ss never sleeps, this is "squawk box." ♪ good morning. welcome to "squawk box" here on cnbc. i'm michelle caruso-cabrera along with joe kernin and andrew ross sorkin. and preserving the space suit for neil armstrong's space walk. we'll have more on that story later this hour. first to the business news of this morning. major indices in china plunging. the largest one day drop since 2007. stocks falling on new worries amid the prospectus with the highest economy take a look the shanghai the shenzhen and hang sentence all lower. we'll have a live report from our colleagues in asia in just a minute. u.s. equities futures at this hour don't seem to be responsing

negatively. the dow opened lower, the nasdaq lower by 6. we had a multibillion dollar deal. teva acquiring allergan. we should tell you that teva is officially withdrawing its off for mylan. you may have remembered they made that offer as a hostile offer. it was not morninging. mylan which located outside of the u.s. became a bizarre beneficiary of moving outside because of the way the government's rules work abroad were they relocated it made it much more difficult for teva to pursue a deal. >> how do you think the mylan shareholders feel about the big fight? how do they feel this morning? >> in the immediate case i think that they can't be

thrilled. long-term, mylan's ceo has made the argument and i actually buy it that there's more value to them -- >> reinvesting -- >> -- by reinvesting and being independent. >> so we'll see what happens there. >> can i ask a really important question? >> yes. >> friends of mine would like to know. does this get us any closer to a botox -- >> that's what friends would like to know? >> i have women in their 40s. >> ben is going to be here and he has offered -- >> i think he offer the chin thing. >> the chin. >> or the eye? >> no goes right up to the chin. we should tell you that -- >> for your prostate or something. it involves needles in all of these places. >> brent saunders will join us

here on cnbc. 6:30. >> he will be. >> and what we understand from him, generics have a lower margin business than the brand business so, "a," is this the time to be getting out? is this the operating to be getting out, given they've got a lot of stuff. >> how much do they owe right now after the recent acquisition of allergan. they'll pay out for that. this will pay that down and get the debt ratio down where they can focus on higher margin products. there's other things besides botox. you know what's become a really big -- needles are big, but they're not scalpels. anything that saves you like the full-on cutting. >> under the knife? >> yeah where you've got to spend three week misone of those -- you know, humphrey bogart bogart. what was the name of that -- when bogey -- you don't even know what he looked like at the

beginning. all you see when they take it off, of course bogey. but you just see him totally different. anyway as china -- you guys are young. culturally, it's hopeless. >> i know who they are. >> i know who they are. this is back to generational issues. >> no you don't watch old movies? you just watch the new stuff. >> it's a classic. but the thing in china reminds me of like -- there's a thread here. >> yes. >> as i pull this and you pull it -- it's -- that's what it reminds me of it scares me. it's so far away. it's their margin problems. central bank of china, they lent them money to do this. and when it happens it has ripples. >> and then add the hammering of commodities on top of that. those two things together. like those two thing, i'm fearful, are telling us -- then

you look at the major u.s. averages that really haven't done very much since november. what are these indices around the world doing and telling us? >> what was boone pickens, 70, right, by the end of the year? >> most people said that. >> where is it today? 47. going to be 50% of 70 theoretically. that's pretty amazing. some other top stories today. this one just hearing how it works, you're saying that the air bag goes off. >> that's bad. >> i've never been a big fan of fiats in general. >> they're so cute. >> it's like fiats, who would -- >> they're cute. they're cute. >> but they're that chintzy, you slam the door and the air bag goes off? u.s. auto safe regulators fining fee yas chrysler a report $105

million. the total including a $70 million cash payment and an agreement that the automaker will spend $20 million improving the recall process it currently has. fiat's deal includes an unprecedented buyback offers. it gives owners of gmc a chance to get vehicles repaired. mcgraw hill reportedly a deal to sell "saturday night live." >> i'm wondering the same thing. i didn't know they didn't anything to do with snl. >> the snl financial. >> it's a data information company. it's owned -- they probably -- the numbers are going crazy. it's owned by private equity firm snl. you say snl, that's all you

think about is snl. >> only on "squawk box," you have to think that and -- >> and, remember atm, do they still have that a synchronous transfer mode. >> did they laugh? >> no they didn't laugh. they're convinced that ron burgundy -- you know. and verizon workers in nine states voting to go on strike if necessary. a contract with 40,000 union workers expires at midnight on august 1st. >> if necessary. in today's squawk planner, norfolk southern before the

bell. earnings june durable goods. but the biggest story, two-day fed meeting that begins tomorrow. in global news greece's government said the stock market will remain closed. the boerse has been shut since june 29th. and negotiations off to a rocky start. let's continue the conversation on china. let's go to asia. he's got more on the huge selloff that took place in china overnight. good morning. >> hi andrew. this was a real shocker, a rude awakening just when you thought it was safe to get back into the market. we saw a burst to volt till on the downside. the chinese equities market was recovering. down 16% of lows that we saw in july but we wiped out more than

half of those gains in the biggest session. the biggest decline in almost eight years. what was behind it? i think it really underscores how leveraged this market and therefore how volatile this market still is. let's not forget margin financing by official channels this is just official channels mind you is about a third from last month's peak but it started to tick higher once again. there's also a sense amongst investor today in mainland china that the authorities in beijing may be backing up supporting the market. that's another reason why equities markets threw a tizzy today. we saw low pmis last week. society, we saw industrials in china contracting by 3th% reversing the expansion we saw in april and may. the big questions for me in terms of the outlook, whether

the capitulation continues and what beijing's response is this time around. >> sri, thank you. a lot of scuttlebutt about the mysterious shadow margin. things that have been happening with china, people supposedly pulling back. bank of america, finally some comments on that. let's talk about it from china. and we have earnings. i don't know whether you'd call them good or not. especially from a revenue point of view. i think that's been a little scary. let's see, who so far in the last week scared us amazon was great. ibm scared us united technology scared us. some of the yanks in the stock market didn't have a good week. >> apple. >> apple, may be different to some extent. although i finally read a piece -- >> do you want to take credit for it or not take credit for

it? >> no it was one that basically said the consensus is that apple is forever going to be the greatest company in the world. when you really look closely it's the one product company -- and if anything changes that it may be price -- i just read that. you see these guys come in and they get so defensive about it. but, i don't know. over 150 s&p companies and six dow components are going to report this week. social media, energy health care consumer names dotting the calendar. what's most important? here to talk the markets, we've got the fed, china -- did we put greece to bed for sure? peter bookhart and brian leavitt senior investment vatic? . if you can find something scarey i'm sure you're up to speed on it. with supposedly the margin in

china, the numbers that are provided don't tell the whole story. and there's apparently trillions. and if people do get nervous when margin-selling happens, it's relentless. and there's no explanation for it. when a lot is happening, it's going to keep happening. is that happening? >> even if we believe it, it's 8 to 9% gdp. even the number they're giving us is three times bigger than it it here. >> so the number could be smaller than the actual number? >> exactly. >> you have margin and only two times margin and there are ways being provided to get around it supposedly. >> right. >> that we don't -- >> well i think the most interesting thing about today is that there's talk about the chinese pulling back from stockings. so this just gets us into the whole central bank thing. they're great at blowing bubbles

up.the second you walk away, the air comes out of the bubble. we've seen that here and everywhere. chinese are experiencing it first hand. you can control things for a certified period of time and all of a sudden, markets are going to run out when you go away. >> markets never seem to go away. there always seems enough power and money in the central planners. is there a number so big that even chinese don't want to handle it? >> i think they're seeing it first hand right now. but i think chinese authorities realize what they don't -- what they've done over the past three months. they know the bubble they've created and they know the carnage that they created when they pulled away. so i think they want to now test the market how much to walk away. then it becomes a feedback group. so they walk away the market falls 8.5% and then they need to go back in again.

>> there were 1,000 stocks -- >> frozen. look at that oh gosh. the one upside almost no american is involved in this right? most of our viewers can't be involved in this because this is mostly mainlanders. >> there are etfs that you can trade. but i'm sure it's mostly the retail in china. >> was this one of the top three things you're paying attention to or not? >> yeah of course this is one of the top three things we're paying attention to. i think for the next years what's happening in china is a story for the global economy. when you talk about bubbles, you compare what's gone on in china. what went on in japan. what went on in nasdaq and oil prices. what's gone on with bio technology this move pales in comparison. the big story with china, obviously, we're going to need a long-term progression with a more consumer-based economy.

the financial crisis gave them that opportunity. instead, they started to create a lot of cred and money into the system. they ended up with a worst case sin another, slowing the economy and a big pickup in asset prices. now, it doesn't have to be 1929 in china. 1929 was a major pose mistake in the united states. what you have to have to see them do -- >> can we project on to china the same way we do stock markets in the united states which they are a discounting mechanism. and to see them tumbling like they are in china, is it telling us something about what's going to happen for that economy which is therefore going to be very bad for the global economy and u.s. market eventually? >> well we've been through a period where chinese growth expectations have come down pretty substantial, right? so we're moving through it. i think what's most important, as we have a fed meeting this week. they've been so whipsawed as to whether they're going to be

raising rates. what china is indicative of is slow global growth and weak demand in commodities. in the united states the big story continues to be easy monetary policies really valuations and a prolonged disinflationary environment. >> following along with what happened with equities and oil -- >> the only thing new in china is what's happened in the stock market. >> commodities have picked up. it's made no sense, europe is going to be recovering. it made no sense, the fed is going to start raising eventually. so we don't think we're still -- you know the phantom wasn't huge but apparently it was, china now. >> a lot of the industrial metals topped out in 2011. >> what if that plunged, you say

they're going to grow 7%. you knows that a fake number. >> that's probably half that. >> is that plunge in the stock market telling us it's 1% or 2%? >> i think the stock market is its own animal. just as the rally was not reflective of anything the decline is not. >> okay. >> we didn't talk much about the energy this week. not only is the stock market, but every company is different. look at amazon and google. both of them went up like 100 points. on the other side you've got ibm and apple. >> you're finally getting dispersion of returns after a bull market. it's not all this rise of tide. commodity prices a slowdown in chinese demand but also the big strength in the u.s. dollar so as we look to the fed this week how much rate hikes can the fed enact until we continue to get more pressure on the dollar. more weakness on commodities and

headwinds for earnings. you know when lauren bacall passed away. you know she was a complete legend? >> yes. >> the work that went into making a legend you know the background -- have you seen any lauren bacall movies at all? >> yes. >> this is dark passage. the reason people are writing about, the reason it's so amazing. first half of the movie is shot from point of view. you never see bogey. then when he goes under the knife, they take all the bandages off, he's bogey. that's what shadow is famous for that. >> thank you for that. >> you don't need a knife with brent saunders coming in -- >> we're going to talk to brent saunders. when we come back we're going to talk about another guy,

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welcome back to "squawk box" now. how to the race for the white house. donald trump running strongly in the early nominating states of

iowa and new hampshire for the gop. that's according to two nbc news/maris polls. trump leading the field, despite a criticism of john mccain's war record. let's bring in ben white, a cnbc contributor. good morning. >> good morning to you. >> how long -- the question is how long does this hold up? >> right. >> is it possible it actually holds? >> i don't think it's possible they actually hold. they're not increasing as poll numbers. people like the straight talk. but they liked before with mccain they liked before with michele bachmann. i think the problems with trump, when we start talking about his policy positions they don't line up. >> and he was asked yesterday about immigration. and no real answer. he sort of said we're going to get the bad guys out. >> and we're going to build a big wall. when you get to abortion and

taxes. he's been against huge tax increases on the wealthy. when people go to caucuses when they go to vote in new hampshire, they're going to look at those issues. but he's incredibly good tv. he's really entertaining. he's a great speaker and he's going have some momentum. >> did you see that really you want me out? what about when he decides to pick a vice president you don't think -- okay fine you want to go listen to rick santorum and what he's saying do you want that? do you wand lindsey graham every comment out of his mouth? that's what you want? you're nothing without me. everything i say in a voyeuristic way. >> i do think there will be a point where he peaks and cedes. >> but the idea the editorial

page mentality would seep through to the front page. >> to the newspaper? >> that will never happen that i'm aware of in any real newspaper. andrew? >> it never happens in "the new york times." >> it wouldn't seep through in the interviews, right? >> no. >> it's pretty -- >> it wish it would seep through more than "the wall street journal." >> i don't think it would go to the journal. >> i'm not sold on trump's longevity in this race at all. at question at this point, how much of his own money does he want to spend? he could spend a whole bunch as his poll numbers go down. >> are you saying he would be putting his own money -- >> he would do that. he has no grassroots organization in iowa. i don't know what his grassroots is in new hampshire. eventually if you want to win iowa you have to be setup, you have to win on caucus day. >> strategic list, the other folks pitting with him, should

they be taking him on? hide and duck an coverd cover? what's the move? >> he's got to get himself in the news. that makes sense. immediately he's the news. if you're walker rubio or bush, the three in the top tier, you wait for him to fade. switching topics hillary clinton releasing on what i'm calling the larry fink capital gains fund. you're going to introduce capital gains to try to get people to invest. does that work? >> it may work. it's not exactly what he's suggesting, it goes down to zero if you're 6 or 8. it got swamped by eat mailthe e-mail story. if you want to unite pro growth for democrats, you say let's raise taxes on capital gains.

>> and it's a telling thing, too. by her position is this the move that fires up the left? >> no it's not. >> it's a yawner? >> it's a yawner. they're never going to satisfy the bernie sanders folks. with that increase. but you want to appeal to them by saying i am willing to raise taxes on the wealthy somewhat without losing the center and wall street democrats. so they're trying to thread that needle but all anybody talked about was the e-mail problem. >> is it a problem? >> it's on obviously a problem, when you're sending state department e-mails from your private e-mail. >> is that a problem for her. >> well it could become much of a problem if it's proven she knew she had classified information she was sending from a private server. then that becomes a bigger problem.

if that's not proven -- >> 4 out of 40 -- the ones that haven't been destroyed, but obviously, it's 10%? >> well i don't know. >> is that right? >> it is that's good math. that's impressive. there's a lot of e-mails. there's more to come on it obviously. it's going to be a running story. the question is does it become a partisan story where democrats worry about hillary clinton. if they do joe biden is the end of the race. i don't think bernie sanders and o'malley are good options. >> and you are against socialism? bernie sanders is not -- >> i wouldn't consider him a viable opponent. >> can they get past that -- >> it was an outrage. >> these guys got -- it's not enough to -- >> you can see jeb bush come back and say, all matter.

coming up -- isis oh global warming and isis. anyway coming up newsmaker of the hour teva pharmaceuticals acquiring allergan. brent saunders has offered to all give us botox. i don't know if you got it yet. he did.

♪

good morning, welcome to "squawk box" right here on cnbc. i'm we've got breaking news out of asia. the major index, china plunging in a big way, the largest one-day drop since 2007. stocks fall ago midnew worries about the prospects of the world's seventh biggest economy. taking a look at what's going on on this end. equity futures down. dow down 20 points. nasdaq off 7 points s&p 500 looks like it will be open by 1 1/2 points. teva acquiring allergan joining us brent saunders sea. so great to have you in the studio. offered to come in with the botox. >> another time. >> just to see what it's like?

>> why another time? today? >> right after the show we'll go. >> i have a friend. >> how much before this have you had and how much will you be able to pay down? >> we have roughly $42 billion in debt. >> mostly from doing the allergan deal? >> yep. the proceeds could net out to be $36 billion or so after tax. and so when you look at where we stand, this should close within the first quarter, we continue to generate a lot of free cash low. we should be at nil debt. >> are you you're your betting on your right horse. teva obviously, what a great business it is with the aca or any cost containment, generic is great business. you're basically exiting -- $40.5 billion. i didn't think anyone knew your generic business was that big. that's a huge business. >> leveraging to get in higher

margin cosmetic-type stuff. >> and regular pharmaceutical. >> it's 2.4 billion. you can do the multiple math. almost seven times. if you would haved edasked he a couple weeks ago was it for sale, i would say absolutely not. you guys have covered a lot of the recent mergers in the insurance industry we're down to essentially three retailers at the pharmacy level in the united states. this is the right deal for us at the right time. when you look at our brand of business, aesthetics, eye care g.i. women's health, these are higher growth businesses for us. we can double-down and build those therapeutic categories. >> can i hear you correctly, did it it happen this quickly three weeks ago?

>> this was a very quick paced like most of our deals we will allergan in two weeks, forrest in two weeks. >> strategically, was this more about paying down debt? or was this more i want to focus on brand? three weeks ago, you weren't thinking about this walk us through that thinking? >> strategically, this was a continuation of our strategy. when you go back to 2007 when our chairman started this whole story, it's about moving up the value chain. moving up the margin innovation change think of warner chilcote. always moving up to integration assets. this really pushed that up farther. and when you think about it we weren't going to be a consolidator of generic business. we've always said that. we were going to buy brands. teva is a natural consolidator.

this is their legacy on global scale. >> heather brush who owns mylan will would tell you they're a terrible consolidator. one of the reasons she didn't want to sell her company to them especially with stock involved because they were going to do a terrible job. >> they would focus on things like dividends? >> that's true. but remember, they brought in new management about a year and a half ago, they hired our head of jengenerics. >> did mylan make a big mistake? >> i think teva made a smart decision moving to us. >> if you would have been with mylan, would you have done that deal? >> it's hard to say, i don't follow mylan that much. i think teva did a great deal.

>> brent, how much cosmetics and how much is therapeutic in terms of the pharmaceuticals we're talking jab. >> what's left of allergan 2015 aesthetics is only 3% right now. >> only 3. you don't get agree imbursement from medicare and things like that? >> well it gives us a nonreimbursement market. even when you had david pyatt on the show he would tell you those businesses continue to grow even in the great recession. the lowest ever about 5%. they're double-digit growers even in tough times they continue to grow. they're a nice hedge on the economy but the reverse business, when you can bring innovation, like just announced yesterday for depression. two compounds for depression

the medical needs that's how you really provide. >> yeah, i saw that. long acting -- what was the name. >> norax. >> you're going primarily therapeutics. >> the aesthetics is always more popular because botox is the biggest pharmaceutical in the world. >> you know what it's a luxury to have for me if i'm only talking to you about getting botox, then i'm not worrying about anything. it seems more elastic, necessarily need do that stuff. >> you don't. it's nonevasive. jim cramer said we own that. >> you are in europe much cheaper, right? >> what botox? >> yeah. >> not really.

there are maybe some companies where it's cheaper. >> in greece? >> well remember botox is like kleenex. everybody calls a neuromodule ator botox. >> in terms of consolidation -- >> we're confident they can close. virtually every regulator will weigh in u.s. and eu and other regulators. we expect it to close in the first quarter, but teva has assumed all the risk in this deal. we have not taken any risk. >> other question i have while you're here how do you make up all the consolidation in the insurance space? and what does that mean for you guys? >> yeah that's a small part of what has made us receptive. when you look at how dynamic this industry is. how quickly it's changing. we want to leave that change.

i don't want to follow that change. i think a lot of that will impact generic business. what it does for the branded business, it says innovate. if you put out a third drug with a slightly better outlook then you're not going to get innovated. change the paradigm on depression. if you put out better projection. >> with the ssri do these look better or is it -- >> what we're seeing getting in space through data. but it's compelling you're getting better efficacy with no side effects. you're getting it instantaneously, many ssis don't work for two, three, four months. >> thndand then you've bought the weird anti-depressants. >> that's problem with suicide.

remember suicide is the number one cause of death. you got weeks and weeks before it. they can't deal with it. >> thank you. it's important you're here on the set. >> it's really good. >> did you watch? >> i watch you guys every morning. when we come back a kick starter campaign raising the money needed to preserve the space suit of neil armstrong's famous air suit. we got the details when "squawk box" returns. at the dealership. nice buick! i guess that test-drive last night went well. actually, i'm still on it. you know, we're test-driving this buick for 24 hours, right?. yeah. so what are you doing? test-washing it. okay, well let me know when you're done, i'm gonna take it test-shopping. introducing the buick 24-hours of happiness test-drive. it's on your terms and a better way to take a test drive.

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♪ fly me to the moon ♪ welcome back to "squawk

box." crowd funders have raise $540,000 to preserve a space suit worn by neil armstrong who walked on the noon. it's in time for the 50th anniversary of the apollo moon landing in 2019. the suit was put in storage in 2006 to prevent further damage. the shanghai composite falling more than 8% overnight. that's the worst one-day drop in over eight years. it comes just days after china dalio signaling the alarm on china saying there's no place to investment. the next guest says dalio and the rest are wrong on china. leyland miller is president of the chinale-based brooke international. we welcome him to the set and to

tell us why we're so strong. >> the stock market is not the real economy. the fear the problems in the economy created a panic to connect it to. the leadership hasn't helped by using real economy tools in the stock market. there's actually improvement from q2. >> and you don't believe that the stock market and the real economy are connected in that we keep hearing over and over again that you know there's all of these retailer investors who are effectively day trading. and if not day trading, businesses doing it. >> sure people in the stock market right now. trading or margin. they're putting money down. scary things are happening. that's what 8% of overall investment in citizens. this is not the key to the company. the company to the economy is getting the sales boosted to getting the credit situation better. to get the label situation

increasingly stable. that's what you want to look at not the ebbs and flows of the stock market. >> as in the past hour the person said with the u.s. market with a discount in the market, if you see a shot it tells us there's a recession coming, et cetera. so the huge drop in the stock market doesn't tell us that the economy is far worse than even the slow-growth predictions? >> it telling you absolutely nothing. >> why? >> because the first half of the year, saw this rally. >> right. >> the economy is actually slowing. the second quarter towards the end, actually saw a deceleration. the stock market collapsed. until the two things are connected and they're not yet connected you're seeing totally different performances in the economy and the stock market. >> all right, i feel better. back to half full instead of half empty. >> well you're the -- let me ask you a different question. i understand you're -- i

understand your real economy issue. my question is if you're ray dalio, where do you invest? what does make sense, if you're right? >> i think you have to have a more moderate view of china. i think originally it came out and was said good things happen in the long term. it was short term opportunity to invest in china. so you have to have a different view between the short term in china, the long term in china. again, look you're seeing a world of slower growth. it's going to be harder to invest than the last few years. >> so, we shouldn't worry about suddenly the real the city market in new york falling because of all of these people wrapped up in markets, that they can't buy in san francisco? >> we're more likely to see money flowing out of that. >> in response because it's so bad? >> yes. >> thank you. coming up as we said a lot

of earnings coming this week. pharmaceutical stocks will be in focus in the coming days. we'll have the inside line next.

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big pharma in focus this week. dom chu has the earnings break. >> the earnings break continues. merck and pfizer are both

tomorrow morning. what you got are two big fat pharma companies that do tend to trade, we asked our partners to look at the numbers. both of these large cap pharmas tend to beat earnings estimates. in the case of pfizer you see 20 out of the last 22 times over the last five years, these guys have beaten the analyst estimate. the stock is flat on average the day after reporting average. it's positive 45% of the time. with pfizerser, if you look at the cart, a nice slow steady grind. investors have been awarded. they haven't gotten the large cap biotechnology returns. merck is an interesting one as well. over the past five years, it's actually beaten more times than pfizer has 21 out of the last 22 times. but it too, on average is down about we'll call it .2 of 1% the day after the earnings reports come out.

if that was positive 40% of the time. what's interesting, large cap pharma for these guys right there, is not a lot about these large pops. fact, both of these companies, they ten not to go up or down by more than maybe 3-to-5% on a good to bad volatile day. they are typically steady performers. generally speaking pfizer on average, numbers wise over the past five years has gone up one month out more oftentimes than merck has. this is not to say this is exactly what will happen with these stocks. if you take a look at the recent history, it puts those moves in context. you will not see the biojen type. >> they're over 3% in the bonds. >> right. it's been huge for a lot of these names. what will be interesting is the conversation that comes out of them. it's about pipeline it's about any commentary in that acquisition. when lily earnings came out, they said hey, we see

bubblish-type prices that's an interesting commentary from a large cap ceo. so you wonder with merck and pfizer whether they make any kind of a commentary about the strategy they have down the lean. what they will do. >> that will probably drive them more. >> they trade more with interest rates. >> it better be a big draw. >> even in the pipeline. it will be an interesting drug to move that. >> that's one thing. if you look at the spend that these guys have. they have billions of dollars if their coiffeurs, you either spend that on r&d. that's the way you get a pipeline or on buying somebody else. it's great. when was the last by a major pharmaceutical? >> people are betting big on hepatitis c. you wonder what that next big drug will be? the cholesterols, they work differently, they work even better but they're very expensive, not like we think of

like a cancer drug. but there will be millions of people. >> because of statins, all those kind of stuff. post statins, there are certain side effects. a lot of people don't take statins. >> they don't work on certain people? >> right. if you broaden that up to heart disease, that can be a big deal at that point. >> we got approval for one of the few classes of stuff. >> okay. coming up when we return this morning's stop stories, including a huge drop in stocks overnight, later a media news maker, disney ceo bob iger will join us in studio at 8:00 eastern time. you don't want to miss it. squawk box returns in just a moment. .

china fears are back. the shanghai composite getting crushed overnight. we'll tell you how global marks are responding. braking this morning teva acquiring allergan. details straight ahead, gawker under fire the ceo is here to tell us what changes are coming. the second hour of "squawk box" begins right now. ♪ ♪ ♪ >> live from the beating heart of new york city this is "squawk box." >> welcome back to "squawk box" first on cnbc business world wide. i'm andrew ross sorkin.

let's begin with the sell-off in asia, the shanghai composite tumbling 8.5%. while all of us were sleeping it's the biggest loss in eight years. traders cited growth and concerns that china would refrain from monetary policy t. sell-off followed unprecedented government intervention. if you take a look at what's going on the europe and part of the function of asia let's flip that board around. >> it's fought working. >> maybe it's fought working. i don't know if we can show everybody. there we go we have red hours, in large part about what is going on. the dax is down 1.4%. u.s. equity markets if terms of what is happening, it looks like it is opening as well. the fax off about 12 points and the s&p 1,200 off about 4 points. >> among other top stories, u.s. safety regulators finding fiat

chrysler it includes a $70 million cash payment and an agreement the auto makeer will spend $20 million in its profit. it contains and unprecedented buy back option for consumers. it gives the owners the kaens to receive a trade-in or a financial incentive to get tear vehicles repaired. in technology news the apple watch will be at best buy stores august 7th. this is the first time the device will be sold outside the apple retail stores. a multi-billion dollar deal breaking they are acquiring allergan for cash and stock. both boards approving the deal. allergaf brent saunders joining us in the last half here here first on cnbc. >> this is the right deal for us at the right time. when you look at our branded business aesthetics eye care gi women's health urology,

infectious disease, these are a higher margin higher growth business for us. so now we can double down build those therapeutic categories up and also look for future transformational deals like the allergan deal. >> teva says it will review it's option for the 5% shares it owns in mylan shares. the shanghai composite down 8.5%. you saw that was the big worry about three weeks ago. the government came n. they did stabilize it. they got a nice bounce. it's firmly in hand now. in addition on tap this week. in the u.s. a fed meeting and our first look at second quarter gdp. joining us global advisers founder and head of research pimco. tony, we get in the weeds of the

segment. let me start with tom. i think it's what's the day? the days state almost august. >> 27th. >> is that seven months, seven out of 12 we're more than halfway through this year. we're down on the year and we seen some few highs sort of beginning, few and few a. lot more new lows some of these technical things are crappy. are we is it a consolidation that refreshes for seven months or are we is this the beginning of when we go down after six and a half years? >> i'd say we have a lot of worries, china oil commodities. yeah. >> everything came home. >> i think this gets resolved if one of two ways. most of the clients we talked to get scared because they think the u.s. is the only sort of last man standing. so we're about to tumble. i think this is the opposite. i think what we have as you said this might be if you spend six

months literally going zero. >> what year? >> 1904. >> remember that. >> 1904? >> the only year. >> i thought you meant 2004? you meant 1904? >> martin is like 800 million dollar market cap. >> yes, it's the only time in the last 2500 years where the market had a zero percent gain in the first quarter and 0% gain in the second quarter. not saying this is 1904 there was a rally in the following six months. >> in the following sex. >> so we would get another huge gain on top of what has been a tremendous volley? >> you have to remember. when people say the market is expensive. it's because the energy is around 30 times t. market derated this year. we've had earnings growth. >> the ratings means multiple has gotten smaller.

the yield curve has steepened the long term. that's bullish. we know there is an oil dividend coming. we know we've taken a hit on industrial production. i think you're is showing signs of life and you know japan is acting good. so. >> we said low interest rates will be low for a while there is inflation and recovering, it should be a time for stocks as well. >> the mark has to fool people. it's too obvious. >> is that what's happening? >> i think at this moment a lot of our clients have raised a lot of cash. i think they are cautiously positioned. in the beginning of the year they had positions on europe and coin. they will put it where they will invest in the second half. the u.s. has visibility. >> i said to michelle. i was using her could china pull

into this threat and all of a sudden it's a trillion dollars. >> it's scary here. >> could it be contagious if china really goes bad? sfwr the market the print isn't too bad. >> it's a trillion dollars. >> the linkages locally. and there aren't many linkages to consumers there. 1.6 trillion. how much money do they have in chinese stock? >> how much? >> i think nothing. >> so the linkages. the only thing they can do which is to inflate prices. they haven't been able to do that despite massive easing here in the u.s. and asia. it should be mine is in the midst of this massive deleveraging. think of it simply go to the

bank throw in a thousand dollars to it to pay off the loan. what if the bank doesn't repay your loan with another one. it vanishes for decades, central bank is pinching all this money. people decide to bring it back. they don't want the debt. that makes it difficult for prices to rise. central bank say they don't do replace that loan. in europe there is negative year after year there isn't enough money to combat this banks aren't creating it. in the u.s. it's better though, for this weekend. the u.s. bank loan vote is actually strong. the fed is successful to an extent. it's battling the global story. you see it if global prices. as tom said the year we seen the negative affect of oil. ap ex1,900 to 1800 or some that's as low as it gets. we are think next year oil will be closer to 60 fought 50.

because what happens probably 2 million access if terms of production. by the time the production slows and demand is still rising. even though china's growth is slower by 6 7% growth. it means demand for oil. the demand is still rising 1-to-2 million barrels a year. so prices next year nowhere who knows? >> the range now is two, two-and-a-half. prepped up. it seems the fed probably creeps up a little more. we're not talking about a big change. as joe said the backdrop for stocks as far as we could see would be very good. europe won't raise rates for three years. they'll probably be 1% in 2020. the rest of the rates, low. it could be quite a long time. they're fighting massive banking systems so it's got a long way

to go. >> it makes, you don't see anything in all the markets. >> in those other markets. >> we see policy makers there. we see investors there we know what investors are doing. when they see low prices in japan. they grab them. so it's the individual that tends to worry but the institution tends to dive in. we know as well the president in china wants is better quality over quantity. in china the relationships, so much of china's economy is built on relationships. they're trying to break that and the power of state-owned enterprises. there is a big transition. >> we will be able to handle this. no one likes the deflationary

spiral. >> central banks. >> it's big enough to drag the world out of this. right. we are doing better? >> car sales hit a ten-year high and also housing is faring well which shows consumers have the wherewithal all to spend. clearly in the mid-2s which is strong for the u.s. the most it can convert is 2 given less slower productivity. >> you think the best we can do is that? >> probably around 2. ben berna nke said it's around 2 as well. this is what the feds. >> we can make it to 4. >> joe thinks we make it to 4. >> here and there, oh sure with better policy all we have is one of the two. >> policies are responsible for. >> fiscal policy isn't helping. >> don't cause it and say better

side of the aisle. >> all right. thank you. >> it's going to be fine. china is getting hammered. >> it's like throwing back from 1904. he can probably say that. that's how it's behaving in the wild west back then. it doesn't have the connection like it does here. >> that's what's going on. >> it will affect markets. >> was there a war around then? >> no, not that. i know when world war i was. there is some other minor thing going on. >> the u.s. has a panic. >> that was before. the day after. >> it lets in creation. >> basically zplu want to insure. >> there will be a panic later. >> when we come back social media companies, twitter and facebook reporting where should you put your money? we will talk with ed lee and

dennis garvin what moderates are telling him about the strength of the global economy. gawker under fire the founder nick denton will be here talking about the controversial story and changes he is planning to make. we are back in a moment. [ music playing ] .

>> twitter hosts the new ceo. the roll out the project makeover. the design to draw new users to twitter. it's up 28% in the last 12 months. the company's stock is soaring on confidence that earnings and revenue will continue to grow. all on the success of mobile ads and the potential for video as well as instagram ads.

and it has come at the expense of twitter. sharing news and following public figures, facebook invested heavily in and says it is throwing engagements. two stocks to watch on tuesday afternoon, twitter reports wednesday afternoon. >> thank you more insight on the social world. two businesses one challenge, one less challenged. let's talk about the challenged one first. >> doesn't have a real ceo. >> i want to ask you about the ceo situation. the other thing we did hear in the past i don't know 72 hours is about square jack dorsey's other business and the potential for it to have an ipo or a planned file there. >> the secret. >> so what does that mean to the extent that some people expect that jack might become the ceo of twitter? is that even possible now? >> if are you a shareholder, you don't want a guy running two

different companies at the same time you can't effectively do the job. he is serious. he can't be ceo of twitter. he should say that out loud now. that's the thing. >> so there is a possibly to do both. he thinks they will let him do both. he feels passionate about it. he found it square as well. you got to choose. you got to focus. >> when you think about things like project lightning, the real makeover, does that happen under a jack dorsey on a temporary base basis? or do you have to wait until a new ceo comes that can bless this new thing? >> i think you got to get that out now. you don't wait for someone to come in and change it. it's a project that twitter sorely needs. it's supposed to make it easier

for new users to understand what the dam thing is. i think for a lot of folks, they get what twitter is or the purpose is. >> dorsey is also on the board of disney how does he commit to that as well. they used to be rubber stamping. this is a big company as with el. >> growing companies. that's the thing t. challenge is you got to move faster. you have to be there, to be much more available. i think. >> i don't see how he commits work at disney while trying to deal with all this. >> agree with you. i completely agree with you. start-up. if you want to call it that. you think can you do one thing, them all. it doesn't work like that. >> we can work with iger. after steve jobs passed away. he was one of the sort of central. >> you want to have that voice that sensibility on the board, absolutely. if they are serious. he has to go road shows, investors, institutional people. >> is the expectation.

>> you can. expectations are really low. you can play that game if you want. if you are twitter. setting the bar low is good for them. any win will help them. >> it's more the expectations game earlier. a lot of analysts will have wall street had number they never quite hit it. didn't boat it the way they should be beating it off. it grows steadily month-to-month 84-to-year. >> is facebook now essentially moved into the twitter territory doing a lot more news, a lot more things of that nature. content stuff, video stuff. exactly. >> it's a good question. i don't think so, because of all, there is so much content, so many ways of getting content.

>> instagram you can argue sui a better type for certain parts of the country. >> they have to differentiate. what kind of news what kind of content. >> on facebook it feels like there is nothing but them placed there by advertisers, you got to watch this its crap. >> they do too much of that, people will leave, go somewhere else. >> are people talking about that? >> second or third video is always some kind of like a viral thing. >> i think complaints from members of facebook about facebook are sort of a given now. you are complaining about it. it's so entrenched.

you know, you are fought giving that up necessarily. that's why facebook has so many. >> i think people go with hey, marge nam. an ad free or a cleaner version of it. >> and why fought? right? >> if you are going to pay for it. why not? i just think that for their, you know their business model long term. >> what happened with cable tv? they claim if you pay there won't be ads. then you pay and there are still ads. you know. >> remember the early days of cable? you pay for cable. everybody eventually gets off facebook. >> i think all your relatives and your friends you all have to leave en masse. >> you start a new movement. >> he's not there. >> i think.

>> are you sure? in there coming up adam sandler's picks em. how it stacked up? that's twitter. plus, "squawk," stick around. when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than

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. disney'santman topped the week box office it was anentman second straight week in 1st place and bringing in just under $25 million in north america. in pixels adam sandler hoped to capitalize on our game with appearances by pacman and donkey cong. we will talk more with disney's ceo bob iger. he will join us at the top of the hour. i saw a movie on amazon called "exmachine" i think. it was awesome. why? >> we were sitting around trying to find a food movie. >> they use push technology. >> artificial intelligence. >> is aboutman this thick? what does he do?

>> i don't know. we'll have to talk to mr. iger about that. >> what does he do? >> i have not seen that. there he is. >> from an aunt. >> who is ahead of theantman moniker? what is it art follows sometimes the obvious art? this is amazing. the fiction al deer from the simpson. there really is a duff beer. the first time it has been available in orlando. 21st century fox plans to roll out the in you're in the next year. there are currently no plans to distribute it in the u.s. outside of theme parks. >> hispanic males overindex on the simpsons. >> it is. >> that means they represent 1% of the population, a much larger of the simpson's.

>> barney loves that. yeah. he has actually cut his lip. >> hi. my heart just stopped. >> love him. >> oh there it goes. >> but it's so close, it's such a big deal. you can introduce duff beer. >> an awesome show. fantastic. >> a few other things where you introduce it after it's popular on the tv show. >> wherever. >> coming up stocks in china selling off the shanghai composite down 8.5%. we will talk markets and commodities next. we take a look at u.s. equity futures. the dow dropped lower. the nasdaq by 20. s&p 500 by 7. .

welcome back to "squawk box" among the stories front and

center right now. swiss bank ubs posting a berg than second quarter jump t. firm's ceo suggests the bank has good momentum. back here in the u.s. though gasoline prices falling by a penny in the past three weeks. the lund burg survey budget the price of a gallon 76 cents below the year ago price and an instant messaging software company backed by gold man sax and other -- goldman sachs. this could have symphony called a rival for the messaging on bloomberg terminal. break that strong hold. >> time for the trading block. the big market story this morning, coin t. stocks there are suffering their worst drop in eight years. commodities have been paying attention to the second biggest economy for months.

gold bounced back slightly. oil tumbling over the past month as well. down about 20%. wti back below 4757. dennis gartman joins us to break down these moves with us. what's going on dennis? >> michelle. it's ugly out there. it's not just the ones that everybody pays attention to wti crude, brent crude, take a look at the grain market. it's making new lows. very good crops out there right now. good weather, perfect weather. that's weighing on the price, but the overriding fundamental am is china. china has difficulty. you talked about the fact the stockmarket was down 8% overnight. down 25 or 30% from its highs. well off its highs. the government is doing everything it can to prop up stock prices. thus as far far, it has been utterly unsuccessful if doing so.

usually government intervention ends badly. this does not look pretty. >> we had guest after guest on this morning. when we show this chart. don't stress about that. that's not telling us anything big here overall things will be fine. don't be frightenned of what's happening. do you buy that? >> no i really don't buy. that i think we had problems. i think china had been a leader to the upside. you are seeing divergences within our stockmarket. where the advanced decline line for example, was making it wasn't making new highs, the stockmarket itself was making highs. those sorts of things are disconcerting. the amount of margin borrowed in china and here is disconcerning. i think you have difficulty if stock prices. so other people may disregard or tell you to pay little attention to what's going on the coin. i tell you to pay a great deal of attention in coin. >> what are you doing here? are you raising cash?

are we close to a bottom in any of these things? >> i think we are closer to the top. i hate to say that as an old friend of mean said bears don't eat. it's much more fun to have a bold market than any movement in a bear market. i'm afraid with bond market. with the bond prices going higher. rates going lower. with commodity prices generally trending downward it is very difficult to put together a bullish case for stock prices. >> in the u.s.? >> who weeks ago, three weeks ago, i was bullish. now i seen a lot of reasons to be at best neutral stocks in the united states and slightly bearish of them. >> did you see the first half looked like nothing. if history repeats, sometimes it does. plus he made the argument that multiples will come down. >> well, i hope it's right. it will be a nice thing to think

he shall be right. i'm fearful he won't be right. let's as i said bears don't eat. it's not fun to be bearish with stock prices. i'm afriday i think it's time to be at least at best neutral. i think the best thing to do is quietly go to the side lines and allow the circumstances in europe and china to win their way through to clarify themselves. right now, it's a little ugly out there. >> dennis the consensus is that demand can always the rise for crude can slow. it's a rise like night follows day, people will use more and more crude. therefore, it always goes up sooner or later. most people say 60 70 by the end of the year almost like a 30 40% move. that's a pretty good prediction. if you are right, you should mortgage the entire house and buy futures, shouldn't you? it's not definitely going back to 60 or 70 is it?

>> i don't think it's at all going back to 60 or 70. the term structure, the deferred futures expanding their lead tear spread relative to the front months tells you actually that druid prices are heading lower. it's telling you crude is being paid to go into storage when the contango as it is called widens rather than narrows, when the deferred futures straid trade as an expanding premium to the nearbuys, crude is paid to go into storage. it is rarely a bullish sign. it is almost always a bearish sign. i'm afraid crude prices will make newer lows not new highs. >> this is the box the fed is in. within they raise rates, commodities get stronger the dollar is worse. it is never a good time to raise rates. you say it's so nice to be bearish. i like when we call the feds heroes, because they stayed at zero so long a. hero is when you

raise rates to 22%, that's the hard thing to do to take away t. euro by leaving the printing presses oranges saying we can have it all, have our cake and eat it too? >> if you take a look at the three major monetary authorities in the world the bank of japan, the ecb and us. we're the only one that's actually beginning to tighten monetary policy. >> so they say. >> no, actually. the data actually shows it. the adjusted monetary base has gone sideways and the adjusted monetary base should always go up by x amount and expected growth in the economy plus population. if it's going sideways. that's tightening. the ecb and bank of japan are if their experimental phases. they're still expanding. so there's a difference. >> i think if people think about the spreading effect that can occur from commodities. we haven't talked in a long time

about emerging markets. brazil is having all kind of trouble on its own already. this is going to punish them even more. all of these commodity producers down south, they're getting hammered. >> take a look at the brazil reale in the last course-and-a-half. it's stunning to see how that currency has become. the dollar is extraordinarily strong but on the course of the past two or three months or the last year dollar has been king. as you said before in the show. i think we're in the 3rd or 4th inning for a strong dollar. >> that in and of itself is tightening. >> yeah. mexican peso getting hammered. >> at a new multi-year low. >> thank you, dennis. >> thanks for having me on. always good to be here. >> bubba gump. >> what about bubba gumpf? >> started in a movie. >> there is a chain there is no

such thing about bubba gumpf competent it cable from the movie. >> over on time's square. >> it was in the movie. there is no bubba. >> i like bubba. >> a sad part of the movie. coming up big mover, ahead of the opening bell your list of stocks to watch is next. ten at the top of the hour an exclusive with disney ceo bob iger. he will join us on the squawk set live. .

ave a mind? a subconscious. a knack for predicting the future. 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 back to "squawk box." the futures suggest a negative open. they moved lower throughout the morning t. dow would lower 58 moints points. the fax lower by about 14.5 this in the waking state sell-off in china overnight. let's look at the stocks to watch in the united states this

morning. morning. >> is akwierk allergan. teva will withdraw it's offer from mylan. teva says it will review the 5% stake it owns. in other deals, mcgraw buying "snl" financial. it is owned by private equity few mountain capital i think we will be ready to take a break. >> we will take a quick break. when we come back a golfer under a bit of fire. two top ed course with the founder and ceo nick denton will join us to talk about making changes to the 12-year-old company. we are back in a moment.

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but right now, it's choosing time. ooh! we have a winner. all: what? [chuckles] he's supposed to pick one of us. this is a joke, right? that was the whole point of us being here.

welcome back to "squawk box" media pulling a story about the personal activities of a media executive. moving to new headquarters founder nick denton outlined the mission statement also offering buyouts to those who may not dig the few strategy. we will face up to celebrities and other public figures that use pressures to suppress the truth, reenforce the state division. establish a clearer standards of news worthiness inject humanity into golfer.com. bringing in managers and editors and refine our work place culture and continue. nick denton ceo of gawker.

joining us now, have you mellowed out? what's happening to you? >> again, married last year. some say that's had an impact on me. but this has been a long time in coming. gawker is a large company now. it's a full online media company emerging in the last few years. >> so are you no longer going to out major executives and corporations cheating on their spouses? >> we will continue to reveal truths that we believe to be interesting. >> hoy are we going to explain this? a controversial piece. we'll make that nameless where you outed an executive. who wasn't a ceo of a bigger trub likely traded company. >> i never heard his name. >> you also outed tim cook the ceo of apple before he probably outed himself. what was the truth and interesting part about that? what was the distinction if your

mind? >> there was no secrets in silicon valley it was a well phone fact. we exist in order to take information that is known amongstth people like you and me to spread that to the public. i think there is a huge difference between that a major ceo of the most valuable company in the world known to be gay by his peers and fellows. >> you were so not proud of the other piece. >> the other piece was the cfo, media company, was being may be blackmailed by a male gay escort who the media executive is married with children? >> he to my mind was at least in that context he was a private individual. this had nothing to do with financial irregularity. it was not interesting. i didn't believe there was a point to it. yes, absolutely when it went up in the state it went up in --

>> there was a whole slew of media entities. that's why they exist. >> you are fought one of them. >> i think of l.a. confidential and the movie and what that magazine was supposed to represent. they're a dime a dozen. that's what they do. it's a great story. an unbelievable story for l.a. confidential confidential. >> or the old gawker. >> radask you this. the old gawker gawker as of yesterday are there other pieces that exist online you wish you could take down? >> i think a few, readily a few. most of them that go up i'm extremely proud. >> what are pieces? >> we will be going if and doing a thorough investigation. >> if it had been a female escort, would it have been different? >> i'm gay and i know what it's like to live in the closet. when your family life is by the

revelation. >> those are fair game? >> they are living the lie. when you are living a lie, it's incredibly traumatic to the individual. i do believe people are better when they are living if the truth. >> okay. what right to we have to make that call? >> you got a person that's a family man. his kids are if grade school and early high school. you find out he hired a female escort. that's not the same pain you are inflicting on him? >> i don't think that in itself is news or interesting. >> so you won't do that either? so there is no distinction? >> if there is a story, if there is a head lean i can say, oh that's interesting, if there is something revealed here there is public interests at stake, absolutely we will continue to do those stories. it's a question of judgment. editorial judgment needs to be exercised. it's not absolutely plaque and white. >> that itself the truth. >> hulk hogan, your company is

under fire from hulk hogan that you said could put the entire company potentially in jeopardy. he heard last week he made racist comments on a videotape. i believe it's the same tape you had. i don't know if you had the extent of it. why had you not reported that part before? sample we are not entirely sure about this particular audio. we have been trying to get to the bottom of this story for a long time. first of all, there was one tape. then there were three tapes the fbi were sitting on. and there is some discrepancy if fbi has him we're trying to work out whether that is the same transcripts as the tape that the fbi had. >> you posted 90 seconds online. you got more of. that you don't have more of that? it was to only one you had? sample we posted an excerpt of what we had to prove and to document the point to the story we wrote. by the way, that's a story i am

extremely proud of that only gets more interesting as we go deeper into it. if you ask, when do we publish? when do we fought publish? i'd say media executives no hulk hogan, who has discussed his sex life incessantly, who is an extremely public figure. he has opened the door to this kind of investigation. we will pursue it. >> the tape have you doesn't have any of the racist audio that we are reading about now. >> the tape we originally that was the basis, we originally pun u published in 2012 did not have the racist dialogue. >> two journalist questions folks say decisions have been paid because of.. that you either want to have to raise money from outside investors. you always talked about when to grow organically. a, are you trying to bring if an investor and you were worried this was going to pose a problem? >> we make decisions every single day. every single week that costs money. we are the freest place in new

york media and journalists that want that should come and should work at gawker media. we lose a lot of business all the time in the stories we do. i am proud to do that. >> do you want to be more like -- >> the audio we have result of the stories we do that is what advertisers find desirable. the opinion works because we have distinctive. because we are bold and because we will do stories that other people will fought do. sometimes we should fought do those storiesch sometimes they're a mistake. >> its almost look the genie is out of the bottle. by that you remember jfk? media knew full well all of the escapades. in the day and age we are in right now, it seems like you can't be gawker if you are fought gawker. this was your not your role in life, but to walk it back.

because it's going to be out there somewhere. >> it's best to own that. >> 20%. it's a cost adjustment a. recal brachlgs as for jacquie and the baby boomers, who es secrets are coming out. those secrets will come out. we will be a part of having those secrets coming out. because you can't no longer sustain the insiders have all the information and people being. >> hopefully you would have written the article about bill cosby 20 years ago because no one wrote them back then. >> we did. win of my wrik critics in this particular dispute wrote a good piece reminding people of the accusations. it has a lot to do. >> no one was writing them 20 ago when he was huxtable. >> after the hogan case is complete we will. >> did this situation hurt your

ability to do that? have you had any conversations? >> it didn't cross my mind. >> when you were making the decision whether to 'ul the cord? >> i made the decision to pull the story. people called it vial. i agreed. >> some people say put a note out there, the toothpaste is out of the tube. some people would have much said all this is fine if nick wanted to add a note and say he is uncomfortable. that's one thing. to take it back is a full other. >> to apologize and leave out the text and explicit photographs and to leave off that headline i just don't see how we can do it. it was so far beyond the lines. it was an embarrassment no the brand and me personally. it was a mistake. we owned up to it. we discussed it internally. i am proud of that. i am proud we can earn our mistakes. decisions have to be made. >> a few day at gawker. appreciate it. >> he talked all about hicks sex

life. you have to leave immediately? >> i miss it. really. >> wrestling stuff. >> and beyond. >> really you know about it? >> kind of extraordinary. >> all right. let's go to brake. >> the ceo of entertainment disney bob iger joins us on the "squawk box" set in an exclusive interview next. understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about.

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breaking market news china crushed the stocks overnight in the biggest one-day loss in eight years. new this morning, a record find. fiat and chrysler facing a $100 million fine for safety issues. a live report coming up. the newsmaker the man behind the house of mouse. bob i ger ceo joining us troubles at espna. gigantic bet on china and the forces coming back to the big screen t. final hour of "squawk box" begins right now. >> live from the most powerful city in the world, new york. this is "squawk box."

[ music playing ] >> welcome back to "squawk box" here on cnbc. i'm joe kernen. sitting in for becky today. i can't just ent e end there. i'm sitting next to iger. they're here. we're in the company of both sides. >> i'm not sitting if for becky. >> you were not. you were honoring our studio. we can tell you how to do this. you want to get one for disney? hang out with us. we are less than 90 minutes away from the opening on wall street t. futures could not be higher i don't think given what's happening in china and in europe. it started in china, hideous, down 8%. the worst drop in eight years in that market which briefly responded to the government. the government's intervention then you knew that you're was going to be down even though

it's not greece. all they michelle caruso cabrera knows a lot about i. back burner or? >> we will be talking two weeks, unfortunately. >> you have no reservations for you yet? >> no we did make some today. >> that's the insight we need to give our viewers. >> i heard the story, investors talking about today in the meantime, teva pharmaceuticals is requiring allergan in cash and stock. meantime, teva is withdrawing its my elan. it is going to review the options for the stake it owns in mylan shares. u.s. auto safety regulators finding chrysler t. total includes a $70 million cash payment and an agreement the auto maker will spend $20 million, in the detailed process. more details on phil le beau in the next half hour. swiss banks posting a jump in

second quarter forecast. the ceo suggests the bank has good momentum going into the second half of the year. >> on to our news maker of the morning, shares of disney riding up. up more than 25% this year close to 140% in the last three years t. media and entertainment giant hosts some of the biggest brand. you know them all. espn pixar, marvel. abc. the list goes on and on. joining us if a require in studio exclusive interview to august that ability the soaring growth the man behind the magic, bob iger t. chairman and ceo. also with us as mr. kernan told you, sef sonenfield is here. good morning, everybody. bob, we can talk choinl that's a huge issue. media landscape, espn. why don't we start domestic then abroad.

a lot of questions at espn. you hear about the names, people leaving. props more importantly than that. that's a side show to the larger question about subscriptions, there has been loss of subscriptions and what happens to the unbundling picture if unbundling is really common? >> well, first of all, i'm an optimist in general. i think when you are an optimist, it's smart with starting out being a realist. i mean being a realist about the marketplace the dynamics of the marketplace the challenges that any business large or small faces. it would clearly as the marketplace is changing scene of the accidently. media landscape is changing. the way things are distributed marketed the way everything is consumed the optimist side is espn is probably the number one brand in sports definitely the number one brand in sports television. it is not a niche brand in the first calendar quarter of this year. 83% of all households tuned into

espn at one time or another. it has an unbelievable treasure trove of long sports rights. i think live is very important in this environment and it has adopted technology to not only succeed on air, meaning on the normal or more tra terrible channels, it's adopted technology to intering a and deepen engagement with its fans basically off air. so i have bullish feelings about espn long term. i'm a realist in terms of the disruption of the business. i happen to believe that if we end up seeing more erosion in the multi-channel bundle quality will win out and popularity will win out. who ill the business model may face some challenges over the next few years i think long term for espn because of the strength of the brand and everything else i said they'll be fine and pricing leverage too. >> when you say five years out,

ten years out, do you see espn on the same tier? do you see the skin my bundles? do you think have you the same number of subscribers, more less? >> i. >> i think it's impossible in the media today to look ten years out. it's changing so fast. while we can make predictions, i'm not sure i would necessarily make them with conviction. >> right. >> five years out, i don't think you see sophisticate change. i think eventually espn becomes a business sold directly to the consumer. where there is an engagement that espn will know who their consumers, are will use that information to customize their product, enable personalization. essentially engage in a much more effective way and also offer advertisers more value as well. that's longer term. just i think there is an inevitability to that. i don't think it's right around the corner. >> so like the hbo model. they will sell directly and have you pay directly for it?

>> well, there are a few brands in the television space that have the ability to do that. hbo is doing that now. i don't know what their experience has been so far. all tow i know a pretty good advertisement for it this morning on espn disney is another i think brand and product that can be sold directly to the customer. espn is definitely one of them. if you want to use hbo as a modem. what espn would be looking for would be a much larger penetration of the market place, meaning in the -- >> much bigger numbers? >> yes, definitely. there are bicker numbers watching today. you can look at it two ways. you can look at the number of subscribers and viewers. and the number of viewers is pretty significant because of the sports that's on the college football championships are a great example of that. espn has a long-term deal. >> you got it. you want to pay for it.

so many analysts looked at this issue would think a subscriber would ends up paying $21 to $28 a month. is that a realistic number? >> we have done some research. it's kind of conjecture at this point until the product is really taken out. we don't know. i can't comment specifically on those numbers. >> contest. >> i'm not going to project or conject. >> i think i paid $66 for a five minutes play. >> the journal. cnbc. >> one thing, when have you seen ratings, just go back and if you look at it you can start with the triple crown this year then go to college hoops, then go to the super bowl. >> soccer. >> it's like a record. every single time. >> live sports is very popular. >> there is no getting out of commercials. >> no skipping them that's right. interestingly enough espn's

ratings this year are up over 2013. friendt 14 was an aberration because of the world cup. the ratings are substantially up in a mark place that is much more competitive or there is much more choice and people are shaving or cutting the chord or playing endless games on iphones. >> people have sort of pointed out via com. when you look at who is going to win? how do you see it? >> well i'm certainly not going to be specific except i will say it is very very important to have high quality strong brands. that's why we're in the business of disney and star wars and pixar that you cited earlier, joe, and abc and espn. >> it's all fair i'm talking about the content in general. i know these things. we move in the future. but a 75-inch flat screen hi def

television with anything you mentioned on it. i don't know if our entertainment experiences get more and more shift indicated and technology takes us -- more and more sophisticated and technology takes us further and further. >> whether it's pixar or sports. >> one of the things that makes bob different is a fortune piece they called you the cte, the chief technology officer him i remember at the time you stepped in nobody would have thought that was possible. that was your pitch to the board. your pitch was invest in more creative stories and go international but technological innovation, i don't think any analyst thought it was going to be possible. it was a you the mulltuous time. you are looking forward, not backwards the chancellor of berkeley says i leave much the way i came fired with enthusiasm. that's what your pred scissor has to deal with. instead you have a completely different world. you were talking about things that i don't think any disney

followers thought was possible to have lucas arts and industrial magic with it and of course to have marvel with there, to have pixar. but they're all separate worlds. somehow, you have innovation between them. how does that work? >> you are right about technology, in any business it's easy to look at any disruptive force as a complete threat and technology is definitely the most disruptive force that so called traditional media, radios television is facing. no question about it. i decided. we decided as a company to view technology as a friend not a faux. to adopt it. first of all, use it to make your product better. you said about the 75 inch screen. let's play to that technological shift. make our product look better.

hi def is one way to use it. let's use it to reach more people. go mobile. one great example of it. let's use it to create a closer proximity to a relationship with the consumer an example of that. and we have been doing that across all of our businesses using it to enno rate is. >> they talk to everybody. >> what i ended up doing instead of creating one ceo at disney. we use technology in so many different ways. i didn't want to bureaucracy et. it's the traffic cop and the where i force people to go through intersections together and not necessarily going at one another and it's worked well. since then i spent a day last

week looking at new tech following and it's mind blowing but exciting. >> you have jack dorsey on your board. he is obviously involved with intths now. potentially outfielding square. when you look at your business would you ever buy a technology company, not a tech -- you bought makers for example, if technology, but like a social media company or what might be considered more a consumer tech company? >> i wouldn't rule it out. i don't think you should take that to mean we are looking at doing that. our acquisition has been from the direction of our strategic technology, let's buy marvel pixar, lucas, good examples. let's buy tech following where it gives us an advantage, where we can use it to do the things i talked about earlier and live by things that give us a better global foot print. >> i was going to say, jack

dorsey, i get why you want him on the board. he's incredibly busy. >> all our service boards service. we it's nice to be on the disney board, our meetings tend to be kind of entertaining too, not that we show movies all the time. i'm a big believer in having a board diverse in a number of ways. by gender ethnicity, by background. so from facebook to steve jobs before that, good examples. i feed people on the board we need people on the board that challenge us in terms of our position is in the world as it relates to technology and the disruptive forces we talked about. >> over the years, what did you learn about the theme park? it almost seems it comes in and out of voke. i remember thinking about universal and that wasn't even one of the key assets comcast was looking at i remember blackstone, ten times what it sold for at one point.

at one point it looked like the expansion of disney in one part of the world was going to be a lost leader. it didn't turn out. >> not for us. walt disney put us in the theme park in 1965. celebrating the 15ing anniversary. they haven't looked back and expanded in tokyo, paris, hong kong. we are build income shanghai. they are capitally intensive businesses. they tends to be expensive to build. you have to continue to put capital into the businesses to expands and reinvest. >> you can get stale, screw them up. if they're not clean. >> you can screw them up in a variety of ways. fortunately, that's not our experience. >> it's working well. >> extremely well. >> you can't find a gum wrapper in the disney theme park. you can't. it's little secret elves around. >> anything in your business due to the you the mulltuous activity in the chinese market

whether it comes to sales of your product? >> no we haven't. we opened up a disney store in shanghai a few months ago. i was there. we haven't opened the theme park yet. we don't fully know. the research we have done suggests the chinese consumer is not in terms of behavior. >> changes in the stockmarket, they know no safe places to invest. the environment looks rickier long term let's say over the next two or three years as you are building this business would you continue to invest se same rate? would you continue to slow down? >> these are businesses you build for the longer the, 66 years of disney land interesting

enough. we put money in 2008-2009. we few we were in it for the long haul. we expanded disneyland in. ka we put in few fantasy land in orlando. we're going all out in coin with shanghai disneyland in about a year. we believe in that mark for disneyland big time. we think it's the most exciting opportunity they have had in a long time. >> you own 46% of that? >> we do. >> how is that working with the jv property issues and things? >> we had a very smooth healthy relationship with our part first there. there haven't been any real issues. in terms of theft of intellectual property. there has been a problem. a movie released in the chinese marketplace that looks and feels very, very much like the movie "cars" that pixar created a few

years ago. that's a problem. but it's not the kind of problem that will affect our theme park business or our view about investing in china. >> are you responding to any of that? are you litigating? >> we have made our feelings known. >> i remember when the chinese began investigations they said this is the year everybody will take vacation several years ago. hong kong disney they were throwing their children over the fence because they were so desperate to get in. that was how much hunger there was for the product crazy. >> when hong dong disneyland opened. we were not as prepared as we feed to be about crowds and what happened was the theme park was sold out and a number of people got on subway trains and came to the park only to discover it was closed because it was sold out. >> that will not hatch. we will be much more careful in

shanghai. we had multiple meetings. >> when you have 300 million people in three hours, that's almost the entire united states. >> income qualified, actually. people who can afford a ticket to the park. >> beyond the actual population. >> it's a large population base. >> does it have to be physically bigger? >> it is physically bigger. it's the largest we have opened maybe on par with tokyo on opening day. it has plenty of expansion opportunities. >> is it commentary that well, let's get around? do we still have abc? isn't that a commentary? does it mean anything to you anymore? >> sitting here on 6th avenue i started at abc the headquarters were two blocks up. abc is still an important business for us. it's a healthy content creation business.

whether you talk about the programing we own, produce in prime time abc news it's a profitable business a business we are proud to be in. it's still in my heart. >> it's shrinking, though? >> if you look at the company. the company has grown, given acquisition and growth in international markets. a few of our businesses don't loom once large like they once did. >> can we talk star wars? >> go right ahead. >> i brought all the secrets with me. >> tell us. >> it comes out december 18th. >> have you seen any part of it? >> i haven't. i seen the film without most of the special effects and music, so we call it a temp track a. temp store. >> is it good? >> i can't wait for the world to see it. >> how much of the business will be for the film itself versus

all the ancillary product that comes from it? >> well. >> the consumer gods business over or a branded business. >> have you been in it? it's very crowded. >> it's time for good reason by the way, andrew with the consumer products business we have which is truly global it has become a big business for us and one of the reasons we were so interested in i, it had the profile of many other disney businesses and marvel prince. consumer products is important. but the movie has to be good too. it's probably the most important, start with the movie. we're making three of the films, this is "star wars 7," the force awakens. there will be 8 and 9 and stand alone films, which we've announced two. >> you don't want to announce more while you are here? >> no i don't.

>> i'm excited for everybody to see the film. >> i was going to ask, does it kill you that you didn't get harry potter? they have done a great job. what company is that? >> you don't have to do a disclaimer. i noticed on good morning america, i plug our own a division of our parent company. >> it rings a bell. >> can i ask, you knew steve jobs well of course you, he asked you to take his place, actually on the board which is so great. walt disney of course, you didn't know. you saw the impact of the confusion that followed when he disappeared from the scene. they lost their way a bit under his son if law. you look at frank wells in 1994 is there was some confusion you

know cheryl sandberg. a horrible loss. you seen companies come through tragedy. some well, nom sought no well how do you think survey monkey has gone and cheryl joining that board. it looks to me they've done the right thing s. that your sense? >> it is i honestly don't have that much insight into survey monkey. i know cheryl extremely well, i do know she joined the board. it creates continuity. >> apple has done a great job coming through tragedy under sivgss that were extremely difficult. it's hard to operate a company when you are in mourning. apple clearly went through a period of deep mourning. i think they deserve a cre amount of credit for figuring out how to deal with the emotion that clearly they were feeling throughout the company. some of those iconic as steve jobs at the same time keeping an eye on the business. i think the results speak for themselves.

>> have you had butter beer? it's like ice cream. it's so good. >> bob, thank you for coming in thank you for all your success. >> i can't wait to see "star wars. >> coming up stacks to watch the names as we go ahead ready for the opening bell.

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whole new light. liberty mutual insurance. >> coming up the economic data

point of the morning. june durable goods. a look at futures, which are still down 76 points on the dow almost 7 on the s&p. we'll be back. .

we are just second away from the durable goods data. we will show you what the ten year is doing if as vans of that. there it is. 2200923%. rick santelli is standing by at the cme in chicago. rick the footballs, please. >> reporter: michelle, no disappointments here matching exceeding expectations up 3.4%. we are looking for a number a little north of 3 maybe 3.26789 this is a bit better. look at last month the ridge released not so well. down 1.8 now doundz 2 in2 let's do the xs. extransportation, last time up 1% now downgraded to 10 capital goods, exaircraft. capital, future investment proxy. we're looking at up .9 this is

actually a very good football compared to the numbers we had been getting. once again, it's as though today doesn't look bad. then we come to the next phase, we take it away. last month it was up .4. i remember how important this number was. if we look at shipments versus orders, they're down 110 up .3 last month turned to minus .23450ez numbers aren't so bad. they definitely take most of the glitter. most of the sheen off this number. sometimes the really big stories overwhelm us. in the end, this is a huge story. it may play out over a long time frame. upon the the less mr. commodities, whether energy a lot of global trade tied in with china. okay the federal reserve meeting this week. it will be interesting what their thoughts are. even though there isn't a press

conference following the meeting. back to you. >> all right. backgrounds on this manufacturing is the problem child of the economy, butch etted by the stronger dollar. its been hurt by lower oil prices, which have reduced manufacturing orders for the equipment. what are we looking for in manufacturing? please god give me stability. i'm not negative on the upside. it doesn't tell me manufacturing has turned around. what it could be telling me is maybe we seechd d reached the bottom in a series of declines rick is right to point out this one number non-defense, exaircraft. a long way of saying business perspective up a percent. its been negative the past few months. if we bottomed out. if the u.s. economy has learned to deal with the stronger dollar and come to a bottom in terms of decline, who said it earlier, we are now at 800 rigs, if we reach the bottom it can grow from

here then there is reason for optimism. things like housing seem to be taking over maybe we'll do that, the growth numbers we have been looking for. very quickly, did you see the feds accidentally release some numbers last week? >> that's what we have you for. >> they accidentally released numbers in june. five years. it was attached to these big zip files. they referred it to the inspector general, define how it happened. it's the thing the gang that couldn't screw up straight. they reliesed wrong numbers. that's below. i put 2020 to show you the wrong

look is. >> the wrong numbers, at least the chances. >> it's interesting to take an algorithm. i want to sew you the fed funds real quick. this is the fed's own forecast for where the funds rate will be and then note that 2020 number approximately for the long run. >> thanks steve. >> a big week this week. >> i have have always been way too up. >> they have been wrong on that. >> are you going to give us an optimism rip now? >> chrysler agreeing to a record fine over safety issues. phil le beau joins us from chicago with the details. the idea phil slam the car door the airbag goes off. just the idea that can happen. that's got to be the worst car in the world. >> that would really ruin your

day, would it not? >> well yes, it would ruin my day if i stavp stammedpy door and the airbag went off. >> what's next? that is like -- which cars were they? i assume it could happen with a fiat. have they gotten better? >> joe, the fine involves 23 different recalls. the most serious involves faulty gas tanks and trailer hitches and the positioning of those gas tanks on jeeps. let's run down the numbers here. the fine that's coming down the agreement, this is a whopper of a fine. overall, you might look at this and say $105 million for a company to decide. money wise you are partially right there. 20 manyle to improve the recall process and enthis there is another 15 million they could be fined because they're xhooit committing further violations in the future.

it could be up to 105 is if they make further regulations. fiat chrysler agreeing to buy back about 500,000 ram trucks if the owners want to buy those back. they will have an offer to trade in those vehicles. separately, one million jeep owners can receive a trade in to get a repair done on their vehicles. also fiat chrysler has agreed over the next three years, there will be an independent safety auditor who will be looking at how jeep chrysler handles recalls in the future. it can't be we got it. don't worry about it. no you will have to commit to doing things a week and a half ago, we sat down in detroit and we clearly made it sounds as though his company got the message it needs to change the way it handles safety recalls.

>> if we commit on our side it's always been nothing willful we have done. i just think this new order requires and we have done part of this requires a significant shift in the way in which we organize. it's a big issue. >> a significant shift in the way they handle these issues. we'll see iffy auto chrysler makes that shift over the next couple of years. take a look at fiat chrysler up since they first held a public hearing and guys the ends story here is perhaps the most interesting. this will get tons of headlines it did this morning. did last night. i guarantee you for the most part this will not have any impact on sales. can you look at the history of major recalls over the last several years. a lot of people go oh that sounds bad. by the way, that's nice styling on that particular model. we are a country pretty much

numb to the idea that recalls, auto recalls are horrific news and stay away from the company. >> toyota. the gas accelerator, right? wasn't it a toyota? i thought it took them years. >> they took a brief hit in 2008. very brief and after you look at the market share they're on the cusp of passing up ford again to be number two. they've brought back their sales. look at general motors, the market share is up within the last year. i think generally speaking you see a public numb to this whole issue when there are major recalls. >> got it. yeah. i agree, so many darn many of them. ceo bob iger joining us on set in the last hour talking all about the state of the media industry. here now with this reaction is anthony declemente. senior analyst. good to have you here. it's the first time that espn stands alone sell it by itself?

do you think that's true? >> he said it's an inev taekt over the long term. i think espn has the quality and the following to be able go direct to consumer. i think ultimately if the bundle breaks apart, disney and espn are well positioned because you have such demand for espn sports which have the number one sports brand in the country in the world. so i think, you know you think about the bundle. we're in the high 90s, million number of subscribers in the u.s. esmn you pay your cable bill it's between 650 and 7 a month. what would espn have to do at what price point? >> so i threw out the 21 to $28. a people say a third of the people arewafting in a big way. >> that strikes me personally as

a higher price point. if you were to think of a third of today's subscribers at tripping the price, that gets you alt 20-21 on the low end there. >> that would get you. so a third of the subscribers, i'd triple the price. >> but i think that it's we shouldn't make this leap so quickly. because i do think there is going to be an intermediate step which is skinnier bundles. you asked bob that in the interview. when you think of slink tv or apple's television service. they're potentially going to be including the most important networks. which are those? espn i mean you? have to have espn if you launch a skin my over the top bundles. so i think before the bundle breaks apart, my view is that we will see growth of these skinner bundles. >> what else do the skinnier bundles represent? >> i think the broadcast tv networks have to be a part of that. i think you have cbs.

abc. >> back to basic cable, basically? >> if you are a media company and you have 22 24 networks and you know only one or two of those are in the top 15 or top 20. then you really have a problem. so you want most of your economics to be focused on the top ten or 15 cable networks. >> just answer one question bob couldn't. which i said you will lose in will? >> the market is already telling us. i haven't seen this bifurcation in multiple disney is trading at 19 time warner and fox in the middle. i have a viacom is in the middle. if you name a network, the karate channel, i don't care as a consumer i won't switch. you dprop espn. >> i would have thought nickelodeon and mtv would have counted. >> the fact is ratings are down

in both of those. we will see how sustainable na is. it's down a lot. >> thank you. >> coming up. the, if da approved a cholesterol drug. we bought the the ceo joining us on the set right after a quick break. we are back in a moment.

a new cholesterol drug from regeneron getting the green light from the fda. joining us the president and ceo of regeneron pharmaceuticals and our pharma reporter i

messed up your name. i have been working on the drug. it's obviously for anyone who knows, it's a pro protein, type 9 inhibitor. we have been waiting for that. >> i'm glad are you a broadcaster. >> we have been waiting for this. >> which is better than that. also you make it pcs k-9 inhibitors. we won't talk about. that that's a dirty word. >> i'm trying to pick up. >> others are working as well. >> who is the other? >> amgef has one. >> so there are people that are really tough, the bad cholesterol, they can't take statins. it doesn't work as well. you got numbers as high and they can go down 60% for these people? >> yes, it's quite remarkable. let's face it. statins are great drugs.

they should be the front lean here. some people with cardio vascular disease or hereditary cholesterol. they can't get it low enough on a statin or take enough to get it down and that's where our juggle might come in. >> you got the price here. because 14,600 a year. the story we did last year oncologists complaining. the drug cost $1200,000 a year. why are they saying at the price is a problem. maybe it's the millions of people taking it? >> it's possible. 10 million people might be in need. that will be funneled down. >> how much money is that? >> i wouldn't do that. >> actually our price is the lowest price of any self administered anti-body. so if you look at the other

drugs they are two and three times what our drug is going for. and we approach the pricing of the drug based on value of delivery. >> because you save money. >> how will this be used? joe was asking about off label use. on twitter, jim cramer was asking people to go to the doctor and ask for this. how broadly is it used? in there the indication from the fda covers about half the people by our estimate who have cholesterol that needs to come down further and they can't get there on the dose of the statin. if those people have a hereditary form of the disease, they say that's a fast gel or people who have clinical cardio vascular disease, a heart attack, a stroke these are all people who should have their cholesterol down and sometimes with a maximumally tolerated statin they can't get there.

we're excited there is another alternative out there. >> earlier in the show. we opened up taking a lock at other news in the pharma space and the ceo then was talking about the difficulty of the consolidation for retailers. already cvs has spoken out with great skepticism about the drug saying we want a lot of science and proof that this patient is not going to respond well to statins. are you worried, the three megaretailers will cause problems? >> i'm not worried at all. i want to meet with the senior exexecutives. i think frankly we have more in 2407b with them than apart. they want to see the right people get the drug. we want to see the right people get the drug. we want to see people take their statins first. one of the benefits this is interesting economic forces. one of the benefits of our drug will be that some people don't even take it. will be forced to take the right dose of the statin and get their cholesterol down. we have the same goal there. so i don't think that there is going to be a big issue.

but because there is still plenty of people who will benefit from the product after they've taken their statin and need their cholesterol. >> how do they come up with that price of 14,000? they were challenged before with one of your drugs, it's okay to mention between friends between us. when challenged they cut tear price in half. so that's a pretty big spread. >> i think some would say that the pricing was a mistake. it was not done properly, not done well. i think a lot of to the went into the pricing. and it is a good case study. i think there are three ways to price drugs, be i what the market will bear what you think will be the fair rate of return or the value delivered. we are moving rapidly. we believe you should be in the last category, based on the value you deliver. >> all right. >> i just wonder if it really works well and all these people need it.

i wonder it will be a battle in medicare and how they did it. it's a huge number we are talking about. how do you say no to people? it could really impact whether they live another ten, 15 20 years. >> we certainly don't say no to people. if you can't afford a drug is there what would the centers for med dare what will they do in this case? reimburse us? >> i'm sure they will reimburse it. >> over time joe, the divide has become much higher. prices can be adjusted. that's not an issue. remember. >> we'll talk at that point. >> we'll be back. >> we'll talk at that point. >> call me. >> okay. >> thank you. >> great to see you. when we return we will look ahead to the week on wall street with jim cramer. the fed's first read on q 2 gdpa. flood of earnings. we will talk to mr. cramer in just a moment.

4re6r789s go down to the new york stock exchange. lots to talk about. we can talk about asia. i want to get your deal on the teva and mylan, maybe iger.

>> sure i think that this is a big win for brent saunders. i loved the interview this morning he sold this stuff 17 times ebitda i feel teva got the best ends of the deal. can i understand why brent would like to take stock on that all that matters is people say china is down. our futures have been down much more than they are because of china. i think people say the commodities implosion is very bad the market. how bad the market is being masked by a couple stocks. >> is that a buy signal? >> no. >> it's get out of dodge? >> look i think china has to go

these stocks i tried to do a screen of the stocks coming down. they're nowhere. there are high companies, they got to petro china it's interesting. let's like be cool for a little while. just be cool. i thought dennis gartman was right, we just kind of want to be cool. wow the destruction in china is going to be much bigger. >> we had all these guys on early. i don't buy it. >> let's say that's true. why is everything going down? >> uh-huh. >> sometimes you just say, you guys sure you are right. but that doesn't mean we shouldn't sell this stuff anyway. i think that there are many banks levered to the market.

i think the communist party let the market come down a little. i think it wants to take the they're out of the market. take a look at the charts you guys are showing. you have to go back to where this started. a lot of people came at the absolute top in june. >> all these people. it's just 2,000 over there at nasdaq. but there is no s&p. which is why we are kind of let it come down. let the minerals come down. let oil go to port. let it happen. they're looking at you. >> okay. we will do that and look at new just a bit in a couple minutes. much more straight ahead.

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isn't it beautiful when things just come together? build a beautiful website with squarespace. >> i want to thank jeff sonenfield for joining us. lots going on today, jeff. a lot happened here. >> allergan a lot of headlines, iger was incredible headlines. the news you broke on espn was pretty exciting. aside from the investors stories, a management triumph there. what he has done in the show

business world filled with egos is pretty remarkable and how they collaborate. they switch jobs up top. >> people said there could never be on iger. he's outdown eisner. >> switching jobs to physical out who should get the number two, he has succession mapped out. >> thanks again. >> join us tomorrow. "skwaung in the street" is coming up right quawk in the street" is coming up right now. >> >>. >> good morning, welcome to ""squawk on the street."" david faber is off today. futures are down after coin crashed 8% overnight. second biggest loss in history. the pain led to hong kong india, europe down on the a busy woke for data the fed and earnings, a