. and i think that needs to change. and unfortunately it's the market that's going to force their hand. but the fed has to stop being so afraid of the u.s. economy's ability to handle even slightly higher interest rates. >> it's hard to raise rates when german bunds are at less than one percent. >> right but zero interest rates with an unemployment rate at

6.2%, inflation moving closer to 2%, the high -- job openings since 2011. >> still emergency tactics going on. >> 2001, it's wholly inappropriate. >> and if it ever goes back down we've got nothing left. >> do you think the bond market is what forces the hand or do you think they look at the numbers themselves and say okay we need to get ahead of this and maybe move earlier in 2015 than a lot of people are expecting? >> i'm convinced the fed will never get ahead, they'll follow. maybe it will be the bond market, maybe it will be the data. maybe if we have a 5.5% unemployment rate by year end and we have a 2% pce the fed will be forced to. and the amazing thing is that cpi is going to be 2% for four straight months. but because the fed convenely looks at the pce monetary policy is a little different than it would be otherwise. >> all right, peter. not very optimistic for a friday but, it's realistic. >> i'll have some positives in my summary. >> oh, good. whatfeel want that at home.

it costs something, doesn't it? >> yeah. >> that's why you're here. >> up next car collectors are about to find out if there's a bubble brewing in the auto auction market. robert frank joins us from the pebble beach classic car auction. it's been called the woodstock of billionaire car collectors. perfect name as we celebrate the anniversary of the original woodstock. coming up the business of super suckers. first it was trendy cupcakes. then it was cronuts. now it's lollipops. we talk handmade candies. the new sweet tooth trend. has g, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity

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welcome back to "squawk box." the futures right now have been up 50 -- they haven't moved much. i've seen 52. 58. up 52 again right now which would be the end of a pretty solid week. i did some work, some calculations. it would be the best week in the last six. >> are you serious? >> yeah, to determine -- >> did you know that -- >> back in positive territory both the month of august and for the year now, too. >> really? >> yeah. >> i think i came up with the best in six weeks. why, did you know that? >> did you read a tweet from me or something? >> you told me that in the six and the 7:00 but i forgot already. i thought that was my -- >> that was -- >> you own it. >> okay. >> all right. better be right. >> i got it from him. >> no.

>> all right. is there a bubble brewing in the car auction sector? robert frank is at the pebble beach auto auction and joins us now. hey, robert. >> hey, scott. we seem to be entering a new phase in the collectible car market. we've gone from expensive prices to just insane prices. it's less about intrinsic value now and more about four wheel safe deposit boxes for the wealthy. let's take a look at these numbers, sales numbers for these sales at pebble beach last year, the auctions in total were about $300 million. just over $300. this year it's going to be between $450 million and $500 million for fewer cars. now also for context just the top five cars that are going to sell this year, more than the total of 800 cars that sold in 2009. now if we look at the question of whether this is a bubble or not, you look at what i call the law of trophy properties. is this -- you have a growing number of rich people and a fixed number of rare collectibles. or will this keep continuing?

>> we are reaching a kind of high here with some of these values that it's hard to imagine it going a lot higher. but, i said that a year ago. and so, you know, here we are at a new high, and better cars are coming to market, and they're newer -- they're newer buyers coming for these things. people that we've never seen before. >> now a couple of warning signs that are flashing on the dashboard of this market. you've got a lot of speculators, dealers and investors kind of creeping in to this market so that's a little more hot money than we had before. and also some of these prices are doubling and tripling just in the last couple of years. yesterday i spoke to jay leno one of the greatest collectors in america, just got an amazing collector and a great car guy. he said he's bullish on this market because of all the overseas wealth. let's take a listen. >> there's a guy in saudi arabia who buys every aston martin, he's got like 212 of them. so whenever they come up he buys

them. >> and that's just the db5 collection. >> exactly. so americans used to vow the money. the guy from texas with the big cigar. that's been replaced by the chinese and saudi arabia so it's a little different. you've got to compete on a world market instead of just a local market. >> now we've got to remember, you know, so many people that i talked to the big collectors here, the buyers, sellers, basically say look, this market can only go up because of the supply and demand. but we forget in 1990, prices for these top cars fell 80% in the most recent recession they fell about 20% or 30% but it makes me a little bit nervous scott when people start talking about a permanent bull market in anything. they start saying this time it's different. there are so many wealthy people, fixed number of cars. that makes you a little bit nervous. >> robert, you know, people fall back on the scarcity value, whether it's art, right, we've raised a question with you and you've raised it yourself

whether there's a bubble in fine art and the other side of it is it's the scarcity value and that keeps pushing the prices higher. at some point, though, you just wonder if it runs out of a place to go. >> yeah, and a lot of it is driven, again, by the global diversity. you know, the last big crash we had in this market in 1989, 1990, you had a small number of japanese collectors who were just buying everything indiscriminately. what leno and other people told me is today's buyers are smarter and they're just much more diverse globally and there are more of them. at this ferrari sale last year we saw thousands of people, a lot of them from around the world. so there's a case that if it's a bubble it could go on for much longer than we think. and the correction may not be 80%, it could be 30%, 40%. >> robert i'm going to defend you a little bit here with wapner picking on the cars. you know the -- >> i wasn't picking on the cars. >> you've seen this rothko? basically this is a summary of

the rothko tt was it. that sold for $140 million right there. that's my rendition of the rothko. >> you forgot the color. >> i forgot the color. put a tie dyed shirt on one of those little things and spray some paint. did you see the woman's bed that she was -- she was in a bad mood. >> that's what i'm saying. >> did you see the bed? >> no, i did. >> it had ashtray butts and used prove lablgt prophylactics and it was a stage of her life from awhile ago and it's got rumpled covers. wasn't it like $35 million? at least you get a ferrari. >> that's true. >> instead of a crummy bed with -- you can drive it. >> there's too much money all over the place. >> it's the sail thing. i'm just standing up for the cars versus you know this thing. >> i love the cars. i can't believe a car is going for $38 million. >> he just had an argument off camera about how that the fed was actually the good guys in doing all this -- >> was that an argument? >> it was you saying i have no time for anyone that says that

the fed's actions weren't helpful basically. >> that's what i said? >> sort of. and i'm saying, now you see all this money sloshing around. >> i've got to get out of the paraphrasing business. >> what did you basically say? you can't say q1, 2 and 3 weren't helpful? >> i just have a hard time accepting the fact that anything the fed has done hasn't been helpful in some way, shape or form. i'm not going to make the argument -- >> scott there is another side. there is another side. >> -- stanley drunkle miller delivering alpha -- >> we don't know yet. there's another side that says it's not just -- >> that's my point. we don't know yet. >> we don't know yet. it could be not just not helpful. it could be incredibly hurtful. >> or it could do nothing wrong. right? >> we don't know. >> the hyperinflationistas who -- >> you just pointed to the -- where do you think the art market and this car market where do you think this bubble who do you think gave the ammunition for the bubble? >> okay so the fed just gets everything, everything that's gone on is all at the feet of the fed? >> i certainly think you could

attribute some of what's happening to the fed. >> this is a long, long argument. people said the same thing back in 2001 that the fed let it run up for two long. >> look what happened in 2008. >> look any time you have any sort of manipulations people will say okay you can't smooth things out forever. any of the problems therefore are your fault because you were manipulating. >> well we'll see. but at this point, i don't -- you know, who is it that was in here that said it was mcculley who said that the fed saved the world and can take a victory lap and it's case closed. i just don't know if that's -- if we're going to end up in hindsight knowing that that's true. the point that druckenmiller is making is you've got to say look you can't say wow look at the great economy we had in 2006. you've got to factor in 2008 and ''09. >> now we're in 2014 and things have recovered a lot. we don't know where 2020 comes we're going to be -- >> basically we're saying this is an unended -- unfinished novel. it's never going to be answered. people will say look at the

problems that were created no matter how far down the road. >> i don't say either. but are you firmly on the side of they were great and nothing's wrong -- >> i didn't say that. >> well i'm just saying -- >> i wish things were better. >> you do? >> but to suggest that the fed is the problem where things aren't better -- >> i think to suggest everything they've been is helpful but not hurtful. >> i didn't say everything was -- >> you know what would make me feel better, guys? a lollipop. >> yeah? >> you going to do this on camera? >> no, read. >> coming up lollipops getting -- >> do we need to hug it out? >> no. >> lollipops. >> getting a makeover. all natural ingredients fancy sticks and new flavors. it's all the rage. a closer look at the sweet treat in just a minute. >> sweets. >> you like cherry? >> no. strawberry, watermelon. >> monday on "squawk box," international paper ceo. plus we talk property prices and the state of housing. with the host of hgtv's hit show, "income property." "squawk box" starting at 6:00

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welcome back to "squawk

box," the features now, let's see how we are setting up this friday on wall street. have not moved much, right, joe? >> between 50 and 58. >> why is yours clear? >> different flavor. >> what's yours? >> some sort of berry. >> mine a clear too. i need artificial coloring to taste good for me. >> close your eyes and try. >> what are you going to do? >> then you don't know if it's clear or not. >> is this your read? i was tasting the lollipop until i saw something about hemp, hemp fest. let's get going. >> seattle's national hempfest, largest legalization rally and biggest expo. marijuana is legal in washington state, and there's two lounges to obey the law and smoke pot legally. the weekend festival includes 120 bands, a hundred speakers,

and a hundred vendors. >> what if the haze hits you? >> i don't know. >> joe? >> okay. >> are you engaged in a fed discussion now? is this where we've gone now? >> people said, god, out of your mind. no -- >> really? >> normal suspects. >> i'm not talked to by anybody. >> news today, the two supermarkets may have been hacked. the journal says a data breach at super value may have affected more than a thousand stores. meantime, the parent of jewel osco says the computers that store credit card data for customers, they've been hit by what are called an unlawful intrusion. no word if data was stolen. my lollipop's going to be gone. do you chew them? >> no, never. >> do you?

>> no. this has seeds in it. i don't chew it. >> a tootsie roll pop does not last. >> i heard that about you. the big business of candy. "squawk box" will be right back. don't just visit san francisco. (water dripping and pipes clanging) visit tripadvisor san francisco. (soothing sound of a shower) with millions of reviews, tripadvisor makes any destination better.

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well, forget cup cakes, everybody. lollipops, the next big thing in the sweet space. our next guest thinks so. joining us, the founder of quinn candy. thank you for being here. >> thank you for having me. >> you used to be in the cup cake business, but now hard sweets, lollipops the way to go, why is that? >> well, for me, cup cakes were a great way -- did it for nine years, a long time because i'm obviously very young, and then getting to the point where we wanted to do lollipops, and it was just an easier product to make. with cupcakes, for my business especially, we sold fresh product only. with the lollipop, a team can make, package, and move across the country to sell, so it's, you know, in terms of business, a lot better how i wanted to do

things. >> makes sense in how you live your life because somebody has to make the donuts? >> pretty much exactly that. >> did you research beforehand? i looked into it and sales of candy that was not chocolate last year was about $10 billion, an increase of 3%, and they are looking for that to increase by another 1.8 billion in five years. how do you crack in on that market? >> well, the research part of it was basically that there was a big need for nonchocolate sweets, interesting to me. i didn't want a business where there was tempering and tricky things with chocolate so to move to hard candy, fruity candy was the way i wanted to do it, and that was the market. for me, the way i wanted to do things was natural and minimal inagreements, nobody was doing. >> how do you break into the business? where do you sell it? >> i sell it, location in portland, oregon, our flag ship store. we sell through our own online

store, various other online markets, and throughout the country. >> and -- >> l.a., new york, everywhere. >> what have you been surprised by and anything that is jumped up to throw you off? have there been anything you hadn't expected? >> the response to the candy itself is overwhelming. the ingredients we use have sort of really been something that people have really responded to, and we make the candy in oregon, a land of, you know, great places to make things, so people right now want candy that is a little bit more natural, doesn't have artificial flavor, no artificial coal already in it especially, so when i started out, that was a natural choice for me. i wouldn't make candy any other way than that way. i was not prepared how supportive people would be of the model and wallets, not just by saying -- >> i need color. >> sorry, jamie, i need the

color. i used to use karo on pancakes, it was clear because it was cheaper. i need color. i'm sorry. what is this? it has no -- >> i think yours is peach. >> i'm kidding. thank you very much. >> my pleasure. >> thank you, scott, you're wrong, but thanks." "squawk on the street" is next. good friday morning, welcome to "squawk on the street," i'm david faber, live from the new york stock exchange, carl and jim enjoying the beach on a nice day. the road map this morning starts with anything but soda. coke takes a stake in monster beverage, coffee,