that's why i bought it. >> you mentioned earlier, market driven, the vix has come down a little, stock market came off its lows. >> and when you look at the s&p still negative and vix still negative, big spike over 22 is not holding. >> guys, it's been fun. good thanks to all the folks here at the bureau at one market. great hospitality. hope we're back sometime soon. "power" starts now. and welcome to "power lunch" where the market and your money are headed into uncharted waters. have no fear, more than a trillion dollars worth of investment advice coming your way. i'm michelle here with brian and melissa tyler is on assignment. >> let's forget about denmark, nice country, legos are great but also forget about japan because now it's the debt of global powerhouse germany that has seen the yield on some of its debt go negative. in other words, you have to pay them to hold your money.

look at the ten-year reaction. all of this on the eve of the big fed decision. joining us is the chief executive officer for blackrock global fixed income. i know everybody wants to blame it on the brexit,ry, but the reality is the yield on the german bouund has been falling r 30 years so what does it tell you when the bonds of one of the biggest economies in the world are now a negative yield? >> so, first of all, i think you're right in terms of they have been falling for a while. some of it is aggressive monetary policy and there's not enough bunds relative to what the ecb has been buying and that people use them to manage their risk and use them as hedges against credit, hedges against other sovereign risk so all of a sudden when there's a flight to quality you get the extreme moves that have created this dynamic today which, about by the way, bleeds into the u.s. treasury market and other safe assets in the world today.

>> let's say it's only the ecb or primarily the european central bank doing the buying, rick f.that is the case, does the yield mean anything? if i buy something for myself, it's not setting a market price. >> yeah. that's 100% right. i don't think there's anybody that i talk to or many people in the marketplace say i'm going to buy ten-year bunds as this level because they are a good investment. i think people are buying them, a, because they have shorted them against other assets and b, because they are a flight to quality and i'm going to hold them and, c, because there's so many of them around and you create these unbelievable moves, similarly in a move extreme way to what's happened to japanese government bonds and less so the drag that hits the u.s. treasury market. >> if, for instance, the european banks are having to hold more capital through basel iii and the impact making those yields go lower and there was a report that commerce bank was

looking at perhaps taking their money out because they don't want to have to pay negative yield anymore from the ecb. >> so it's a longer discussion than the nature of our segment, but listen, i think what it does -- what it does is it forces -- you think about what you have to do. people have to get yield in their portfolio and people have to get returns so they look for other places to get returns. one of them, people say you can just keep policy at zero or negative rates if there's no after effects. the after effects are real and the mal effects are real. people look at storage, how do i storage assets? do i go into gold and take more risk into my portfolio? i think it's not fair when people say policy just means you can keep policy easy if you don't hit had the inflation target. there are other effects and you're seeing them play out in the markets today. >> yeah. i'm surprised we haven't seen strong rebellion. the reports from commerce bank about just wanting to take the cash and stuff it in safes because it's actually cheaper i thought was a real important

moment in this discussion, rick. what do you do as an american investor, we presume that's what this audience is mostly at this hour even though we're a global network, when you see yields falling like that? do you reach for high risk yield or low-grade debt? what do you do? >> so it is one of the more challenging environments that we've had in a long time. i think it means you have to diversify your portfolio. try to get into places where you're not as effective by the distortion and rates. the municipal bond market has been a great place where people have taken advantage of a tax benefited yield that we think makes sense. there are parts of the carry environment today where whether it's high yield and we would look at some of the securitized asset classes that make sense and own some places that are not distorted because of this incredible move in developed markets raise so parts of emerging markets, indonesia, india, where you get investment

that makes sense and it's not distorted by the monetary poll. >> i a negative yield doesn't look so bad as long as it's within the rate of inflation. are these yields dangerous for some people? i mean, if some people are so risk averse, they are willing to do that, buy a negative yield, is that unsafe? >> so it creates -- first of all, obviously, your return paradigm. in a stable way it's not great, but you think about what's happened and one of the things people don't factor in as much. when you bring rates down you extend the risk of fixed income. you extend the duration of fixed income. people are sensitive when all it will take is small moves higher that can create a dynamic similar and not nearly as profound a way when you have the taper tantrum. doesn't take much when the rates back up and you can create loss in portfolio. >> that's a yes i think. >> we have to go, but a he makes a good point. bill gross mentioned if you sell

a bond for .3%, a 30-year bond like in toyota and it moves by .1 of a percent you wipe out a year of return. you're gone. >> that's fair. thank you very much. do appreciate it. >> let's get now to sue herera for a news alert. sue? >> thank you very much, brian, and this concerns the s.e.c. and the iex exchange. basically what's happening is the s.e.c. staff is recommending full approval of the iex exchange application. the full commission will vote on recommendation on friday. the only issue that they have to work out apparently is the speed bump which is designed to slow down the fastest frayeders and that's been a bone of contention with some of the other exchanges like ice. iex was started by brads katsuyama featured in the book "flash boys." there are other exchanges that are pushing back on that, but right now the s.e.c.

commissioners will vote on recommendation this friday. back to you, melissa. >> all right. thank you very much, sue herera. take a look at amgen shares and outperforming the broader ivb index and down more than 6% for the year. let's get right to meg turrell who has more. meg, take it away. >> melissa, thank you so much, bob broadway, the ceo of amgen, thanks for joining us. >> nice to be here. >> i want to ask you what's been driving biotech more broadly this year. a lot of fears around the election, talks about drug pricing. how would you characterize just that rhetoric and how you expect it to continue going into the u.s. election? >> i might start in a little different place. i might start with the fact that there's been a profound wave of innovation emerging from our industry over the past year or two and i think a lot of excitement around that innovation and clearly clinical results are driving some volatility and valuations and in addition there clearly is also rhetoric around the political climate that exists in the united states and the

affordability in particular of the new innovation that's emerging to address some of the serious illnesses that we face as a society. >> how much does the election matter to your business? who actually wins? does that make a difference? >> i think the most important thing in our business is the ability to generate innovative drugs that address the needs of society, and we live in an aging society, society afflicted by a number of chronic diseases for which innovation i think is the answer, and so far more important than the political cycle is our ability to innovate and address the needs of patients suffering from serious illness. >> and i think a lot of this rhetoric is kind of depressing valuations. it's clear the ivb is down this year so much. as a bigger company in this sideways with a lot of cash, how does that influence how you consider deals? >> well, we historically have enjoyed a mix of internal and external innovation in our business and we continue to look externally for opportunities to acquire innovative molecules or even companies, and i think the

volatile climate that exists today makes it a little more difficult on the margin. >> in order to pinpoint where the companies should be valued. >> for example, in order to pinpoint where companies ought to be valued and fundamentally i would expect that over the long haul our business will continue to be a mix of both internally generated innovation and externally sourced innovation. >> well, i'm going to go back to a source of that innovation which is sort of your genetics driven rnd. you discovered a gene that lowers people's risk of having a heart attack. how quickly can you translate that discovery into an actual medicine? >> we hope very quickly, but the big picture here is that amgen is profoundly aligned the idea that human genetics offer a revolutionary new approach to finding drug targets that matter to help address serious illness, and what you're referring to is an example of that. potential new pathway to illuminate heart disease and potentially a new therapy to address the risk of heart disease in society so we're

moving very quickly and we have to have a molecule that addresses that target in the clinic over the next two years. >> well, bob, we'll have to leave it there. many more questions for you. thank you for joining us. >> thank you, meg. >> all right. back over to you, guys. >> all right, meg. thank you very much. on deck, the biggest winners and the biggestlousers among all the retail names lately. some. names may surprise you. plus, a minneapolis man suing the tsa. if he wins, it could open the airport lawsuit glad gates, and would that keep you safer? that story still ahead. trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.

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welcome back to "power lunch." i'm michelle caruso-cabrera. pope mao renewing his ban on assault weapons in the wake of the country's deadliest shooting in u.s. history. let's get to cnbc's john harwood with more. >> reporter: michelle, he did renew that call for renewal or the revival of the assault weapons ban that was passed during the clinton administration and then was expired and was not renewed. he also updated americans on to the investigation into the orlando shooting saying that the evidence points to a shooter who was self-radicalized, not inspired -- not directed by any foreign terrorist group. he recounted some progress that the united states had made in reclaiming territory from isis, but the heart of his response was a denunciation, strong denunciation of donald trump, without mentioning trump's name he called it un-american the way donald trump has reacted to

terrorism with a focus on muslims broadly rather than on terrorists specifically. >> we now have proposals from the presumptive nominee for the president of the united states to bar all muslims from entering america. we hear language that singles out immigrants and suggests entire religious communities are complicit in violence. where does this stop? >> now, the president went on to mock the notion repeated by donald trump over the last few days that his failure to say the words radical islam somehow contributed to the problem or america's inability to stop problem. he said in fact he was careful in his language to avoid aiding muslims in recruiting disaffected people by portraying

the idea that america is at war with an entire religion. this also represented the president's response to the suggestion that donald trump made publicly yesterday that president obama himself might be sympathetic or somehow complicit. donald trump saying he's not tough or not smarter or maybe he has something else in mind. powerful response to president obama today from those suggestions. i just checked donald trump's twitter feed before coming on air. no response from donald trump yet but i'll be shocked if we don't have one in the next couple of hours. >> keep us posted. thanks. john harwood in d.c. defense stocks did make a move to session highs as the president spoke. lockheed martin is up by half a percent. raytheon is seeing a slight bump. the intraday is what you need to focus on and enin terms of northrop grumman that's higher by a third of a percent. >> let's bring in clark irvin, former inspector general and department of homeland security under president george w. bush. good to have you here. >> thank you very much. >> i don't know if you heard the president speak earlier and

certainly heard john harwood. the president used his speech to fight back to fight back on the notion that he doesn't take the threat against america seriously enough. >> he absolutely does and i think the president was very, very clear on that. he pointed out that it would come as a surprise to the terrorists who have been taken off the battlefield by the united states thaurg the bush administration and the obama administration that the president and the administration does not take the threat seriously enough and i have to underscore what john said. the president was at his most impassioned on this notion that somehow using the phrase radical islam is an antidote to trip. anything to suggest that we're at war with the entire religion is exactly what isis wants. it's this tiny minority of muslims who are perverting that religion in killing in the name of islam with whom we're at war >>the department of homeland security was founded in the wake of september 11. it was a very different attack we suffered in orlando.

a large-scale coordinated attack and now we've seen more than one case of individuals or very small groups of people, man and his wife, attacking the united states. is the department of homeland structured in a way that can help stop terrorism, this new kind of terrorism that we're facing, especially when it's meant to deal with immigration. this guy was an immigrant. >> it's a question of less of government structure than the nature of trip. as you say, we're in a different world. we have a new normal. as catastrophic as attacks like 9/11 can be, if there's any good news it's because they have such a large scale they are very difficult to carry out. now, in my judgment terrorism has become normalized and randomized meaning it can happen any time anywhere against any target. we have here for the second time a terror attack on a soft target, in this instance a nightclub, a terror attack in a city like orlando that unlike new york or washington is not considered to be in terrorist

cross hays and bus this particular individual was radicalized online in the anonymity of his home it's very difficult. in fact, it's impossible to stop this 100% of the time as the president said. it's very, very difficult environment wherein it requires the help of every american. >> what about the threat of domestic terrorism? this guy said something about isis. may never have had anything to do with isis. search of the worst ten mass killings in american history had nothing to do with islam or muslim religion or anything. people pissed off about something and they go and want to kill somebody else. we may find out this guy was pissed off and this was an anti-lbgt crime. how do we got domestic terrorism, really home grown stuff? excellent point and no question all kinds of motivations, mental instability, hate crimes,

prejudice on the base of race or ethnicity or sexual orientation and we don't give much attention to crimes motivated by those motivations as we do the kind of terror attacks that are motivated at least in part by some religion perversion so it's important the consequence. more important the consequence than the motivation and we've got to understand that every american has a role to play here in unifying the country and doing our part, as i say, to help our counterterrorism and law enforcement. >> you've said that a couple of times, and what i haven't heard yet here is so what do we do? does that mean neighbors turning in neighbors, what is this? >> let me tell you. when we see signs that someone is motivated by hatred to the point that we think that person might well act on that belief, then it's our obligation as american citizens to call that to the attention of law enforcement professionals. it is highly likely that anyone who is radicalized by any violent belief will have come into contact with someone who spots that. in fact, in the case of this

particular killer, he -- >> he was interviewed twice by the fbi, right? >> he was interviewed tries by the fbi. >> so. >> that's a separate issue. >> what can the fbi do when there are not indications that the person has moved from violent belief to violent action? that's a very, very judgment call. >> i know we've got to go. michelle brings up an excellent thing. now all the articles about this guy have his supposed friends or former colleagues, yeah, i knew he was going to do something and i said something or i didn't say something or i should have said something. when do we know to say something and who do we say something to? if you come across somebody that's spewing hate and making threats that you would perceive as valid. >> right. >> what do you do because all these people are saying i told local authorities or i should have said something and the guy slipped through the cracks and murdered 49 people. >> right. >> what you should do is report that conversation, that suspicion, to local law enforcement authorities and then

it's their responsibility to follow up on that and to interview that person. now in this particular instance there were three interviews by the fbi, and, again, we're going have to look at that in the days ahead. the fbi itself is looking at that. the director said that yesterday. there were signals missed. it's very, very difficult. it's a very difficult calculus that they have to make. >> sir, thanks so much for joining us. >> thank you. back to the markets, alibaba's big revenue forecast giving a boost today but is it

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alibaba. thanks so much for phoning in. we do appreciate it. >> the numbers in terms of the forecast are staggering, 48%. the consumer numbers, the gmv numbers, gross merchandise value numbers. why do you have a neutral on it and what's the biggest headwind in your view because if it is a possible downturn in the chinese economy, the forecast today being so bullish would allay that fear. >> yes. it is the chinese economy and the chinese economy hasn't really crashed yet. there are aspects of it that have gone down but the consumer has yet to slow down and alibaba is probably the best proof of that. they represent much of consumer spending in china. their gmv continues to slow. only 22%. it was 24% last quarter, and it's only going to be 22%. alibaba's success right now has a lot to do with how well they are monetizing those customers by adding more and more services to their merchants and

consumers, but the -- the risk for a slowdown in the chinese economy affecting the chinese consumer still ways on the shares in my mind. >> when you look at the various metrics, a lot of investors are questioning gmv because everybody calculates that differently and gmv may not mean revenue book paid items so you value that over the revenue forecast that they are giving in terms of your view of the stock? >> it's unlikely that they are overreporting gmv and so that fact that that metric continues to decelerate does indicate that the chinese consumer is starting at least to somewhat decelerate. we heard from their competitor jd.com that they are pointing to the chinese consumer starting to decelerate. alibaba is growing phenomenally well and at the end of the day the growth is tied to the chinese consumer very closely and that's really what's going to determine their fate over the

next few questions. >> gill, thanks for phoning in from the site of the alibaba shareholders meeting. up next, one of britain's leading newspapers urging its readers to vote to leave the european union and wait until you see the headlines. "power lunch" is back in two. ri. ri. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars.

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hi, everybody. i'm sue herera. here is your cnbc news update at this hour. we have federal appeals court upholding the net now tralt rules which require internet providers to basically treat all web traffic equally. it's a win for the obama administration. consumers groups and also content companies such as netflix that want to prevent online content from being blocked or channeled into fast or slow lanes. maria sharapova has lodged an appeal of her two-year suspension from tennis with the court of arbitration for sport. she's seeking to completely have that ban lifted or reduced. a decision is expected by july 18. bmw is recalling nearly 189,000 suvs in the u.s. because the child seat anchors may become

damaged and they won't hold the seat properly. the israel covers model years from 2011 to 2017. and a strong tornado was caught on camera as it ripped through masterton, texas. the storm touched down monday bringing with it hail and dramatic lightning strikes in addition to that. they are still under a storm warning at this point. that's the cnbc news update at this hour. i'll turn it back to you guys. >> i'll take it, sue. thanks so much. final gold trades across for the day and we we are seeing the flight to safety alive and well here. we are finishing off the session highs in gold but it's worth noting we hit the highest levels since february. gold closing up .1%. the most sizable moves we're seeing here in palladium as well as platinum. each up by 2%. now let's check in on the bond market. rick santelli is tracking the act and all the negative yields around the world from the cme. rick? >> absolutely. that's what every trader is watching.

our five-year has been pretty active and important part of the yield curve. there has been a minor u-turn and still at very low yields even on the session we're lower than what we closed yesterday. you see the right side. hooked back a little bit. it is significant if you're into comping back. for a while at the low yields of the day comping back almost exactly three years to june of 2013. we're still comping back to 2015 on the 30-year bond, as you see, and it continues to flirt with that 240 level. finally, let's look abroad, shall we. a lot of look in the jgbs in particular and maybe the bank of japan is taking its foot off the qe gas and we'll monitor that closely and no matter how you slice it the 20-year chart says there's never been lower yields in the 16 basis points on tens and when it comes to europe we're all watching the 10s but the 3s are pretty interesting. the most negative on the curve hovering a few basis points below minus 60. sully, back to you. >> let's get a news alert with

dominic chu. >> sully, with regard to what's happening with uber, a dow jones report citing sources saying uber plans to raise between $1 billion to $2 billion in debt financing in the form of a leveraged loan, that is a loan issued to corporate clients that have perhaps higher interest rates associated with them. the loan would bring to some 50 billionth amount of cash that uber has raised. uber plans to top institutional investors for this type of loan say those sources familiar and that uber has hired again, according to the report from dow jones, morgan stanley and barclays and others to arrange this leveraged loan. interesting development on the private company side for uber. back over to you. >> dom chu, thanks very much. calls to leave the european union are growing increasingly louder in britain and now one of the papers is urging its readers to leave the eu. let's bring in a brit. you must know because you're english. what is happening overseas,

wilfred? >> the momentum is building very, very quickly. "the sun" newspaper, the most read daily has decided to back leave. why is that significant? it's believe it's the most read daily, as i said. it has a large working class readership and has a history of changing its allegiance off successfully before elections. its choice to back a brexit a further sign of exit winning more in a reactive sense than anything else. this is an update on the polls. there's been three major polls in the last 24 hours and have given exit the lead. leave has had a three-point lead of, 47% to 44% highlight the huge momentum growing behind leave. as for the betting markets they showed the same momentum and don't predict the same outcome. the latest odds imply a 60% chance of remain. why the discrepancy between those two. that's an expected swing on the due due to expected uncertainty

as opposed to the status quo. market responding in the past week. sterile down 3% against the u.s. dollar and german dax down 7.5% and bonds being bought whether in the germany, u.s. as rick just told us. >> all the focus on the pound. not so much on the euro and when i think about this, boy, if they vote to leave there's a threat to the entire european union. >> the periphery loans out. >> the italians can say, we're -- we're going, and then the currency becomes under threat. >> absolutely right. i couldn't agree more. we've seen equity stocks respond, i think there's one crucial difference compared to the greek crisis when we know how much that was threatening the euro. not an immediate systemic banking impact where there is a

big political threat over the medium term that could, of course, affect the political future of the european union. >> we're watching european financials trade at lehman brother lows so the market is telling us there is some sort of immediate threat, whether it's not necessarily from britain leaving the european union itself but the ripple effect michelle was talking about, the dissolution of the eu. >> as you guys rightly point out the euro is the outlier that doesn't respond yet whereas german bond yields have. the dax 9% of sales go to the uk and 10% to china. dax always responds on china's news and starting to respond on british news. >> big gaps between the polls. are you going to vote to leave? yes, yes, yes, and what the betters are betting on, as you noted. it's narrowed but still a 12% difference. the people always say one thing and maybe i shouldn't. >> the momentum is being matched on both in terms of the trend. it's getting closer and you're right the terms of the difference of outcome at 2.2.

>> that british vote just one big thing on the minds of those who deal in stocks every day. bob pisani back with us. obviously you've got the brexit and federal reserve and bond yields. what's on the mindsch everybody? is it really the british vote? >> it is. brexit is the number one issue, and i think a lot of people were surprised. polls take people by surprise and it definitely moved hour markets in the last few days. want to show you europe. we ended close to the lows for the day of france, germany and spain here. we're down now, almost 5% in some of the markets over in europe. take a look at the s&p. we moved off of the lows for the day as europe closed at 1130. you can see that right there and we're still down here overall and, again, clearly a little less inclination to sell as we came off the lows. if you take a look at the vix, volatility index, amazing moves in the last two days as the brexit really heated up 15 to 20 on the vix here, a very unusual move. overall clearly people reaching

for protection on breks yilt fears. you can see we're off of the highs here. got up to 22 at one point and come down a little bit here as the selling is alleviated, again, since the european close. in terms of sectors, well, with the yields not doing anything, we're getting interest rate sensitive groups like utilities and telecom and consumer staples leading the way and banks have done nothing and it's another crummy day. fourth or fifth day, notable declines, all of them and regionals as well as the big money center banks so we're now dealing with declines that are very notable. some. banks here are down 8%, 9%, 10% in the last four or five days and there's where the real impact you're seeing of the low rates and brexit concern is sort of spilling over here, the double whammy hurting both sides of the atlantic. >> something key to watch. thanks so much. >> okay. brexit, what do you do? do you invest, is it an opportunity or do you wait it out? let's bring in mark heppenstall

and what do you think? >> what looked like a long shot a couple of weeks ago looks like it's turning into more of a coin toss today so i would expect more volatility especially until the brexit vote. >> does that mean hold off, wait. >> what do you do? >> for the long-term investors i would see it as an opportunity to get in for a trade. i think that's another question. it's hard to sort of bet on a coin toss. >> steve, you say this is the time to invest in europe, right? >>? >> yeah, absolutely. take advantage of the long-term play. buying in at a cheaper rate right now. brexit is not going to happen. it's not going to happen. >> you're convinced. >> i do not think brexit won't half. i know the polls are getting tighter. london polls and britain polls are always off. the betting part is where you see the true numbers. 9%, 10% of the undecided, your

moderates in the middle and the ones generally going to go for the stability of what's predictable and what's already taking place. tic advantage of the fact that the market is discounting these prices, especially in the financials and take advantage of that now and that's where you get your outsized returns. >> we should highlight. you brought up the bookies and wilfred brought them up as well. we don't bring them up lightly. considered a very serious measure and people look at the bookies quite frequently and oftentimes they are far more correct than the actual polling numbers so that's why we bring them up. mark, what do you think of gold here because we've seen it rights, and if you're worried about volatility or about the possibility of brexit, some people are thinking that's a good idea. >> certainly if the fed is going to remain dovish and keep rates where they are, i think gold becomes an attractive asset and relative to german three-year yield and 60 basis points, never thought i would say this, gold is a high-yielding asset compared to a lot of sovereign

bonds out there. >> it's not brexit but what's happening with interest rates. what do you think, steve? i see here that you think gold is the worst investment on the plan >> yes. >> why? >> i think gold is an awful investment. it was an awful investment for 30 years until the early 2000s when somebody convinced the world, the fear trade, save your accounts during the tech bubble and now everyone is starting to get back to the realization they don't use gold for anything. not used for any production value or no real value in the open market other than fear trade. if you're a trade and doing a day-to-day thing, that's a different story. gold 30 years will be looked as the next worst investment over the last 30 years. doesn't do anything. not going back to the gold standard. >> heard all of this before, i know, but -- >> it's pointless. >> you're not giving an enthusiastic endorsement of gold. >> if central banks are going to keep printing money, eventually you'll lower the value of money and if you lower the value of money that's constructive for the price of gold so i certainly

wouldn't label it the worst investment in the history. >> it's not tied to money anymore. it used to be tied to money and it's tied to money in some theoretical back room channels of people talking on the internet, but in the reality. world it's not tied to any monetary policies anymore so why should it drive the price of it? >> didn't anticipate a big gold debate. >> i'm sorry. >> art cashin says you're keeping up on hands to broad the border guards. >> go to powerlunch.cnbc.com to see why steve likes twitter and everyone is staying away from tesla,.cnbc.com. siri stole the spotlight at apple's worldwide developer's conference and when about apple tv? we'll look at apple's big plan next.

apple justors underwhelmed by yesterday's developers conference and that may turn out to be a really big deal and what hasn't turned out to be a big deal is apple tv despite being a pretty good product, in my important. apple rated a strong buy with a $130 price taggett. age angelo, listen, apple app, my daughter watches it all the time? why hasn't it gotten more attention? >> i think you make good points. when you look at the tv operating system, it's first important to note that it's still very early in the cycle. i men, it was just released last year, so i think you're going to have to give it some time to really kind of ability to play

its role in the hardware side of things and the view is the operator system will be a great platform, the hub towards everything associated with the home, the connected home and gives apple a good opportunity in the coming years to tackle that kind of internet of opportunity and when it comes to the actual hardware device i -- i think you kind of have to give that some time and hopefully that living room evolves into bigger things over time >> you know, i always get the bill and the e-mails this my daughter is buying a show or a movie, whatever, and i wonder how much does apple make. you know, if you buy the season of the americans or whatever it is and it's 24.99, whatever it might be. do we know how much apple is making off that versus the distributors or produceers? >> probably not much, and if you look at how much apple is actually making off the actual tv platform, i mean, it's maybe 1% of their overall revenue so it's really not a needle driver

here. >> ben, what do you think, is apple tv going to wow us at any point and do you believe the building out of the little black box puts to bed the physical idea of apple hardware, an actual tv? >> well, the hardware itself will never be that impressive because you have to buy other stuff to use it. they are trying to ease people in having a remote from the iphone and using that to bring that this. as a content driver, they have also introduced single sign-on now so all the apps that you use for video and content can be authenticated with a subscription not through apple's streaming program eventually i

would hope they move into a fully fledged tv set because you don't have to worry about the inputs, volumes are unified and things like siri can work passively into the home. >> they can go right after the video game market, ben and you can play a lot of games, 60-inch de rossi road, nothing like it. personal experience. >> you've done it. >> remotes are terrible. >> no idea what you're talking about. >> on the apple tv? >> the bigger one, still small. >> so is the fire tv. it's small. >> it's simple. it's amazing. >> can never find it. it's in the couch. >> download crossy road on your flat panel tv and you'll know what i mean. okay. >> long lines at the airports have caused thousands of people to miss their flight and many people get upset and one minnesota man wants cash compensation for a missed flight caused by a long wait by the tsa. suing for the cost of the ticket, just over $500.

what do you think? good idea or potential pandora's box of litigation and lawsuits that will tie up this nation? >> i think it's a great idea. >> why not. >> i wish the tsa were privatized, far easier to sue a private company rather than the government and you'll have much more accountability of what's going on at the airports. >> will he win? >> get to the airport earlier. >> what if he says he got there two or three hours beforehand and he missed the flight. what if an fbi investigation delays you getting to the airport, do you see then the fbi? what is the expectation of security? >> intuitively. >> i understand. >> somebody who flies a lot. >> do you admire his moxie? >> yeah, absolutely. here's the thing. if i believe those lines made me safer i might be more willing to

toll rail them and i'm not convinced, massive, massive lines trying to get on an airplane that we're any better off safety-wise, not convinced. >> melissa, do you agree with that? >> i think we're safer -- it's hard to prove a negative. what would have happened if we hadn't had the tsa in place? >> doesn't have to be this tsa but a different tsa. >> i believe we have been safer over the past however many years since the tsa was put in place. hard to prove a negative, that without it. >> extremely difficult. >> that's all i'm saying. >> sometimes the tsa lines are like playing a giant game of crossy roads. >> the u.s. ten-year note yielding 1.068%. the german bund, the ten-year, plunging, going negative for the first time. look at it there. lower right-hand corner of the screen, just two decimal points

out. we'll discuss what on earth to do to find yield. bond legend bill grossing is giving stock picks, mm-hmm. this is completely exclusive to cnbc, the names that he likes when "power lunch" returns. i could get used to this. now you can. when you lease the 2016 es 350 for $329 a month for 36 months. see your lexus dealer.

last week we sat down with bill gross and asked him to give us concrete actional investing ideas right now and not just bonds. here's part of what he told us. >> i like mortgage reits. we're talking about manly and other companies that yield 11% and 12% and what they do, basically the banks without the infrastructure of a bank. they buy a government-guaranteed mortgage paper and finance it at -- at, you know, 1% and they earn 3% and lever six times and that's why you can get an 11% or 12% dividend. >> you can see four more of bill's best ideas right now that did not air on tv. go to our website, powerlunch.cnbc.com and we'll air more of our revealing and

exclusive interview with will as we talked about things like the lawsuit. all of that will air later on this week. pretty interesting stuff. up next, one of the greatest stock investments of the past decade continues to hit new multi-year lows these days. what happened to chipotle?

check out shares of chipotle. they are down more than 14% in just the past month. company has had a string of bad luck and bad news including the loss of its brand of the year title to mo's last week. chipotle has tried its best to avoid negative press since the health care scare and that doesn't help the stock very much. trading at lows it hasn't seen since july of 2013. you talk about this a lot on "fast money" at 3:00 p.m. eastern. >> questions of whether or not the food safety concerns are behind them. it may be over in terms of number of cases reporting but some thinking that the community, some of the customers will never go back and there's a big question mark over chipotle, whether they have defected, not necessarily defected to a specific chain, grow

graphically, the barn rah next door and the qudoba and if they have simply lost those guys to other competitors. >> thoughts? >> you know, i just wonder the focus on organics and having to go out into a supply chain that's very different than say what a mcdonald's does raises questions to me about how much just know what's in the food. that's all. i mean, i speak -- not in any specific evidence. >> one of the greatest money making stocks of a decade and then it just fell off a cliff. all right. u.s. retail sales overall rising half a percent in may. believe it or not that topped expectations but it's been a wild year for pretty much all of retail so here are some of the best and worst stocks in that sector. did you know, someone says, what's the best retail stock over the last 90 days. you'll know the answer. ulta salon leading the charge up 24% and below that big lots and five below. done well, up 14 and 12% each over the last 80 days and worst

retail stocks, conn's and abercrombie & fitch and fran kresa holdings. cohn has lost half of its value. retail seems to be changing. genius. >> master of the obvious. >> genius insight by sullivan. >> all right. it's just after 2:00 p.m. on wall street. stocks are losing steam this hour. the dow jones industrial average is down triple digits at this point. the s&p and nasdaq are weaker as well. dow off 115 points and the s&p lower by 12 and the nasdaq lower by 28 points. what are the biggest threats to the u.s. economy? steve liesman knows because he is here with the exclusive results from the cnbc fed survey. steve. >> thanks, michelle. at least i know what the respondents to the fed survey know. outlook for growth, came down pretty dramatically with the weak first quarter and had that built back up a little bit and

then it came back down. we're now hovering in the boring and per pet pull. 2.3%, 2.1% for the next year, the range we've been in for a very long time post-recession period. the next is the probability of recession and still tick back up and where it was with the worst fears of recession in january at 30% and now it's 23.5%, a bit above the long running average. one of the concerns out there among the respondents is the presidential election. 58% say that the presidential campaign has a negative outlook -- creates a negative outlook for the forecast. 40% say no effect and 3% say it's positive. among the other big threats out there, we'll take a look here. the perpetual number one has been global economic weakness. come down a little bit. it's come down a little bit and tax and regulatory policies here in the state. that's come up a bit and 28%.

over my other shoulder here the possibility of rising interest rates at 25%, and this is a new one here, protectionist and trade policies, 13%. now saying this is one of the biggest threats. we'll hear a bit about that, michelle, that the post-presidential campaign we could be enacting protectionist policies. >> and nobody mentioned breks yilt? >> no. >> some comments about brexit but the question is why did the fed not hike in june. 50% said it was because of the weak jobs report and others say it's because of the brexit. a lot of economies don't see this as a big deal for the state unless there's systemic risk that comes off of it and the actual nuts and bolts of the agreement or britain leaving the union is not seen as a big deal for the u.s. economically. >> god it. thanks, steve. >> pleasure. let's talk more about the federal, interest rates and your money and bonds everywhere are giving investors less and less

yield. might be good for mortgages but is it good for anything else? let's bring in global market intelligence and here on set and sri joining us remotely. you've been saying the ten-year is going to go down. you've been right. are you sticking by your call that the ten-year could go below 1%? >> brian, again, i've said that on your program to you when it seemed unlikely to go below 2%, that it actually would. now we went below 160 earlier this morning, brian. my expect is that this will go through 150 and towards 1%. the reason for expecting it is even at 1% the ten-year treasury would be a cheap buy when you consider that the ten-year german bund went below zero today, negative yield and we're not going to say that the united states is significantly riskier

than germany, that it should be yielding that much greater. you have a disparity in global bond yields and that's the reason -- major reason why i've been expecting yields to continue to come down. we're also having central bank feast and so to say with the ecb bank of japan, people's bank of china, all trying to ease further and further. that in turn is also going to cost overall global leads to go down including the u.s. treasury. my point here, brian >> okay. >> wow. >> he heard my voice and he just stopped talking. >> todd, what do you think? do you agree? we going to go to 1%? >> i don't think it's going to happen but investors are certainly flocking into some of the etfs and a little more credit quality like the investment grade corporate bonds and lqd and vanguard's getting strong inflows and high inflows

into the corporate bonds as well as investors are willing to take on more credit risk to get 3%, 4%, 5% through risk there. >> forced there because germany negative and japan negative and u.s. almost nothing. >> i think they are forced there in part because the yields are low for the treasuries so they are willing to take on a bit more risk and if you're more confident in the u.s. economy then the vanguard etfs can bring a low cost structure and be quite liquid. >> s ri, so many people, including if you take a look at the bank of america, merrill lynch survey released today, two-thirds of investors said brexit was an impossibility, that i'm paraphrasing and in terms of the trades going into the brexit vote, long bonds, long gold but there will be a really quick unwind of that trade if brexit does not happen. >> melissa, i think brexit is only one tiny portion as to why the yields are going down. if brexit threat did not exit on june 23rd i would still see

interest rates going down or the yield going down significantly, especially on the u.s. side. let's say that brexit does not happen and the remain actually prevails on june 23rd. yes, you do have u.s. treasury yields backing up some, but longer term it is one of global economic weakness and in terms of what todd talked about, melissa, in terms of where the returns are going to come from, by my calculation, if you had bought the ten-year treasury last friday at 1.64% and you held on to it for a year when it reached and went down 1%, you would get a total return of 7% from your holding. if you reach 1% within nine months, which is very clearly possible, your annualized return will be about 9 boston so you're doing extremely well in high grade. the point is that this is the time for you to take a duration

risk when the global economy is slowing and this is not when you want to take a credit risk and that's an important distinction to make. >> and we've seen the longer term treasury etfs that are out there, the ones getting the inflows. investors have been -- despite there's recession fears that may be out there, vfrtors aren't going into the short-term. >> the tlt. >> rotating into something that offers them a little bit more yield and more comfortable with the risk profile that they are taking on. >> do you think they are buying, it todd, because they are nervous it or because they think that it's a good deal? >> i think they are buying it because it's a good opportunity to be able to do that. some people who may be going into fear trades but we really will be seeing money moving out of fixed income efts if people were afraid of the fixed income. we've seen more than 40 billion flow into fixed income etfs this year. strong inflows despite the challenges and the fed concerns. >> todd, a pleasure. thank you.

sri, if you are right i'll take you to dinner an i'll borrow every dime to pay for the dinner because money will just be free. sri kumar. >> it would be a pleasure to have dinner with you, brian, for that reason alone i hope i reason. >> i'll have to pay. sri, thank you, appreciate it. >> thank you. today at 5:00 p.m. eastern time the msci will deliver its highly anticipated decision on the inclusion of chinese mainland stocks and they have fallen sharply but over 4% in the last week while china's markets are ray tempting to make a recovery. are chinese stocks ready to be put in the global spotlight or are markets too volatile? our jim cramer had this to say today. >> i see the chinese market, and i think, well, i don't say that they have it under control but i also say it's not a disaster. i just don't want to own chinese stocks and don't play by our rules. >> let's bring in joel wells, portfolio manager and tim seymour, "fast money" contributor and, guys, good to have you with us. tim, i'll kick it off a year ago, june 10, 2015, when msci

decided against including china into its indices and global investors are probably breathing a sigh of relief because shares are down 46%. what would the impact of inclusion be or not to include this time around? >> all we were doing is talking about the speculation in the chinese stock market which had the market soaring into that number and ultimately that selloff, you know, exacerbated fears about china in continue. a lot of people imputed the weakness in the local stock market as that which would take down the entire economy and consumption trends that were fragile. going into this year and as an em guy it's great that the world is very focused on msci reclassifications because peru and pakistan are also in the mix today and china is the big one and i think -- i think they will get the nod. i think there will be a partial inclusion, 5% of the investable market cap free flow and i think, you know, for em investors tracking the index, that's probably 18 billion to $20 billion over the next year

or so, but in -- in symbolism for the total market feel here i don't think this is as big of a deal as it was last year. >> right. >> even though china psalms what we're watching. >> joel, you know, whenever you hear about let's say an s&p inclusion, stock going to the s&p 500 and the stock goes up. are we, you know, in the same sort of circumstance, chinese stocks go and global investors who are indexed on the msci index will have to go by. as tim point hsbc has an estimate out meaning an extra $20 billion in chinese stocks over the next years. >> i don't know if at the moment it's an actionable or tradeable event. i think the other guests mentioned it's only going to be a 5% inclusion factor and that won't happen until june of 2017 so markets will have a year to digest what's going on in china. it's not going to be easy. they will have to get acquainted with different accounting standards, different currencies.

they will have to learn man drin because most of the financial statements that these the companies have are not in english so there's going to be a ramp-up period and so within in this next year or so will give us ample time to digest what the markets can do and look for opportunities. there clearly are vom opportunities in mainland china. >> yeah. let's get right to them. tim, where are you seeing the opportunities right now? today, for instance, alibaba said they expect 48% revenue growth for fiscal year 2017. that, of course, flies in the face of everybody who thinks there will be a downturn in the economy and the consumer there is going to slow. >> before we get into that reigh really quickly. as em goes, china is already 26% of the index so people trading the eem or vwo need to know they are heavily pegged to china and as we looking a the china consumption story, no matter what you want to say about the industrial growth in consumption, it's growing.

numbers are pretty scary and baidu is the best combination of kind of valuation meets growth, i think, across -- >> they take their revenue forecast down 10% and you say it's a buy now. >> even with that trade it's 18 to 19 times at growth probably 25 to 35. still like it. >> where are the opportunities right now in china? >> first of all, the vwo actually is tracking to the ftse and they started introducing "a" shares into the index some time ago so there is exposure to the "a" share market that you can already get, not the side or scope should the msci include it later. >> sure. >> we are, you know, i think the opportunity here really can come on an active and a passive side. the fact of the matter is passive investors have no way to articulate a real view in china, a holistic view of what the economy looks like. whether it's looking at the new economy, the old economy or what not. so i think this will be a wonderful opportunity for people to roll their sleeves up, figure

up what spots they want to be in, but here they can take a much more holistic and get some of the economic benefit of overall indexation. now from an active side we like -- we look at the real estate and real estate is an incredibly important component of gdp for the economy and -- and really front and center for whether china pulls itself up out of the -- of the cyclical downturn that it's in right now. we imagine going forward there's interesting opportunities, policy drive or perhaps m & a opportunities in the real estate space. >> joel, thank you. joel wells of alpine funds and tim seymour a f-money trader. more on that tonight at 5:00 p.m. eastern time right here on cnbc. >> germany's bund yield turning negative and the uk could leave the eu. what's happening in europe and how it affects your investments in the united states.

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welcome back to "power lunch." i'm michelle caruso-cabrera. stocks off their session lows and sol i'dly in the red. dow lower by 92 points and nasdaq by 21 and s&p off by nearly ten, a decline of half a percent for every major average. let's talk about the negative or positives. piper jaffray ceo joins us for a "power lunch" exclusive.

health care conference going on and we wanted to talk to you about brokerage business. good to have you here. >> delighted to be here, thank you. >> let's talk about a number of issues when it comes to the markets. german ten-year yields now negative. does that frighten you? how does name pact your business in trading? >> well, obviously it has an ongoing impact. i'm of the belief that if we get a slight turn here in unemployment after the pause last week we're on to more positive ground. if you look at the earnings, they are relatively consistent and positive. >> okay. and what would that imply for yields here in the united states, do you think? >> i think there's a clear bias by the fed to look for an opportunity to start normalizing the yield curve. obviously we're being pulled down by the global level of interest rates and as we can all see negative territory in many

countries but i think the economic stability here and the fed bias suggests to me we're not going there. >> even in the face of the election, steve liesman, has rise raised the concern that there's some worries that the election could be a detriment to the economy here when you survey economists. >> i'll grant you that this may be a more unusual election but i think history suggests that elections typically have a more moderate impact on the markets than you might think. >> i've got to ask you about m & a because in your latest quarter, first quarter, analysts were pointing out that your m & a revenues were quite strong and coming off a record fourth quarter and they are also pointing out they are expecting a general market slow down in mergers and acquisitions. saw a big deal, microsoft buying linkedin for more than $26 billion. does that excite you thinking that the animal spirits are out

there and there's more deals that will get done? >> well, i think a lot of fundamentals are very much in place for m & a activity. you have a relatively stable economy, but modest economic growth so top lines for many companies aren't at the level that -- growth that they would like to see. with credit readily available it makes good sense we're in a positive m & a environment. in our particular case we were speaking to a little moderation after several very strong quarters back to back and we look forward to seeing a really constructive m & a environment. good to hear >> thank you mr. did you have. chairman and ceo of piper jaffray. >> coming up, the story of a small business that's making money by providing marijuana retailers with cash. plus, robots are taking our jobs. is the problem going to get so bad though that the government is going to just have to pay people to live? we're going to talk to a former labor leader calling for

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each day was fueled by thorough preparation for events to come. well somewhere along the way, emily went right on living. but you see, with the help of her raymond james financial advisor, she had planned for every eventuality. ...which meant she continued to have the means to live on... ...even at the ripe old age of 187. life well planned. see what a raymond james advisor can do for you. welcome back to "power lunch." i'm dominic chu. shares of synchrony falling

today. the credit card company expects more chargeover rates as customers fall behind on payments. check out american express, capital one, discover and back over to you, guys. >> thanks, dom. cnbc teaming up with "ink" magazine and today we're in denver where one company is hoping to cash in on legalized marijuana. sneaks's kate rogers is live in the mile high city with more. kate? >> reporter: hey, michelle, that's right. key yosks are everywhere today from mcdonald's to home depot, but one denver-based startup is taking that kiosk technology and hey playing it to the cannabis industry. take a look. cash is one of the marijuana industry's most nagging problem. dispensaries are flush with it due to a lack of normalcy in banking. tracking it is a challenge made

eliot spitzer with denver-based jane, a retail kiosk solution for cannabis dispensaries. >> the reason for jane is to create a greater user experience for the consumer as well as providing dispensary owners with cash control and regulatory compliance. >> reporter: the company is run by entrepreneur david ellerstein and offers several solutions. registered customers can order with an app and jane isn't greated with dispensaries seed-to-sale tracking software to manage what's ordered and paid for. >> as regulators and bankers are all dialers as cartel dialers, we can show them we're business-minded in how we handle our cash so we are maybe somebody they should bank. >> reporter: jane machines are pricey, about $15,000 and are in five stores right now with plans to roll out two dozen more in the coming months. >> i'll take them, go up to the counter and show them my

receipt. >> reporter: you can be out of here in five minutes. >> for customers it means shorter wait times in dispensaries like this and for dispensary owners it's an easier way to reconcile their cash at the end of the day. >> reporter: the owner this company says jane has shortened wait times in her shop. >> the best thing for us is to allow our regular customers to have an opportunity to not have to wait in line and we know who they are. they come in and everything is ready to go. >> reporter: as you guys know, of course, we're here in beautiful denver. for cnbc and "ike" mag zone's iconic tour 2016. our second year doing it. great lineup. tyler will be there tomorrow and i'll be there and if you can't join us here live in denver sign up at cnbc.com/iconic live to catch all the action. won't want to miss it. >> at least we know why tyler went out a day early. >> a visit to the underground.

>> we're joking. >> she didn't disagree. >> you are quiet, kate. >> what's going on there. >> reporter: i'll leave it to you guys. you're the anchors. >> wow. kate rogers. put your seat in the lobbed and upright position because we have two airline stocks that analysts are says are worth your money and after a big run earlier in the year is crude oil stuck at 48 bucks? the final trades straight ahead.

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hello, everyone. i'm sue herera. here is your cnbc news update at this hour. president obama says nth muslim rhetoric from the likes of donald trump is not the america we want arguing that treating muslim americans differently won't make the u.s. safer. >> if we fall into the trap of painting all muslims with a broad brush and imply that we are at war with an entire religion, then we are doing the terrorists work for them. >> two sophisticated adversaries linked to russian intelligence services broke into the democratic national committee's

computer networks and gained access to the dnc's research on donald trump. the firm crowd strike basically said it was approached by the dnc to investigate a potential breach of its systems and immediately uncovered the russian hackers. a protest erupting outside nra headquarters in virginia. the demonstrators calling for stricter gun control legislation. they carried signs and the names of the 49 people lost in the orlando nightclub shooting. fans of hockey hall of famer gordie howe were able to pay their last respects to the hockey legend in detroit. howe's casket arrived at the arena where he'll lie in repose. the family made it a priority to allow the public to have access. funeral services will be held tomorrow. that is the cnbc news update at this hour. michelle, back to you. >> thanks so much. the oil market closing for the day. let's get to jackie deangelis over at the nymex. >> hi, good afternoon, michelle. oil prices closing at about

$48.50. a little bit of a pullback. the bumpup in the dollar contributing factors. bullish news and the market is taking it in stride because it feels it already knew this, that demand is going to pick up in the back end of the year and we're going see non-opec supply contract. at the same time what's interesting, a report also said while this rebalance occurs in 2016 we'll see a surplus again. that's what people are focusing on. at this point crude really stuck in this range though it's in the upper band near $50 but not able to get over that hump and really hold there. back for you. >> all right, jackie, thank you very much. time for street talk. guggenheim security starting with a buy and $110 target and the analysts says the company is quote, harvesting, him, not me. him, not me >> you didn't say that, because that's such a brian sullivan. >> clearly a viewer and genius.

insulated customer dominant business, see 8% to 9% shares growth and 12% share growth and things the brand awareness on tractor supply is growing and calls it a a you unique discretionary retailer. tractor supply is four times bigger than its next bigger competitor. >> in tractor supplier. >> dog food, carhart. 20% upside. btig more bullish with a $115 target. >> raymond james bullish on alaska as it trails third quarter eps on a number of others in the wake of rising field costs. it's alaska's top pick and it will manage the competitive capacity risk well and improve revenue trends. still the price got trimmed from 88 to 105. >> and in the middle of a dealing right? >> yeah. >> virgin, see how that goes. third stock, another airline

pick, by the way, melissa and i need new reading habits because it's from the same analyst. >> we liked the note so much, we both liked it and we shared our love for the notes which disturbs me. where we are. >> so nice we read it twice. this one is allegiant air, same analysts at raymond james upgrading it to a perform. specific to allegiant the analysts says investors may be overestimating a couple of things, the impact of rising fuel costs and the overlap with the deep discount frontier and spirit airlines in particular. their target price on a lg t 190, about 30% upside. >> lennar, mkm is previewing the second quarter and earnings are out i believe on june 21st. a below consensus eps forecast and lennar is one of the more solid operators in the space with a strong recent track records of, beats and given this track record and recent lackluster stock performers it may be a short-term catalyst. it is sticking with its neutral

raising and $52 price target. this whole sector today is getting beaten like a rented mule as brian likes to say. >> that's right. no sense to rented mules and they will carry things for you. today's under the radar name, vonage, ticker vg, citi group upgrading it from a buy to neutral. the target goes, get this, to $8 and the stock is at 5.32. a bump today and 48% upside to the stock. here's why. it's a call based on the shift to clobd-based computing for companies. here's the thinchlg the analysts think vonage could start to nibble away at the 1-800-number business. >> that's interesting. >> ever go to click to call buttons on the website. a lot that have is the technology that vonage may be powering. analysts sigh free cash blow to growing as well. vonage getting a boost and an $8 target. >> 60% upside. >> yeah. >> big name. >> that's it for street talk and let's talk now about something else. we've talked a lot about how

more and more jobs may be taken by machines. in the future will there be now have jobs for people, and if not, how do people live? we'll talk about it. one of the former union leaders says we need a $1,000 a month universal basic income. he'll make his case coming up. i was working in the yard, my chest started hurting and i thought, well, you need to go to the doctor. i was told that is was cancer, and i called cancer treatment

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the s&p financial sector again lagging, and we're down more than 1%. the spdr bank regional and the kre, the ticker, both near their lowest levels. day and tracking for a fourth straight down day. first time it's happened in about two weeks. these etfs are post double digit losses over the course of the past 12 months so financials not just on our side of the plantic, bribe, but also the other side in europe as well. certainly a focus for investors. back over to you. >> thank you, andy stern, head of america's biggest and most influential union has some bold and some would say crazy ideas on how to wipe out poverty and jump start the economy. it's called a universal basic income in which the government would write a $1,000 check to

every american whether they would work or not. it works out in raising the floor and we welcome them to "power lunch." this vote just failed in switzerland and had it up for a vote and we've talked a lot about this on the show and even as a guy that would lean conservative, i look at this and think if there are no jobs or not enough jobs in the future, what do we do, and this is meant not as a gift but what? >> this is meant in order to provide economic stability and end poverty. we currently have a social safety net to try to take care of people in need, and what we're talking about now is a very old idea, actually milton friedman and richard nixon passed it in the house twice and the democrats refused it because it wasn't big enough and so it's an idea that says in order to make sure that everyone has a floor, something they can't fall below, that we end poverty once and for all, let's give everyone a check. >> i interviewed milton friedman several times before he died and

he liked this concept or the earned income tax credit as well but because he didn't like the nanny state idea of section 8 which is money for housing, foot stamps, which is money for food, right. it's a voucher system. if you want to give the poor money, just give them the money instead of having these big federal programs that are poorly run, inefficient, et cetera, so would you advocate reoperation all of these welfare programs with this? >> first of all, a very big ally in martin luther king who was somewhat responsible for creating the welfare state and said we didn't ask for all these programs. we asked you to end poverty and if you want to end poverty give people money so milton friedman and martin luther king are very much aligned. yes. there's 126 programs that give people cash. i'm not saying we end all of them, but certainly a lot of them. that's the basis of how we can fund this kind of program, so, yeah, we'll have to change the welfare system going forward. >> get rid of the whole welfare system and replace it with this and the other thing he was

concerned about you can't give any kind of welfare to immigrants, advocated allowing a lot of immigration and if you wanted to attract best and those who wanted to work the hardest you made sure you didn't pay them because if not you i trkted people who didn't want to work. >> my plan says for neighbor 18 to 64, every month they get a $1,000 check. >> even immigrants. >> citizens of the united states, and basically that's $50 above the poverty line for an individual and $24,000 a year is for a family of four, so we're basically ending poverty but providing some stability as the jocks disappear. >> where does it go though? the opponents of this would say first off, you're paying people to not work, not what america is about and once you get the 1,000 is that going to be enough. pretty soon they are going to be asking for more. how -- how do you go after those arguments against the ubi? >> well, i think everybody says whether that's social security or any kind of welfare program, the progressives always say it's

going to go down and conservatives always say they are worried it's going to go up. that's just the nature of our system. the question is, if you think about driverless trucks, the largest job in 29 states that could be eliminated. >> the driver. >> 6.5 million people. >> this is an idea that when you first hear it you flip out. >> right. >> and then -- and i've done a lot of research on this. believe me, on my off time and at the office and even -- the economists that most conservatives love to cite, highiac, support it. >> right. >> this idea because the idea was, and i'm not saying i support it, but supporting the idea of lifting everybody so that everybody consumes because otherwise, and i do worry, and i didn't read your whole book, flipped through it as much as i could, that these jobs being wiped out are not going to be created by other jobs. >> and that's where we give brian a hard time. curb your -- >> we need to sop -- >> jobs that are historically --

>> men no longer rowboats in the bottom of a gallie. jobs go away all the time because of innovation and change and i'm not convinced that this time is any different. there will be other jobs. when people have to work, there are things that are created. there are new ideas that happen and those people are put to work doing other things. >> can i answer my co-host here. >> sure. >> i don't disagree with that, but you actually make an analogy to what i'm talking about in the book which is not just that -- i do agree, humans -- we do a good job of creating need for ourself. >> adapt. >> here's the problem. what's to stop us from going to anchor in mumbai? because they can pay us $50 a month. >> i'm glad i'm approaching retirement. i feel bad for the 20-year-olds. >> you're getting somebody to ghost write something and getting bids on freelance writers coming from the philippines at like 1/10 of what an american worker would want and you realizing oh, my god, not just about not having a job, it's about having a job at 80%

less pay than you currently have. >> yeah. i think technology and software has aallowed owl of this to go global and in my book i talk about transcribing my tapes where i put an ad on my website called up work and i have 1,000 applicants and hire the chief transcriptionist for the supreme court judge in the philippines at $3.50. that's not right. >> why isn't it good he has a job? >> it's great he has a job. >> for americans. >> that job will take someone here point. >> here's the problem. they say 45% of all the tasks, oxford, 45% of all the jocks, boston consulting, 25% of all the jocks, pew, half. experts say we're in deep trouble so i say a tsunami is change is coming and we'd be crazy not to look at the warning signs and if it's not universal basic income. i'm not betting my life that this time is the same as ever

about. i'm not sure that's true. >> i am. >> i don't know who is right, but i -- i will make a bold and confident statement right now which is this is not the last ubi discussion that we have on this network over the next ten years. >> that i can guarantee you. a lot to coming. >> nice to meet you in person. >> i don't meet a lot of you in persons. >> you guys are very nice to each other before the commercial break. kind of expecting to do this. >> we share milton friedman's concept. >> did you ever meet him. >> fantastic. >> i think i was saying at the kato institute. >> i can't believe they let you in the room. >> andy stern, the book is called "raising the floor." as out now. i know we'll get a lot of feedback on the segment. thanks for coming in. >> thank you. coming parks new record on how much americans gave to chair. see, there is good news out there and plus a device that's literally and this is -- this is a true story. the device out there. they just approves it that sucks

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we're just learning that a major donation is being made by the walt disney company, $1 million to the one orlando fund to assist those affected by the tragic events in orlando and walt disney stepping up to the plate with a $1 in ilion donation. just getting word of that. meantime, speaking of charity. americans gave away more money last year than ever before. robert frank's got that story. good news story. >> yes, another good news story other than the disney thing. charitable giving in the u.s. hitting an all-time record last year of $373 billion. donations increased 4% over 2014 and marked the second year in a row of record giving, giving by individuals made up two-thirds of the total with pound dayses and estates and companies making up the rest. mega gifts of 100 million or more totalled 3.3 billion last year including john pauwels ann's gift to 456rd of $400

million and david koch's gift to memorial sloan-kettering and smaller gifts by everyday americans of $10, $20 also increased so where did most of that money go in the top spot for donors >> the top was religion accounting for a third of the total. education ranked second followed by human services with $45 billion. the fastest was international affairs, down after the recession a and now up. >> religion, because they tithe. >> it was a third, now it's a half. it's coming down even though it's a larger share. >> that probably represents a decline in participation in religion. >> yes. we want to get an update on high end real estate. >> really high end. this year none sold at that price until now. the playboy mansion which came

on the market in january sold this month the metropolis. the price 1rks $05 million. that makes it the most expensive home ever in l.a. metropolis is famous for the hostess and twinkie empire. he owns the property next door. he plans to combine them. it require s hugh hefner to liv there till he was 90 until his death. >> i would insist that hugh hefner stay there. that would be all the fun, right? >> where's the party at the playboy mansion without him. >> stay there forever? >> no. but the twinkie magnet, the kpam pls. >> give us one of those. >> it's family show.

>> there's a ding dong joke in there too. >> a big deal yesterday. he's probably going to take in billions. >> it's interesting. the smallest violin but a large violin for the state of california which has had a lot of budget problems. taking close to $3 million. his tax bill at 13.3% will be over $370 billion, could be as high. we don't know what his tax planning is, but could be over $300 million to the state of california. we haven't seen ipos, so they need this money right now. >> it's one of the criticisms of california being reliant on capital gains because your revenue moves like an accordion. >> not just capital but tech. california has become a tech economy. that's one of the impacts. >> we've had one and that was yesterday over the last six

months. i'm working on some other story on this. we had one. that's not even public yesterday. >> okay. thank you. >> thank you, guys. >> well, the fda is approving a device that some doctors are calling assisted bow liam ya. we've got a closer look when "power lunch" returns. credit karma, give yourself some credit. know that my score sucks.

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welcome back to "power lunch." let's get to meg terrill in minnesota with a news alert.

meg. >> that's right. the world health organization committee meeting right now to discuss zika and the risks imposed. they say there's very little risk as a result of the olympic and paralympic games and therefore they're making no recommendations that anything be changed as a result of the zika virus and the olympic games. they attribute that to the fact that the olympic games will be held during brazil's winter and despite the efforts they're putting in place. they're continuing call it a public health concern of international concern but nothing will be delayed or postponed in terms of the olympics, michelle. >> thanks a lot, meg. we wanted to ask you about this device, an fda device, a fat loss device called assisted bulimia. they use a tube to andre at

least 30% before the calories can be absorbs. of course, this is a process really for obese parents, parents lost an average of 48 pounding during the first year. i would imagine the medical community would be really divided about this. >> melissa, it's a really interesting approach. the fda very clearly high up in the release of announcing approval of this device should not be used for people with eating disorders. if you think about what this device actually does where you have gastric bypass surgery which makes your stomach smaller so you eat less food, this essentially makes so it you don't absorb the calories that you're eating. it's only for obese situations but clearly giving some people pause about it it's something physical that i see hangs on the side of your body.

>> i would love something that would allow me to eat more, quite frankly. >> you would want to walk around with a bucket on you. >> i know. >> it's not for you but for obese people. >> i know. >> in terms of weight loss drugs, there hasn't been a lot of options out there. a lot of the weight loss medications taken orally, for instance, have been found to have some adverse effects. >> that's right, melissa. we actually have had new weight loss drugs approved in the last if you're bus we haven't seen them taken up by the medical society. these are small companies, market caps less than $500 million. doctors are not prescribing these drugs because you i don't lose as much weight and there are safety concerns. folks are wondering whether the surgical market and device market will be a good

opportunity investors aren't sure either. >> thank you. meg tirrell joining us from the conference. we've been showing that video over and over again. we apologize. >> it's an animation. >> a cartoon basically but still disturbing. let's take a look at a check on the market. brexit. that's definitely influencing the session here, we're pretty much at session lows. the dow is down by 127 points. financial's really taking it on the chin with the s&p 500 down by 1.5%. >> this is a very important sector, especially considering how poorly they're performing in europe and the united states. you brought it up earlier in the show. it's beyond brexit. there are issues with the european banking system that maybe are coming to a head here. >> there are concerns about loan repayments. american express, guys, we have time.

amex is down. >> on the sin krony news. >> you'll probably talk about that on "fast money." >> that's right. >> thanks for watching "power lunch." >> "closing bell" starts right now. hi, everybody, and welcome to the "closing bell." i'm kelly evans at the new york city. >> new york stock exchange. >> and i'm bill griffeth. the fears of the brexit rising as the german ten-year bund falls in negative territory for if first time ever. if you follow those kinds of things, this is really a momentous moment. >> how about the u.s. tenure going down 1.5% again. we'll have administrator on these moves just again. new problems in venezuela too showing that venezuela's