now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." oh, good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. we'll start with food prices. wti going up. wti sitting at $5050. yesterday, crude oil was down slightly it was down 52 cents to $48.55. even with food prices down, energy sector was one of the strongest sectors were we watching. stocks up across the board. everything you see has increased. the u.s. food inventories fell

by more than expected last week. separately flipping from july to august. you are seeing green arrows, the dow futures up by 24 points. we did see slight gains like this yesterday when the markets closed. s&p futures up by 2. nasdaq but by 2.5. if you check things occupy, the nikkei was down. the hang seng up, and shanghai up by 1%. ahead of that brexit vote, the dax up by 0.6%. the cac up by .30. tesla offering to buy solar city. tesla would pay $26.50 to $28.50 a share. that's a 25% to 35% premium to tuesday's closing price. of course, solar city's stock has been down in a very big way

this year. elon musk controls both of those companies. he's calling this deal a no-brainer that customers could buy an electric car, home battery and solar system all at once. the question is whether it puts too much pressure on tesla assess balance sheet. >> if you're an investor in tesla not you're thrilled. >> it's all about the battery, and there's a recovering story about two companies controlled by the same person. >> well, it's his cousin. twin sister's son. >> are they identical, we don't know? >> identical twin cities. >> identical. is that what it says here? >> so, if you were shareholders and voting would you -- >> i don't know, i haven't done the research. >> if it's a no-brainer, you don't have to. you just do it. >> you just do it, right?

>> otherwise, you don't say it's a no-brainer, do you? he thinks it's a no-brainer. i saw a special saying this is different because this -- you need to have -- there's a difference between a conflict of interest and something that's self-serving to line your own pockets. if it's a conflict of interest if it's actually being done to benefit shareholders. >> i wouldn't suggest he's doing this to line his own pockets. he believes in this. >> a conflict of interest in governance, i don't know whether it matters. >> if solarcity were doing better today, the not clear that tesla would win. just the strategic knowledge may or may not be there. a lot of it may have to do with the price of solarcity, frankly how solarcity has suffered over the last couple of years. to me, it's not a no-brainer. >> and i wouldn't question elon musk's thoughts on this,

strategies. if you're an investor is this not necessarily a connected business. if you're an investor, a believer in tesla, that doesn't mean you're a believer in solarcity. >> i'd be mad if i were a tesla shareholder. >> yeah, i don't understand that story and i don't understand this. >> are you sure, solar has its own issue. better man it through some stuff. solar's got its own issues, it's not like we've got the whole club business figured out now. that's like adding two pretty tough -- they're going to have to manage through a lot in the future. >> throw that challenge on top of tesla. also, softhanks that named ken miyaichi ahead of the operations company. it became clear that the ceo

planned to deep his job for another five to ten years. now, aroara had faced a bit of criticism over what some consider lackluster investments. he did make money. $208 million in the past two years. one of the highest paid executives in the world. of course, he came over from google. and mcdonald's has received half a dozen bids for the china and hong kong stores according to an reuters report. an offering from beijing, a tourism group sand power and tan china. and they entered the auction to team up with some of those chinese bidders. >> how is that going to work? they are going to be a mcdonald's store or take it to somethings? >> that's what i'm unclear of. i don't know if this is a

straightup franchise deal or manage it as something else? >> if we had a countdown clock, i wouldn't need to tell you this -- now less than 24 hours away from the start -- >> we do. >> i was kidding. you know ma the next countdown clock is? election. 139 days. i need that down to not seconds but tenths of seconds. >> not my countdown. and something else happens between that. >> that's right, you with your personal life. >> gets in the way of -- >> it is. we're all worried, sitting right next to me. >> i was here last time to the day before. >> i know, i'm at risk. get my goulashes in here. wilfred frost joins us from london. a pretty nice junket, there, wilf, to be covering us whilst over there.

did you see "the wall street journal," matt ridley, he's in the house of lords and i'm wondering whether you two have ever crossed paths going in and out of the body, when you're as a co-house of lords individual. but he makes really good case -- i read this, i was like how could anyone vote to stay after reading this. did you see this today? >> i'm afraid i haven't seen that particular piece. and i'm afraid i've not crossed paths with the aforementioned lord ridley. i don't often go into there. i've been there once or twice as a guest. i have a piefl newspaple of new sum up what's going on. "times" saying ftse chiefs join forces to large vote for remain. and we've got "the daily mail"

saying if you believe in britain vote leave. encouraging people to vote with their hearts. their gut. and that is really the issue that is facing voters today. that debate, do they go with the economic argument, which we would have to say has been won bit remain camp, whether by scare mon amogering is open to debate. or to go with the gut. the immigration argument, i match w imagine those outlined as you mentioned by lord ridley. it's the final day. it's not a focus of politicians, as we've heard the arguments, it's a focus for the polls. the latest polls have the "financial times" poll of polls, 44% to 45% in favor of leave. yesterday did give leave momentum that's why sterling was up yesterday. the betting markets, of course,

do remain strongly in favor of expecting a remain vote. the latest saying there's a 77% probability of remain. we do speak to one of the leading political betting companies today. an interesti ing ipso facto, th weight of money has been on remain. the volume of bets has bee on exit. so there are more bets being placed on exit. but the bigger bets are going on remains. perhaps, that's one of the factors that could suggest that markets are mispricing this. as we look at sterling as we discussed yesterday it's near the highs of the year and suggesting that we are heading for a remain vote. a number of guests this morning did say we'd see markets james mellon, a hedge fund manager said sterling would hit 1.52. not quite as bearish. and the euro, another market we

need to keep can a on if polls come out do suggest that it's closer than expected. guys. >> eu -- this is lord ridley, the eu is a supra national government run in a fundamentally undemocratic, indeed, anti-democratic way. four presidents, none elected. legislation entirely by an unelected coalition that could overrule parliament. i mean did you know all of that, when you signed on to that? do you remember what happened to us were they were taxing and no representation? don't you feel that way about henry viii there's precedent for this, wilf. >> precedent with henry viii? >> yeah. >> the sovereignty argument is an important argument. i have to say, though, it's probe the least important of the big three. i think most people that really want to vote exit, they're moved by the immigration point.

most people that really want to vote stay are moved by, of course, the economic argument. the sovereignty argument is important but i think it can be exaggerated. it's very frustrated as a brit to think that brussels makes some of our lords. but the percentage of the laws that influence our day-to-day lives it's a not a majority of laws. yes, is it growing as a percentage, that frustrates some people. but really at the arguments of the heart. immigration, sovereignty. or one's head, the economy. those people leaning towards that. >> we have state-type guys over here. but we at least have one government running things. we still have trouble whether states should do things or federal. we have our own immigration issues as well. it's funny how the entirely world is on the page on some things. anyway, wilfred, let's do this. it's going to happen tomorrow.

you know, even if it is a remain, i don't know whether the eu is fixed at that point. i don't know whether this is -- like now there's cracks in it and it makes it even harder to eventually consolidate. i don't know. it's not going well. it just seems that it will eventually collapse understand its own weight anyway. >> absolutely right. there's some big implications for the future of europe, regardless, we've seen lots of opinion polls particularly out of the likes of france and italy suggesting they want their own referendum. and implications for the uk, we could see political ramifications moving forward, whatever the result. >> all right, wilf. we'll check in with you throughout the day. we've got big interviews coming up. do you want to tell us who quickly. >> david feherty. >> indeed, ryanair.

>> wilfred, we'll see new a bit. he's there in london. he's covering this as it happens. >> i think cameron, if this doesn't go, he can become an actor. he can play colin firth. they're like the same guy, aren't they? colin firth plays royalty. have you noticed that, the similarity? do you know who i'm talking about? >> i know who you're talking about. >> king george. looks like cameron. haven't you looked -- he's on the cover every day. i thought it was colin firth. i did. in the meantime, in testimony before the senate banking committee, fed chair janet yellen outlining some of the dark clouds that she thinks still remain in the marketplace. and also, how she sees the brexit issue affecting markets. >> it would be significant for

the united kingdom and for europe as a whole, i think it would usher in a period of uncertainty. and it is very hard to predict. but there could be a period of financial market volatility. that would negatively affect financial conditions. and the u.s. economic outlook that's by no means certain, but it is something that we will be carefully monitoring. >> joining us right now is hines ollison. head the steeple. >> and a cnbc contributor. guys let me ask you first. do you think that the smart money is right when it comes to trying to figure out how that brexit vote is going to go. peter, what do you think? when you look at the betting markets when you look at sterling, when you look at how some of the stocks have lined up, do they have this right? >> i mean, if i was to bet, i

would say they would stay, just based on what you said, particularly the betting powers. but might as well flip a coin. i'll lean to a stay, if i were to bet on this. >> what would you vote? >> i am very sympathetic to the lead. just being an american and enjoying independence to have this government far away telling us what to do would bother me, i'm sympathetic to the leave. >> hans, what do you do? >> with the betting money, to stay. even the pound money recently. look, the undecideds are going to decide this vote. at the end of the day, you have to follow money which is exactly what you would have done if you look at the scottish referendum. and anyway, the way this cuts what's remarkable in britain right now is how vibrant that democracy is. think about it over the last

several years, they have voted on some very big issues. and it is, you know, it is something to marvel at. >> if you both think that the smart money is the right way to go, what does that mean if there's a surprise here if they actually vote to leave? or if it's so close that the stable wins, but it's within a 1% or 2% margin. what does that mean for market volatility? >> well, i think if it's close, and i know people are saying that that will create more questions, right? this is going to happen anyway. so, these questions will persist because the core problems in europe have not been fixed. you still have a sclerotic supernational government in brussels that just continues, right? there's a moment for them, if they're listening to their market, in which case this is britain, they'll undertake a reform effort to get better decision making and a more robust response to their

problems. i think, you know, the short term, you got a big market dislocation. but the question is what really changes after that? all right? if it is brexit, then it's going to be a period of five years plus while they do their workout, commercial activity will not go into halt. that economy is much more robust. >> peter, we know you've been hesitant about stocks. you've been concerned about what you see here, but we also have a fed that seem to be standing pad. there's nowhere else to put your money. how do you weigh those two arguments, the idea that stocks may be overinflated. but when comparing problems around the globe and the idea that the fed is not raising rates, what do you do with your money. >> no, that's an amazing question and the key question for years looking at the alternatives. clash is an asset class if markets fall. so i can say, am i willing to

pay in some metrics, valuations that are most on record just to have some yield. but to me, the risk reward just remains very unfavorable. i find better values in other overseas and emerging markets. >> such as? >> such as brazil, for example. i can argue over the next five years maybe their market will outperform the u.s. that market in dollar terms fell 80% from high to low. >> with good reason? >> absolutely. it's a complete mess. but i think investors shouldn't just be in something because there's no alternative. they should really dig deeper for true value, rather than just being an overvalued asset class just because. >> hans, quickly, what do you like right now, which asset class? >> i kind of like uk equities to be honest with you. if you look at what you pay per unit of book value, they're about two standard deviations below the u.s. market. and if we don't get brexit,

interesting opportunity. >> hans and peter, thank you both. great to see you. coming up when we return, hillary clinton attacking trump on an economic speech. trump is set to fire back here in new york. he teased it by saying i will be making a big speech on the failed poles and bad judgment of crooked hillary clinton. we'll be right back.

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can't date donald trump set to deliver a speech in new york attacking believe it or not hillary clinton who once again, believe it or not attacked him. apparently yesterday, trump not only attacked on his business record and plans for the economy. john harwood joins us now from washington. shocking. shocking. attacking each other, john. better get used to it. 139 days i think. we're going to have a countdown clock when we come to this from now on. >> took my breath away, joe, couldn't believe what she was doing. just as she attempted to do on national security a couple weeks before she tried a comprehensive

take down on donald trump. she said his tax cut would benefit the rich. she said the u.s. debt could cause a global financial disadvantage. and said his entire overall economic plan would throw the country into reverse. >> one of john mccain's former economic advisers actually calculated what would happen to our country if trump gets his way. he described the results of a trump recession. we would lose 3.5 million jobs. incomes would stagnate. debt would explode. and stock prices would plummet. >> now, donald trump replied in realtime with a tweet during the speech accusing her among her things running up the trade definite kit with china as secretary of state. he also posted this instagram video about debt. >> hillary clinton's only right about one thing, i understand

debt and how to handle it. i've made a fortune with debt. but debt for this country is disaster. and obama has piled it on and she's been there watching. >> now, the real response from trump is going to come today in a speech in new york where he's going to go hard after clinton scandals and portray her as you indicated in the intro as crooked hillary clinton. we'll see how that is. joe. >> kind of hit on different things on fund-raising, i guy who isn't running anymore has more than $1.3 million left over from a previous campaign on a state wide level. >> it's very low. >> and again, i guess he could self-fund if he needed to. although he's paid some stuff back, too. and he points out, trump points out, it wasn't even a full month in earnest for fund-raising. do you think if they put their peddle to the metal, do you

think there's well-heeled people that are going to step up for trump? >> i think it's going to be difficult for him for the following reason, one, if he really has the money he says he has, and there's questions about that, many donors are going to say, especially those who aren't inclined to support trump, anyway, why should i throw money in if donald trump's got money and he can just write a check. this is what the rnc spokesman yesterday was saying. it's not saying that he only has $1.3 million in the bank because he can write a check at anytime and bring it up. for that reason, donors will stay away. on the other hand, donors do care about the republican party, they care about senate and house candidates and some of them will support donald trump over hillary clinton. i suspect they will raise a significant amount of money but not enough to be truly competitive with hillary clinton organizationally and in terms of

advertising. >> still don't know the general election versus the primary election. we know it's unconventional. and we know how much free tv he gets. we saw, jeb bush was loaded -- $100 million gone. >> that's right. >> so, i don't know. and actually looking at, he spent more money on t-shirts than on tv advertising. >> she's advertising heavily in battleground states right now. he's not. the question is, is the paradigm that worked in the primary, is that able to succeed in the general? i think most people who have paid close attention to politics for a long time are very skeptical of that. donald trump's broke a lot of rules this year. >> dare i say, romney -- romney didn't have that much money, it didn't help him, that's for sure. >> well, helped him. just not quite enough. >> right. okay. when we come back, zoe's

kitchen is a fast food chain that specializes in mediterranean food. it's got food that's healthier for you. as we head to a break take a look at today's s&p 500 winners and losers. i asked my dentist if an electric toothbrush was

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♪ ♪ if you leave me now you take

away the biggest part of me ♪ welcome back to "squawk box" on cnbc, first in business worldwide. u.s. equity futures at this hour. it's all about -- that's what i say, let's do this. can we, please? tomorrow? anyway, up 16. on the session, a go up and then so flat. >> and we've had a lot of pro-stay. this is "if you leave me now." >> right. >> at the top, we played rod stewart which was "stay with me." >> this is sad music. we've got the mainstream media take on this. the globalist, anti-nationalism. mainstream media, we're solid-state. >> no. >> yeah, we are. >> i was wondering what the leave music is.

>> i hope it's positive, happy, go it alone. this whole thing is leaving. >> independence day? >> independence day. the movie is coming out today. it's against the slimy gross -- remember those things, disgusting. >> yes. >> it's always -- i don't always -- why do they look like lizards if they're so smart, why do they look like lizards. they have scaly cold-blooded skin. on today's economic agenda, fed chair janet yellen -- yep, she's got more to say, if you can believe that -- continues about how they're going to stand pat. how they're going to stay where they are. how conditions aren't daily gent. steven rece is here. i think it should be every month on the economic policy. before the house financial services committee at 10:00 a.m. eastern. also existing home sales data

for may. look for results from winnebago before the opening bell. and bed, bath & beyond after the close. so the house guys are going to ask questions today? that makes it interesting. >> should be more interesting than the senators. a little more political. and the house guys are also more owe possessioned to current policy. >> did you say something happened with corcoran yesterday? yeah, bob, i think, made a mistake but -- >> i saw your tweet how he asked about the -- >> they had said. >> i missed it. >> the only reason i saw your tweet, someone retweeted it. because i blocked you. >> you blocked me. >> the audience doesn't know what you're talking about. what are you talking about? >> as in you? >> i don't know, you don't know. >> bob corcoran asked janet yellen if she's now doing qe 4. >> we talked about that with

corcoran on the air. >> right. >> because of this idea, and look, this is something fisher had said on this program in the last couple of weeks about how they're going to continue to reinvest all of those. they don't know whether short term or long term. it's additional quantity. >> it is. it is. bob corcoran said you revealed this today. this is slang that appeared in the december 2015 statement. it's been around. >> fisher was the one who raised all the alarm bells about it. >> okay. i'm not saying -- i'm not saying, bob corcoran -- i said yesterday is one of the smarter senators when it comes to financial issues. i've been a fan of his in thinking about the economy and regulatory issues as well as dowd frank. >> i don't think the markets have figured that out, i talked to a number of financial pros and big investors. we're going to do some digging.

>> i can't say what the broader market thinks we asked when do we think the balance sheet is going to decline. >> i think the language that's been recently introduced we don't know if we're going to put nose long therm erm or short te. >> that's actually the issue, the normalization or raising rates well under way and has been out there for almost six months. >> long term, short term? >> you wanted to go there, i didn't want to go there. are you still interested? >> no, i don't think anybody understand what is you guys were debating or talking about. >> again, when you say everyone, you mean you. >> all right. all right. >> what's going on at this table, personally? it's like a family. >> it's worse. >> let's do today's "executive edge" if we could, the future looking casual, fast casual, now representing 5% back to 2,000.

one player in space is zoe's kitchen eating up profits. joining us is john castle. he's the founder. zoe is your mother's name. >> zoe is my mom. >> which i like. >> it's a very popular name now. >> we keep talking about the growth of fast casual. the question is can it continue? and when you look at like mcdonald's and all of the older guys, whether you think they're going to change their twice either squash you or catch up? >> they're going to have to change their ways. the future of how people eat in america is definitely changing. soccer moms, people play baseball-year-old. nobody has time to do anything. you go to zoe's kitchen you have an incredible fresh meal to make from scratch every day. >> who are you competing against. straightup fast food. do you think you're competing against true sit-down restaurants?

do you think you're competing against people who are going to go home and actually cook? >> you compete against everybody. you compete against the home, fine dining, service, you compete against all of it. the question is how do you retain customers and get frequency in the space. that's what our people is going to do. >> when you sat down on the break, i said, do you think you'll do a restaurant in new york. you said hard to do a restaurant in new york andal in california. why? >> because it's hard to do business in california. the difference of doing business there. it's a very liberal state. the cost of doing business there is extremely difficult. with cost and labor and wages, all of the other things from a political standpoint. >> let's go there, since you've gone there, minimum wage, what's it doing in your business? >> for us, we typically pay higher than any of our competition. >> what ado y do you pay on an

basis? >> 10 to 12 bucks an hour. i made that curve. >> if i made that 15, what would happen? >> typically about the quick service, mcdonald's and those types. the problem is, when you have a prolg model paying royalty. at some point in time, it's going to affect it and then you can't pass it on to the consumer, the people who eat at mcdonald's places like that, typically, the customer is the less educated low-income customer. >> what are the implications how much you're doing now using technology for people to order at the moment? >> technology is huge. >> and whether that's going to ultimately undo employment for people? >> to a certain degree when you can walk into a restaurant and

place that on your cell phone and walk in and pick it up. really what it will help with is speed of service which is key if our industry. >> they've got that in new jersey. a couple of places in new jersey i don't think i can go there and order in new jersey, right? >> we're in the east coast from the philly area, all the way down to arizona. the growth model in what our team is doing now. we have a great management team in zoe's kitchen. they're doing a great job in terms of real estate and those types of things. it's important to understand were you're growing a brand that quickly, it's important to go to stores that have existing restaurants. >> is it like a boston market or something. >> what you need to know from zoe's kitchen we basically make everything from scratch at every store every day. we're really the oy one our size in america that's not a burrito, that's not a burger that does this on a daily basis. i mean, we make chicken salad by hand at the store every day.

>> this is the thing, joe, when you're on the road with your kids, i'm the one who wants to stop at mcdonald's, my kids do not. that's a new development. mcdonald's was made to attract the kids, not the parents. now, it's the other way around. they would much like to go to fast casual places where it's fast they're more now attune to food than when it was when i was a kid. the generational thing is fascinating to me. >> that's the thing. when you look at starbucks, they have created a place for consumer to go and spend their day to stop and meet and see people. what we do at azoe's kitchen which is unique, we basically are out there and have created a product that people become addicted to and we become a part of people's lifestyle. we're in their kitchens at home with tubs of chicken salad and food. when somebody has a baby, pregnant, they would bring it to your house. it's catered. >> we've got to cut this off.

i know you're in the middle of a new venture right now. you can tell us about the new venture. i want to know what it's like to get capital out there. apparently capital is free? when you read zero interest rates, is capital free out there? >> it's the old add damaageadag need money, it's difficult to get. for emerging brands capital is still difficult to get especially in the restaurant space. >> we've got to run, chipotle, has that been any lesson for you? you guys are trying to do fresh in every single place and because you're doing it by hand, what are the implications of that? >> the most important thing when you put all your eggs in one basket and food made in one place and sent out to restaurants it's extremely dangerous. at zoe's kitchen we make everything from scratch at every store. >> thank you. >> thanks for having me. >> and a running back, too, at alabama. when we come back, facebook

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welcome back to "squawk box." this morning, facebook signing deals worth $50 million with media companies and celebrities to stream videos for its live streaming service. that's according to "the wall street journal." among the celebrities they signed up, kevin hart, gordon ramsay. and deepak dhop practice and russell wilson. reporting facebook's deal with buzzfeed has the highest value $3.5 million followed but "the new york times" who paid $3.03 million. and how hot was it this

week? to fully cook a pizza inside a car. reached 120 degrees. it says here the experiment conducted by nbc's arizona affiliate 12news. you've seen eggs on pavement. >> yeah. >> over easy. not recommended. >> no. >> like eating spaghetti off a new york subway floor which we've seen people do. >> where they found bubonic plague recently. >> yeah, but they used cleaner and put spaghetti and meatballs on the floor. >> you eat that up. >> there's no cleaner in the world that would allow you to -- >> no, sorry. coming up, the man who brought post-edwardian

generation of viewers to "downton abbey" talking about the brexit tomorrow and the future of the uk.

we're just a day away from the brexit referendum. let's go back out to london for wilfred frost joins us with a special guest that i know we will talk brexit. if i had julian -- lord fellows

here, i would be asking him about each individual actor and actress. because i -- i mean, it was -- i am really sad it's gone. there is sadness in my house that it's gone. >> i joe there is great sadness in pretty much every household not just in the u.k. and u.s., as you're saying, about "downton abbey." we're joined by its creator. lord fellows julian. >> good morning to you. >> joe was talking about "downton" and how much he misses it. >> i find it moving, the fact that these people did become so important, these characters who i thought up sitting at a red light somewhere and then across the world people mourn their departure. i am flattered and moved by it. >> we'll get into some of the

more nuanced points with the guys back in the states. chatting off the screen. we were asking why there couldn't be more series, but there could well be a film? >> i hope there will be a film. i don't want to be mysterious. i completely support the idea of a film. logistically it's quite complicated. the thing is we have a lot of running characters, and we really do need them for the movie. so you know, you can imagine at the end of the show they all shot off into shows on broadway, series in l.a., things in the west end, things on television. and they somehow have to be gradually coaxed, you know, back into the fold. that would be a big issue. if they could do it, i would love it. >> do you have a favorite character? >> people always ask that. they are all my babies. i love them all, really. of course maggie is fun to write for because she is a wonderful actress and has this extraordinary ability to be both funny and very powerful emotionally, you know,

completely one scene to the next. you can never catch her out. whatever you write for her, she can deliver. that is very rewarding. but really i love them all. i think they're great. >> my favorite is carson. i want to bring in the guys back in the studio. i know they're desperate to talk to you. joe. >> i would have said carson. that was my first thought. then i thought how much i love thomas. so many things were -- came together at the end of the finale that you are going to have to -- you know, is bates going to be involved in other potential murder? so many things got settled that you would have to start from scratch with a lot more drama, right? >> i did try to resolve things. i mean, i do feel that writing the last episode of a series that's run for six years is not like writing an ordinary episode. with an ordinary episode, you're trying to bring in more viewers,

make people interested who were not before. but you're not at the end. at the end you want to please and reward people who stayed faithful to the show for all that time. i do, anyway. i wanted the characters to be happy. i like happy endings. i'm unashamed of settling so much. very interesting that you say thomas was one of your favorites. that's very good news for me because i love doing this thing of making audiences change their minds about characters. so that initially you think you don't like -- or in an argument you think initially i'm on her side and then you think, oh, i'm on her side. i do that deliberately. i wanted with thomas to show that is it very, very difficult to be gay starting in 1912 during that period. >> his progression, julian, from where he held up his hand to get out of the army to what -- to the person he was at the end of the series. he became a very, very positive

character, i think, by the very end when he was -- he got welcomed back and everybody loved him. it wasn't just me. even people like carson finally i think respected him. he took carson's job, right? >> well, carson had a slightly more ambivalent feelings towards thomas. you can't ask too much of an old dog in the way of new tricks. but i think thomas did prove that he had an emotional center, and certain characters like anna saw it before some of the others. mrs. hughes understood what he had gone through. a lot of the younger viewers had no idea homosexuality was illegal at the time. and it was illegal into my teens as a matter of fact. >> do you know how you'll vote in the vote tomorrow? >> i have made it quite clear that i am an outer. i feel we have everything to gain from that.

but i get so tired of show business people boring us with their political opinions that i don't want to be one of them. >> do you feel the likes of mr. cameron and osborne are under pressure? >> i think they're all under pressure. they seem to have their reasons for wanting britain to remain. they're doing their best to bring it about. i don't blame them for that. but i don't agree with them. >> it's been a pleasure talking to you. the oscar-winning creator of "downton abbey" joining us here from london. guys, back to you. >> we're excited about his next thing. >> nbc, the golden age. >> it's not just the plots. you've got to -- you have to binge this. >> i have watched some of it. i need a block of time. >> there's going to be some -- maybe don't watch it now when you're this emotional. a lot of really -- anyway. coming up, hillary clinton attacking donald. this is emotional too. attacking donald trump on the economy and his business record. reaction from author, columnist

and trump supporter anne coulter after the break. it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e350 for $499 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

the brexit countdown is on. we are less than 24 hours away from the u.k. vote that could forever change the eu. markets and central banks around the world on edge right now. we'll go inside the decision and talk to fed governor jay powell straight ahead. war of words. donald trump is getting ready to hit back hard against hillary clinton after she attacked him on the economy and on his business record. >> just like he shouldn't have his finger on the button, he shouldn't have his hands on our economy. best-selling author and trump supporter ann coulter is here to talk about her new book, the race for the white house and the future of america. plus, sports star scammed out of millions.

the details from an sec report on how nfl quarterback mark sanchez, major league pitcher jake peavy and others were duped by an investment advisor. the second hour of "squawk box" begins right now. >> live from the beating heart of business, new york city. this is "squawk box." oh. welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm rebecca quick along with joe kernen and andrew ross sorkin. in studio this morning sharing his thoughts on the economy, the markets and politics is tom fanning, the ceo of southern company. tom, thank you for being here. >> great being with you again. >> a lot to talk about. a lot of things to run through. >> all over the place with brexit, the economy, with this solar city thing. >> that's what i want to talk to you about. >> it will be a stark contrast to what you're used to seeing and the story you've been following so far. >> tom is our guest host.

we'll get plenty of time with him. futures at this hour. on this day before the brexit vote, there are green arrows. equities looking higher. dow futures up 27 points, s&p futures up 2.5. nasdaq up by 3.5. if you check out oil prices, they are higher this morning, but you should pay note that this is a flip in the contract. we are back above $50 a barrel but we have flipped from the july contract to the august contract overnight. a lot of times you see higher prices. in fact, oil was under pressure yesterday and the contract closed below 49. this morning wti at $50.28. i'm rushing through the headlines because we have ann coulter here. sorry. real quick. european markets mostly higher this morning ahead of the so-called brexit vote. tomorrow credit suisse out with a report saying it would cut its year-end forecast for the if the ftse. janet yellen back on capitol

hill this morning. she'll repeat her semi annual economic testimony and basically everything she just says over and over again saying, no, no, no, no, no. to the house financial services committee after speaking to the senate banking committee yesterday. shares of fedex under pressure this morning. that company did beat street estimates on the top and bottom lines. reported an overall loss due to pension costs. was that fast enough? >> it was good. professional. hillary clinton once again calling donald trump dangerous and warning america that trump shouldn't have his hands on the economy or the button or the immigration -- on any of these things. trump to deliver a speech later today where he is expected to refudiate. >> repudiate. >> misunderestimate should be a word. >> these were not mistakes.

joining us with more on this, columnist ann coulter the author of 12 "new york times" best -- that's kind of weird. "new york times" best-sellers. that just seems weird that your books are "new york times" best-sellers. is that okay? does it make you feel good or kind of dirty? >> i love that they put my name on their best-sellers list 12 times. >> including her most recent book "adios america." hopefully we'll draw her out and show that everything is not so cryptic. we had a great conversation off camera already. i just -- just to summarize a couple of things. i said that you -- you were trump before trump was trump. and he was trump but he wasn't a national candidate then about saying politically incorrect things. i remember the harpy incident. when i get -- i get -- i am very sensitive. you must thrive on it to an extent, don't you?

>> i guess so. i never -- contrary to rumors i don't say things to get a reaction. i say things because they're true. i try to say them in an entertaining way. we used to do the last three or four books. my editors read it. the publishers are liberal. say pick out the line they'll go offer. you don't know what it was. i don't care. i lost the gene to care about what people around me think. if i think it's true, i think it's true. i said it in a funny way. oh well. >> your doppelganger came along as you call it. >> yes! >> is it just because he is politically incorrect, or do you think he would become a president that would be great for america? >> it actually -- i like that he's politically incorrect. that's not it at all. i think the media is misportraying trump's appeal. it's a libel of the voters saying they want somebody to come along and be politically

incorrect. it's the issue both parties have refused to address and the topic of my last book. immigration. immigration. immigration. whenever i see the great names trying to search for trump's appeal. use the word immigration. if they don't use that they're lying. of course that's what it is. look how he's being attacked by both republicans and democrats. >> isn't it the economy too, though? a lot of people i feel, think they've been left behind by the political establishment, the rules. the way it's been set up. back to the bill clinton campaign on the economy. >> absolutely. specifically what about the economy? it's immigration and the trade deals. the bad trade deals. it's very smart of trump to be concentrating on the issues that are negotiations. he is a famous negotiator. the fact that straight out of the bag he starts to talk about illegal immigration and the bad trade deals. you guys know better than i do.

i care about the cultural issues more. we have gone from 20 million manufacturing jobs in the '80s to a little more than 10 million now and the population has grown. you hollowed out the center of america. in new york i think people really don't know how bad it is out in america. american workers are being replaced by foreign workers, being replaced by illegal immigration in many places, having the jobs washed out and outsourced. the country -- they need jobs. usually the republican pitch is, you know, capital gains cuts. great. i love capital gains cut. >> you have to have money to make -- >> you have to have a job! right. >> how do you look at his business record given not just what hillary said but his record. he has created jobs and lost a ton of jobs. his casinos have historically underperformed. these are not been great performers over the years. they have gone bankrupt over the years. he hasn't paid everybody back, not only not on time, but there are lots of people who have

suffered as a result. how do you square all of that? >> well, there have been a lot of businesses and a lot of jobs, and yeah, some of them went bankrupt. the casino business. and from what i understand, from people who are not trump and invested in casinos in atlantic city, there was a lot of political corruption in atlantic city, and it just -- it's not going to take off. a lot of people lost a lot of money there. but you can -- i mean, you can see physical manifestations of his success with mar-a-lago in palm beach or trump tower here in new york. >> golf courses. >> the golf courses that are massively successful. there it is. not only do i think the successes outweigh the failure, but i like that it's in real estate. his empire is in america. if his empire -- if america goes down, his empire goes down, which is part of what i think drives -- i mean, i think it's from the heart. i really do.

he may have changed positions on little changes, abortions, so on and so forth. not that that's little but in the grand scheme of becoming president. >> as far as a brand too, ann, you cannot dispute -- >> he is always patriotic. part of that does come from the fact that it's real estate and not a hedge fund manager. sorry to hedge fund managers. >> one person would be considered successful from -- we're not going to call him a reality show host. but you would be successful from the run of -- on top of everything else. >> right. >> it's lonely, i think, supporting trump sometimes. >> in new york and washington, d.c., it is. in america it isn't. >> okay. so i am thinking that, you know, as far as trying to offset sort of the mainstream media take on this election, i don't -- you could be -- i think you could be on every day here and we still would not be able to offset. my question is, does -- can the media still exert over-size

influence on how the population votes, or does the population just not give a crap about the "new york times" or the "washington post." >> there is a book called "left turn" that analyzes the amount that the media influences how people vote by the professor at the time who was at ucla and is now at george mason. he estimated it was about eight points, i think. >> eight points in an election? >> yes. now, with anyone -- okay, we've managed to get -- it's amazing that republicans ever win any elections. if anyone can get around it, wow, it sure seems to be donald trump every time i think -- i mean, for a year every network and not just the liberal media, every network has been ferociously anti-trump. >> right. >> and wow, his voters don't care. >> the networks and newspapers have such a smaller space than

they used to occupy. when you have social media. >> social media is big. >> internet. so many different voices i think. >> and donald trump's twitter account. people laugh about that, but i really think it's an important part of his appeal. it's directly between him and the american people. it isn't being filtered by the "new york times" or fox news. >> he's getting big pressure to shift his campaign, to shift his style to be more presidential is what they call it all the time. looks like his family has asked him to do something like this, and it looks like he may be taking a turn with changes in the campaign to do that. is that the right move? >> to some extent, though i'll miss his midnight tweets. i think they're fun. if he gets guff from speaker ryan he should take to his twitter feed when he is president. >> i have read pieces about if you go back to put today's demographics on "w" and others, even they lose and we get

another four years of, if we do nothing about immigration. the demographics are changing. not to get gender or race-specific here. the point has been made there is not enough white men to put trump over the top on the election. >> i think that's not true. for one thing, yes, america is changing demographically. by the way, it isn't just a natural process. this was a specific design by teddy kennedy in 1965 to change the demographics of america to a country that would be more friendly to socialism. and oh, boy, has it worked! but if you look more closely at even romney's election, you keep seeing his campaign manager going around bragging, we got all the white males there are to get! there are no more white males! he seems to have forgotten we have this thing called the electoral college. to try to compare it to reagan, which i didn't realize for a while. in 1980 and 1984, the south was still half democrat. we weren't getting 80% of

alabama which romney got of white males in alabama. more than 80% -- i think 88% of white males in mississippi. if you throw that in the national average of might what else or white people -- white voters generally, white people voting for romney, in all of the crucial swing states romney either lost or didn't get his national average of the white vote. so maine, new hampshire, wisconsin, michigan, iowa, illinois, obama either won outright the white vote or did way better than he did in the rest of the country. so to talk about the national white vote does not make a difference. all trump has to do is drive it up slightly. he only has to win half of the swing states that romney lost. >> why do you think it happened? >> romney backed away from immigration. he was the strongest on immigration. that's why i supported him in

2012. but then their idea of going mainstream was, you know, this obsessive fixation on getting, for example, the hispanic vote. well, hispanic voters are not swing voters. whether you are george bush, jan brewer, john mccain, republicans are not getting more than 30%. that's it! they're not swing voters. white voters in america are the swing voters. and they have been not only ignored but kind of insulted for 20 years. >> can i give you one more -- with names. you just give me quick answer. bill kristol. >> interestingly, he was much more favorable as many were to donald trump when trump first announced. but he doesn't have a good track record. >> mitt romney. >> i don't know. i think -- >> [ laughter ] >> that was almost visceral. >> well, i loved him! look, i understand -- >> he lost. >> romney is an elegant person. he is a lovely person. i understand why a lot of people

probably, many people watching your show would prefer trump's issues in the vessel of a human like mitt romney. i understand that. i don't think romney could do it. we can't have -- we don't have time for an elegant person right now. the skucountry is at stake. what's confusing about romney is everything i liked about him -- immigration, the way he was going to go after china. he was complaining -- big thing for him, the currency manipulation. now he's attacking trump for these very issues. so he was faking me out? is that what he's saying now? >> who is the best person and worst person hillary could pick and best and worst person trump could pick for veeps? >> i am more interested in trump, and i like chris koback. you're all looking at me and wondering who he is. secretary of state of kansas. won statewide about three times. went to harvard, yale, oxford.

he wrote e-verify. he wrote the arizona law. he is a brilliant lawyer. what trump has to worry about with vice president, you need someone attractive and he is. lovely family from america. >> hillary. >> handsome man. i am googling him right now. >> fantastic. >> so was dan quayle. >> this is not dan quayle. excuse me. >> you said. >> i repeat. harvard, yale, oxford. what trump has to worry about, unlike the usual case is, if he doesn't pick a vice president who is just as good as he is on immigration, the issue that both political parties are against him on, they're going to impeach him. >> hillary will go with plain -- she won't do the mccain hail mary. she'll go with plain vanilla. tim kaine or something? >> sherrod brown. the problem with him is he gets replaced by a republican. >> right. right. >> republican governor would -- would replace him. that's not good.

>> elizabeth warren, i think she would snatch defeiat from the jaws of victory. >> i agree. i think it's a losing idea. completely losing idea. anyone who was thinking -- anyone who didn't want -- >> right. >> actually i think she would be a great vice presidential choice in terms of winning. i think the reason hillary won't choose her is because she is way more charismatic and attractive than hillary and she doesn't want that comparison. >> that slims the field down quite largely, if that's her choice. i take it back. take it back. take it back. i'm sorry. >> to have a democratic female soernt w senator who -- >> there are a lot of people who -- >> anybody sitting in the middle trying to decide which candidate to vote for -- >> i think, at least the way she talks, i don't think this is the way it is in practice. but she talks more like someone who cares about regular working people and less about wall

street. >> how about "wall street journal" editorial board? what happened to those guys? >> they've always been open borders, destroy america. invade the world. >> you get someone who is not totally anti-trump -- they're trying to get me out of here. they're so far and few between. trying to milk it. thank you. tesla's bid to acquire solarcity. the ceo of firstsolar joins our guest host tom fanning. the stock down 27% year-to-date. "squawk" will be right back. show me movies with romance.

show me more like this. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love.

call or go online and switch to x1. only with xfinity. you know that guy? >> no, i don't know him. >> tesla offering to buy solarcity for $2.8 billion in stock. that puts tesla's offer somewhere between $26.50 and $28.50 a share. solar city soared on the news. te tesla fell sharply. below $200 for the first time since march. and down almost 12%. i think that was after hours. phil lebeau joins us with the story about this and what elon musk is saying about the future of tesla. hey, phil. >> we'll hear more from musk in about 20 minutes. early skepticism from analysts. rbc capital saying we do not believe the proposed transaction will be well received by tesla

shareholders. this note from oppenheimer as it downgrades shares of tesla saying we believe the shareholders will view this as a bailout for solar city and a distraction to tesla's own production hurdles. 2 $2.8 billion all stock deal. musk last night on a conference call explaining why he believes this deal makes sense. >> we think it's really a huge opportunity here to have a highly integrated, sustainable energy company that answers the whole sustainable energy question from generation of power to storage to transport. >> we're talking vertical integration. this is what concerns some investors. solarcity is cash flow negative. it is not profitable. it lost $263 million in the first quarter. meanwhile, when you look at tesla. many people have been focused on what's happening in the future with the model 3. yes, the giga factory is an

important part of the story. it's supplying power storage units, starting to deliver battery packs for tesla electric vehicles. the main focus for a lot of investors is with the vehicles and the goal of delivering 500,000 vehicles by 2018 which is very ambitious and many doubting they'll hit that target. real quick on oppenheimer, more about why it believes the deal does not make sense. in the note, the analyst says, we do not view this transaction as the best and highest use of tesla's capital and human resources given the potential return on capital possible in the electricity industry. there you see what they're saying. the returns are not going to be there when you look at the electrical industry versus what you are looking at in terms of the automobile business and where tesla is currently. the conference call starting in 15 minutes. we'll let you know what they say as you look at how the shares of the companies did after hours. we'll continue talking about this deal and the future of solar.

one ever the biggest solar developers in the world first solar entering in a partnership with southern company to expand their foot print. sinking the guggenheim solar index down 33% year-to-date for solar. joining us with more on the partnership and the future of clean tech, james hughes, first solar ceo and our guest host is tom fanning. you guys have that partnership. i want to talk about your business in a second. i want to get your views on this idea of tesla merging with solarcity. by the way, we haven't talked about rebranding some of it. they want to sell some of these things under the tesla brand. >> it's such a different business model than our business model. i don't really have a specific view on it. solarcity is focused on the residential retrofit segment. that's a segment we don't participate in. i don't want to be consumer-facing. we don't think the economics are

very good or solar on the roof. we build large-scale, utility scale plants. our guys are tom and the other big utilities as well as international utilities. it's an interesting transaction. >> i was going to say, when you saw the headline, did you say bailout? did you say, genius, no-brainer? i just want to sort of get the sense from somebody in the business of what you thought. >> i don't know if it said bailout. my immediate reaction was, man, that creates a really complicated business. wall street doesn't like complicated business. >> my reaction was less about what it means for solarcity and more about why would you want to own something that that's complicated? >> we need to underline a point made. when we think about solar companies, they're not all the same. you are starkly different than solarcity. >> why do the economics make sense when you're building for electric utilities versus being consumer facing and putting

things on rooftops? >> the cost to build a utility scale solar power plant, the capital cost is less than half the cost of putting solar panels on a roof. the capacity factor, the amount of energy produced, is a third more. when you take those two factors into account, you get an order of magnitude difference in the cost of the electricity, so the electricity that we sell to utilities today ranges anywhere depending upon where you are in the country or in the world, from as low as 2.99 cents per kilowatt hour in dubai to 4 or 5 cents per kilowatt hour. the cost coming off the roof are numbers dramatically higher than that. it's simple cost. >> play out the business and the technology over the next five years. because the technology has come down in price so materially. does it ever become cost competitive to put it on the roof? >> i am coming down at the same rate they're coming down. what happens is the wholesale price of power is now being pressured down by renewables

that are of such low cost. so while you can say, okay, here is the cost trajectory on the roof. if your wholesale cost to power is coming down. very natural gas. very utility cost solar and low cost wind, you put all of those into the wholesale power market you end up with low costs. >> we talk in the past of how this subsidization through tax policy of renewables is crazy. >> we openly said we don't favor an extension of the investment tax credit. we lobbied for equal treatment of wind and solar. we said, whatever you do, we want to be the same. i actually believe that the investment tax credit today is a constraint on the growth of the industry. we are trying to funnel the entire industry through people that have tax capacity. it eliminates significantly large pools of capital from being investors. for instance, tom buys products

from us through his non-regulated business. his regulated business, they are constranined in their ability t monetize tax credits. that's a huge pool of low-cost capital that would be available for the industry. big european companies, there are a lot of big european utilities that would love to invest in the u.s. in renewables. again, they don't have the ability to monetize tax credits so they don't have competitive capital as a result. most of the benefit of the investment tax credit, in our opinion, flows to the pockets of the providers of the tax equity as opposed to flowing through to the cost of power. at the wholesale level for utility scale, while there might be a spotliglight increase if y eliminate it, you have more people. we don't believe it's a net positive for the industry. >> i know you like to bet on all

sorts of technologies. you don't want to be in one. >> yes. >> let me ask you long term, in terms of the new stuff out there. is solar it in your mind? do you think wind will ever out -- when you look at all the -- plethora of stuff out there. >> they're both complementary technologies in that their production profiles are very different. i do, however, believe that, as costs continue to come down, and they are going to continue to come down, you will see solar becoming a dominant feature in the marketplace. >> i agree with that. wind will have its place. solar will be more pervasive. talk about the future in innovation coupling solar and storage and a lot of the misconceptions many people have there. >> so, you know, a lot of people have this notion that, well, the sun doesn't shine at night. we have to figure out how we have storage to generate electricity at night. what those of us in the electric business know is we don't need electricity at night. we have wind, hydro and nukes that run 24 hours a day.

we have more than adequate electricity at night. the issues for the utilities with solar is we produce a the lo of power in the middle of the afternoon and fall off in early evening. there is a lot of demand as everybody comes home from work. so what the utilities really would like to see us do is integrate storage at the utility scale so that we can take some of that afternoon power and translate it over to the early evening hours. >> it doesn't have to go longer than that. >> correct. >> we're doing that at southern company. >> one of the things people don't understand, big utility-scale solar plants have a lot of excess dc versus ac. it's free. if we can store the dc and redrifr r redeliver it in the evening, very cost effective. >> thank you, james. we have a couple of headlines. mortgage applications rose 2.9% last week according to new figures. driven entirely by a jump in refinancing activity as average mortgage rates fell slightly. we'll get another update on the

housing market at 10:00 a.m. eastern when the national association of realtors releases may existing home sales. they are expected to post an .81% increase. win win begay above the street's expectations. the stock up almost 6.5%. investment advisor ripped off pro athletes by investing millions of dollars in a troubled online ticket seller. denver broncos quarterback mark sanchez. san francisco giants pitcher jake peavy and roy oswald were victims of the alleged fraud. the sec says ash najarian siphoned $33 million from clients' accounts to invest in a company known as the ticket reserve. the company was dependent on the cash infusion to stay in business. the complaint also says he didn't inform his clients that

he held a seat on the ticket reserve's board and owned millions of shares in the company. do you remember around the holidays what our background shot used to look like? >> how beautiful it was with the lights and the train? >> take becky -- that's nice. >> coming to you live from alcatraz outside the -- where actually they're building a wall. they're building a wall behind us. >> donald is getting started early. >> that is unbelievable -- that is the ugliest background. thanks, guys. no problem. we're just doing a tv -- no. it's fine. it's good. coming up, did you -- did you notice that earlier? >> no. i was walking by yesterday, and i looked and go, what are they doing there? nice timing for us. >> it will be a construction zone for a while. coming up, over one third of ryan air's passengers travel between the u.k. and somewhere in europe every day. so it's no wonder ceo michael o'leary is hoping that the oou.

remains in the eu. he is our guest in a moment. we'll be right back. the first stock index ♪ (musicwas createdughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals.

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welcome back to "squawk box." never one to parse words ryan air's ceo michael o'leary once called the european union the evil empire and brussels the death star. it's become the biggest cheerleader when it comes to the u.k. remaining in the european union. wilfred frost joins us in london along with ryan air's ceo michael o'leary. wilfred. >> andrew, thank you very much. i feel woefully underdressed for this interview. i am joined by michael o'leary, ceo of ryan air. fantastic outfit. >> what can we say? what more can we do to purr swayed the u.k. to vote stay tomorrow. ryan air has played a leading role in the campaign. one of the key things u.k. citizens can understand that europe has delivered has been the low fare travel revolution, cheap holidays abroad all over europe. that's why so many young people are so heavily in favor of staying in. >> you said if brits vote to

exit the eu as a project is doomed, it will be that severe a fallout. >> it's inevitable. if britain votes to leave it's damaging for the u.k. economy and the european economy for the next two or three years. huge uncertainty while britain tries to negotiate an exit out of a single market and tries to replace it with a whole series of trade deals which they won't get done. staying in is the way forward. the british economy is performing fundamentally well. unemployment is low. economy is doing well. one of the most competitive economies in europe. this is the time to stay in and continue to benefit from european membership, not leave. >> as andrew said, you've been very critical of aspects of the european union in the past. yourself, as an irishman, you are not voting here in the united kingdom. to some extent it could sound like someone telling brits how to vote because it benefits his company. >> we speak. i am proudly irish but we speak as britain's largest airline, carrying 40 million passengers to and from the u.k. this year.

we are a large foreign investor. i fly from 26 british airports and employ 3,000 pilots, crew and engineers. i want to keep investing in britain and growing the business here in britain but i can only do it if britain remains a member of the european union. if you take the leave side or ghosn's analysis we may not be free to fly anymore between the u.k. and europe as an irish airline. >> the u.k. is part of the european union, not part of the euro in the single currency. ireland is. overall, has ireland benefited from being a part of the single currency? can it survive as it is. >> ireland has benefited hugely by being a member of the single currency. i think it will survive because the strongest economy is behind the euro and will do whatever needs to be done to make sure it survives. there needs to be more ho

harmonization between the greeks, spanish and irish who have suffered as a result of low interest rates and property bubbles in recent years. that's why the single market needs reform. we have been critical of brussels and over-regulation. i think why this election would bring more about in brussels as long as they vote to stay in. >> thank you. fantastic outfit. michael o'leary, ceo of ryan air. is the fed watching the situation in europe? federal reserve governor jay powell joins us next and "squawk box" will be right back.

welcome back, everybody. long run head winds to economic growth. that is a the central theme in fed chair janet yellen's statement as she addressed congression in two days of testimony on the nation's economic outlook and monetary policy. joining us on this, the impending brexit vote and more is federal reserve governor jay powell. steve liesman is here as well. governor powell, thank you for being here today. >> thanks for having me. >> yesterday janet yellen made

comments about brexit saying that it could lead to some volatility in the markets in the short term. how do you try to factor brexit into where we're looking in tomorrows terms of economic outlook? >> markets have been responsive to changes in the polls clearly. so the vote could certainly bring on isn't volatility. if it happens, financial conditions could tighten. it could have an economic effect on the u.k. and eu. we would feel it as well. we could very well feel it if there were a significant risk-off move with the dollar up and credit spreads out. we would have to take it into account in setting monetary policy. >> fair to say that, if the brexit vote goes and the stay camp wins the election that it takes a big question mark off the table and maybe makes the path much clearer for the federal reserve? >> i don't want to be -- i shouldn't be taking a position on this thing. this is something for the u.k. voters to decide. >> yeah. >> but, you know, we should just leave it that we're -- we're ready for, i think, whatever

happens, and leave it at that. >> go ahead, tom. >> i was going to say, when you make all these assessments about monetary policy, it's not just kind of the values of function of risk and return. all the risk elements in the united states economy and exogenous to the united states economy, event risk in the middle east or malaise, economic malaise in europe, lack of transparency in china. all of that has to weigh into -- i know you have your two criteria that you're responsible for, but you have to take a wholistic view. whether it's brexit or anything else, those risk characteristics weigh in your decision making. >> that's right. this is an unusual time really because the united states economy is performing better than other economies around the world, and that puts us in a situation where we can consider raising interest rates gradually. that's not the case elsewhere in other advanced economies. and so it turns out this is a time in which global development, global weakness around the world are really important for the setting of u.s. monetary policy.

usually so. >> let's talk about the outlet for interest rates. you guys a year ago had a much more robust outlook for where rates would be right now, where they would be in 2017 and where they would be in 2018. when you look at that chart, you guys have saved a percentage point off the outlook for 2018 and more than a a percentage point -- 1.3 points off for 2018. you guys continually get it wrong. it is eroding what i hear on the street which is the fed's credibility. how do you respond? >> first, understand -- i know you do understand, that's not a forecast for rates. it's where rates would be if the feel economy forecast comes in. two things have happened. one, the economy has weakened. in the fourth quarter of last year and first of this year gdp came in below. below expectations. a little bit looking like coming back up in q-2. the second thing is, the thing that's been strong through the last three years of recovery has been the labor market. more than 200,000 jobs a months

for three years. then in april and may we saw a weakening there. i don't want to take too much signal from that, but the right thing to do, seems to me, from my perspective, is to wait and see how much momentum there really is in the economy. the second thing that's happened, though, is you're right, look at the treasury curve. it's come down really a lot this year. a lot of that is just the market is pricing in, you know, some sense of down-side risks here. i think we -- i would say i have been in the process of learning that the rate of interest that will keep the u.s. economy on an even keel is lower than i had thought. >> so you haven't changed your growth forecast but you changed where the fed is at. it takes, what, more fed stimulus, in your opinion now, to achieve the same amount of growth? >> i think that's exactly what i and others have been learning, the so-called neutral rate of interest, the rate of interest needed to keep the economy moving toward full employment and stable prices on an even keel, that rate is lower --

>> suggesting it's not as potent as it used to be which suggests maybe we are running out of steam with this, which suggests maybe it needs to be handed off to fiscal -- >> would certainly welcome help from other sources. but really there are -- >> hold on. that's important. we haven't heard that so much from this dpfed. we heard draghi talk about it. what does that mean, help from other sources? >> monetary policy has been in the ring alone and could use help from fiscal and regulatory policy as well. we don't generally tell congress what to do. we kind of are an agency created by congress. remember, there are -- there are two reasons -- two sets of factors why rates would be low. some are transient. some of them are just low productivity growth, low growth around the world, low inflation around the world. some of them may turn out to be less transient. that's the concern. all policymakers need to focus on looking at longer run potential u.s. growth and doing what we can to promote that. >> the rip-roaring jobs market

you described, i felt good when you were saying that. allowed for one 25-point basis increase. that's what that was good for. one hike. does that make sense? one hike? >> yeah. it's counterintuitive but does make sense. >> okay. >> the reason is, the rate of interest needed to keep the economy on an even keel is very, very low. it's depressed right now. so actually monetary policy is only moderately accommodative. most economists estimate is needs to be around 0. >> the scariest thing, i guess you would almost call it moral hazard with central bankers around the world lulling everyone into the idea that governments when rates rise will be able to service the debt they've built out. we're sitting here not doing anything to take care of that stuff. the minute it goes up someday there will be hell to pay, seems like. >> certainly possible.

higher interest rates would imply higher inflation and higher growth. it might actually be a better state of the economy. >> joe, i think it's so much of a bigger picture than that. it does go to fiscal policy. we need to reduce the size of government, reduce regulation. >> that's not the kind of fiscal policy most are talking about. >> that's what we need. >> they're talking infrastructure and -- blowing out the deficit, not cutting the size of government. >> well, you and i see the same way there. >> that's -- that's what we need, i think. >> governor, thank you very much for joining us. we appreciate it. >> my pleasure. thanks, jay. we'll get final thoughts when we come back from our guest host this morning, tom fanning, ceo of southern company. at the top of the hour. former u.s. deputy treasury secretary will be our special guest. show me movies with romance.

show me more like this. show me "previously watched." what's recommended for me.

x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. let's get back to our guest this morning, tom fanning, ceo of southern company, one of america's largest producers of energy. tom also serves as the chair of the atlanta fed. the only thing that -- everything we have been talking about today, i didn't realize that with natural gas and hydrocarbons where they were -- i didn't -- to me for some reason i have this notion that -- that renewables are getting less competitive. so there are great strides being made -- i mean obviously not with the consumer -- direct to the consumer. that doesn't work without subsidies. >> that's right. >> this actually works -- >> even without subsidies. >> why? >> i have kind of been bullish -- >> per kilowatt hour what is solar versus natural gas?

>> i think they're reasonably similar. when you say natural gas, let me fill in the blanks here. >> we don't have much time, though. >> nuclear, not many chem cpeop do it. coal is going away. the work horses of energy generation in america are dissipating. gas will be the bridge between the future, which may be renewables and energy efficiency and a changing business model, and this kind of old technology. >> right. >> so that's kind of the big -- >> if gas stays where it is, we keep getting more from horizontal -- if it never goes up because of supply -- >> we're making big bets there. it will be the bridge between now and 2050. it will be there. no worries. >> thanks, tom. >> thank you. when we come back, the former u.s. abc news ambassador germany robert kimmitt joins us. check out the futures.

squawk will be right back.

the first stock index ♪ (musicwas createdughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. the brexit limbo. the remain and leave camps making their final case as the u.k. prepares to vote on its future in the eu. the latest polls, market impact and what it all means for the

united states coming up. trump set to take the wraps off his plan to grow the american economy. the gop nominee and hillary clinton trading jabs over jobs. business is more. see, we pay our debts. >> hillary clinton is only right about one thing. i understand debt and how to handle it. >> we'll break it down straight ahead. and another no-go for rio. rory mcilroy withdrawing from the olympic games amid zika fears. we'll tee off on that with the golf channel's david feherty. as the final hour of "squawk box" begins right now. ♪ >> live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with rebecca quick and joe kernen. less than 90 minutes away from the opening bell on wall street. the futures right now, looking up. dow to open 15 points higher, nasdaq up three and the s&p 500

looking to open a little over one point higher. markets in europe right now. we've been talking brexit, brexit, brexit, brexit, brexit. looks like maybe there won't be a brexit. nonetheless, everything on the up side. dax up over 1%. among the top stories, tesla offering to buy solarcity in a stock deal worth up to $2.8 billion. tesla would pay $26.50 to $28.50 a share. that's a 25 to 35% premium to tuesday's closing price. elon musk who controls both companies calls the deal a no-brainer. if you check out the stock reaction. tesla shareholders seem to think it's not a no-brainer. stock odown 11% on the news. mcdonald's received more than half a dozen bids for the planned sale of china and hong kong stores in a deal that could be back and forworth $3 billiono

a reuters report. as part of the deal mcdonald's offering is 20-year master franchise agreement. crude oil prices this morning. wti climbing above $50 a barrel overnight after a report from the american petroleum institute saying u.s. crude inventories fell more than expected last week. you saw the contract month roll over. wti right now at $50.05. >> that gives me -- looking at tesla trading like that, it makes you think story stock. where a comment can -- goes down 12%? $25? that's when it's not supported by normal fundamentals of earnings and profitability and everything else. that's when it's up on something else, right? >> a, we have always thought it was a story stock. b, solarcity was a story stock to some degree. >> put them together. that will work. >> that's the conundrum of all this. it's a totally different

business. >> -- that tesla -- the stock reflects some unbelievable future and underlying fundamentals. >> if you complicate things by taking in another company -- >> if you buy a money-losing company -- it's a money-losing company. >> that's right. so it's the p.e.? >> that's the point. >> you can't find one. that's the point. when it doesn't have one, it trades on story -- >> right. >> i think it's -- look, it's also a story of a company that is moving its goals forward, trying to hit a lot of different targets. if you're going to confuse things by bringing in an entirely different company and trying to start marketing tesla batteries or different things -- >> there is a pickup basketball game in the prison yard. guys over there lifting weights. a bench press machine. did you see that. >> no. >> it looked like that guy got shanked. >> but i do want johnny cash -- >> thank you. who owns that building? what building is that? >> it was the time life building. >> time life?

>> it was. past tense. >> moved downtown. >> they are publishers. >> they moved downtown to some new digs. new digs. on today's economic agenda, we've got this going for us, which is nice. fed chair janet yellen continues her semi annual testimony on the economy and monetary policy this morning. this time it's before the house financial services committee. it starts -- write this down -- starting at 10:00 a.m. eastern. also when we get existing home sales data for may. bed bath and beyond is set to. >> reporter: off-- report aftere close. countdown to brexit is on. less than 24 hours away from the start of the vote. sara eisen joins us live this morning in london with a look at what's on the line for the u.s. economy and why american investors should care about the outcome. sara. >> reporter: good morning, andrew. the problem for the u.s. -- it

doesn't have much of a cushion against a financial shock right now. u.s. economy is barely growing 2%. the federal reserve is already doing a lot of heavy lifting. so that is why it is a major risk. while the big risk here is financial market pain, it's worth highlighting the trade relationship between the u.s. and the u.k. the u.k. is america's seventh largest trading partner. as far as the amount, we exported -- u.s. exported $56 billion to the u.k. last year. the u.s. imported $58 billion from the u.k. british cars, british medicines, and also alcohol are big ones. overall on trade, the u.k. makes up about 3% of the u.s. trade. it's not big enough to make a dent, but it certainly could hurt if the british economy suffers. the other key here is the trade relationship. there could be some uncertainty as to what it will mean. keep in mind the u.s. and the u.k. don't have a trade relationship right now as far as a trade deal, but the eu is in

the middle of negotiating the transatlantic treaty. if that goes through there could be questions as to what it would mean for the u.k. president obama was here in april campaigning with the british prime minister, said the u.k. would go to the back of the queue, estimates from george soros who has had a good track record predicting the moves. could fall 20% against the dollar if britain moves out. that would be painful for u.s. multinational companies who do business here in the u.k. the real worry here, guys, is the financial market distress. talking about widening credit spreads, falling stocks, stronger dollar and buying you have treasuries. one economist says it wasn't the russian economic relationship with the u.s. that hurt us during the russian debt default. it was the spillover effect from the markets which could be key. so clearly economists are worried about it could be a

setback for the u.s., not an all-out disaster. how big of a setback really depends on the political, economic and financial reaction in europe because the eu is a $16 trillion economy, right up there with the u.s. as the largest in the world. >> all right, sara. thank you very much. for more on tomorrow's brexit referendum, we're joined by former u.s. ambassador to germany robert kimmitt. he is a former u.s. treasury secretary. thank you for being here. >> thank you. >> you heard sara. this is an issue economists are looking at closely and politicians are looking at closely. what would the impact be if britain voted to leave? >> i think it would be very adverse for british, european, u.s. and global interests. i would note that great britain is the only free market democracy that sits at the four top tables in the world. the u.n. security council, nato,

g7, and the european council. i think it's very important for britain to have a voice in each of those four important discussions, and for the united states it's important to have another free-market democracy, that is, britain, at the table when the european council meets. >> so you are suggesting that britain would lose power and we would lose power too as one of our key allies declined under that scenario? >> i think we would certainly lose a consistent free-market voice in the discussions at the top tables in europe. u.s. policy, becky, for decades, certainly through my years of government, was first to get things right between the u.s. and the u.k. and then we would go in together, whether at the u.n. or the g7. we don't have an entrance ticket, though, to the meetings of the european council, the european union, the commission, or the parliament. the british do. and they went in very strongly in support of free-market

principles. we didn't agree on every single detail, but they were the one consistent -- they are the one consistent free-market voice in those discussions. i think it would be in britain's interest to stay involved in those discussions. i know it would certainly be important for us to have that voice at the table. >> having said that, though, that's not a suggestion that our special relationship with the u.k. would change if they voted to leave, is it? >> i think our relationship with britain stays special for any number of reasons, security and political, economic and financial. it would just be that we would have lost and britain would have lost a strong free-market voice at the top tables in the european union. with all due respect to my friends in germany, they are proudly a social market democracy. britain is a free market democracy. i would rather have at the table

someone who believes in entrepreneurship, lower regulation. precisely the things that have frustrated britain about the european union i think would only get worse if britain weren't there. and britain would still have to deal with that $16 trillion economy that was mentioned. and so i would rather have a voice that says, less regulation, less government. lower harmonization would be at the table. if they leave, they lose the >> asking them to be at that table also requires they take a lot of baggage that comes along with it. they have to agree to some of the terms handed down from brussels. that's why you see british citizens chafing at what's been imposed upon them. it's great that we have a great back door to this but we are not putting ourselves to any of the same constraints. >> we're not except that we have to operate within the european union according to the rules that are set.

even if britain leaves they'll have to operate according to those rules. i would at least like to have a chance at having the rules come out in a way that served both british, american and i would say european and global interests. one other thing. there is a great amount of technological envy in europe. there has been for decades. if you look at the cases that the european commission brought first against ibm, later against microsoft, now google, amazon, facebook and others, we need to have someone who is not afraid of innovation, who is not afraid of entrepreneurship. that's usually the british rep. i'll say one last thing, though, if i may. britain has been going sideways in the european union for about five years as they have focused on their internal problems. if you think of the european commissioners of the past, chris patten, leon britton. peter mannedalson, they were not only at the top table but at the top table with top people. so if they remain, britain also

needs to revitalize its relationship with europe to have a much more effective voice. >> ambassador, am i correct in thinking that you see the oou.k leaving as a way of making the european market much more closed and difficult to do business with? not on the same par of china but you think u.s. companies would have a tougher time doing business there as a result? >> i don't think it would be more closed but it would be more heavily regulated particularly in financial services which is not to britain's benefit or europe's benefit or ours. a lot depends on what comes through the transpacific partnership negotiations. one million americans work in the united states for companies head quartered in britain. 1.2 million british workers work in britain for u.s. companies.

if we want the growth to continue, investment in good jobs, we need ttip to pass and enid britain at the table making the strong voice for jobs growth based on entrepreneurship and innovation. >> thank you. appreciate your time. coming up, beyond the brexit vote, "wall street journal," holman jenkins is here with what he says is a solution to the growth crisis in the west. we'll talk about his new op-ed and "squawk box" will be right back. why are you deleting these photos?

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♪ tonight there's going to be a jail break, somewhere in the town ♪ >> playing "jail break." the prison yard behind us. live from alcatraz. why are we at -- huh? [ laughing ] >> leavenworth. 11, 12 years. welcome back to "squawk box." supermax, topic of economic growth in the pages of the "wall street journal's" op-ed section today. columnist holman jenkins writes that the western growth crisis will only be tackled when inflation hits. he joins us now. and in reading that, it's like,

hey, great! inflation! you mean that when inflation hits and we go, wow, this is bad, and we need to actually fix things it won't -- we won't fix things until we get to the next round. >> i am afraid that's true. a political prediction. we are only going to get the momentum and force to address the growth problems if the public is scared by inflation and gofvernment officials that e can't buy goods and services with the money because it won't be there. we'll just get inflation. >> we had jay powell on. is moral hazard the right word for when central bankers -- we stay at zero for so long that there is no cost to debt, so that these things build up. if interest rates do eventually go up, then you say, wow, did i really do that? i can't afford these payments. >> the moral of the central bankers is that we're buying politicians time to act on these

growth things like regulation and taxes. instead they're buying them time to stall. >> it enables the -- >> what's the trigger? we would have thought this would have happened a long time ago. >> it's like the dot-com bubble. you knew it would blow at some point. you have very low interest rates, negative interest rates, no inflation but growing debt, these unfunded pension and medicare burdens. you have no growth. you can't reconcile the two -- the four for a long time. >> so while interest rates are as low as they are, we were talking about infrastructure before, would you go crazy and spend right now? >> i wouldn't go crazy, but it's always a good time to spend money on infrastructure that pays a positive return. why not do that? >> that's the key thing. >> question is can you get politics in line to deliver good projects instead of california bullet trains. that's the issue i have. >> exactly. if you knew for sure and people would be held accountable for

overruns. you don't want big dig replicated across the entire country. >> no. but it's at the cheapest rates you'll ever get. >> if you're going to blow the money -- >> if you're going to do it inefficiently -- if you believe it's always inefficient, this is the best time possible. >> maybe ten cents will actually go into the shovel-ready stuff. >> private partnerships -- >> we didn't have a good experience with shovel-ready stuff eight years ago. >> so many of the boosters of infrastructure are the people who say pay people to dig holes and fill them in again because you get a multiplier effect. >> there are people like that. do you think sometimes when you hear the fed, you think, wow, we need to engender inflation. can inflation be too low where you want to actually bring it back? it seems like, be careful what you wish for, because i remember the '70s. i never thought that cycle would

be over. >> philosophically i rebel at that idea. businesses feel like things are better than they might be. people feel like their incomes are going up when they're not. as long as the illusion holds. inflation is good if you're a big debtor. it's a tax on everybody. at least there is not a blowup and a default crisis. >> i asked ann about the -- ann coulter earlier, about the editorial board at the "wall street journal." i said bill kristol, mitt romney, the editorial board in terms of trump. she said -- she attributed it to always being open immigration, that that's -- that's going to be hard for -- since that's always been part of the premise at the editorial board. i was wondering whether you -- has anything changed since the last time you were on? you weren't totally anti. now that he's fired lewandowski is it different for you?

>> it might be. i'm less worried about what trump does when he gets in the white house, frankly, than how he blows up the opportunity between now and then. >> ann coulter said a lot of conservatives want the messages of donald trump but they want it in a better vessel. a cleaner, mitt romney type vessel. >> elegant. >> yeah. >> you are not a very good presidential candidate if you lose. that's the problem with trump. >> help us understand one thing. i have been reading you now for a long time and your different comments on trump. is it that you want him to win but you don't think he can win, or you -- >> i want him to be slightly different than what he is and win. >> i just want to understand what it is you're after. you criticized him frequently about not being a good candidate, but i am trying to understand -- >> he is a flawed vehicle, but i like the idea of somebody going to washington and breaking things open, especially on the front of regulation and taxes and carpet taxes. somebody who can shake things up. but he has to bring the public

with him too. he can't just be a bomb thrower. he could get in and spend all his time in court defending his illegal presidential orders and things like that and fighting with everybody. that wouldn't be -- >> you're different than bill krist kristol. he says there is no way trump can win. when he doesn't win he'll say i told you so, even though he may be part and parcel to causing it. let's say clarence thomas retires, say somebody else has an untimely death. say hillary clinton puts four people -- three or four people on supreme court, far left -- at least different than what a republican could put on. when does -- isn't that -- isn't there a point of no return for the united states? >> i hope not. >> you don't think there is? >> the supreme -- >> then it's a binary election. >> the supreme court is more important to people who care about the cultural and social issues than about economic issues. though the supreme court is a boar against the run away

administrative state and they have not been doing as much as they can on this, though they've helped in some way. if you change the politics, it doesn't matter what the court does. it follows. if she puts on more liberals we get a more deregulated, vibrant economy. the court will support that. >> you think, if there were some type of crisis or something, she would be more like bill than bernie? >> she is going to -- she wants a thriving economy -- >> so did obama. >> he got reelected anyway. it was a little bit -- >> he wanted a thriving economy. he didn't know the private sector had anything to do with the private economy. >> the gop put up a guy who looked like wall street to most of america. whoever gets in there wants to be re-elected. they want an economy that works. >> he looked like gordon gecko kind of, the white collars. >> nice to see you, sir. when we come back, mark zuckerberg going all in on facebook live. he is spending big to do it. we'll tell you about the social

media giant's million dollar deal with celebrities and media companies.

facebook signing deals worth more than $50 million with media companies and celebrities to create videos for its live streaming service. that's according to the "wall street journal." and among the celebrities signing with the social network, kevin hart, celebrity chef

gordon ramsay, wellness guru deepak chopra and nfl incredi e quarterback russell wilson. when we come back this morning, the donald trump economy. the gop nominee set to fire back at hillary clinton after her attacks on his plan for jobs and business. we'll bring you the war of words next. right now, though, as we head to a break. the u.s. equity futures. hanging on to modest advances off the higher levels we had seen earlier. dow futures up 16. s&p futures up over 1 point. owen! hey kevin. hey, fancy seeing you here. uh, i live right over there actually. you've been to my place. no, i wasn't...oh look, you dropped something. it's your resume with a 20 dollar bill taped to it. that's weird. you want to work for ge too. hahaha, what? well we're always looking for developers who are up for big world changing challenges like making planes, trains and hospitals run better. why don't you check your new watch and tell me what time i should be there. oh, i don't hire people. i'm a developer. i'm gonna need monday off.

again, not my call.

♪ why i got you on my mind ♪ why i got you on my mind ♪ why i got you on my mind ♪ welcome back to "squawk box," everybody. a couple stocks to watch today. winnebago out with quarterly results. earning 53 cents a share. nine cents above estimates. revenue also coming in better than expected. the company's results helped by strong growth and its towable products. stock up 7%.

fed shares under estimates. it reported an overall loss because of pension costs and expenses associated with its recent acquisition of europe's t & t express. stock is down by less than half -- just over .5%. shares of adobe falling. second quarter revenue rose 20% matching analysts estimates. compan company/issuing third quarter guidance. stock down 3.5%. microsoft recently getting into the marijuana business. eamon javers joins us from portland, oregon. i'm going to check out his eyes. he looks okay. morning, eamon. >> we're at the human collective here in portland. don opened the store here early on the west coast. what we wanted to do was show

you some of the financial difficulties of this burgeoning marijuana industry. don let our cameras ride with him yesterday. look at this video we shot showing the process he has to go through just to pay his taxes here in the state of oregon. don actually goes down once a month to the revenue office, drops off $15,000 in cash to pay his state taxes here in oregon. the reason is because the banking industry still won't touch all of the cash that's being generated by all of these marijuana businesses. it's a real wrinkle and an unexpected consequence of legalization here in oregon. you get this situation where all of these businesses have enormous amounts of cash on hand. they complain that it's dangerous, it's not effective for them to do business that way. they would like to get access to the banking system. and we're starting to see some entrepreneurs step into that gap to buy new businesses that fill up that space in the economy. you are talking about companies like microsoft now getting into that business. there is a start-up in los

angeles called kind financial which actually makes software for the marijuana industry to track products. microsoft did a deal with kind financial. we talked to the ceo of that company in los angeles last week, and he told us he sees a huge opportunity here. here is what he had to say. >> i really feel like this is a monster opportunity. and i am not just saying that it's going to be, you know, i am going to make a gajillion dollars. what i mean is our country is not doing well physicalfiscally. unemployment. the states are not healthy. marijuana, the cannabis industry is the fastest growing industry in america any way you want to slice it. >> now you see microsoft stepping into that industry with the partnership with kind financial. they offer the compliance

software i was talking about. it will now be sold through microsoft's cloud. people trying to stay in compliance with state, local and federal laws. here at the human collective in portland they're marketing all kinds of new products. this is called shrapnel, an edible. i have no idea what's inside the package but it looks maybe dangerous. i don't know. chronic corn. caramel corn that's cannabis infused. it says "consume responsibly. medicinal product. keep out of reach of children." all kinds of products here. it gives you a sense of how difficult it is for the businesses trying to get started and can't handle all the cash and get it into the banking system. a lot of physical cash here on the premises, guys. >> caramel corn. wow. you need the warning labels, i would say, because, you know -- that stuff is addictive on its own, so you know -- yeah. anyway, thank you. >> right. right.

>> you bet. >> see you. thanks. the countdown until election day is on. donald trump will be making a speech today, widely expected to fire back at hillary clinton following her attack yesterday on trump's business record. our next guest wrote an op-ed in the "wall street journal" titled "trump's pro-growth path to victory." here to discuss is donald l luskin. good morning. >> you are a believer, i think, that his policies on trade, which some -- some would say, at least his critics would say are anti-trade ultimately will help this country. why? >> well, the reason -- look, trump is certainly not alone nowadays in being anti-trade. hillary clinton used to call the transpacific pact the gold standard and is now against it. that's the tenor of the times. trump picked up on this. the point of my op-ed is that,

while we sophisticated people have learned that more trade is good, the fact is we have had so much new trade, so much globalization over the last 20 years, that the very real, very human systems, everywhere in the developed world, have not been able to adapt to it. it's a shock. it's like if you're running a book store and amazon shows up or running a taxi and uber shows up. it takes time to adapt to these shocks. the china and mexico shock have been among the largest economic shocks in history. we need to have a national conversation about how we can slow this down and figure it out and make it work for everyone. that's the messibage of trump. >> what do you make of what it would do to a company like apple? apple not being very supportive, by the way, the gop. in fact they recently told politico or politico reported that they won't be helping in the gop convention in part because of comments that donald trump has made. >> well, apple obviously is one

of the winners of globalization. as is every hollywood movie star or anybody who is in a position to take a product which 20 years ago would have been an american product and now is automatically at relatively little marginal cost a global product. those are the winners from globalization. the losers from globalization are hole zip codes, hole congressional directs districts of low and semi skilled workers put out of work from the work in china and will probably die before they ever get another job. if you are a strong form utill yarian and believe in the greatest good for the greatest number, this probably works out. it does make the pie bigger. but we need to look at the distributional consequences and realize there are winners and losers. the losers are real people. we can't just treat them as trash. >> when you look at some of the things that hillary clinton said yesterday in terms of criticizing donald trump, in

particular criticizing his business record, his record on debt, given what you do for a living, how did you think about that? >> oh, goodness. i think it's absolutely ridiculous. trump has a business record. he is a very obvious, visible success in a number of industries. hillary clinton has been, like most politicians, at the public trough all her life, and crying poor while getting rich. it's basically fundamentally absurd. this is another great conversation that trump is bringing to the world, despite his manifest faults. he is not unique among politicians at having manifest faults. what he is saying is the establishment is corrupt, the establishment is inbred and embedded and parasitic. we need to get new blood, a new concept, an outsider come nothing and shaking things up. of course the establishment is terrified of that. nobody epitomizes the establishment more than hillary clinton. >> you are a cnbc contributor,

don? >> could you repeat that? i had fuzz in my ifp. >> you are a cnbc contributor. >> i am a former cnbc contributor. >> oh, okay. >> i would be happy to have that situation corrected. >> i was wondering. amazing. we haven't found or actually had that many people on with that viewpoint. but it's interesting because you're really pretty special. i like the -- i like the trump not really a great business person -- i like that argument too given the president's private-sector experience. now, i would beg to differ on one thing. i think the cgi has been really profitable, the global initiative. that has been run like the -- i don't think you could do quite as well if it was in the private sector, but that has been run like a priva enterprise in terms of, you know, benefiting the people that run it. don't you think? >> well, right. of course, that's the whole problem.

we want our public servants to be that, to be public servants. we want their economic activities to be fair and transparent and to in no way create profits for them as a result of their public position. there is a fundamental conflict of interest in the clinton foundation being the most egregious example of everything that's wrong with that system. >> thank you. >> i'll sign you up. >> nice to see you. >> i don't think it costs -- how much do we pay these -- >> i don't know. >> all right. anyway, thanks. when we come back, "squawk" heads to the links. former pro golfer david feherty joins us. e we'll talk about tiger woods, the olympics in rio de janeiro and his upcoming new show. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains?

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morning. >> morning. rory mcilroy the latest athlete to withdraw from the games in rio amid zika fears. the four-time major champion saying he won't compete citing health fears over the mosquito-borne virus. he said. after speaking with those closest to me i realize my health and family's health comes before everything else. others have pulled out of the games. rickie fowler cast doubts on whether he'll travel to rio. here to talk about the olympics, the british open and much more is david feherty. he is a member of the family

now. i should have known that. i don't know why -- i didn't know you left cbs completely. host of the feherty show on the golf channel. i have known you since the days of mcatee. 20 years ago? phil griffith was with us. he was like a producer. he made good. >> makes me feel old. >> feherty is -- did you think you could have an irreverent, fun show about golf? i mean, that is a -- that's in and of itself it's a feat. >> it's amazing. i thought, well, it might go a season. i'm bound to screw something up, you know. say something inappropriate. i've said a number of inappropriate things and we're still doing -- >> you are. flourishing. so rory, someone was kidding me, said he may be going if he could hit it in the fairway, which was a problem at oakmont a little bit. but there are fears, i guess. but sometimes you think the --

to be in the olympics for your country -- >> yeah. >> i would be torn. >> when they look back, the guys who don't know, might regret. when i played for ireland or for europe in the ryder cup, those were the highlights in my career. if i had had a chance to play in the olympics -- you have to think about it. these are kids. some of them don't have kids yet. it's just -- it's one of those things, a very hard decision, no question about it. >> i guess you can't really fault someone for what they have to do for themselves and for their family either, right? >> yeah. >> royal trune coming up. that's the actual jug right there. >> i don't remember you winning that. >> no. >> came close a couple of times. there are only three guys in front of me at turnberry. or royal trump as i believe it's known. >> right. >> finished sixth at trune.

i was never going to be one of the players who could hold that and call it my own. the fear of success -- >> i remember talking to you in the past about it. you stopped playing competitively at a pretty young age. >> yeah. >> you could have kept hitting your head against the wall. >> yeah. >> but it feels good when you stop, right? you made the right move. >> i did. i feel like i served a 20-year apprenticeship playing golf for a living in order to be able to talk nonsense about it for another 20 years. >> you can't trash fox coverage. what did you think? >> i thought they were very much improved. >> the technology i liked. i liked the stuff on the greens, the tracer stuff. >> yes. i loved the tracer stuff. i would love to see somebody top one and see if they can follow that. >> one comment, joe buck or somebody, it was oakmont, it was a six-foot putt. and he goes, he's going to tap

that in. hearing that. two-footers are not tap-ins. so tiger -- should tiger go the feherty route at this point? he is very talented. will he be back or should he become an announcer? >> depends. i don't know if he'll become an announcer. i never really thought about it. it would be an interesting -- >> would he be a good announcer? >> i think tiger woods would be good at pretty much anything he chooses to do. he is just one of those people. you know, i -- depends on whether he can get healthy and fit. this is a nerve issue in his back. he's had it operated on several times now. the golf swing is not be conducive to making your back feel much better. i don't know. i know he is taking his time and really trying to make sure that he is healed this time. because perhaps, you know, he feels like this is his last chance to get back at it. >> i just remembered something. when you have gotten in trouble -- i won't bring up the actual incident, but you do get political once in a while.

i think we're like-minded in several ways. what about brexit? yay or nay? >> when i hear people's opinions about it my mind changes. i can't figure it out, whether it's a good idea to leave or not. i am an american now, so i don't really care. >> right. you are. you have done wounded warrior stuff. you are a great american. how about our election here? >> well, that's -- that's a muppet show. that can only happen in america. i mean, i have great faith in the country and, despite who becomes president, i think we'll be fine. >> right. do you think, back to golf, quickly, we all worried, i guess, for a while about a -- tiger not being in the majors. some guys have stepped up that i think might be better than tiger was in his prime. >> i'm not sure about that. >> jason day? >> these are phenomenally talented kids. whenever i got into broadcasting, tiger woods became a professional golfer at exactly the same time. you talk about a lucky break!

i saw the most extraordinary things, you know, for ten or 12 years. my children won't see golf like that. their children won't see golf like that. >> watching dustin play, tiger couldn't hit it 400. >> no, no. but he hit it a lot less often as well. won a u.s. open by 15. won the masters by 12. british opens by eight and 10. just did things that no one will do for a hundred years -- you can only be as good or better than those in your time. i would love to see the two play with the same equipment in the same era. two extraordinary people. >> jack, i think -- experiencing it, as you get older you can shrink. did you see jack standing next to dustin? he is some kind of a mutant. he must be 6'5"? >> i think he's four. but jack shrunk a couple of inches since having his hips done. he says barbara is taller than

him. he -- he has suffered a bit, you know, with surgery. golf became painful for jack. you could see when he hit it. >> rory and the zika. are you going are you going down there? >> i will be there three weeks giving people viruses, i hope. i decided i'm a carrier, not a sufferer. >> it was a pelosi quote -- >> yes. somebody took it seriously. >> i know. i know. i know. anyway, are you willing to say right now i'm going to be on your show? you can't really guarantee that because of -- >> well, i'm ultimately not in charge -- >> see, i knew he was going -- i knew you were going to -- it's called feherty. and it's a sister network. you're lying, you don't know. you only control it. >> there are a lot of things i'm not in control of. most of them bodily functions. >> there's a lot of cooks in the kitchen. >> absolutely. i'd love to have you on. i believe you played like a dog yesterday. >> did i tell you that?

>> no. >> you heard. you know, i was out the night before. >> i know. >> oh, yeah, you saw me. that's right. >> yeah, i did. and neither of us had a clue we were seeing each other today. >> yeah. you have a better -- that's a different subject. thank you, sir. coming up when we come back jim cramer down at -- actually not at the new york stock exchange, he's on the west coast going to join us live from san francisco. and also a quick check on the futures right now, dow looks like open 22 points higher. back in a moment. i laugh, i sneeze... there goes my sensitive bladder. sound familiar? then you'll love this. incredible protection in a pad this thin. i didn't think it would work, but it does. it's called always discreet watch this. this super absorbent core turns liquid to gel,

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there it is. now you're an expert in less than a minute. this is how car buying was always meant to be. this is truecar. ♪ jim cramer getting ready for "squawk on the street" from the west coast this morning. he joins us from san francisco. there's no san fresca, did you think you were getting on a plane to london? what are you doing out there, jim? >> well, i just feel like i should interview various ministers of parliament to talk about whether they should buy bristol myers or pfizer. i mean, i don't know. i mean, maybe you buy half pfizer before the vote and half after because it will mean absolutely nothing to them. or we can just talk about the fate of western civilization, which frankly i'll leave to the lords who do those great programming on pbs. >> jim, tesla, i'm desperate to hear your view this morning.

>> well, tesla was obviously desperate to save solar city. i mean, solar city had an existential crisis, that last quarter was the worst i've ever seen. people trying to figure out what kind of business are you, your business complements everything else that's sustainable. and musk has the supporters, doesn't matter raised a lot of equity at 215, it's a cult of following and those who bought without knowing the cult are feeling pretty badly today. but the cult followers, the kool-aid tasted good -- that's a reference to a story i follow when i lived out here as a homicide reporter. i think solar city -- >> if you're a tesla shareholder this morning, should you be happy or furious? >> well, if you bought on the underwriting and you're not furious, then it's just because you like the car so much you're probably willing to live in it. >> all right. jim, we will -- i'm going to tune in just to finally hear what you do say about tesla on

"squawk on the street." >> i think tesla's not a buy. not a buy. >> okay. okay. that's something right there. coming up, morning movers, list of stocks to watch ahead of opening bell. first though, voters -- >> send him back to prison if looked at you -- >> we were looking for -- we don't have that. anyway, polls are going to determine the future of the entire eu tomorrow. don't miss our full brexit coverage starting at 6:00 eastern. new bikes aren't selling guys... what are we gonna do? how about we pump more into promotions? ♪ nah. what else? what if we hire more sales reps? ♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it.

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tell you very quickly about one stock to watch this morning. barclays upgrading priceline group to overweight from equal weight staying the current valuation of the travel website reflects undue pessimism in their words about the company's prospects. >> okay. and call it hamilton's revenge, new york clamping down criminalizing companies using what's known as ticket bots. it's taking center stage after the ham ill pilton star spoke o. brokers use software to buy tickets and mark up the prices and resell them on sites like

stubhub. >> about time somebody speaks out about this. it happens not just on broadway, it happens with concert shows. >> right. it's going to hopefully help everybody, sports, everything else. >> good. >> that op-ed by the way, joseph, ran in a great "new york times." make sure you join us tomorrow. "squawk on the street" begins right now. ♪ california love ♪ california knows how to party ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber at the new york stock exchange. cramer is at one market in san francisco. he's going to give us some west coast love this a.m. jim, what do you have planned out there? >> well, look, we're going to talk to all the companies that actually are changing the universe. you know, i'm talking about companies like fitbit, which has been just so misunderstood that people absolutely hate, to ford

voice and we lose the voice.