and, thank god, a big deal by the u.s. making the negative news cycle over the weekend. the women's soccer team taking home the world cup, defeating japan handily, right from the get-go 5-2. monday, july 6th 2015. and "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box." here on cnbc. i'm becky quick along with joe kernin. andrew is off today. if you're just waking up this morning let's get you up to speed on the latest with the greeks. voting no. the country's outspoken finance minister has resigned yanis varoufakis had campaigned for the logo of accusing his

creditors what he called terrorism. meantime, greek banks remain closed today. the atms are running out of money. the ecb is holding a conference call today tole try and decide how long to keep a life live at the banks. meantime germany's angela merkel will meet with france's francois hollande today. and there's a meeting of creditors today. >> we were talking before the show it just is confounding to me just watching it happen. it almost looks like you get so defiant at some point, you'd almost rather inflict your own demise, than have it inflicted by somebody else. and i think that's part of what happened here. >> merkel saying by the way, she thinking the greek prime minister basically drug his people into a wall. >> if you're a creditor -- if you're a socialist and smart

money like thought that would never happen. once it happened i guess all bets are off. you can't assume that they're going to have some sort of all attitude about -- in the middle east, about democracy, no longer do i think we can expect democracy and our way of life in the middle east. i think obviously in america, we get arrogant about our -- the way we do things. we can't export democratic principles. >> by the way, this wasn't -- this was the europeans trying to ban together a very wide variety of ways of doing it. >> it's notion of paying back your debt is not a -- you know not -- not running up a big tab and like the guy with the college loans. are we supposed to celebrate this guy because he's taking a stand? >> the guest that we had on set a few weeks ago, saying look i

didn't pay back my student loans and you shouldn't either. >> how about progressive economists and bernie sanders. it's a huge victory. you know paul krugman or what michelle is going to talk to someone. this is a heroic about.ct. it's almost as if they can promote socialist reend distribution, it's not just in this country, it's in england, redistribution everywhere. >> i think you and i both assume they had would recognize that this would be incredibly difficult for the greek people. so much is imported in greece anything that they have is worth less. if you're protecting your pension going much less far. >> and the biggest side of it seems to be preferable to -- >> i'm still not convinced of that. the referendum question itself was such a strange question. this was not do you want to say

in the european union or not which is the way other european countries have in this. that is not the question they voted on. i'm not sure the greeks understood what this would mean. look, other european leaders now have a choice too. >> right. we'll see whether merkel doesn't want to preside over the dissolution of it. the whole idea of the union where it's got greece here and germany with totally different culture cultures. the germans are resentful that their welfare checks -- >> it's more resentful -- >> it is. >> and government officials calling it terrorism when people having to ask some progress reform. but as they point out, if merkel blinks than ever other country trying to progress reforms will

think they can come in. >> i did try to put myself in the greeks' position over the weekend and trying to think why this would go this direction. i can understand them saying look, the taxes are unbearable. what you have asked is too much. i think they should have cut back on some of the taxes they're asking for at this point. i think they should have gone ahead and said, look as long as you've changed to try to get structurally more in line with a democratic outcome in some of these, that would have made more sense. >> didn't you use the term i just can't help cutting off your nose to spite your face. money today for 60 euros for the atms, there could be more tomorrow. >> coverage over the weeks, justend, everyone going to the polls saying look i'm thinking about my kids.

is this for the next generation? >> if the bank out of money before then then the banks could be basically be in default. >> if you're not giving any more euros, then you're in a position of coming up with the ious. and you're essentially out of the union at that point, you're creating your own currency? >> i was watching that happen yesterday, i thought, you got to be kidding me. then the soccer game came on. and they scored. the news cycle was so -- it made me forget about greece for a while. i hope it replaces it's crazy because it's important and has wide ranging implications but for a while you're able to take a break. >> the women's team huge congratulations. that ties all back to one thing -- >> jersey strong. >> carli lloyd. >> jersey strong. and we see chris christie

tweeting jersey killing it in the world cup. and the other one as well. the other big story, and this is -- we'll see whether this will event really take center stage away from greece at some point, china. major support announced over the weekend intent to stabilize stocks. shanghai is 30% here winding it up in the last few weeks. the hang seng is getting wobbly too. brokerage and fund managers vowing and regulators announced that china would cut ipos and capital measures and support long-term investors entering the market. from what we've been told it's

hard to say that is this is the beginning of some horrific contagion. but looking today, it's not that bad. >> and responding by -- i've been surprised that the u.s. futures and the european markets have done as well as they have. let's take a look at how everyone else seems to be faring given the vote over the weekend with greece. take a look the u.s. futures and they are lower. at this point, looks like the dow is down by 109 points. s&p futures down by 11 points. nasdaq off by about 27 points. take a look at the early trading in europe. these markets are open at this hour. the dax is down. again down by 1%. which had you told me this on friday that the vote would go this direction that it would be an overwhelming no vote i wouldn't have bet that this would be the loss this is queer dealing with. the cac is down by 1.2%. the ftse down by 0.25%. italy that market is down by

2 1/2%. and portugal that market is down by 2%. the european yield, five-year-old at 31%. bund is still at 1%. in germany, the ten-year there, trading at 0.751%. we'll take a look at what happened in arabsiaasia. the shanghai down up by 2.41%. and the crude oil dropped to 54.42. and in terms of the fair trade that tells you the yields are below what they had been on friday. again, not a massive move when

you consider this could be the unravel of the eu. and the dow up against the euro trading at 1.1031. and the gold prices look like they're barely budging. >> the one thing i found somehow, the way it was all said and done i can't figure out how voters voted. i think the first bush is going too pull out against clinton. >> having trouble separating yourself? >> i was pretty sure the first bush was going to get re-elected. i've given up on retails. i have given up on that. >> i thought even when i saw the early returns, i thought well this is just the early returns. >> but the one thing that i always thought would be a last-minute deal -- >> just because i assumed would

be so damaging to the population to actually -- >> now, will it be a last-minute deal or is not? >> maybe. i'm thinking legislation ging less and less. >> last-minute deal i still think they would do it. i don't see how both sides find face-saving in this michelle. they seem to be just pushing people apart. i don't know how they can both ever get together now and save face, is it still possible? >> reporter: i'm not sure joe, we hear the commentary out of the german it's incredibly stride strident. the prime minister feels emboldened by the vote last night. let's show you the video from last night. celebratory feeling here in the

square. 61% of the voters voted no in heavy turnout. only 31% have come in with a yes. the other big news the finance minister yanis varoufakis has resigned. he had told the world if there's a yes vote he's definitely resigning but this morning, we learned that he has stepped down as well even though they got the no vote that they were wanting. what happens next is the big question. the prime minister has promised if he got a strong no vote he would go to brussels and he could secure a deal between 24 to 48 hours. and the greek finance minister the cnbc producers caught up with him yesterday and reiterated the same thing. >> reporter: how do you see it tonight? >> i don't need that. >> reporter: if it's a no vote, how quickly do you think you can get a deal. >> fast. >> reporter: when do you think? >> i don't know. >> reporter: in addition to

that, the finance minister has gone on record with a couple different outlooks saying that he thinks the banks are going to open on tuesday. what does the ecb decide in terms of whether or not they're actually going to send more physical cash to this country. back to you. >> we've talked about this a lot. and i always mentioned stiglets and krugman and bernie sanders cheering on inging on the group. i haven'tvnhaven't read "the new york times," i've read the journal. maybe you can make it clear why we should celebrate, you know a country that is not going to pay back its debt. what a day. >> our guest there on the balcony has been very patient and i think listening keenly to your discussion so far.

professor james gal brea. a good friend with yanis varoufakis. good to have you here on the balcony. >> my pleasure. >> you can give us any insight into why the greek finance minister resigned? >> i think the primary reason was to help facilitate a rapid deal with the creditors. it was clear that he was an obstacle. he feld that it would be better if he stepped aside. >> reporter: he has said repeatedly if they got the no vote that they could get a deal in 24 to 48 hours? >> it depends on the creditors but the elements of a reasonable deal there are. it was spelled not a letter from the prime minister to the european partners. it include a restructure of bet.

and receipt opening of the banks which would require the support of the european central bank which should never have closed in the first place. >> you really think that based on all the rules that the ecb follows they shouldn't have cut off liquidity when the bank runs down in the middle of the night? >> it's largely related to intrabank loans. it was a self-induced bank run. and it was part of a political pressure move which the ecb should never have been part of. and walking that back and getting the banks up and running in the next few days a sign of good faith is extremely important. >> reporter: do you think that's going to happen? >> i have no idea what's going to happen in frankfurt. they tried to pressure them into accepting the terpms.

and the population answered that with a great deal of courage. i think that must have sent a shock wave back to the rest of the europe that was expecting a strong yes vote. and a the restability of a government like the one that was defeated in january. and of course it's very clear that the big population has none of that. >> reporter: joe kernin has a question for you. >> just watching everything happening. i guess the one thing i can't understand is how are we to discern the difference between something that's going to be called austerity, suffocating austerity. versus pro-worth moves that everyone thinks down the road are necessary to set some of these southern european countries up for long-term success? it seems like a no to more austerity many times is sort of a no to pro-growth reforms. and it just seems like -- you know, or welfare checks will be just coming forever.

if you don't get structure reforms to make things better long term. how do we distinguish between those two? >> okay. three points. greece is not receiving any kind of subsidies from the european union for quite a long time from the eurozone for a long time now. secondly greece was bankrupted in 2010 five years ago. the proper thing to do at that time was to restructure. pay down the debt. that wasn't done. that wasn't done to rescue the banks to transfer the credits, the debts, to the taxpayers. the creditors really made a huge mistake. the. they need to fix that mistake. greece since then has been subject to absolutely stringent as you usterity austerity. and the pro-growth reforms has

been jie zbantgigantic. >> reporter: if i can follow up on joe's question raising taxes will be recession father? >> absolutely. >> reporter: but what has happened here they really haven't opened that up. you have all of this kals calcifiation that happens, it's costly and it's pay as you go. those things didn't change? >> well the new government is committed to long-term structural reforms including public administration and the tax system. but what the creditors have been asking for are just flat cuts in pensions going to people who are only getting 350 euro a month now, below the poverty level. well below that increase. and for tax increases as you

mentioned which would directly hurt the competitiveness of the tourist economy that blames the taxes on hotels for example from 13% to 23%, you are going to make greece a much more expensive location, compared to ed to competitors like turkey. and that's not good for the growth of the economy. these are suggesting that the agenda is not bode for dead collection. >> reporter: how about the issue -- go ahead, becky. >> professor, even if anything you're saying is true even if you push back and say that we don't want this or the greeks have said forget this we're not going to take this deal do you this understanding that you could be headed down a much worse path. that it could be a much more painful path for the people. that to many people seems like it's completely irresponsible?

>> that is indeed the choice that was before the greek public. they understood it very clearly. and they chose not to continue on a path that was dicktated to them on the outside that proved catastrophic over the last five years. so, yeah they're taking a bit of a risk maybe they'll get a better deal. no one is talking about exit here. >> but they're not the only ones that get to make that decision. you're asking the creditors and the creditors are just as angry as the people. >> that's entirely right. no, that's exactly correct. if the creditors, if the governments of europe choose to break up university row zone onp the eurozone on their own, that will be all their responsibility but not what the greek people want. >> we keep using the word "union" and union seems like we should come up with another

word. the way you that describe it professor. the creditors want this. and the greek people want this. no one is on the same page. it just seems like this isn't a real union. and if it's not a real union and disparate parties, it's like aishaa charade to call it a union? >> well it say union. but it's based on principles which are highly dysfunctional. and the greek government backed by its electoret are trying to end. it's what yanis varoufakis has said in public. these are issues that extremely well trained economists are against arguments which have clearly failed over the last years. >> reporter: can we focus on one

single point, i think it's what makes the germans in particular crazy, by the greek government's own admission, when you look at the paperwork they've submitted, they've admitted that the civil servants, the retirement age is 56. and women, even lower. they're saying we're not asking to you cut pensions, we're asking you to have the age go open. is that so problematic? >> not problematic at all. the government has a group that this should be reformed. particularly there are sectors that employees are dumped into the public system at relatively early ages. there are two or three points to make about it. one is that the country has no effective unemployment insurance so early retirement has been kind of a safety net of last resort for a lot of people. it's a safety net which has been taken up by many people because

there are no jobs and haven't been for five years. and secondly beyond that the creditors have in fact been investing upon pension, they would like a percentage of gdp taken out offof pensions this year. and that would thrust elderly people into hinger and homelessness. >> reporter: professor thank you for joining us. the audience will be asking you're the son of very famous john galbraith. >> yes, i am. >> and that doesn't sound like everybody is in the same -- if they want to control their fate themselves, then they want to be greece. then you can't be part of the union if you're not going to -- >> what gets me is both sides

seem to be convinced that they are completely in the right. and the other side is wrong. that is when you're head haded hed to -- >> why are we talking union? >> i have never seen a divorce where both sides were comfortable. >> but if the greeks want to determine their own fate is what they voted for, if you determine your own fate then you need to go back and be greece. i don't know. >> you can understand the points of how difficult this as youusterity has been. you can understand that. when we come back we will talk about the situation and what it means for investors. and live reports from beijing. "squawk box" will be right back.

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box," everyone. we have two big market stories this morning. we've been talking about greece. also the situation in china. and china measures made this week. joined from beijing, eunice. >> reporter: thanks so long, becky, after a week's long correction, they come in with guns blazing with heavy ammunition to shore up

confidence. the leaders gathered including the chinese premier himself. the brokeages were mobilized. the ipos were suspended and the central bank called on to provide lid quiddity sa assistance to a government-backed finance company which puts money in the hands of investors at the end of the day and borrow more on the stock market. the leaders here are very concerned about the potential social fallout. a lot of the investors are knew inexperienced and have borrowed a lot of money on margins. we've seen massive gyrations. the shanghai market was up. and fell by a closing high of about 2%. a lot of investors are talking about now they're not so sure these measures are really going to have any lasting impact. a lot of people were talking about how they're worried that

the government is losing control and that more needs to be done to shore up and rebuild confidence. guys. >> it's a story we're following very clol. again eunice yoon. >> joining us is now the chief analyst it the chief analyst at brook group. gentlemen, thank you both for being here today. >> thank you. >> we were just talking and i said i was surprised that the reaction in the markets has not been more severe this vote in greece. i was completely surprised that things went this way. why do you think there's not more of a market reaction? >> well greece is small at the end of the day and this is a political problem. as you look as an example, the difference in core capitale legdp

is different than mississippi? >> i would say it's the beginning of the send. >> that's precisely the point. we learned, i remember learning in freshman economics that a monetary union without a fiscal union is unstable. and we're at that flash point now. so, this could be the point where a real fiscal union takes place, or not. either way, my view is the muted reaction of markets today is really a reflection of the size of greece. and at the end of the day, it's unlikely to derail general modest global growth. >> peeshgts doter, do you agree with that? or do you thank you people are holding out at this point? >> i think it's a combination. with varoufakis resigning even if there's a deal greece is still going to need 50 billion uros over the next couple of years. it's still a basket case and is going to have ripples.

investor taking a risk that they're taking. 6 1/2 years into a bull market and global assets are very expensive. i think two months ago when the german ten-year went five bases points. and made people realize, prices do matter. let me reasset my risk. it's going to be greek centric. europeans i don't want to say will deal with it because edge is delusional. they're thinking and tsipras is delusional that he can take the economic policies in north korea and somehow make that a good thing. >> let me ask you guys both about china. joe made the point earlier, if you start looking at all of these markets and start wondering about whether equities are truly getting incredibly expensesive at this point. or if the feels like things are

beginning to teeter how do you hook that up? how do you come up after looking at these markets? >> well you certainly have still reasonable valuations outside of china. the u.s. were at p-multiples that don't look like 2% ten-year yieldspy look like they reflect a 4% 5% ten-year yield. and we've had european performances but not nearly making up the attractive performance since the prices. i don't think equities are particularly expensive right now. china is an unique case. i'm a classic allocation guy. you're supposed to have the amount of equity in your portfolio as the size of the economy in the world. maybe that's a little too big right now. but we just don't know what the real numbers are in china. we don't know what the real valuation numbers are and we don't know what the real economic numbers are. >> what do you do instead. >> do you double down on u.s. stocks? do you look more at european

stocks? what do you make up for what you would be putting in china? >> i think one of the places where you do have opportunity is in the developed markets where let's strip away earnings and look at an example, the pricing of the back. in europe it's even bigger than the perpetual underlying. >> if you take all of the money that greece owes european banks and write it down to zero are the banks still falling? >> they dent really owe much for the european banks. owe much of their own to the eu or imf. >> how do they end up solvent? >> the european banks aren't going to get impacted.it's the taxpayers. >> will it wipe it out? >> exactly. >> is that going to matter? >> yeah it's going to matter because it's going to lead to higher interest rates. >> if this is just greece if

this is just greece and we've got low inflation here out in the the foreseeable future all of these great things happening for equities. unless there's a banking contingency like it's a good thing for equity so greece in and of itself cannot cause some type of systemic contagion? >> to me the biggest risk to global assets is a rise in interest rates. unless we see a global rise in interest rates i don't think there's a global risk. but we have seen a global rise in interest rates. we went from 185 to 2.5 in the short term. to me, greece is a side show to the globalizing interest rates that we've seen. let's just say that greece is temporary solved. interest rates are going to start heading higher again. >> bonds and more overprice in

stocks but credit is an opportunity. credit spreads widely with the greece event, high yield and investment grade. i agree that rate at risk but more to bonds and stocks. >> gentlemen, thank you for coming in. coming up, we're going to head live to overseas to singapore and china. that's next. i help you recharge with nutritious energy and strength to keep you active. come on pear it's only a half gallon. i'll take that. yeeeeeah! new ensure active high protein. 16 grams of protein and 23 vitamins and minerals. all in 160 calories. ensure. take life in. verizon say neversettle. t-mobile agrees.

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reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? welcome backs to "squawk box," everyone. greece voting no on a key referendum. wilfred frost is standing by in london. and in singapore this morning.

we're watching what happened in greece but also what happened in china. >> that's right, a reaction in the asian markets we're looking the losses of 1% to 3%. china, really, itself over the weekend, beijing came out with pretty major market stabilization measures. and they did have an effect. in the morning session. the market vaulted by 8%. only for the gains to fade through the morning session and into the afternoon session. the net effect was the market up by 2.4%. so a degree of stabilization, but the question is of course for how long. look at context here. mandated by beijing, the broker brokerage has pledged 120. of shanghai on friday 150. that gives you some confor example. this is arguably the proverb

drop in the bucket. it's going to short term and margin ago. beijing is prepared to intervene in the stock market to preserve the wealth effect that is underpinning the housing market and the broader economy. all right. let me send you over to my colleague wilfred frost in londz london. >> thanks very much. here in europe red across the board, reacting to that greece story. we're looking at 1.4% of declines for germany. 1.5 for france. the periphery of italy down 2.6, portugal down 2.9. given how much of a surprise that no vote out of greece was were and what it meant to greece's future the size of these declines relatively muted. settling after repaired some initial losses. i want to have a look at the dax over the last 30 days. yes, over ten days the peak on june 24th we have fallen some 6% off greece issues. but that ignores the rally we

saw 2 1/2 weeks ago. again, relating to greece and since the last two or three weeks, we are basically flat on the dax. so european assets managing to ignore the crisis despite the headlines. and the euro down 2.8%. but pared losses from the open today. >> wild fredfred, thank you. we're watching this closely itself. we're trying to figure out the reaction from the nations at this point. this may be the greek people speaking. but no matter what the german leaders want to do secretly 95 got a population that they have to deal with too. trying to allow both of these sides, as you mentioned, before to save face with contingencies is going to be increasingly difficult. >> we believe that the way the beijing finance minister said

the reduction in debt is not on it. they're looking for somewhat of a hair cut. mark grant's piece from what i was referring to if they decide, no we're just not going back the contingent liabilities are like $6.5 billion. so the eu in general, means each and every citizen in the eu is going to have a -- >> a big check -- >> yeah. coming up the ecb will decide how long to keep the greek banks a lot. the central bank boss ewald nowotny will join us next. stay with us.

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xçó0 welcome back to "squawk

box." joining us on the squawk news line, ewald nowotny. governor, thank you for joining us. it's good to hear your voice. you're on record -- >> yeah, i'm on record here. >> -- you're on record here saying if there was a no vote that any type of constructive byline after that would be difficult. now we know that caucus is gone.lk varoufakis is gone. does that help at all? >> i'm afraid that it's not going to help very much. it's a matter of economic perspective. and it's about economics attrition. and so by the looks of things in a realistic way, the economic situation has been changed substantially after the referendum. >> do you, at this point,

foresee an ending that allows greece to stay in the euro? >> i think we all have an interest that greece may stay in the euro. but, of course we know this means that a number of actions have to be taken. greece has in fact applied for a new welfare program. and this is an issue that has to be discussed now in detail tomorrow will be a eu summit. but i think that this will be one of the issues. and the second hardline is concerning liquidity provision. and for this we will have a telephone conversation of the ecb. >> well, let's see that the

worst case scenario comes to pass and the banks look like they're running out of money today or tomorrow. and some horrible stuff starts happening in greece. will the ecb decide to come in and help even without any movement on the greek side in terms what they're willing to do? >> i think you will understand that i cannot make any detail eded suggestions on this ahead of the meeting what we have. but, you know, the ecb is an evidence based institution. so we have to look at what is already the maneuver according to the legal situation that we are in. and i think this has to be clearly distinguished from the

political aspects that has to be dealt with by the heads of the state and the finance minister. >> so it seems that both sides are going to find it increasingly difficult to come up with something where they can say that they've got something, and that they're saving face. let's look at another worst case scenario. let's say greece decides we can't pay. we're just not going to pay. are the contingent on those for the ecb, i've seen numbers up $500 million. if that were to happen. what would that do to just the structure of the union and the ecb? >> well we have of course with regard to the financial relationships between greece and the rest of europe or the rest of the europe rorw eurozone, we have

quite a number of avenues. one are the bilateral loans given by member states to greece. another aspect is the fss. a third is the s & p program. this is exactly what this is just now on the line and then we vhave the refinancing aspects. this is something we have to discuss today and at the end there is of course this whole issue of the payments system. so i think if it is not. it shall not be able to get some track and support of some. it is different ingredient. >> all right. we got to go.

if greece were the word would you say you were optimistic at this point the worst case is not going do happen governor? >> i think the central bank is not a question of being optimistic but rather realistic and this i try to be. >> okay. great. i missed you in vienna. next time hopefully i will be there in a week. i'd love to come in and see you in person. >> i hope to see you in the quiet times. >> good thank you. >> thank you. all right. >> when we return this morning we will get more on the market reaction or lack thereafter to the situation if greece. stick around, "squawk box" will be right back.

welcome back everybody him check out the euro. right now sitting just at about 110. joining us to talk more about it is kathy lean at asset management. we were at 105 earlier in the summer. how does any of this add up to good news for the euro? >> you are right. there are no panic in the situation right now. i think there could be chaotic train trading. the reason why we have temper the market is holding out hope. i think their thinking is wrong.

nothing has changed the past weekend. while the finance minister resigned. they may start higher it's a serious risk. we are short euros. we think it will go below 110 to 108. number one we do have the rest at 70%. number two, we have the reaction. i hope that won't be the kasem we hopefully won't get a monetary situation by the ecb. finally, there is a good chance the federal reserve could have it in 2018. it can come. >> i'm sorry to cut short. we have run long on everything today. it's great to have you here. >> thank you very much. >> maybe the euro is worth more with greece not in it. >> i don't know. 70%. going higher. coming up, should europe take additional steps to save greece or sit all but a done deal?

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a historic austerity vote in greece. >> i think every one of us was afraid but we've said no. >> fallout from the vote and reaction in stocks. proceeds and oil straight ahead. the outspoken greek finance minister resigning abruptly. a top european negotiator tells us what's next for greece. we action from the vote from richard fischer, he will join us live as the second hour of "squawk box" begins ritvo now.

>> live from the beat accounts heart of business new york city this is "squawk box." >> the late great no no no amy winehouse, i didn't think about that. playing "no, no. "welcome back to "squawk box." first on cnbc world wide. a big fat greek no. >> i saw that. >> joe kernen with becky quick. andrew ross sorkin is off. in solidarity labor in greece. >> no no, no. >> okay. that's not why he's off. >> the austerity tariff. our top story this morning degrees voting no.

finance minister yanis varafoukas i thought he was going to stay amid what he called creditor loatheing. the creditors probably blame him to some extent for this it's weird. you win. then you step aside to say i just want to get -- >> although he didn't step aside dprashsly. he says he wears the creditor's loatheing with pride. >> here's how -- surprisingly, here's how the markets are reacting so far. nothing out of hand. not a 2% loss anywhere except for italy and portugal and in this country, u.s. equity futures were down triple digits but just 114 down on the dow. the euro as you can imagine taking a hit now down to 110. we'll cap a 108 when all is said and done. here's the price of oil. we will get a live report from aten in just a moment all the

way back down to 54. 54 on west texas down almost 5%. that itself the biggest move we've seen in any of the markets. first, becky has a look at other stories we are watching this morning. >> joe thanks. among headliners china announcing an unprecedented support measures to try to stabilize stocks which had plunged 30% in the last three weeks. china's top brokeper brokerage, a state investor promised to buy more epfs and china will cut ipos and capital raisings and support long-term investors entering into the market. as they told us earlier today, there is some question whether the state lost control of the market. that's where some of the real nervousness comes for investors there. in the u.s. aetna is buying humana for about $230 in sha irs in cash and stock t. deal would

nearly triple aetna's medicare advantage business. the tie-up is expected to face anti-trust scrutiny. you can see the et that shares are down. humana shares are up today t. ceos will be on "squawk on the street" later this morning. the u.s. women's team defeating japan 5-2 to win the world cup. carly lloyd scoring three goals in the first 16 minutes, leading the united states to its third world cup victory. this is the first time since 1999 and the u.s. team a avengeing its loss to japan four years ago in the world cup finals. >> that's great. did you see that 55 yard goal from there. there it is right there. i felt for her after that. returning to our top story in the morning. greece is rejecting -- michelle

caruso cabrero is over in athen, i watched in horror i thought the numbers were wrong. i got so many excuses for totally miscalculating. i'm writing it off. i don't understand how things work here much less in elections other place, but if the elected socialists are ready, i guess you shouldn't be that surprised when you decide i'm going to stick with them and just see what happens but it's crazy. >> reporter: well he told them all repeatedly on thursday and on friday that if they got a strong no vote they would have to leave the euro. the banks would open soon. he would get a deal in 24 hour to 48 hours. if you believe that then why wouldn't you vote for that position at this point? the other thing i would say, though you talked a long time about whether or not greece should leave the euro and maybe especially among the poor we have spoken with have said you know what what has the euro

ever done for me? i got nothing in the bank. they really feel like they haven't got much to lose or anything at this point. i think that's why we saw so much celebrating in the square last fight. the numbers were overwedge no 61% and the square below us was filled until roughly 1:00 in the morning with revelers. we are happy about it. the other hig headline the finance minister resigned unexpectedly. he said if the vote had gone the other way, he was definitely going to resign. this morning it rail out. he says the creditors paid him. as a result maybe if they will get a deal it will be bet fer he wasn't around. his great friender, pland it this way. >> the major reason is it was to

help facilitate a rapid conclusion of a deal. it was clear he personally was an obstacle to that expressed be i the european so he felt and alexis tsipras felt it was better if he stepped aside. >> what isn't clear, we are thinking they can't stand the prime minister either. and maybe it isn't going to be good enough. already the on thetonality isn't any tans. >> there is no chance that tsipras would step down do you? >> absolutely no. i think there was a hope if it had gone the other way that sip practices would have to go as a result. they were hoping for maybe a whole new government to negotiate with several head the

whole team isn't trustworthy in some respects. >> again, that's the situation from the ground in athens this morning. for more reaction we are joined by richard fischer, the former president to the dallas federal reserve brng and a cnbc contributor. he join us is this morning from buenos airies. what do you think about the vote. what happens in effectnext? >> you forget greeks have been in turmoil not just the last several weeks, for year after year after year they misled on statistics when they joined the current union and they have had a troubled economy very high on unemployment. they are looking for something, gravkt grasping for some straw. i don't think they've talked about the democracy, i am in a country right now that has been

in a way ar jen dina is in a sense some ways the greece of the americas. they're totally concentrated on themself that i have a dysfunctional economy and you can see the downside of what can happen in greece if indeed they depart from the you're o and they decide to readopt the dogma. this is a case study, if you look at argentina, still arguing about it with tear creditors. this can go on and on and on. i'm not surprised in the least by the no vote. >> richard, it's hard to see how angela merkel comes back to the table and can do something her own constituency will be pleased at this point. unless there is something else she can say. how do you save face on both side? how do have you elected officials coming back to the table? i just don't see the next step. >> well you have to part of

this is european theatre, this is there enormous weight. this is still the legacy of the war and the economic dollar. so of course angela merkel and her government and the austria ministry you just had on they have to say they will keep working at it. working at it. this is one of the legacys you have to deal with in europe. and they'll extend a bit of an olive branch. if you look at how fort mcmurray they are on the terms of this offer they've made to greece i don't think there is a lot of negotiating there. but they'll do everything they can optically to look look they are reaching out as much as possible to dpreek people. again, you have to remember there is a lot of theatre here there are enormous politics behind this this is a political issue more than it is an economic issue. just to go back to one thing

said earlier, greece from the european theatre, the departure of greece physically with no offense to what the governor has done. they've had a gentle reaction here i think they have far greater weight. >> eventually it could be something lost richard, depending on how germany react, whether they blink or not. as a central banker. let's say we see horrific hardship if the banks run out of money tomorrow, if are you a central banker would you ignore whether there were no concessions and go ahead and raise the cap or would you just

hold firm? >> well again, you have to have a contingency plan behind you. i don't know for a fact but i would assume the ecb particularly led by german influence probably have already got a contingency plan though in place, including the printing of dragma. there is a limit to what can you do. have you to have a contingency on hold just in case to make sure you smooth out whatever market effects they may have. but you just pointed out, you see these people lining up at atms and all over greece including cabinet members leaving the parliament to go withdrawal money from their atms up to 60 euros or 65 euros, whatever the number s. i think from what i read from what i understand, the banks will run out of cash either tomorrow or

within this week and there is a problem. so you set up some kind of rich financing, but it would have to be in a way to ease the pain and yet at the same time fought give up your negotiateing tools. >> do you think merkel can handle the progressive media in the, she's going to be labeled, it's already happening that she's somehow, almost like the greece is without blame in any of this and that it's just due to these ridiculous draconian demands they are making. it's happening in this country i'm seeing it in the left. our progressives are blaming her already, not blaming greece. >> i know angela merkel i had the pleasure of meeting her. she is the modern market thatcher, joe. you remember how people hated market thatcher. she is really the iron woman of

europe. and i think she adopts the principal position of the progressives as you call them the spies and that she was a great leader. we all know that i think angela merkel is very self-confident, very comfortable in her position as chancellor. so she leads by principle and you have to remember becky made a comment earlier in the broadcast, ultimately people report their own people. she has to be supported by the german parliament and the german people. there is a limit of tolerance. she know what is that limit is. but there is this overall theatre as i said earlier, the germans have to play on the stage of in order to look as they are as european and non-german centric as possible. that's the inner play with angela merkel, i believe. she is a strong leader. she is the modern thatcher. i think she is indifferent to

this so-called progressives you feel about her whether in the united stateser elsewhere in europe. >> richard. >> she is going to worry about her chancellor's position. what's that becky? >> we were watching the euro it's sitting at around 110789110 at the same time you think that maybe the euro would be more valuable if it sets an example that there are rules, there are laws how do you play out the euro's value over the long haul? >> well again, this is just my personal opinion. first of all, you mentioned rules and disciplines. that's very much a part of the german mentality.

so they will stick ultimately to rules and discipline if you look at sort of the numbers and you think about the euro itself it should be this is just me personally speaking should be of greater value if there is a graek essex. you take the weight, a tiny weight out of the system. once you get through the disruption and the liquidity squeeze and whatever short term disruptions there may be it should be a stronger currency. if that were to happen. you mentioned the other political movement. as you know north of the river po in italy, there is a movement on the far right. those who actually pay taxes in italy to support the south home et cetera, to separate. you see the same thing on the far left and also in portugal as you mentioned.

i would think this sends a message to them that they have to be very very careful, particularly if the ecb and the german government insist on rules and discipline. so this will be the interesting thing to watch as we go forward. you also have a naturalist movement in france which i don't think will ever 42 ethe euro. that would discount their volontsov to germany and they want to be equal to germany even though they are no. so i want to put it the way, becky, gentleman. nobody really knows the answer here. you got a lot of opinions banterred back and forth. we'll see how this play works its way through. i think it will take quite a while. this has taken quite a while to get to this point. there will be surprises as there was the referendum suddenly being called d. outcome that some people were surprised by. i think the fact that the euro stays at 110 is despite all the polling that was done, in the end, this was not the big

surprise that everybody thought it might be. >> all right. richard, we want to thank you so much for joining us. we hope to see you again soon. >> okay. thank you, becky. >> oh my god he's been the greece of latin america. coming up, big mark moves this morning. we'll tell you what to expect next with the chief investment strategist from us and a live report from athens, a member of the eu group in charge of the bailout negotiations. and we'll take a closer look at the big 5% drop if oil prices, here is another look at the price of crude. .

u.s. markets looking to open lower this morning after the holiday weekend. joining us is the chief economist at j.p. morgan and mike ryan strategist of wealth management in the americas for ubs. north and south. >> that's why you got some grey. that's a lot of responsibility. what did you tell your people to do this morning? >> well we didn't tell them to do a whole lot. we few there was going to be volatility. basically, we have been counseling folks to maintain a current overweight if equities

and overpositioning our stuff. we continue do maintain a cyclical presence in the u.s. focusing on the financials and slightly industrial. >> what would you have to see in the situation to say raising cash? >> i would have to see the political process completely break down. you are saying -- >> you haven't. that's the important thing here is it ran because what you had is you had a referendum vote and you saw the finance minister resign, that means there will be a political dialogue back and forth. it takes the political stage. i think what would be important is all the negotiations stop and the european central bank was forced to withdraw. >> that to me is the real quickal point the european central bank has to step? >> weeds see the marks move before we saw anything happen to our gdp or to global economy. i think we would see that first. you probably have more time to

stay complacent. is there anything yet that us kas you any consternation? >> yeah i think we have a position where the time is running fast t. greek and the creditor side moving closer over the coming days. i think we're in a situation where the risks that greece does get pushed to its monetary is leaving. financial stress goes up. i think we should look at this as an event from the point of view of the u.s. economy is not likely to be ever dramatic in terms of impact. i think it could be negative for the euro economy in a way that feeds back directly. >> coin bigger? >> china bigger no not bigger. i think the euro has a much bigger impact. >> what has china done? >> china has a lot of stuff in terms of the how the government is trying to manage the financial markets. i think the chinese economy is

doing better in the middle part of the year i think we look at the u.s. economy mid-year it's picking up steam. there is a biggest rick here for the u.s. and the fed thinking of moving is how much stress will come on our borders. >> you can tie all these situations with markets back to the political decision. you seen a grooek greek official saying the prime minister. tsipras will be having a call with putin, which raises a concern. in china, the government is concerned, these are average people. citizens leveraged and who have margins purchases of stocks there, and if they're losing money, that could create political instability there, too. i think the tie between the politics and the stockmarkets at these points raises some

concern, too. >> there is no doubt about that that we are dealing in degrees which will get to a scale in an as advanced economy in many many decades, however from the point of view of the u.s. economy the u.s. economy is doing better here. we are shaking off the first part of the euro's weakness. i think the economy outside of degrees was doing better. probably will have negative feedpack from what's going to happen in the next few weeks. i think the global combli is not in bad shape here. however, what we don't know what's going to happen in gross here. i think that the risk that we could see a disruptive process that pushes greece out of the monetary union has gotten fairly significant at this point. >> you are lucky of the americas. >> we basically run calls all day yesterday, talked about this. the one thing i would be careful about, this isn't likely to have a big impact on the u.s. one thing we learned over the course of the last seven years or so if

it happens anywhere, it matters everywhere. i think what the central bankers will focus on what is the potential we see some spread throughout the financial system. >> in europe a lot of people have been urged to invest in europe. they're where we were a couple years ago. europe has had a great run, the stock market. would you raise cash there? >> no again, i will agree with bruce said let's think about where we were four years ago. four years ago, if that had happened, it would have been catastrophic. you basically had the eurozone on the brink of recession, a banking system heavily exposed to greece. it had very little latitude to make the policy moves they're making now. i think it's fundamentally different than four years ago i think it's an entirely different set of circumstance than four

years ago. >> i wonder if we should bring money back here. >> i would argue, joe, over the course of the next six-to-twelve months, i think you will have better opportunity in the eurozone, we see a stronger central bank policy we think while these are chunky issue, we don't think it will change direction. >> is it a slowing especially because of degrees or kerry is saying they won't get it done. >> right now it's fear. >> maybe it's care. maybe it doesn't come back. i don't know. >> that wouldn't necessarily drob oil prices. . >> if it comes back. okay. they're looking at it. they want a deal so bad it will get done no matter what. >> the one thing i want to emphasize is the ecb, it has a

critical role whether the financial markets stay alive. i think we will feel the limits from the political process, the other thing which is different him than where we were the ecb will come in and contain stress. i think that's a big reason why it can have a spillover effect. >> when we come back we have the latest news from greece, there morning's top stories are up next. plus the story from rory mcilroy, that story straight ahead.

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welcome back to "squawk box," everyone. among the stories front and center today s&p says the eurozone country's exposure to an event is 3-to-4% gdp on average. they suggest they are spread over a long time. no direct rating impact is seen at this point. it is the end of a trading era today, this will be the last day for chicago and new york. speaking of the windy city the

grateful dead setting attendance records at soldiers field. steve liesman was there for all three days of the concert. the records top the previous best seller youtube. >> i don't know that much. in sync sings this song? >> now he does. >> big news world number one rory mcilroy ruptured a ligament less than two weeks before the start of the british st. andrews, he posted this twitter picture saying he got hurt playing soccer with friends, he has already started rehab. he is working hard to get back as soon as he can. he had won more tournaments in recent years than anyone. 11.

but that right there makes it kind of interesting for jordan spieth. >> potentially come up with a grand slam. >> the first two already. mcilroy's out. i'm looking for some silver lining. coming up. more on the fallout from yesterday's historic vote in greece. a live update in athens and a european group that's been negotiating. as we head to break, take a look at u.s. equities futures. by the time police arrive on a crime scene they could have little to go on. a vague description. a single piece of evidence. a partial plate number. with an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. ibm analytics helps one hundred thousand officers

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>> rejecting the greek

austerity. >> reporter: here in athen, every single day i have seen people lining up to get the small amount of money they need. this country is running out of money. it's invisible. one man said to us i voted. he said i voted no while he was standing there waiting to get the limited amount of cash he was allowed to have. he said i voted no because it was a matter of pride. so clearly, this has been a question for greece in saying to europe we don't want to be told what to do. it was a 60% vote out here in the square there were celebrations last night. as if greece won the super bowl. now the greek finance minister it appears he has done that it was to try to help negotiations with europe. it looks like the germans and others are still talking tough. back to the liquidity problem, those people at the atms. this country is running out of money, which means that time is

running out there may not be much more time. >> thaurk very much keer simmons on the streets in athens. more on the no vote in greece the head of the euro working group. he has been a part of all the negotiations with greece. thank you for joining us. i suppose the next question has to come what next? >> good morning. >> sip vas saying he is ready to come back to the table. what happens now? >> well the no vote in that size of this magnitude was obviously unexpected within greece and outside greece. there is a clear view. with eneed the greeks to tell the other europeans what are the

consequences of this no vote. what are you going to do? then europe will be able to react. there is and old request for adjustment and after the euro summit of leaders tomorrow evening we will have a clear view of how to be able to deal with that. one thing is totally clear as you have already heard, the situation especially in the financial sector is a first challenge and the european central bank is closely monitoring the situation on the ground. >> is it your understanding the ecb will continue to extend money to the greek bank the greek central bank at this point? >> my understanding is that the reaction of the european central bank will of course depend very much on the political situation and the political situation will depend very very

much on what alexis tsipras and his team will be able to say tomorrow evening. i understand they will be turning up in town earlier. there will be a finance minister to prepare the leaders meeting. one thing is clear, the clock is ticking, the situation compared to a week ago bs ten days ago deteriorated. den days ago greece was a country a certain degree of confidence they would get a further bailout commitment. as we are speaking today the tourism season looks bad, the financial sector issed closed down with capital controls. so we need to move the greek side needs to move as fast as possible. but there will be obviously very very difficult discussions

go ahead. >> this is something tsipras has told his people that with this no vote he can now come back to the table and ask for more concessions, that he has a stronger hand do you think that's the case? >> the problem is that when he lets the old program expire there was i think little clarity for the greek population of how long it takes to negotiate a new program. this is not about only one democracy, which is very important. it's about 19 democracies and very many member states have lengthy parliamentary procedures to order up to come to a program. so any hope that there will be a solution within 48 hours or 72 hours is i think not very realistic. we are talking about longer time

periods. one feeds to examine very closely how the economic six has changed. one has to prepare reports. they will have to form a clear view on what the situation is. these reports will include what is the economic situation. they will include is there a danger to the area as a whole? what are the financing requirements? and is that sustainable? we will be looking forward to reports for that from the european commission and the international monetary fund. >> so what you are saying. >> if they are actually empowered to produce them. >> what you are saying is the rules will not be suspended? >> the rules will not change. they are enshrined. >> thomas i think one of the huge questions. >> no the rules are quite clear. >> and that's the bottom lean.

no matter the human suffering that may take place in this situation, no matter it may take past the deadline of june 20th. you don't see changing that process, this process will play out the way the rules are laid out? out? >> there is a clear intergovernmental treaty with rules which have a constitutional standing and they are quite clear on what circumstances can such macroeconomic adjustments been given. this is not to say there may not be efforts for humanitarian reasons, i would not exclude that and i guess some of the institutions may already be working on that. but the pure macroeconomic adjustment programs operate on the very clear rules to which degrees also signed up.

>> we want to thank you very much for your time this morning. we appreciate you joining us. >> that was pretty good with the lay if with the construction there. too. >> i think that lays out how difficult of a negotiation this is going to be t. two sides come from very different positions. they see the world differently. >> yeah. >> and the greeks think they may be able to come in and avert some of these long time lines that have been laid out. >> that doesn't sound like the case from what he was just saying. >> crazy. the people that keep saying it's political. i kind of understand it. nothing has changed if terms of the dire straights. it's the same thing, just all this wrangling. you know i said i was out over my -- that was no. it was an stasia fish one of the founding members of the fish playing with the dead the people that know that that's

fine. but for me once jerry died the dead were dead to me. >> not for all those people. ba da bump. >> they're not dead to me. coming up, like leesman. >> we will get a full report i suspect. >> the price of oil dropping off the lows in the morning. still down more than four-and-a-half percent. analysts will join us next from washington. become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.

>> the price of oil down sharply, joining us from the fallout and tomorrow's deadline for a nuclear deal with iran. kevin book why was it down earlier, kevin? >> i think you can point to the correlation between the dollar and the barrel. if you are looking for proxy on how oversupply the crude market may be. the relatively small change produced a large change in crude. we are producing mar foreign more than we are consuming. that can make the speculators flee quickly. >> as we move back above 60. a lot of the people that go back

to 70 or 80 are feeling pretty good. is there the beginning of a move back down to 50 or below, do you think it snapped back above 60 is coming again? >> well, it depends on your time frame. looking between now and the ends of the year there is a couple catalysts for weakness in crude. one is the weakness in iranian back to the market if they sign a deal this week. the second is we are at the global peak of demand right now. saudis burning crude, the u.s. driver driving responsibly to the lower prices. what you got the a lot of new production out of the middle east. >> that in addition to the weakness coming in demands, possibly with the way the refinery maintenance in the fall suggests more weakness than it strengthens in mid-16. >> we are watching this game between the greeks and the eu. are we seeing the same stuff between john kerry and iran? he said no no not this it's not a done deal.

then i read it because iran was already like celebrating with a video and sort of implying they had gotten all kind of concessions, so is that just more gamesmanship to act tough to not look like we are getting all walked over here? >> it's a little like punk rock slam dancing. iran versus the p 5 mrs. 1 is very much like ballet. everything is choreographed if you think about it cynically. they say the data is july 7th. we all know congress set a date of july 9th. when will they finish the deal? in all likelihood not until july 9th. they're fighting looking extremely tough. to their folks back home. let's face it. this has been a principle since april 2nd. there are 18 months. that's a lot of momentum. >> so it's going to get done.

i'll haveing trouble seeing kerry in some type of bal lie outfit. that's a horrific vision. i was just thinking about it. i seen him in the full body condom. the chip plant on the wind surf. i don't need. that i can't unsee it now. >> he's in every man as you know his connection with nascar and football. >> everybody governs. so it's going to get done you think? >> 80% odds before the 10th. >> thanks kevin. >> thanks for having me. >> when we come back. we have more of this morning's big movers your list of stocks to watch next. still to come the impact of the june jobs report. "squawk" market master marty feldstein will join us. "squawk box" will be right back.

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>> take a look at stocks to watch. dollar tree got ftc approval to acquire rival family dollar. the company will expect the deal to be completed today. harley-davidson will be in focus today. barney says the shares of the motorcycle maker could rise 30% thanks, to reduced costs and a buy back plan. they are looking at chipotle and sucked the shafrs could drop 15 to 20% due to growth not being

as flush as people thought and trip adviser was upgraded. barclays says it's based on prospects for the company's instant booking platform. guests upgraded to future tral from underweight, analysts points to improving trends in europe and recent meetings. coming up after a quick break, "squawk" market homeland el erian will weigh in. a wheat veteran is a ceo disruptor working to lower the cost of entry into the market. so stay with us. .

. >> uncharted territory. greece roots to euro exit and the country's finance minister steps down. a live report from athens but market reaction from around the world straight ahead. aetna humana a huge look at the $37 billion tie-up. and fireworks fly in

jurassic world while the magic of magic mike fizzles out. oh. the final hour of "squawk box" begins right nouw. >> live from the most powerful city in the world, new york. this is "squawk box." >> welcome back to "squawk box" here on cnbc first of all i was very disappointed with the second magic mike. >> the sequel? >> no. >> you watched both closely? >> repeatedly, yeah. i got it. no. i missed that one. not planning to see this one. i'm joe kernen. andrew has the week off. ion why. i'm not jealous of their ads. we have the futures right now, it's worse, down 154 the worst level i have seen. last session we were down 115

earlier. checking out the markets earlier. they're a little over a percent. most now about the same. a little worse if france. italy and portugal i don't know how you read that, because everyone is wondering what does this mean for italy and portugal and how they approach many upcoming negotiations with the eu about their status. oil prices dropping sharply. we are hearing that's because of the rise in the dollar and that the markets are oversupplied at this point and it doesn't take much to move the oil mark. we are up it looks like we had gotten back to 60. >> it looked to be the level for a while. >> it did. >> let's look at the stories inzors will be talking about today the ecb is holding a conference call to decide how long people's lifeline at the greek banks. this comes after dpreek citizens voted no overwhelmingly in a referendum. also the country's finance

minister resigning, hopefully, that will set things up for some sort of negotiation because, obviously, there was a lot of animosity between varoufakas. china is destabilizing stocks after the main index plunged by 30% over the last three weeks. among the moves, china's fund managers made a collective pledge to invest more than $19 billion into stocks. the country's regulators announce china would cut ipos and capital raisings. tomorrow is the deadline on iran's nuclear program. secretary of state john kerry says negotiators have made progress but major points of contention still remain. joe. >> if you missed it, americans celebrating the u.s. women's soccer team world cup win defeating japan 5-2. the star of the game carly lloyd, who scored a hat trick in soccer. that's usually good for an

entire season, an entire world cup. you get one person gets three goals, incredible. >> 16 minutes, yay! >> the u.s. is the country with three women's titles. you were talking last fight. when they were in the world cup. the women do much better for us in the u.s. i'm not banking on the men winning any time soon. >> let's give credit where credit is this morning. way to go! >> for me wow, they gather away from greece for while. i was mad at the greeks for not doing what i said they were supposed to do. >> far be it from them to fought take your advice. >> i'm seeing a lot of people feel the same way on twitter. they did it for pride. let's see if pride puts food on the table or pharmaceuticals in the, i don't know how you do that to show them you are not going to knuckle under to someone else's demands. >> it seems like the human suffering will increase at this point. we don't know what the next step

is. things will get more complicated. >> whether this is a move that you know was taken and maybe wasn't the best thing to do. although, like i said all left wing media organizations, it's a great day at the huffington post celebrating a. courageous vote. a few stocks to watch to help flush aetna is buying humana for cash and stocks. humana shareholders get cash and a little over .8 of an aetna share. we will have scott gottlieb on. i'm reading, did you see, it's a horrific piece she wrote in the "journal" today the affordable care act single handedly is causing these mergers. andrew actually wrote a piece on that a couple weeks ago. andrew wrote from the perspective of the big nasty corporations going in together. not from the effect of the affordable care act which greeced the skids and propelled the company to do this because

theseco-ops haven't worked and later the ceos will join "squawkon the street," when are they on? our friends mark betterolini. maybe he will wear a tie today? and bruce broussard of humana. retailers. >> this is you. >> i read a lot. >> keep going. >> retailer sears says its newly investment trust s e.r.a. tage. you know what that is spelled backwards? nature. it's a nice too name. it will trade under the symbol srg. sear's says it previously announced rights offering for s e.r.a. tage was inspired like a combination of sears and heritage who would want the heritage at sears? i wouldn't want to imply.

>> it's so way back you can buy a long lasting heritage go k-mart. who would want that? >> let's get back to the top story of the morning. greece. once again, front and center. the finance minister varoufakas resigning overnight. michelle caruso-cabrera take it away. >> reporter: i have this "squawk box" edition, i like to show you the morning paper which says agreement or exit after a strong no? the world for agreement in greece sinphonia, it's a greek word. here is ta nea. it says reforms or grex it. they have emphatic and dramatic

headlines, acropolis, it says 61% no to the lone sharks. so that's the tonality that you can see from the newspapers here guys. they realize that yesterday was a huge huge event. the political process started. the prime minister alexis tsipras met last night and with the leaders of the parties. they got to bring together some kind of proposal to the creditors to see if they can get a deal done. remember the prime minister promise as deal in 28 to 48 hours. the finance minister yanis varoufakis. he's got a book out called "mod engreece, what you need to know." he's been following closely the situation here. he is not surprised that varoufakis had to be thrown under the bus when it gomscomes to negotiations. >> he is not a good negotiator.

he thinks he is superior and as a result everyone dislikes him. how will you sprooik strike a compromise with people like that in the room. he may be a good person to blog. but blocking is not good politics. >> reporter: he's making reference to the fact for years he had a blog and that's how he announced his resignation. he posted it on his blog. minister no more was the headline. >> michelle, we spoke earlier with the head of the euro group walking through all of these negotiations, his point is they may think the greeks may think they are getting a fast deal by allows the lasttime deal to expire sets an entire new process that will take time weeks, potentially, if not longer and they're not ready to change the rules because the greeks are in this position. there are rules, processes and of course from the german perspective, those rules and processes still are important

and have to take place him. >> 24 hours, 48 hours, for a deal becky, is a pipe dream. when everyone is getting along. when everyone is on the same page. when every single party is in agreement. it can take at least three weeks to get the whole process done. nobody ever achieved it in 28 to 48 hours. so i think he is absolutely right. he is telling the truth. we will see how people react to the fact that it is so incredibly unlikely a deal is going to happen any time soon or the banks will open tomorrow as has been promised be i the leadership. look, the banks could open. that doesn't mean there will be money to take out. you shut the banks because you are fearful your employees will get beat up. when it says i have a deposit, why can't i get my cash? the head of the euro working group spoke exactly for the whole of europe. this will be incredibly tough

and this no vote doesn't necessarily get them anything better. >> get out of there. you are supposed to be on with me later this week. i don't know what you are doing with the money. are you using a credit card everywhere? have you stood in line? >> reporter:. this is probably not a conversation we should have on air. >> all right. come on back. get out of there. you have done great work. i don't know what else there is. thanks. let's get a check on european treasuries. are we seeing a plight for safety for investors in europe? a fixed income strategist. guy, are we seeing a flight into fixed income there? >> yeah, a little on the margins. you know i think what is encouraging, home is that the funding market. kind of the market plumbing that we need to insure that global banks are appropriately funded it is doing quite well.

one spread basically measures the difference, this spread is a teeny bit wider. it's far far below the 2010-2012 highs. that's a key thing to focus on so he has a short-term quality. it shouldn't affect the u.s. frankly in europe which has a lot of the prices. >> it's priced in or it's just not a big enough issue at this point to worry about. what does that indicate to you that funding has remained steady? >> well, i think it indicates the power that the central banks paper over any of these short determine distress within the mark has been proven time and time again, right? there is no concern that say for example greece leads the eurozone or might in the future that asian banks will pull back on their willingness to lend to

italy banks. there is no worry. the ecb made such a strong statement. regardless of what happens, the rest of europe remains very well protected. i think it's the closest way to describe that. >> let's say that germany starts waivering a little bit on whether they start caving to greece in some way, would that make it more likely that there could be some trouble in some of the other southern european countries in the debt. is it by taking a firm stand here is that actually helping the situation in italy and spain and portugal? >> well i think right now, the ball is if two courts so to speak. one is greece's voters. they're essentially refusing to accept another 25 years of 25% unemployment with this vote and

also portugal. right? so these two countries, call it a year two years down the road portugal in particular will be evaluating what happened to greece's economy to establish that hard line with creditors is effective. if it ends up being effective, we could see other countries follow what greece's likely path. that's still a risk we are talking about a year or a ku7le years down the road. we will have a lot of time to herald that risk into the market. >> and as far as our kenya, are you still staying low for a long time, right? >> we're staying low for a long time in the short term and it has a little to do with what's going on in europe. obviously the treasury is worth between five and ten basis points lower yield. that's not the long-term team. is we have weak demographics in the u.s. and slower productivity growth. those two things will not be overcome. so i expect the straights to remain well below historical

averages. probably the rest of our careers. >> thank you. good to see you again. >> when we come back. marty feldstein will be joining us. coming up at 8:30. we'll ask mohamed el-erian. "squawk box" will be right back.

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>> welcome back. everybody. u.s. stocks futures are lower. they have come back a long way from the session. at this point we are looking at futures down by 146 points. the s&p down 17 and nasdaq down third points below fair value. is it leading to a buying for investors. >> becky, that's the reason why so many strategists and experts are weighing in on views of what's happening and everything else that will happen with negotiations. here's the reason why, strategists are saying this is a buying opportunity. over the course of the past year, we've seen this trend where things are moving higher.

balancing or close to around the level, depending how we open today the 200 moving day average. every time we have this pullback of 4-to-5%. wells fargo is out saying gina martin believes greece is a buying opportunity. she is looking at dividend stocks. other schools have thought about whether or not this really is something we should worry about some people do say yes. why? all this volatility on greece has a threat of a contagion. is it limited or does it spread to other parts of the eurozone? still it's an unknown. what's the credibility of the euro? what happens to that currency? this is an unprecedented area. we have never seen in the 16-year history any countries leave. so with regard to all of these factors. this is one of those situations

where, yes, we are seeing this trend stay intact. we are seeing a little strength here in the euro in the futures, starting to pick up off their lows. whether or not this remains a buying opportunity, it's a source of debate. a lot of unknowns out there. that's why a lot of experts will be updating their clients on what their house views are back over to you guys. >> don, thank you. joining us is marty feldstein, he is an economics professor at harvard university and was a former adviser under president reagan. thank you for being here today. >> good to be with you again. >> so what do you think with the greek vote the no overwhelmingly winning? is this the beginning of the end for the eu experiment or is this just the beginning of the end forconnect 1200>ymóúc/[;iq36]t

. test test. test test. test test. test test. test test.

>> it would be a target. >> i would think so. >> i'm trying to think of what could i mean i don't get uncomfortable. what would it take to get me to sit through that? you know? >> probably handcuffs, shackles.

>> now, you are speaking my language. >> that will be "fifty shades of grey." i didn't see that, either. >> but i can't imagine you sitting unless you were forcibly restrained. >> would i go see that movie no? >> you like gladiatot point of views? >> yes, i do. >> do you ever see a grown man naked? >> is that a movie? i missed that one. >> how about the sequel? >> when we come back this morning, we will talk about what's next for greece. tsipras is speaking with merkel saying he will present proposals tomorrow. up next, mohamed el-erian will talk about market moves and later is the affordable health care act killing competition? we will talk with dr. scott gottlieb. his op ed in the "wall street journal" hits on that topic. stick around. "squawk box" will be right back. that's why i have the spark cash card from capital one.

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. >> welcome back, everybody. it still looks like we are indicating a lower open this, mo. the dow futures down below fair value. s&p futures down by 15. the nasdaq is down by 28 after

the greeks vote. in an overwhelming manor. take a look at what's happening in europe. france down 1.5%. italy and portugal those markets down by 3 and 3.5%. oil decliners down 4%. joining us right now from irving, california, homeland el-erian, the chief economic adviser and co-cio, a lot of questions of what happens next. what's your guess? >> two things, becky. first on the political funds we have negotiations. we seen that already. but much more important to what is hang on the ground. i don't think people are paying much attention to that. oak, this economy in greece is grinding to a halt. it's going to be very difficult we started who it the government being forced to introduce ious

without the government having some sort of financial engineer and, therefore the political process is going to find it difficult to resist what's happening on the ground and that's why i'm really concerned that he may be on the path to high probability success. >> high probability, we just spoke with marty feldstein, he brought up an idea he says is being circulated right now about putting greece on leave giving them a leave of absence from the euro, where it's the official part of the membership, they don't get to use the euro anymore? what do you think ability an idea like that? >> a few years ago i called him a sabbatical, let greece go out. since then there has been a lot of damage done to neutral trust. the notion of the sabbatical is much more difficult today than it would have been a couple years ago. >> if the greeks actually exit the euro, what does that mean? we know this is a very small economy relatively speaking, but

it lays out a game plan for how someone can lead the monetary union. it also, though, sets a set of standard that sends a clear message to other nations like a spain or a portugal, saying you have to follow the rules in order to stay in the union. >> clearly there are risks and these risks will skew the americans of non-traditional parties in europe, particularly in spain. having said that becky the euro though controls its destiny. the eurozone has instruments to limit contagions. they have those instruments and the eurozone can take steps to make it a better union. the rest of the world, you know, the three channels of contagion. two of which i'm not worried about. i'm not worried and the economic contagion or the financial contagion. what i do worry about is the

technical contagion the shock and there will be an initial sell-off. but at some point this is going to create entry points for markets that are fundamentally supported. >> when you say that you are talking about sell-offs that could eventually lead to entry points. you are not talking about the dow down 150 points today? >> oh, no, no, it hasn't played out yet. sorry. this is just another step. it hasn't fully played out yet. we are still on the path. it's a great accident. it's a big accident within greece, we are on the part of a great exit. so i wouldn't rush in now. but i would start to give more valuations of it. but i would wait and i who you would keep some. i think there will be an attractive entry point. not only in the u.s. market which is expected to outperform and it should, but also emaernlg merging market bonds will be hard hit. some of the peripheral opportunities, not just right now. >> i have been surprised the markets didn't sell off a little

more violently today this is true. we heard from institution after institution that has now sade greek exit is more likely. even s&p saying it is more than 50% likely. i heard others putting it at 70, 75 likely at this point. if that's the case, why aren't people more concerned today? the odds include drastically that the greeks leave the euro and that leads to chaos? >> there is hope in the marketplace. we see it in the analysts today there is a hope that somehow politicians can remain in control. after all, they do have the solution to this problem. degrees is small and you can solve it from an engineering perspective. so there is this hope that the politicians contain control. i think that under stills two things. one, critically what's happening on the ground means that the situation is slipping out oft the control of the politician. i don't think that's been

factored in enough second it is hard to start constructive negotiations, both sides have to tell it to their domestic constituents. i think there is a a bit of excessive optimism. as i said, we shouldn't go all the way to say this is 2008. this is not 2008. this is much more isolated shock to markets. >> when you say there is a around attractive entry point. are we talking a 5% decline or 10%? >> i think it will be very name specific. it will be those names that are supported be i the tremendous amount of cash in the system. including corporate balance sheet when you go to countries there are countries twoes fundamental apples would act as an anchor to this sell-off. it will be very name specific as opposed to an overall market

corner this one. >> we will talk a little about what's been happening with the health care stocks consolidation there. aetna, specifically and the idea that you could have five big managed care operations that are going to two to three in the near future. what do you think about that? i know this is not your area of expertise. it must be something i have given thought to. >> you will see it in other places, too when companies have cash and they do. when they don't trust economic liftoff as capable velocity as such. we will see much more consolidation in many more sectors. >> that will continue until people have the confidence. remember, there is a very big difference between financial risk taking up here, the economic rick taking which is down here. so when you combine lots of cash with low economic risk taking, what you get is lots of

sectionors, too. >> thanks for talking to us. >> thank you becky. when we return, why greece might be better off leading the euro. princeton economics professor will join us. later how obamacare is reducing the competition.

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welcome back to "squawk box," everyoneb, if you are just waking up, the future, the dow futures are down, s&p futures off 17 the nasdaq down by 32. >> cnbc disruptor well front is a digital wealth management service lowering the barrier to entry for investors. it echos the belief in passive investing in index funds. burton is a chief investment officer of well front. he is also a professor emeritus and economist at princeton yuvt and the author of a random walk down wall street. the book now in its lernerth edition. so how does this work? it allows an investor an easy entry and low fees to be involved this an index kind of way? >> exactly. there are a lot of things that i

and everybody who works in investing can be unsure about but the one thing i'm absolutely sure about is the lower the fee i pay to the purveyor of of the investment system, we use index funds with the lowest possible fees and charge a portfolio management fee which rebalances, tech law harvests only 25 basis points. >> could invest how many different index burton? >>. >> how many different investments or investors? >> investments. >> very broadly diversified as many as ten different exchange traded funds using equities from around the world including

emerging markets using bonds from different markets using real estate, so extremely broadly diversified and the investments are rebalanced automatically, which also keeps risk levels down and in some cases can even increase your return. >> is everybody in the same thing or do you look at an individual's? >> no. >> how do you do it? >> absolutely not. the people we tried to tail lore things to people's age risk tolerances, we try to give them a questionnaire which was helped design by behavior finance people to try to put people into the kind of risk levels that they're likely to be comfortable with. >> let's talk greece quickly. at this point i just to summarize i think your thoughts, greece is by far and away the

biggest outlyer. and just if greece exits it doesn't mean that portugal italy or spain are next. you think that might be the best thing. greece and the rest of europe are so different in their prospects as far as their economies go? >> well, i think the problem is that greece is basically uncompetitive today with the rest of europe. greece and germany are as different as possible and one of the few ways in which you can get competitive is to have your own currency to devalue that currency and then you can make the competitive level consistent with your euro partners. today i don't think works. a currency union works in a place like the younes because if there is a lot of unemployment

in appalachia the federal government throws money in through food stamps. we also have laor mobility. if there are no jobs in appalachia but there are jobs in california, people can move. what doesn't happen in europe there is much less labor mobile. so i have always been a skeptic without a fiscal union and what 2k3w45i7b9s completely out of whack, with i is what greece is today, i don't think it works. i think the most likely scenario is a greek exit. i think that's probably likely to be the best thing for the greek people. >> i don't know how you prepare for a terrorist event or a black swann or something like that. the world only ends once i

think. but if you were going to worry about these guys, you wouldn't invest at all. what do you do? pretend it's not going to happen and stay the course? how do you prepare for some horrific event? >> i don't think you do. i think you basically have simply if you are saving for retirement you invest consistently over time. and if there is a lot of sloppiness in market and my guess is this is not over. this is going to be uncertainty in spades for a long period of time and if markets continue to go down, you have a few extra buck, throw them n. i'm not saying you time the market. invest regularly by god if there is some real drop in the market and you've got some few

extra bucks it will never hurt to put them in. >> right. a couple cases of water. maybe some canned goods may not be a bad idea too burton? >> that's true. >> all right. it's not funny anyway the world is funny. we appreciate. what kind of s.a.t.s do you need for princeton at this point or if i know you does it help, do you know? >>. not at all. >> that's what i was worried about. thank you. >> thank you joe. >> i thought you were considering going back to school. >> to learn something about business, maybe. no, it's too late. >> for us. up next, dr. scott gottlieb on how the affordable care act is reducing competition. "squawk box" will be right back. .

the urge to merge hitting the health care industry with aetna announcing its deal for humana but could consolidation leave patients with fewer choices and reduced competition? that's the armt made. a penned op ed in today's wall street journal, make your argument, you say all this consolidation that we're seeing right now is a direct result of

obama care. what happened? >> well obama care imposed a lot of costs on insurers. so they need to merge. they can spread their fixed cost among more members. the problem isn't necessarily the consolidation. the consolidation would be fine if there were new plans that would create new choices for consumers but we haven't seen that because the government has capped the profitability and new plans need to spend more money at the outset as startup costs and if their profit margins are capped, they won't enter the market. >> although the affordable care act did lay out a plan for all the other plans that were supposed to pop up. what's happened to those? >> there's been about 50 new plans that have entered the market under the entire obama administration. about 40 plans have left the market from mergers or from outright bankruptcies or just they've been extinguished.

and we haven't seen a lot of new plan formation. 23 of the 50 plans that have entered the market are not for profit plans. all those are up side down and practically greek economics. they're spended more money than they're taking in. one filed for bankruptcy. the other is heading toward that. the administration also tried to run an insent vised plans that the hospitals could run and cut out the insurance company middle man but we've seen this before. we tried to do it in the '90s where hospitals funded their own plans. they didn't do well. there's a reason why health plans run to manage risks. the idea that you're going to recreate health plans with these washington creations doesn't seem to be holding out. >> new story out today that says that several of the health insurance companies are looking

for rate increases of 20% to 40%. >> "the new york times," it was a holiday. it was like friday and they put it in there and hoped no one would see it. but 30% and 40% increases are going to be asked for and they asked the president, he said oh well you know you have to push back on that and we'll see what they finally get. >> you're still talking about double digit increases for many plans. >> everybody is sicker. no healthy people signed up. >> the plans are spending more money than they're taking in and the other thing to watch is the administration is going to start talking about the average rate increase. that's lower than "the new york times" article, but the net effective increase how people are impacted are significant. most people joined these plans that are now trying to push through the big increases. >> they're going to portray it as these guys trying to make more money and there's going to be pushback at these companies.

they're going to be, you know and the media will be working administration on these blaming them for being for profit insurance companies. >> the administration strong on number four and a lot of the other places lost money in the big markets and the other companies will be able to lose money for a period of time to try to sustain themselves in these markets. this is why new plans can't enter the market. if the administration strong arms them strong plans can't sustain it. the big plans can for a period of time but basically all the plans are moving money in obama care, all the ones that are actually attracting members. >> thank you for joining us this morning. appreciate the op ed. >> when we return what you need to be watching before the bell and be sure to keep it locked here. the ceos of aetna and humana

will be joining "squawk on the street." "squawk box" will be right back. mark lert leanny. bert

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♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? quick look at the markets. futures now down 153 or so which is, i haven't seen much worse

than that on the session. the s&p down about 17 or so. even if you had said that over the weekend, that's not -- >> not as bad as you might have expected. >> and same with what you're looking at there. almost 2% in france. you know, the ftse those guys were smart enough not to get in that crazy currency. >> we have a squawk victory lap to tell you about this morning. dale earnhardt junior winning at daytona. after a lengthy rain delay for the race he was on with us last week. of course, muting the win from yesterday's race it will probably be remembered for a horrific last lap accident. austin dill lon's car sailed up side down into the fence and shot back onto the track. it was hit by a car. he walked away from the crash but five fans were treated for

injuries from debris. no one was seriously hurt. >> i, you know coincidence, i don't think so. i said barely anything to him about just one little thing about if you were to drift behind the car on the inside a little earlier, i thought he might and next thing you know there he went. but it probably had nothing to do -- >> no. >> make sure you join us tomorrow and watch "squawk on the street" for the big humana deal. "squawk on the street" coming up right now. ♪ >> good monday morning. welcome to "squawk on the street." we're at the new york stock exchange. once again we begin a week of uncertainty regarding greece. this time as the country votes no on the referendum. dow was down 2 points. they've