when he first launched that site back in 2004 and we have the video to prove it. friday august 28th, 2015 and squawk box begins right now. >> live from new york where business never sleeps this is squawk box. ♪ >> welcome in. i'm andrew ross sorkin with joe kernen and sarah is with us this morning. becky will be back next week. it's a pronunciation issue for me. a lot to discuss. >> it's a hard g. >> i know. >> we have a lot to discuss with jason today following this week's roller coaster ride in the markets. the dow travelled more than 10,000 points during the last

four trading sessions with yesterday's strong gains. now the major u.s. averages all turned positive for the week. the nasdaq now positive for the year. check this out. the dow and nasdaq are now on pace for their best week in a month and a half. stocks are now out of correction territory sitting less than 10% from record highs from monday's intraday low. the dow is now up 8%. if you had caught it at the bottom this would be a great week for you. the s&p has risen nearly 7%. the nasdaq is 12% higher. we should give kudos to our friend that had those dates. he said this was the week. remember he had the exact dates? you were out. >> i was probably out. >> i think i was out. i wasn't here. >> assuming this holds up. we don't know. >> like yesterday i was checking

from time to time and i was in a place that i didn't have wifi. >> it was that fake out. up 2.5% and then all the way down to less than .5% and then back up. >> you're thinking i bought into this and now it's going to go down and ends up going up 360. >> it's crazy that stocks are up for this week. >> they were down over 100. down less than 100 on dow futures. we saw a turn in commodities overnight. let's check out what's happening in china. that's been such a story for the u.s. market as well and joe it was another day of saving face in china. the shanghai composite closing about 5% higher. gains fed up in the final hour

of trading but the government support measures from beijing. they'll start investing $313 billion as soon as possible and reports that it also bought stocks a head of the big parade. >> two days in a row. >> for victory of world war ii. >> shanghai and shanghai. it looks like they went in and the plunge protection team came in. i saw yesterday that yellen is going to go in september to bury the greenspan put and bernanke put to say see there's no put. i'll doing this based on monetary policy. >> they're looking to buy our stocks that would help. >> but the question is would that be a good thing with the

markets? >> it's moral hazard. that's thinking that the fed is always going to be there so you don't factor in the risk that should be there in a free mar t market. you love the puts. >> of course we all love the put but i feel very strongly that monetary policy is there to create price stability and the fed also has a dual mandate. >> dual? >> yeah. >> i think it's crazy. i mean, i think the best you can do with monetary policy is perhaps either pull economic growth forward or delay it some or slow things down. it's not there independent, people in the economy create growth. if monetary policy created growth there would be no reason for free enterprise system. you could have the fed print money and have politician spend

it and it would be over but it doesn't really work that way. >> let's check out the trading action, early action in europe here as well. obviously this has been a global stocks story this week and german stocks were down. down a little bit more earlier. they're still down a little over .5%. they have been over the hardest hit in europe. some pockets of green, ftse 100 had a good export number. that stock market has gone green and so has greece ahead of another big election they're facing on september 20th. >> let's check on the broader markets this morning because everything seems to be connected. big day for oil yesterday. 42.62. remember we touched 37 or 38 at one point. so now 42.62. the ten year, it has, you know, went under 2%. now back to 215 and we're still waiting to see what happens. did anything come out of jackson hole other than fly fishing?

>> the big one was dudley and the next one is going to be fisher when he speex tomorrow. >> he's going to be the whole game. he clearly does have her ear. everybody says that. >> i didn't want to elevate esther george. janet yellen isn't going to do it the right way i'm ready to put her in right now. kansas city. that's it. okay. up 260 at 1125. >> we have corporate news to tell you about. an 8.5% stake in freeport. shares are undervalued and he plans to speak with the company and may seek a board seat. should we segway to trump. he wants him to be his treasury se retear and then had to call carl to apologize?

there's a whole sort of donald trump carl vortex thing. >> he wants him to be the chief negotiator with china and japan. >> need leverage in the negotiations. carl usually have leverage. >> the u.s. has a lot of leverage versus japan and versus china i think. >> is it just me or does anyone -- like a year ago if you said donald trump is almost president. he's picking carl icahn wouldn't you have thought this was an onion piece. look at this? really. do you see what i'm saying -- in your and i know you don't believe a lot of this is ever going to come to fruition. >> i actually increasingly think it might and i don't know what to make of that. >> what are the chances that president trump appoints him. tell me the real odds on that. >> it's whether congress can

approve it? >> the whole scenario. >> if trump actually became president do i think he would actually try to nominate carl icahn i actually do but you have to believe that he can -- >> i don't know. >> you tell me? >> do you think it's a good idea to have a corporate raider as secretary treasurer. >> now they're called activists. >> same thing. >> but he would have to be approved by congress. >> that could be tricky probably. >> yeah. >> get gordon. >> yeah. >> because greenmailers got a higher price than the rest of the share holders and they don't do it that way. >> maybe he would be good with china. >> anyway, back to the news, the fda -- >> what's so strange is that is actual real news. that's like news. the fda approving the

cholesterol lowering drug, a similar drug from regeneron got the green light from regulators last month. how do you pronounce that? >> i don't know. >> repatha. >> that's as good as anything. you did the syllables. you broke it down. >> it's a hooked on phonics thing for me. >> i want to buy a vowel. >> the chairman of china's unigroup visiting the u.s. to meet with micron technology board members and try to revive the bid for the chip maker. they rebuffed an informal $23 billion offer back in july pointing to a likelihood that u.s. regulators would block the deal on national security concerns. we'll see if they can fix that.

uber's china arm closing a $1 billion fund-raising round. dealing with strong domestic competition. they're one of the rival chinese car hailing apps and raised $2 billion last month. uber has taken over the united states and parts of europe and china there's copy cat folks that have done it and doing it better than they are. >> what's the latest on uber toward ipo. >> i have not heard. >> i have not heard. >> you tell me what you think the latest is with the ipo market. >> they're raising so much money on the private market. >> is the window shut? you have square coming later this fall. is airbnb coming? >> we have a guess on later to talk about it but certainly you're looking at the market action this week wondering has that window closed up. now to the market action in aids i can't today. sri joins us now from singapore.

we saw china rally in the last hour as we have been seeing. what else are you watching? >> we did, yes. next week will be absolutely critical because we get quite a lot of data from china. get the release by the national bureau of statistics of the factory pmi for the month of august. also the private forecasters numbers. this is the final pmi figure for the month of august so if they are sluggish. if they point to consistently weaker growth in the chinese economy that could test market sentiment right now which seems to be that much better. settled higher sirca 5% on the mainland. would say that this weekend, you've been discussing that, jackson hole is going to be very important for emerging market equities on our side of the

world because if the fed's number two does strike a dovish tone, possibly even 216 deferred that could give emotions battled assets something of a reprieve but that is still hanging over the markets so we'll wait and see what next week brings us in terms of the data and in terms ofexpectations. back to you. >> sri looks good. >> with a big collar. >> with the spread. >> you go with the spread? >> i don't go as spread. sometimes i have. >> it's a young man's thing. >> in the states investors pulled out 17.8 billion. the data shows a flight to funds that holds safer assets.

money market funds a tracted more than $15 billion. good morning to both of you. do we think the bottom is in and we don't have to worry anymore or this is going to be a volatile ride. is everybody out next week? >> a lot of public schools are. >> i wonder what's going to happen to volume in term of who is minding the store and who is not. >> my view is that risk reward is very positive. however i don't think the volatility is over. we don't know what the fed is going to do and the second is that i think china's devaluations was a game changer. it certainly made us -- we have

been very bullish on this thesis that there's no other alternative. i still think that's the operating assumption but i also think that china, there's two types of economists. those that don't know and those that don't know they don't know. i think we realize with china we know we don't know and i think that's going to take -- until those are resolved it's going to be hard for the market to make up a big bounce from here. >> okay. now that's what i love about the question is that each guy that you ask there's a different way at getting a nonanswer answer. >> so it's an answer. >> is the bottom in? >> is the bottom in, no. >> i understand that. >> you don't want to talk about a bottom, whether it's in or

not? but i want to understand how he thinks the stock market and this volatility is going to effect the fed and -- oh, right. >> oh. >> all right. >> that's a reasonable way to follow up that question, right? interviewing 101. >> everybody argues that the fed is -- some people argue that the fed is data dependent and others say no they're watching the market tick by tick. both of those things are determined and so that means that they're watching both of these things so they're watching how the market reacts to it. there's a wealth effect social wrated with what happens in the market and those things influence prices and employment in the long-term. >> i get that the fed is a big deal now but we should talk about energy after the move in oil yesterday.

a 10% rally for oil. wti had the best day since 2009. did that lift stocks or did stocks lift energy? did something change with the commodities trade? >> no, in my opinion that has that's has to do with oversold conditions and technical issues with regard to people being short and trying to cover their shorts. we did a survey exactly one year ago on oil and the average expectation for right now with $99 and the range was 75 to 150. just to give you an idea. that's where oil prices were a year ago. >> obviously it's a big -- i still think it's a big tail wind for economic growth in the u.s. and the developed world. >> but to answer your question real quickly right now the two biggest uncertainties are what's happening in china and oil

prices. to the extent those things go up and copper also, those are very positive catalysts for the equity market. >> what about the economy in general. >> it continues to make progress. everything is excited about that 3.7% number in the second quarter. i'm not as excited because i looked at gross domestic income and it grew a lot slower but what i do and many others do is they take the advantage between gross domestic income and real gdp. >> you're doing u.s. i want to understand where you think china is going to be a year from now. >> quickly china continues to slow down. within a year's time we'll probably see 6.5% growth but that's not bad. even though right now everyone is fix sated on 7% growth. tsa not bad. they're throwing tons of monetary stimulus and monetary

policy influences an economy and it's coming to fruition. >> it's 8% in terms of growth for china. >> we see rebound. >> they're juicing it up. absolutely. as the year progresses they want to see a lot of growth but at some point that stimulus has to slow down and the long-term secular decline is not going to stop. >> thank you for being with us. jason is going to stick around for the rest of the hour. >> coming up, 1 billion people logging on to facebook in a single day. it's a big milestone for the company. we'll tell you what mark zuckerberg first told becky ten years ago but first here's a look back at other dates. other things that happened on this date. ♪ behold, these are two wind turbines. can you spot the difference? the wind farm on the right was created using digital models and real world location-based specs that taught it

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welcome back. if you're just waking up this morning equity futures down 88. read them off. 8.86 on the s&p and the nasdaq is down over 20. 21 points. donald trump and hillary clinton are the leaders in a new presidential poll. this story from washington. >> hillary clinton took on

donald trump and his fellow republicans. >> if you look at their policies most of the other candidates are just trump without the pizaz or the hair. >> a new poll shows clinton is leading the democratic field with 45% but that's down ten points in the last month that she has been plagued by questions about her e-mail server. >> vice president biden scored third in the poll but faired better than clinton in match ups with the leading republicans but biden is still mourning the death of his son and hasn't decided whether he'll run and is telling top democrats. >> if i were to announce to run i have to be able to commit to all of you that i would be able to give it my whole heart and my whole soul and right now both are pretty well banked up. >> meanwhile on the republican side. >> we're not going to take it anymore. we're just not going to take it anymore. >> donald trump is telling voters what they want to hear. >> i don't wear a toupee. it's my hair. >> he asked one supporter to

settle that long standing question. >> yes, i believe it is. >> thank you. >> he heads the gop pack with 28%. up 8 from last month with ben carson climbing and jeb bush falling behind. >> okay. it's horrible when people keep accusing -- do you know who accusing people of wearing a hairpiece? balanced people. misery loves company and they just can't stand it that somebody has descent hair. i've tried that and had people pull it. >> i don't want to mess it up. >> it's real. wow. >> yeah. it's hair spray. i'm sorry. yeah. heal thy self physician but we have done the. >> if any of that hair went on

fire it would be bad. have we not done the hair blower. >> we did. >> the leaf blower. >> we did the leaf blower challenge. people want to believe that you're dishonest and that you're trying to hide that your balanced and they're nasty when they say it. you can say anything else. >> you and donald have something in common. >> your hair color shade is the same. >> i like his hair. i think he's a handsome man and it's real and it's not a comb overeither. >> that made the front page today. >> it's always about the hair. >> don't i know it. >> we're going to get on to your side part. >> your mini comb over. >> facebook hitting a big milestone for the first time. 1 billion people signing on for

one day. this is what he predicted in 2004 in an interview with becky quick. >> when we first launched we were hoping for 400 or 500 people. harvard didn't have a facebook. that's the gap we were trying to fill. now we're at 100,000 people. >> facebook now has 1.5 billion monthly active users. shares, take a look, $89.25. >> he was so young then. he was like 20 years old. >> we will have to -- >> he's so old now sarah. >> i'm just saying ten years ago. >> how old is he now? >> 30, i think. his wife is pregnant. >> he's growing up. >> i think what's amazing about that statistic a billion a day -- >> he's still very young. >> yes. but just in contrast to twitter which is 315, 316 million active users and that means once a month. so it shows why there's been such a disparity. >> the distinction.

>> oil watching that coming off the biggest one day gain since march in 2009. prices this morning were under pressure. they have turned higher. wti crude not by much. joining us now is kevin, clearview energy partners managing director. you were on last time i was in this seat a few weeks ago and you said you were expecting another downturn. we saw that. yesterday's big rally short covering or signal that the trend is reversing? >> well as a balanced man that's never levied an accusation against someone with beautiful you hair like joe kernen we haven't seen the down side yet. the market got scared. short covering makes sense in august. and let's not forget that the north american producer keeps

producing. i think the cash is going to get cutoff in october. we're not so sure. they'll keep financed and keep producing. more of your supply side risk going into the 4th quarter. >> why does it have to be supply? why can't the demand upside better u.s. economy and even better outlook for the chinese economy, the two biggest oil importers have an impact and boost the price? why does it have to come from supply? >> demand is the reason why we're seeing such a lag in such skepticism about the market but what is the limit of demand growth? it's price sensitive in places like the u.s. where they're doing all they can do. half a billion barrels of gasoline demand year on year in 2014 versus 15. that's the most price sensitive response in a very long time. what are are the limits? there's so many people and so many cars and so many roads in the world. for china it's an industrial demand story. a true recovery.

the 8s and 7s take us into a demand scenario. i'm not sure the market believes it yet. >> all right. thank you very much for your take on oil this morning. >> thanks for having me. >> coming up when we return, hurricane katrina is the costliest disaster in u.s. history. this weekend marks ten years since that storm made land fall. a special report on the long road to rebuild it back. next. squawk box returns in just a moment.

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welcome back to squawk box. the population of new orleans about 20% smaller today than ten years ago on the eve of the

costliest disaster in u.s. history, hurricane katrina but that only begins to describe the changes in one of america's most treasured cities. scott is back in new orleans today. good morning to you. >> good morning, what you see behind me is relatively rare. those are new homes in new orleans's lower 9th ward. the city 20% smaller than before the storm but this neighborhood is about 80% smaller. what you see a lot more of are these, in an area where the industrial canal burst, broken homes, what's left of them, empty foundations, empty lots where a vibrant neighborhood once stood but then there's other neighborhoods like lakeview. that's where the 17th street canal burst and they are back. it was clear even when we were reporting on the unfolding disaster a decade agatha this city was under going fundamental changes but it was of course impossible to tell what the

changes ultimately would be. fortunately just a few years before that new orleans had become home to a non-profit research organization called the data center which is tracking these all along and in the process documenting a living laboratory in disasters. >> everything becomes completely uncertain. so whatever you thought was true before the disaster about how many people were in a certain place, how many kids needed school, how many aid was needed. how many people were poor. how many people were rich, whatever data you had or assumptions you had about what a place needed, it is wiped out. >> here's where we stand. basic numbers in 2000 just under half a million people lived in new orleans. that is down 20% today. the population still majority african american but not as much majority. it is whiter, more hispanic and more asian but the poverty rate is roughly twice the national

average and that's one of the lessons here from this disaster and something they brought to other disasters like it around the world and that is that the haves become richer. they have more. the have nots have even less. >> thank you for that. ten years later. pretty extraordinary stuff. >> when we come back on squawk box, china's economy at risk. the fed's rate hike plans in doubt and now central bankers around the world are gathering in jackson hole, wyoming this weekend. we'll hear from the former ecb president next. first a quick check on what's happening in european markets right now. lower across the board but off the lows of the session. futures in the u.s. pointing to a lower start as well. we'll be right back.

joining us now is former ecb president and hard to believe how much we talk about a quarter point, the possibility of a rise. we have been talking about it for years as we have been in this zero interest rate policy environment but considering that some people say that the fed is hesitant to raise because they don't want to raise too soon and they always bring up your name. and i'm not sure whether that was the right move or not when you did it because i think the fed should move and i think that, you know, you got to do what you got to do and when you think you got to do it and you can't see the future necessarily.

but if you were sitting in janet yellen's chair right now would you raise rates in september? >> i am not in the seat of janet and she has information that i do not necessarily have. so it is absolutely clear that before this market turmoil, the determination of the open market committee seems to be quite firm. i can't understand that having observed what has been incredibly hectic and with a level of high frequency volatility that was more or less unseen, i can't understand it but i have full confidence that they will take the right decision when they meet. >> really? the other thing that we have talked about, we know the fed has a dual mandate and i know that you're familiar with that,

but we have had people pause at 3, 4, 5 different concerns that the fed needs to take into account in raising rates and they are -- the fed is all things to all people right now and maybe it's because congress is gridlocked and maybe it's all within the fed but they're a huge part of the u.s. economy right now. we have to worry about whether the dollar strengthens or there's not enough, they have too many differing concerns at this point. would you agree with that? >> i think that it is true that the many mandates might be a problem because you have to make it between a variety of dimensions. but we can simplify in the view of all central bankers and it's

entirely shared by the members of the open market committee meeting, the price stability, credible price stability in the long run is a necessary condition for delivering what is extremely important, growth and job creation. sustainable job creation, sustainable growth in the medium and long run depend on credible price stability. depends on the solid anchoring of inflation expectations and this is shared as i said by the fed as well as by major central banks in the world. so in a way you can simplify this multiple mandate that you have and it's one of the main issues that the fed has to look

at. whether or not they're credible in having medium term price stability which is 2% now at the global level. >> that would be great if they focused only on price stability but, you know, focussing on 5 and 10% moves in the equity markets and everything else that they seem to take into account now, you know, whether our dollar strengthens against emerging market currencies even or how that's going to effect global trade. it's too much and they end up, you know, they can't see the forest through the trees at that point. i know you wanted to talk about some of the causes of the extraordinary market volatility. in your view, this is global as well right now. in your view, what's causing it? >> well, we are experiencing i would say, new behavior of the

global interconnected, highly interconnected system and clearly that is more or less suggesting that we have to leave now with much higher level of high frequency volatility. with all the problems we could measure the kind of problem that we could have this week of course. but i am afraid that this is now part of the system in which we are due to globalization, due to an incredible level of interconnectedness at a global level and due to the technology because we have there the interaction of machines with men and women and machines are certainly playing a very important part in the high frequency volatility that we have observed. >> president trichet joe eluded to this but i'm just curious a

lot of people do think that you raising interest rates a few years ago was a serious policy error. do you in retrospect think that it was and if so what have you learned about moving too early on interest rates as we all contemplate the fed's next move? >> no, i don't think it was an error to be absolutely clear. because what we had in mind in the governing council was to be sure that nobody would challenge our determination to anchor medium term inflation expectations and at the time when we increased rates we had some kind of threats on inflation expectations that we are coming from commodity prices increases and so forth and we were very keen on making clear for all market participants that for us the solid anchoring a little bit below 2% of medium

term price expectations was key and it worked very well if i may because we also prevent it remarkably until a year ago the deflation nary threats which were also looming in the crisis and have to say that a year and a half ago we had an extremely good anchoring of medium term inflation expectations preventing us from having the realization of the deflationary risks. unfortunately it happened in the most recent period of time and the ecb did what was necessary

to counter this threat but i think that we permitted our expectations to combat both. deflation and inflation. >> very good. thank you very much for your time today. >> thank you. >> when we return, summer's fastest moving real estate market, new numbers out this morning on the hottest spots for housing. first though as we head to a break, check out the futures. red arrows. dow could open down about 500 points. we're back in just a moment. isnl when things just come together? build a beautiful website with squarespace. no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks,

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welcome back to" squawk box." new housing data this morning. diana olick joins us. >> we know houses have been flying off the shelves for the past six months pretty much everywhere. a lot of that has to do with tight supply and that leads to bidding wars. the fastest markets are the ones with the biggest price jumps. also seattle, denver and even just outside boston in cambridge. things did slow down a little bit according to trulia. 63% of the homes for sale in june still had the for sale sign up in august and that's a slight increase from last summer and that may be due to price fatigue. as we look to winter, maybe some

good news for buyers. the markets with the fastest moving sales are the same that see the biggest change in sales pace historically going from summer to winter. they slow down the most. topping the list? san francisco. about a quarter of homes for sale in joan were still up in grabs in august but in winter that share increases by 19%. in seattle, 13% more homes will sit for at least two months. in boston, 12% more and shame for charlotte, north carolina and chicago. where can buyers tack their own sweet time? detroit, kansas city. and pittsburgh and newark, new jersey, which everyone keeps telling me is the new hot spot, but i don't buy it. >> it hasn't taken off yet. i always thought that spring was the hottest time to sell your home. is that wrong? i thought families always wanted

to move -- >> for school for the next summer. >> i always thought by august people weren't moving because of the school thing. >> it slows down in august. we saw it slow down more this summer and probably due to the prices. as we look to winter, you want to know where those buyers might finally have a chance. they want to know when am i going to be able to get into this market. even in san francisco and seattle they could have some better shopping this winter. our guest host is jason trenert. to the houseing recovery in the u.s., how much is a risk of rising rates? >> i don't think it's much of a risk. it's unlikely rates are going to rise a lot. i think as president trichet was

talking about, i think certainly inflationary expectations are well anchored. i'm also not worried about the fed tightening, wailing the houseing recovery. i think the consumer personally is in wonderful shape. there are a lot of things happening. wages that are bottoming. housing is a good leading indicator for employment. lower oil prices. lower commodity prices and savings rates are very, very hie. all those are positive for consumer discretionary and also housing. >> it has been among the best performing groups of the year. the second best to health care. you still a buyer of consumer discretionary? >> i am. i like it a lot if you are taking a six to one-year type of time horizon. they've done very well. they tend to be domestically oriented sectors.

they don't have a lot of exposure to what's happening outside the u.s. if rates rise some on the long end you'll have a positive yield curve. >> let's say that the wealth effect and animal spirits that the fed tried to conjure up with qe, let's say it did work and asset prices did rise. they were hoping the underlying economy would catch up and justify the rise we've seen. has it risen enough? as we do the inflection point trns and we go in a tightening phase, how much is still based -- how much is overvaluation based on mfed action? >> you have -- you are stepping on the gas and the brake at the same time. you have very accommodative monetary policy but tight regulatory policy on banks.

the velocity of machine has continued to go straight down. so i would argue the real easing, it's probably enough, the fed has done more than enough where you need the easing is on the regulatory side. >> how much of the market's advance in the past five years is not justified by the underlying economy? >> i think it's -- >> is it caught up? has it improved? >> the underlying economy has improved but i think there are other pockets of overvaluation. we talked about the private markets before. other places where there is real overvaluation in my view. >> you're seeing that come down? >> i think so. >> how does that break, though? >> you are eventually going to get higher interest rates. also it's just a supply issue. if you look at the supply of publicly traded companies, 3600 fewer publicly traded companies today than in 1997. the private equity business has exploded in size.

so essentially you've just -- it's been a little bit of a shell game. you've moved the risk to other parts of the market which are somewhat less transparent. there is a little bit of a supply/demand issue. the interesting thing will be when the private markets have to go public or they have to really get an exit, it will be interesting to see how that works out. >> thank you, jason. it's been good having you. coming up, more on this morning's market action. another session in china overnight. plus, republican presidential marco rubio joins us from the campaign trail. first, a check on oil prices which were up sharply yesterday. you're watching "squawk box" on cnbc, first in business worldwide. can a business have a mind?

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a wild week in the markets isn't over yet. a whip saw rally in china overnight. what you need to know ahead of the opening bell ahead. >> our newsmaker of the hour sounding off on america's china policy. senator marco rubio joins us live from the campaign trail. and unsinstagram thinking outside the box. the second hour of "squawk box" begins right now. welcome back to "squawk box." i'm joe kernen along with andrew

ross sorkin and sarah isen. becky quick is off today. has a great voice. >> he does. >> our top story, the markets. u.s. stocks coming off -- >> we had him on. >> we'll see him in a couple of weeks at a golf thing. all the major averages turned positive for the week. u.s. equity futures at this hour are down 135. it's gotten worse. now down 15 on the s&p and down 33 on the nasdaq. >> yeah. sorry. i just made a face to the camera. is that like trichet comes on and then -- >> defending his move and legacy. >> people blame everything on us. the left thinks there should never be again anything that looks like austerity anywhere and we should just have -- everybody needs to live the same. if we have to borrow to do it. that doesn't distinguish talent

or hard work or anything else. that's what separates -- >> i get it. >> if you -- >> i know you want to let the chips fall where they may. let's tell you about some news breaking overnight. china closing sharply after a volatile session. it gained 4.8% after a rally in the 3030 minutes of trading. the nikkei closing 3% higher. we're also watching oil prices. wti crude coming off its largest one-day gain rising more than 10%. oil prices now on track for the first weekly gain in nine weeks. that could end crude's longest losing streak since 1986. also freeport-mcmoran.

the shares are undervalued. he plans to speak with the company and may seek a board seat. >> in the filing they'll look at executive compensation. >> is that going to change the stock price, though? >> the stock is up sharply before icahn came in because they announced a major cost-cutting plan and 10% more layoffs. they are in oil and copper, two bad businesses, and the stock was off, 90%. so pretty big rebound. instagram is ditching the square. it will allow users to post in land scape and portrait forms. until now, photos and videos had to be cropped. >> i like the square. >> i do, too. >> it may make a push toward more video content. it's much more difficult for users to crop after recording because the framing may change throughout the video.

>> sometimes i think the picture is so small -- >> you can do that sort of cropping and expanding. >> you can't zoom on somebody else's picture. >> you can just do your thing with your fingers, that contracting and -- anyway. >> anyway, this is for video. i don't do much instagram video. >> joseph does a lot of instagram. >> no, i don't. whenever something is on twitter or instagram. i don't have instagram. you have to log in to -- >> you should be able to see it. >> i was on it for a while. you just get pictures from all these people, right? all of a sudden, there's a picture of someone you don't know or care about. >> you can -- you can just follow me and andrew. >> some people just do -- i find myself only using twitter when

i'm sending a picture so i'd probably be better on instagram. >> senator christie is on instagram. he instagramed out a photo of us. >> do you do more instagram or twitter? >> much more twitter. >> he needs to up his game is instagram. >> did you see "bird man"? >> yes. >> i am. and my daughter -- >> have you ever ran naked through times square? >> no. >> we found out yesterday i have -- no. let's get to, who else? our stats expert, dominik chu. >> he's enjoying this conversation. >> out of all of you guys i'm more like andrew. much more prolific on twitter than instagram.

>> dominik underscore chu. >> what about facebook? >> i don't really use facebook. >> you were one of the billion. >> i might have liked some picture, might have done something or made a comment so i probably was one of those 1 billion that used facebook on monday. my pledge is to use social media more. if you count just the closes, just the closes, the roller coaster ride has been huge. that 531-point drop back on friday. another near 600-point drop. another 200-point drop on tuesday and the biggest two-day rally for the dow ever in history. for those who don't like the points, that's the biggest two-day percentage gain since the financial crisis in 2008. a huge move if you count all of these closes up and down. we walked 2300 steps or points during the course of these

closing moves. if you count every single intraday move, we went about 10,000 points for the dow. a huge volatile week for the markets. it's also what happened with oil prices. this is just wti crude. back on friday down 87 cents. don another 2 and change. culminating with the 10% move higher yesterday. $3.96. a huge move volatily for crude. the market action between stocks andyiey commodities. they are left wondering if this means a bottom is in place or this change in volatility means a down trend may be in the offing. >> it has been a stunning week

for the markets. i can't remember when -- back to financial crisis style moves. >> 10,000 points? if you go 10,000 points up don, up down, you count all those up, it's a big move. we haven't seen this volatility since then. remember, all these indices, though dow, nasdaq, s&p were all in correction territory at one point. and given all the moves we're out of correction territory now. the roller coaster ride continues. >> thank you, dom. for more on what to expect, we're joined by fidelity investment's head of global macro and daryl kronk. what did we learn this week? the fact we're looking ining a

week depends on what happens today. >> we only needed two things. stability in china and commodity prices. we basically got both. this was the type of correction that people argued was overdue but that we like. we took advantage of it on monday and tuesday because it was not fundamental. a washout on technicals. heavy volume. we overextended. when that happens you come down in a bang. a big, fast move. that's the kind of correction you want to take advantage of. >> is it over? >> we think we've probably put the bottom in. >> another conclusive answer. >> you double bottom to the october lows. it's not a v-shape recovery. more like a u-shaped recovery. we were buyers on monday and tuesday of large cap equities. >> did it feel like a healthy correction? >> monday morning didn't feel

too healthy. big opening moves. for the average investor, don't react or overreact to these schizophrenic moves. people quickly extrapolated. and you combine that with an august market when a lot of people are not at their desk and liquidity is very low. it's reminiscent of the 1997 quick 12%, 13% decline. markets didn't go over very far in '97 just like the markets haven't gone far this year. >> would you feel better if the fed just raised rates so you can focus on stock picking or are you nervous that would go too early. >> we would like that. i'm not sure the markets would embrace that. i think the fed has the ammunition. if you take out this market

reaction of this last week, the data is there. retail sales, industrial production. >> durables were good. >> it's all there to give them the base line they need to raise rates and probably would have done it in december. we still have a high conviction they'll do it this year. >> if they raise rates, does the market go much lower? if they don't raise rates does it go lower because they think that things are worse? >> do i think the rate hike is like the y2k. >> it's like moving your treadmill from 0% to 1%. you really don't feel it much. >> trust me. you can feel the 1%. if you are on that treadmill long enough, that 1% feels like something. >> the market can focus on earnings growth, economic activity. things not just directly to the fed. >> when was the last time we saw oil and commodity stocks lead

the rally? that was a big deal yesterday. >> yeah, but probably a big short squeeze. some of the materials names were up 50%. i wouldn't read too much into that. it depends on whether the china devaluation was a one off or the start of something bigger. we'll probably stay under pressure for some time. i agree with, in terms of the fed. as long as the fed stays with the early and shallow path, i think ultimately it doesn't matter whether they go in september or december. the fed does look at market indicators, credit spreads, and those are saying not so fast. >> we'll get some more numbers today. we have a jobs report next week. how important will those individual indicators be and do you expect it to continue to show improvement. >> if the jobs report is good and certainly the other numbers have been pretty constructive,

and the markets can continue to stabilize as they've done this week, i think the fed will feel more comfortable going in september. we still have two, three weeks before the september fomc. >> thanks for setting up this friday saturday of trading. coming up, conventional wisdom says china's economic growth is slowing. our next guest says you shouldn't believe that narrative. n then our newsmaker of the hour. senator marco rubio will join us live from the campaign trail. he says as president he'd take a stronger stance on china. and big changes coming to the trucking industry. stuck around for that and a lot more when we return.

welcome back to "squawk box." china's marketed are rising 5% overnight and the nation's central bank intervening for a second day to stabilize the yuan. jo you penned an op ed sounding a false alarm on the crisis in china. nick, explain yourself. >> i think there's been a bit of an overreaction. i think this economy still has for all strong growth.

gdp numbers may not be accurate to the last decimal place. we have very strong growth of wages, personal income, consumption expenditures driving big demand for services. china's level of income is such at people spend more and more on services than goods. investment in property is moderating. the reliance on industrial and investment indicators doesn't really do the job for trying to figure out the direction of the economy. >> we had ken rogoff the other day. you think about the amount of debt piled on in that country. you think about the shadow banking system and that perhaps being overextended. you don't look at that and think, there are more problems than we know about? >> i look at the debt issues very closely. shadow banking is half the share of credit it was two years ago.

almost all the debt is domestic. very little foreign currency debt. they don't have a foreign currency mismatch. most of the credit is coming from the big sis stemically important institutions do not rely on that for funding. they have a high degree of liquidity. plenty of scope for expanding that. the chances of a financial crisis are low. it's worrying. they shouldn't have built up quite as much debt but we'll find it's quite sustainable. >> the overarching question is china's ability to go from a command economy in market based economy and how smoothly they can do that. for once there's some real serious questions about that effort. what's giving you confidence? >> what's giving me confidence

is how far they've gone so far. three-quarters of china's gdp is already produced by private companies. state companies are dominant in a few sectors like finance, telecom, upstream oil and gas. three-quarters of gdp is being produced by private companies. all the growth of employment over the last 20 years is coming from the expansion of private companies. about two-thirds of all investment in china is being undertaken by private companies. and product markets are flexible and competitive. it's already much more of a market economy than many more recognize. >> what are the other things that just in the past week or month has become an issue when it comes to the government's control is you look at them try to prop up the market. in so many different ways it has not worked. what do you make of what they try to do whether it's the

currency itself or the stock market? >> in the equity market their direct intervention was unfortunate. they have a penchant for trying to influence stock prices. we're now in the third different episode, for example, in which they've suspended ipos. they've used that as a signal that people should think it's a good time to buy stock. >> doesn't that undermine confidence in the system and their inability to control the system? >> i think it was unfortunate. this week the intervention was much smaller. peak decline in the shanghai up to 40%. a little bit of a rally yesterday. but i think the evidence is they are back away from that strong intervention of several weeks ago. >> you're making a call on the economy. would you put money into the stock market in china right now yourself? >> i wouldn't put money into the chinese market at any time.

it's a casino, liquidity driven, retall investors. and historically has had no connection with the real economy. china has been a great bet for economic growth the last 20, 30 years. it's been a terrible place to be in the market. when the economy was doing well, the shanghai composite declined by 70%. june of '14 to '15 when the economy was growing more slowly, the shanghai composite was up 150%. now the economy is, i think, doing roughly the same and the market has fallen 40%. there's no connection between equity market prices and the real economy. so i'm bullish on the real economy but i wouldn't touch the market. >> nick, we appreciate it. it's possible for nuk to be right about the economy and jim

chanos to be right about the chinese stock market. >> that's a powerful statement and investors are trying to figure out the link. appreciate it. what are you reading, "the new york post"? >> i'm reading this and thinking about you. what got my attention was the picture of his head. he's foregoing a tv deal for the clippers to do it himself over the web. >> wow. >> the beginning. >> that's why i thought about you. but then someone says, look, he could get this much, but the fox deal is probably more money, but high wants to do it just to be automobile to do it to be a tech pioneer to go over the top. will you read this and get back to me? most of the time the photo shops don't work. that looks like he's driving the lane. >> can they get a little closer?

>> he's way too old to jump that high, i think. i can tell you that from experience. much more on china still to come. senator marco rubio calling for the u.s. to stand up to the chinese in a new op ed. he'll join us from the campaign trail. time for today's aflac trivia question. in the world of animal hybrids, what is a pizzly? the answer when "squawk box" continues. and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just one day. ahh! so he had your back? yep. in just one day, we approve and pay. one day pay, only from aflac. [duck snoring]

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now the answer to today's aflac trivia question. in the world of animal hybrids, what is a pizzly. it's a cross between a polar bear and a grizzly bear. check this out. this is quite amazing. fastest man in the world, sane bolt, wasn't quite fast enough to dodge a photographer on a segway. minutes after winning the title, bolt was waving to the crowd when a tv cameraman on a segway ran him down. bolt got up from the accident. he had a scratch on his left

leg. later he went over and checked on the cameraman. i don't know if the camera guy should be on segways like that. >> those athletes at that level, and it could have -- everything could have -- could have torn a ligament or something. >> the idiot on the segway. >> what do you think of those new hoverboards. >> i want one of those things michael j. fox had. >> there's these new sort of skateboard -- >> back to the future. >> now they sell them. >> not hovercraft. >> i want a hovercraft. >> i know what you're talking about. when we come back,or newsmaker of the hour, senator marco rubio taking on china in a foreign policy speech today. he'll join us from the campaign trail in south carolina. you are looking at two airplane fuel gauges.

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>> i don't know that. >> i didn't know she did anything since "call me maybe." the song you usually play. >> we play death cab, r.e.m. >> country. >> country is great. you're from cincinnati. >> i am. from the east side of cincinnati. >> welcome back to "squawk box." among the stories front and center for us, big lots earnings and revenues topping estimates. also raising its full year guidance. changes to the s&p 500 to tell you about. activision blizzard and, nighted are being added. equity futures right now pointing to a lower start after a nearly 1,000-point rally in just two days for the dow jones industrial average. we're looking at it now set to open by about 108. a little lower earlier.

s&p futures down 12. nasdaq down 29. it's not the points that matter. biggest two-day percentage gain since 2008. >> 1,000 points in two days. >> it's been a crazy week. let's talk to a potential presidential candidate, or potential president. marco rubio is set to deliver a foreign policy speech later today focused on how he'd challenge the chinese government. he joins us. he's currently tied in seventh place with 4% by the public policy polling out of new hampshire. i don't know about these polls when you have 16 people and divide them up and everybody is going to be in single digits until things start playing themselves out as they obviously will. i don't know if it means anything to cite that.

you'll talk china. china has been on our lips for the past two, three weeks and longer. with this market break, a lot of it had to do with the contagion or at least china catching a cold and we started sneezing. >> we planned to give the speech even before this hand. the relationship between the united states and china will probably be the defining one of the 21st century. you're seeing the impact it can have globally. the united states is somewhat insulated to a degree but emerging markets and developing markets are not. those are export markets for us, trading partners. and the other challenge with china is they are not very transparent. we see their numbers and don't know how real they are. one thing you saw early this week when they tinkered with their currency is perhaps a sense they did not have control of what was happening.

they didn't have full control and ability to deal with whatever internal chances they are facing. it's not an open sout. its government doesn't open up their books. i think that leads to some of the panic as well. we were going to give this speech anyway. this relationship between the u.s. and china will define what the 21st century is going to look like. >> if there was ever -- if you look at frenemy, it's been used so much, but this is -- it really exactly describes what we are with china. so essential that we maintain a good relationship in terms of trade because it's the market we need to sell into. 1.4 billion people, and yet they steal our technology. they own us with -- they need to keep buying our treasuries or yields could spike to where we

can barely sustain our debt. to just like hyperbollic statements about cutting off ties or protectionist statements, that doesn't work any better than rolling over for the chinese. >> we shouldn't be doing anything that's counterproductive like starting a currency war. it's like increasing taxes. we can't fall into this trap that it's going to lead to a change in behavior. chin is governed by an autocratic communist regime. in the cause of their military posture in the asia-pacific, they are a strategic competitor and potential adversary. they've taken an aggression position on the south china sea. we need to not just increase defense spending but our posture in that region. on the economic front, this week is a case for why we need to

conclude this free trade agreement with our allies. these are developed economies. if we can foster free trade, in addition for china to join it, they'll have to change their policies and restrictions on imports. the way they manipulate produces, their currency manipulation and steal intellectual property and secrets from our companies. it would be the most powerful trading bloc in the world unless they change behavior. it's hard for them to do it because of the nature of that regime. >> whatever caused us to decide we can't somehow export our values or democracies to other places, it's resulted in making the idea that we would demand something in terms of human rights from someone, that's very unfashionable right now. we'd never ask cuba to do

anything with dissidents and as a prerequisite for opening relations. with iran, we'd never ask them to stop supporting terrorists around the globe to get a deal done. are you saying with china, we should ask them to be more like us in terms of an open and fair society? other places aren't like us, senator. >> not only should we continue to ask and insist on that but be supportive of the people in china trying to make that happen. if elected president i'll invite dissidents from all over the world to attend my inaugust raug -- inauguration. look around the world today. every sort of instability is created by a tyranny. the north koreans, chinese, russians, radical islamists and

iran. what do all five have in common? tyrannies. one of them are democracies and they are all serial violators of human rights. if you oppose putin you wind up poisoned or dead. north korea is horrifying and what happens there. we all know about isis and iran. all the violent instability in the world comes from tyrannies and that should be an indicator for why -- >> you are calling chinese government tyrants? >> absolutely. it is not a democracy. there is, for example, a great fire wall in the internet where they literally block off the ability of their own people to access free flow of information from around the world. they tell churches who their leaders are. you have to have state-sanctioned churches. they tell the catholic church who their cardinal is. we, in fact, have seen an

increase in repression because part of the problem is this model they've been following over the last 20 years has run its course and doesn't work anymore. they are cracking down harder on their own people. >> you talk about the chinese economy and the relationship the united states has, when you call them a tyranny like that, how would you go about creating a better relationship, or would you at all? >> of course we want a better relationship but not at the expense of our perinciples. obviously, we can't ignore them. we've got to be able to continue to engage with them. you can't ignore their geopolitical important. that doesn't mean you silence yourself on human rights issues and look the other way. if they grow more powerful they're going to export, for lack of a better term, their values. and their values are not the kind of world i want to live in. if the 20th century was the

american century. if the 21st century becomes the chinese century, what does that look like around the world, in the most powerful country in the world? it's someone who does what they do to their own people. that's not the koond of world i want my children to inherit and that's not going to be good for trade or commerce. >> we were talking about negotiating in the 6:00 hour. donald trump said he'd like carl icahn to be his treasury secretary calling him a great negotiator saying he'd put carlu con icahn in charge of the relationship with china. >> obviously, carl icahn is an intelligent person. negotiating a geopolitical arrangement is very different than a business deal. all sorts of other considerations and play. it's not just about profits for countries. for china, they believe that their rightful place in the world is to be the most powerful nation. that's the way it's been

historical. and they are perfectly willing to bide their time to achieve it. their first goal is to drive us out of the asia-pacific region. a chinese monroe doctrine for asia. we need to recognize that in any negotiations. for example, part of the considerations cannot be concessions that abandon allies like japan or south korea or philippines or australians or others who feel threatened by what china is doing in the south china sea with navigational rights. >> senator, obviously, there's a mix of foreign policy objectives and domestic objectives that any candidate needs to have plans for. let's switch to economics and we did have a gdp revision. total fluke in the past six years. obviously, not sustainable. heck of a number and a nice one to shoot for. and we've got maybe half of the

political spectrum in this country thinks we can only do 2% and that's good enough if we're going to provide, i guess, a social safety net. 2% is going to be fine. do you have a way to get out of the doldrums? >> part of it is recognizing we're not dealing with a cyclical economic downturn. this is a massive economic restructuring. a massive shift in the very nature of the economy. akin to the investor revolution except it's happening faster than the industrial revolution. we need policies that allow us to be competitive. i'm for tax reform and regulatory reform. we have to compete with dozens of other markets and economies. the 21st century new economy is going to produce better paying jobs than the 20th century

economy. those new jobs require additional skills that perhaps weren't required in the past. we do not have a high ir education system that delivers those skills or is affordable for those who need it most. >> senator, would you -- you are being substantive and being thoughtful on these issues on this program. and yet in this terrible circus that is politics, it seems so hard to get out from under the shadow that is the donald. how do you do that? >> well, first of all, i'm going to be true to myself. i'm going to tell people who i am and what i'm about. i think this country recognizes we're at an important moment. this is truly a generational choice about our identity in the 21st century. if we embrace the new economy we'll have to confront its challenges. but also embrace its couldn

opportunities. i think it can be another american century. i'm going to continue with that message consistently. as we get closer to voting day, voters will focus in on the election beyond the entertainment value of it. no one has taken the time to explain that what we're facing is a massive economic, global restructuring that plays to our benefit. there's no country in the world i'd trade places with. >> senator, you still have to get -- to govern you have to get elected. i think hillary clinton on women's issues. certain republicans are as bad as terrorists in terms of women's issues. maybe some comments on abortion, right to life choice things like that. when you've got rhetoric like that from the other side, that's going to come up in a general

election and you need to cobble together 50%. >> she has zero credibility and it's eroding by the day. a desperate candidate badly hurt by the deceitfulness that occurred with e-mails and server that she had. it's not just the lying about it. that was highly sensitive, classified information that was irresponsibly handled. someone violated the law. we don't know who it is. it could have been her. they're in desperation mode. she's going to use some of this over the top rhetoric. that's part of every election cycle unfortunately. we're going to folk ous what matters. that is a desperate campaign who potentially sees a challenge from joe biden. we're going to focus on our agenda for america and every day it's being further exposed how irresponsible she was on how she handled very critical

information that was sensitive for our country. >> senator, thanks. we look forward to seeing you on set. >> really appreciate the conversation. margaret brennan is going behind some trucks. what do you have for us? >> some of the prettiest, most tricked out trucks in the country are here on display. but it's what you can't see that's revolutionizing this industry. we'll go under the hood. 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.

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truck transportation is getting smarter. morgan brennan joins us from the great american trucking show in texas. morgan? >> good morning. this is one of the biggest topics in trucking and here at this trucking show. that's automation. earlier this year, daimler revealed its autonomous truck which still has a driver but it can relinquish control. the big rigs won't become driverless or self-driving any time soon.

>> we think the fully autonomous mode is like when you sent people to the moon. it pushed technology and the boundaries of technology. we're probably a decade away from seeing truly autonomous vehicles on the road. >> this is going to take years due to regulations and the insurance industry. even then you'll still need a driver in the car for the last mile. a driver is needed for turning into a city, going into an alley. automated tech is evolving. there's a product that allows two wirelessly connected trucks move in tandem. it cuts down to boost fuel efficiency. daimler is marketing trucks with some of those features already. another product that's already

in some of these newer trucks, collision mitigation systems that prevent the rear ending of other vehicles. one piece of tech is electronic logging devices that keep track of every truck on the road and know how long a driver has been driving. there's a final rule expected to hit the street or industry the end of next month. >> thanks morgan brennan live from the great american trucking show. look how fast we got this. listen to this. grateful dead. ♪ my truck coming up, squawk booze news. >> i got that for you, some country. >> we have james bond's hangover

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in squawk booze news, the actor who plays james bond currently sharing his go-to hangover cure in an interview. daniel craig's favorite remedy,

pediolyte. it's a children's medicine to replace electrolytes. craig said if you wake up and you have one of these on standby and down a whole lot you can carry on drinking. one consumer study says adult consumption of pedialyte has grown. the company has run ads that feature groggy adults in a nod to its popularity as a part of a hangover cure. they say sprite is very good for that. or a bloody mary. >> is that guy much better looking than andrew? >> he's an active man there. >> athletes on the tennis court will take pedia light. >> that's like gatorade. >> there was a study done like a

year ago that said sprite was somehow the concoction. >> there's other stuff. a lot of remedies. >> none of them really work. >> advil. >> best thing is to not -- the darker the color of the drink, the worse problem. the darkest thing is like jagermeister. >> it makes you go insane almost. >> i can't do that anymore. >> there are companies in vegas that will do intravenous liquids to your system the day after. >> i.v.s. >> i'm a closed system. there's no way i'm getting a needle put in my arm. >> sounds like a fast cure. >> supposedly it works. >> that much that you'll open up your veins to -- no, no, no. >> to some guy that makes -- >> yeah, it's clean.

here, take it. >> when we come back, marty feldstein blames the fed for the global market sellout. and then the great interest rate debate. he's on the opposite side of joe's favorite banker esther george. 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?

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global market turmoil. is janet yellin to blame? marty feinstein sounds off to the price correction. people running from stocks. is it an overreaction by investors or the beginning of the end? donald trump answering the question on everyone's mind -- is it real? >> look. >> we've already settled that question for me on the set. a windy and final hour of "squawk box" begins right now. ♪ we were running against the wind ♪ live from new york, this is "squawk box." >> welcome back to "squawk box."

first in business worldwide. i'm joe kernen with andrew ross sorkin. you finally took your head out of the toilet and are back on set with us. >> becky is off today. >> you said he was so handsome. >> oh. >> the ashley madison toilet or some other toilet. i don't know. >> do you know anyone that got outed? >> we know somebody in the papers who has -- >> denying it. >> who has been on before. a business guy. >> our top story today, the global markets, u.s. equities futures are down. s&p down 11. nasdaq indicated down about 28, just under 29 points.

this follows a two-day rally. it's now back out of correction territory from monday's intraday low. the dow is up 8%. the s&p has risen 7% and nasdaq is 12% higher from monday a close. overnight in china, the shanghai closed about 5% higher. gains speeding up in the final trading hour. all of these sort of weak explanations. among the catalyst, more government support. yeah, they bought blue chip stocks with government money. there's also some other stuff. investing in some pension plans. that's a great idea in the chinese stock market. china's local pension funds started investing as soon as possible in stocks and other assets. perfect. china's central bank intervening to stabilize the yuan. european trading right now

across the board, except in greece which is just up fractionally. fractional losses in germany, france, italy and -- >> so they artificially inflate their stock market and we go up because -- >> yesterday we went up. >> i think things were worse before they made that announcement. >> terrible. >> it's hard to find an intraday move in china that was positive. >> terrible when policymakers artificially inflate a stock market. we'd never do that here. among the headlines, investors pulled out $17.8 billion out of the u.s.-based stock funds in the week ended wednesday. it shows a flight to funds that hold safer assets. the sad part is everyone is

getting oget ing out at the wrong time. that's what happens. >> how many people have we had on, strategists and investors and portfolio managers that say don't freak out on the way down. the u.s. economy has been showing growth and good data. >> nobody knows. >> u.s. stocks for the most part. 13% of our economy is exports. that's the exposure overseas. yes, there's way more with commodities and everything else. >> most people hanging in -- volatility has been the word of the week. the dow has traveled more than 10,000 points coming and going during the last four trading sessions. they have many people worried, including former ecb president jean claude trichet. >> i think that we are experiencing in the present global environment the -- i

would say new behavior of the global financial interconnected system. and clearly that is more or less suggesting that we have to leave now with much higher level of high frequency volatility. but i am afraid this is now part of a system in which we are due to globalization, due to an incredible level of interconnectedness, and due to the progress of technology. >> global central bankers gathserring in jackson hole this weekend. in a "wall street journal" op ed we talked about, harvard's marty feldstein argues the stock market sell-off was the result of the fed's easing monetary policy. he joins us now. he's a professor of economics at

harvard university and from reagan's council of economic advisers. steve liesman is also with us from jackson hole. you might as well lead the interview. i need to recuse myself. i was just nodding reading that piece. if you need someone to challenge him, it better be you. >> joe, i want you to go. i know how much you like marty and his op ed so i'm going to recuse myself out of respect for you and your hair. >> definitely would have the most hair in that room. just to start with, if that is true that the taking back some of all the accommodation does cause a little break in the stock market, if it was the accommodation that ran it up in the first place, isn't it to be expected? if it helped the underlying

economy get better is it really a problem if you go three steps forward and one step back? >> i think it did help when it was put in place, and i think it brought with it these kind of risks. not just to the stock market but long-term bonds, to emerging market company debt, to commercial real estate. so the only question is whether that can all unwind without significant systemic effects on the economy. so far, so good. but right now those risks are still out there. >> and, steve, we've talked about it all the time. it's like you don't need to just wait for hyperinflation to decide that it was probably not great policy. and we don't know in the future. steve, you don't think it will ever come home to roost, though?

>> you know, joe, i'm going to sound like a central banker for a moment. when you are in the middle of something and make some decisions and think about being in the emergency room, and there's a cost benefit analysis and you think, doing this right now has more benefits, even if there is a cost down the road. i'll throw that question to you. in the middle of the crisis, it made sense. some point along the line, it no longer made sense. and extracting from this operation has proven to be more difficult. what i believe you said was, okay, time to take your medicine, regardless of the fallout here. >> they don't have much choice. the markets are going to correct. ben bernanke was always clear there were benefits and costs. but there are alternative policies, if congress and the administration had acted to void

a better stimulus package, to provide other things that could have gotten the economy moving. the fed acted in the absence of anything else. and unfortunately that carries with it the consequences that you over -- you overstate the values of equities, of real estate and other things, and that can't be permanent. >> i had an impression at some point when we were off 10%, before some of the comeback, that if we got out of this zero interest rate policy, with a 10% correction, and this is apologies to people who lost a lot of money in their portfolios, that we as a country got off cheap. >> that would be fine. >> that would be expected. >> yes, if you push the price/earnings ratio 30% above its historic average, not going to last. if you do it simply because of

an interest rate policy which can't be sustained, it's not going to last. but the real question, which we don't know the answer is, are there enough leveraged investors, enough other potential pot holes in this that we could see a more systemic adverse effect on the economy? if it's just the market coming off 10%, that's isn't enough. >> did you see the latest notion that yellin wants to put to rest the greenspan/bernanke, the perception there's a greenspan/bernanke put and she's going to go in december to dispel that's notion once and for all. and ask marty, has there really been moral hazard conjured up because people thought they took more risk because they thought the fed would always come to the

rescue if something hand? >> there are so many different investors. some said the market is going. i've got to get with it. others thought interest rates are very low. i have to invest some place and will be smart enough to pull out. i don't think you can characterize a single theory that investors had when they jumped on to this bandwagon. >> will she do it because of that, steve? >> i think when yell on and others on the fomc have said they do not want to move in quarter point hikes, i think that's part of an effort to get away from that put. that idea that we're going to telegraph everything. there's a notion what happened in 2003 and 2004 gave the market too much. it is sort of -- i know we've got to wrap here. it's more modern central bank thinking to bring the market along. this notion of transparency at

this conference. it's been decided it leads to better policy outcomes. there's perhaps a notion as well they've gone too far. there needs to be a bit of guess work and that leads to that put. >> they never said when ben bernanke said there were risks, he never said, while i'm encouraging you to shift into equities so that people will have more wealth and spend more. by the way, that's just temporary and it's going to fall and you're going to lose money. unfortunately, that's what's happening. >> steve, and at night, be honest. what goes on out there? do they have a big supply of pedialyte ready in the morning? >> i think i can tell you, i had dinner with the governors of the bank of israel, latvia, norway, we had a nice discussion about norway's sovereign wealth fund

and norway's problem that they found natural gas. and then cigars with the governor of the bank of saudi arabia and governor of the bank of finland. i can tell you that. >> is it -- >> it's hard core, dude. >> you mean the drinks? >> yes. >> no, it's hard core monetary policy. >> that's when you get the real information out. >> you look a little -- i believe you. >> on the eyes, yeah. i got an interview coming up. you may want to talk about that. isn't that in the teleprompter? >> thanks to professor feldsoon to and professor liesman. steve will be with us in a few minutes and, yes, you have a big interview coming up. narayana kocherlakota will be - bbe --

on. and later on "squawk on the street" the interview with stanley fischer. i got kocherlakota right, but this is fischer. >> i will be on "squawk alley" during this. >> it's a great interview ahead of his big speech saturday. >> really? >> i'm doing double duty. >> that's a long day. >> the bloom. viewers benefit. the bloom is off the rose for some of the buzziest ipos. so far more than 53% of this year's new offerings are trading below their opio price. the impact on violation straight ahead. created using digital models and real world location-based specs that taught it how to follow the wind. so while the ones on

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welcome back to "squawk box." some of the buzziest stocks that have been ipos. right now they aren't so hot right now. there are some big implications for some companies gearing up to go public. good morning. >> morning. >> what's going to happen here? the big question is the markets

have been tumultuous. we thought that tech stocks in particular have gotten hammered. in the public market. not yet in the private market. but so many of them think they need to go public. >> this market turmoil and leading up to it has been a wake-up call for all liquidity. investors have to be ready for more expensive financing. we saw it in the junk bond market and in the ipo we saw a lead-up to it. and before this market turmoil some surprising ipos that broke their ipo price. we have seen signs and now this big market reset about to happen. >> come this fall, your prediction we'll not see a lot of ipos? what's going to happen during this window? >> the window still exists but

the balance of hour is going to change. investors have to make money after we saw this whole set of ipos coming out this year that are underwater in post ipo trading. we'll see the reset on valuation because the rest of the value has been ratcheted down and another extra discount because the volatility has been very high. investors are not going to forget that in trying to price these early ipos. the balance of power is going to shift. >> we've seen down rounds, companies that had valuations. a big number that effectively when they go public, the ipo number would be lower than the earlier valuation. we rarely have ever seen that in people trying to go public. >> we have rarely seen these huge private valuations and the

amount of money put into the private equity market. i think the secret is these latest very highly valued rounds are being done with resets, with protection on valuation for the investors in those private rounds. that's a signal that even those investors are getting antidelusion protect. >> we tell everybody air b & b is worth $20 million but that's a headline number. the way these are structures that real number may not be real. >> what happens is the last round, it seems like it's that value. if there's a valuation reset lower, those last investors get more shares to get them to that level. the delusion happens to the recaller investors who don't

have that reset. they realize that valuations are very high. so, yes, i think we will see the resets in the public market but it may not hurt the last round of investments. >> are we seeing too many ipos. i'm down there at the exchange every day at 9:30 and it felt like one or two every single day. i wonder if that signaled something. >> 2014 was a record year. 2015 has been a little slow. but the market has adjusted. the technology presence has been low. haven't seen such low levels. >> not necessarily a supply issue. >> no, this is really about price. >> kathleen, thank you. coming up, donald trump trying to settle a big question on the campaign trail, including, is it realty? we're happy to loan him the

squawk test. that powerful story is next. you're watching cnbc, first in business worldwide. can it make a dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver?

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welcome back to "squawk box." a new poll puts donald trump at the top again. in south carolina, the latest example that this isn't a

traditional presidential campaign. trump brought a woman from the audience on stage to prove his hair is real and not a toupee. >> i don't wear a toupee. it's my hair. i swear. come here. come here. look. >> it is. >> say it, please. >> yes, i believe it is. >> and have i ever met you before? no. >> no, you haven't. >> but you're very nice. >> actually tweeted that out. it's not a combover. trump does not have a comb over either which i can't say about everyone not having a mi mini combover. you were over there with the leaf blower. was that the only time -- >> this is andrew's hand.

>> you were so tender. it was nice. you have a nice touch. >> that's what they should have done to the donald. >> that's not plugs. unfortunately -- unfortunately, at the very end, i don't think we show the very end. we had justin sit down who is bald and then it looked like it had blown off. >> when you asked about the donald factor, eventually we're going to get over the entertainment value. we're not talking about policies. we're talking about his hair. >> "the new york times" is the networks, "meet the press." >> we're all doing it. >> there isn't anyone who can say no to the ratings candy. if you really don't want --

>> huffington post isn't covering it all. they're covering it as entertainment. >> if he is not a real candidate for president, where would you put the huffington post in terms of being real journalism? they don't have a category for what the huffington post is. >> just remember where hermain cain was four years ago in the poll.

personal income and spending numbers hitting the tape. jim? >> we want to see what people are doing with their gas money. the personal income number comes out at plus 0.4 from a survey. the personal spending comes out plus 0.3. expecting plus 0.4. last month revised. that part of it is a wash. down to pce. core pce, 0.1, exactly what we expected month over month, year over year. expecting 1.3, it was 1.2. we started with 13 handles down.

ten-year about 2.16. we want to see, gas has had a second plunge down. want to see if the consumer is emboldened and will spend that. we're right now in volatility versus fed is the whole game. dudley came out the other day and sound like he had our back. we're going to see how this plays out. >> little reaction there. dow futures are still pointing to a lower start. now we go to steve liesman in jackson hole, wyoming, with a newsmaker. >> i'm here with minneapolis federal reserve president narayana kocherlakota. let's react to the data. you heard the core number.

what's your reaction? >> it remains very low. we don't make monetary policy to try to fix inflation now. we want to get back to target in the future. where we are now is a great indicator it's going to take some time, more than a few years, to get back to target. >> what is keeping inflation down, and to what extent is that something the federal reserve can do anything about. >> i think the general thinking in economics for many years is that monetary policy is a key shaper of inflation outcome. that is reflected in our long-term goals statement that there's -- i think that employment is something shaped by many factors outside the control of the federal reserve and it's challenging on that front. on the inflation front, i think we have the power and -- >> you keep saying that and i read in the textbooks.

and that's the general theory. i keep repeating that on television. people get sick of me saying that. you keep missing the inflation rate. central banks around the world can't get the inflation rate. maybe it's time to change the theory. >> there's a constraint we don't talk about. the zero rate on interest rates. how can we get to our target, provide the stimulus required to get back. and one way we try to do that is through the asset purchase program. i thought it was a good thing to do. >> when you say zero -- you are saying because we haven't driven interest rates negative. you are saying if you'd gone

negative on interest rates you might have hit your targets. you find it completely uncompelling. >> barring big changes in the data. we're looking at the data. barring that, i don't see a near-term increase in interest rates as being appropriate. i mean really through the course of 2015. the reason i say that if you lift off interest rates, what are people going to conclude? they're going to conclude the fed doesn't think it can hit 2%. you're going to start to see our credibility, people's beliefs start to slide. you're already seeing that in market data. this is reality. >> do you think the fed should go another step and do additional easing or

quantitative easing or negative interest rates? >> the situation right now, given our inflation outlook, would call for consideration of those steps. >> what is it like to be on the fomc and single handedly hold this view? why is it other guys don't see the world the way you do? >> that you'll have to ask them about more than me. it's a great group of people to be with. i've been really inspired being part of the economy. it's a great colloquy because it's about the kinds of things we were talking about. >> a lot of people look at recent market turmoil and say this is a direct relate of mafe policy. >> we're going to have volatile ut. we saw some volatility in

economic markets. i look through the lens of prices, employment. i worry about market volatility that it's going to feed back on to those variables. having some equity volatility that doesn't translate into debt markets. i don't think that's going to be a major concern. >> marty feldstein was here and said you pumped up markets and pushed them beyond their normal price/earnings rairb you. you not only are going to have a decline in market values but you create systemic risk. >> i've talked about this in the past that keeping interest rates low, there are risks. a way to take that on board is to monitor them and make sure risks being created through the policy are not sufficiently

large to swamp the benefits. we do a lot of work on this in the system and this is not an issue at the current time. >> how much are things going on going to determine outcomes in the united states? >> this is where i think the market volatility does matter. it's not so much as a cause but a signal. it's a signal of uncertainties at the global level, about global demand particularly going forward. i view those as representing a risk. it doesn't affect my outlook but i see it as another thing we have to be cautious about and another argument for not being hasty. >> when you look at the way the market reacts to the federal reserve, there's frustration, a lot of voices out there. what's your best advice in terms

of listening to the direction of the federal reserve and whether the fed is sending mixed signals. >> every fed president and governor who speaks, except for one person, says they're speaking for themselves and expressing their own views. it's like listening to a member of congress express their own views. that's how congress is going to go. there's one person who is that exception for. and that's chairman yellin who speaks for the committee. and markets and other members of the public should pay close attention because that's the voice of the president. i'm speaking for myself. those might not be shared by everybody else. >> your view on the u.s. economy. big number, second quarter, 3.7%. we bounced back from the first quarter. give us a view ahead. >> i want us to get back to 3% growth rate. i'm forecasting 2016 we'll get

back to 3%. you talked about bounce back. the first half is still close to 2% growth. i'm optimistic we'll bible to do bett better than that in 2016. >> back to you with the other side of the story. all balanced here at "squawk box." >> thank you, steve. great interview. great conversation. we'll get some market reaction to president cokeula kocherlakota's comments. we want to know what you've been thinking about and what's going on in the global markets. we're reading your tweets and facebook comments and we'll share some of them in just a bit. use the

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♪ after the wild week in the markets, the fed is asking, should i stay or should i go? with more on this, lou green, a strategist at drw trading. how much does this indecision or uncertainty around the first interest rate hike weighing on

the market? >> i think the thing that's weighing on the stock market is the idea that the fed is going to raise rates. if not in september, they'll do it in the next meeting after that. ever since the bottom of this market in 2009 the fed has called the tune for the market. when the fed balance sheet treads water and goes sideways, the stock market has trouble. the first qe ended in spring 2010. the market was down. when qe 2 ended in the midsummer of 2011, the market was down 20% by october. when the fed did "operation twist," the fed balance sheet going sideways, not expanding, the markets traded in november 2012 at the same level when qe 2

ended a year and a half before. and qe 3 started. and when the fed said qe 3 is over in the september fomc meeting, the market has trouble. it may not just be the fed calling the tune but either slowing the balance sheet growth or turning the monetary accommodation. that makes the market more vulnerable. before yellin said at their humphrey hawkins testimony that not only can the economy tolerate a rate hike but needs one, the shanghai was down 30%. the s&p didn't wobble. after she said that, the s&p peaked a couple of days later. so the -- to finish up, the fact the an tticipation of a change policy is what hurts. >> what's the bottom line,

whether it's september or wharf, what do equity market investors need to know? >> what they need to know is without the benefit of the fed, but as the fed accommodation comes away, as the balance sheet shrinks from $4.5 trillion it would seem that chart of coordination between the two would come into effect. the fed is interested in getting off of zero but probably not very interested in going very far. >> we've got to leave it there. thanks for your thoughts on the topic of the moment, the fed and what it means for the stock exchange. we'll go down to the stock exchange with jim cramer and find out what he's watching ahead of the opening bell. no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than

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we're teasing joe about good music this morning. >> who is this? keshia?

she was on "the cosby show"? >> no. how do you spell it? k-e dollar sign h-i-a. there's a new forecast from beverage marketing. coke and pepsi have their own bottled water brands but the price of water has fallen 25%. and the price of soda has risen 33%. nestle, i believe, is the biggest seller of bottled water. everyone saw this coming. >> yes. >> thought you had something to say about water. >> no, i love water. nothing bad to say about it. the stocks we're watching, ac activision blizzard and united continental. they'll be replacing paul corporation and hospira which are in the process of being

acquired. a group of investors may be cutting their $9 billion offer for chinese internet services provider qihoo. the deal would be the largest e privatization deal for a u.s.-listed chinese company. >> you nighted wasn't in the s&p 500. >> is that surprising? >> i think that is surprising. it's a big company. >> stocks on the move this morning, auto desk earned $0.19 a share for the latest share. revenue came in below forecast rein the company cut the outlook for the full year. and carl icahn just closed an 8.5% stake in free port. he plans to have discussions with management. and game stop beating estimates by $0.07 with a quarterly profit of $0.31 per share. they are also issuing update guidance for the second half of

the year thanks to a strong thanks to new game releases coming out. >> that you don't just down load from the internet. i know. i know. >> you know. >> i think the writing is on the wall. >> i think this is like netflix. >> being disrupted. but they're increasing their revenue game. >> it would be interesting. if they can transition or if they become a block buster. >> jim cramer joins us now. yesterday, jim, when you see things like that, and you can tell what -- it's almost like there's a force somewhere. you're up 350, and people are thinking, wow, yesterday up 600, now up 350. this is really good, and then it takes you down to up 50 just to make people say, oh, no, it's going back down, and then they close it up 350? how does that work? are there ten really big

investors that plan these head fakes, or is it totally by chance in. >> i think you right about that. i think there's few. look at united continue men enc. look how much it's up. it's a 6 % move. this is all s&p related. it's very thin. it's, obviously, the varsity will come back in a couple of weeks. everything we're seeing is so exaggerated. and not good. as you and i both know. when you can be up 600 and down 600, where she stops, nobody knows, is not something they hows to retail investor to feel any confidence with the market. >> i'm afraid to use that varsity, junior varsity expression anymore after we heard isis was the jv. it's just too scary at this point, isn't it? >> that's a good point. let's use college and pro? >> maybe that's a better way to do it. steve liesman, we've had, like this, jim, we haddest esther ge,

and i think that's illustrative of all of us. no one knows what the proper course is and it's divided. >> that's why i like dudley. dudley is not an ideal og. he said we're looking at the data. maybe it's not imperative to raise, but we're considering the market. he said don't lose faith in us. we're going to do what we think based on the data. we're not just going to say rate hike on. we're not going to just say all that matters that really i care about right now is the inflation target, and i thought that calmed the market. it said, we're going to try to get this really right rather than just make a statement that it's time. i think the u.s. economy is very strong. i totally get that they may have to do it. i just love the fact that they were pragmatic. that's kind of what we want.

we want pragmatic based on the data. if data is strong j bring on the hike. >> a friday in the summer to look forward to. >> i know. i was going to take tonight off. i'm here, because we all know, we're in a crazy zone where if we had stopped at 3:30 yesterday, the story would have been rally fizzles, what's the matter? >> right. yeah. i know. >> all hands on deck. >> it gives everyone a reason to watch. thanks j jim. >> good point, thank you. >> okay. we've been asking you to send stories that have you buzzing this morning. the best admissions coming up. check out a look at the futures. things have gotten a lot better. now they're getting a little bit worse. the roller coaster continues. you're watching "squawk box."

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because you got jolted. got a ticket for his girlfriend and now he's going alone. now it's time for us to too responses. earlier we told you about a hackovhac hangover remedy, over the counter children's medicine, pedialyte. one says pedialyte works. he's been using it for years. he says endurox works to. >> what is that? >> i don't know. >> maybe sprite or tylenol, maybe motrin usually helps. >> you're not a big drinker? >> not at all. >> hangovers hurt more than they used to, another country song. they hurt worse when you get older. >> some casting news.

michelle pfeiffer is going to be playing ruth may doff, a story that tells the story of bernie madoff. berry levinson will direct the film. a congratulations to diane enriques of "the new york times" who wrote the back this is based on. and abc is doing a mini series as well. we're going to be seeing a lot of madoff in the traumatic mini series. >> big stars they got for that one. >> who's in the abc one that i'm missing? >> i don't know. >> who's playing madoff himself? >> richard dreyfus ifn that one. >> he looks more like him. >> and blythe danner is playing

ruth in that one. >> we have a video to show you. a man sunbathing on top of a wind turbine going viral. it was caught on camera on a drone. the man was soaking in rays on top of a 200-foot wind turbine without any safety equipment. >> join us month or tomorrow. we don't be here. "squawk on the street" is next. >> good morning and welcome to "squawk on the street." i'm sorry. that song makes me laugh a little bit. i'm here with jim cramer. i am david faber and we're live from the new york stock exchange. kwoi carl quintanilla has the day off. we end this volatile week on