and business stories it's monday, august 13, 2018 "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box. harley davidson song good morning welcome to squawks box on cnbc live i'm andrew sorkin. take a look at u.s. equity futures at this hour we try to make sense of whether there may or may not be contagi contagion. opening up off 77 points nasdaq looking to open down as well 19, 20 points. the s&p 500 off about 7 points also show you what's happened overnight in asia. this is red arrows across the board. the any key down

the shanghai down marginally european equities, this is where -- i don't know, maybe the real hit happened on friday. but right now, spain off about 1% each. finally, treasury yields at this hour, the ten-year at 2.862. when we were just crossing 3 threshold two weeks ago and moved down considerably. >> i think there was safe-haven buying as a result of turkey top story, turkey and its currency crisis. turkey's finance minister says the country is implementing an economic action plan to ease investor concerns. the lira coming off the record lows that hit overnight at 6.87. lira for every dollar. it had gotten through 7.2 lira for every dollar willem marx joins us with more. >> michelle, we heard last night with the local newspaper from the new finance and economics

minister here, also the president's son-in-law, he was talking about this action plan, promising to unveil this morning. what we've seen so far, very small set from the banking regulators from the central bank of promise to provide as much liquidity as turkish banks require. what that means not quite clear. in terms of the rhetoric, that's been clear from president erdogan. he's opposing the increase in interest rates they see it as anabsolute requirement. they need 300 to 400 basis points in order to stabilize things we've got inflation almost at 16% according to the official figures and a lot of people i'm talking to in istanbul, not happy about the situation or idea that this is used as a part of a national rhetoric campaign talking about this is an economic war attacking the country in terms of the future,

though, the central bank not entirely independent following on from his election in june big questions about whether they'll be willing to hike rates and try to stabilize this very fluid situation. >> all right willem, thanks so much willem marx in istanbul for us a lot more coming up at the bottom of the hour there's a stealth tightening by the central bank the way banks fund themselves with the repo rates. it used to be, up until this morning, that borrow for one week at 17%. they said it's going to be overnight and it's going to be at 19% so they didn't do anything with the headline benchmark rate. but this often happens with the turkish central bank they contort themselves into raise to stealthfully raise interest rates because erdogan hates the concept of interest rates. he thinks it leads to higher inflation, not lower inflation. >> kept it low to get re-elected thinks everything is fine now

that he's re-elected now you have an economy to run to stay in office, too if people can't eat, people can't -- >> right. >> it would be fine -- >> you can't bully the economy into doing what you want it to do. >> or currency traders or overseas lenders who length you dloors and euros and you have to pay them back in dollars and euros. you have to run a different style economy. >> the problem of when you keep rates low here, for whatever reason we did and around the world and they think hey -- >> borrowing is great. >> they need it. then they can't pay it back in the local currency. >> the point is made that he doesn't think turkey can go to the imf. >> because >> because he thinks politically it won't work. >> okay in turkey. >> in turkey >> i don't know a country that the imf is popular in, okay? the imf is a very unpopular institution because they tell countries things like, your central bank has to be independent, guess what, the currency has to flow freely, you

have to do all these things, you have to cut spending you can't subsidize people as you do stop subsidizing gasoline. all the news given out to them is bad news. everybody says that about argentina. they cannot go to the imf. because if you think it's unpopular in turkey, it's worse in argentina. >> chief international correspondent. >> i still am. >> something with power and say -- >> it pulls you back in. i think you'd be there you'd be making plans. >> if it weren't august and we weren't like pulled at the seams because so many are in vacation, i'd be in somalia. >> there's a four seasons there. >> it's beautiful. >> isn't there a nice -- >> thousand dollars by the way. >> isn't there a nice hoe till like the ritz carlton that was a prison too >> it was originally a prison.

>> four seasons was the one that was -- >> the rooms are really small. i mean -- >> show us the -- >> did they redo the bathrooms it's not just an iron toilet in the middle of the -- >> your bags aren't packed >> i keep a bag at the office all the time. >> honest to god >> it's right by my desk you haven't stopped by my desk it has toiletries. >> do you have call waiting on your phone if we need to call? >> yeah. >> you may be gone if this goes to zero, if the lira goes to zero, you may be going. >> you mean if it goes to 20, the other way. >> if it comes valueless. >> i forget -- >> in geo political news, russia responding to new u.s. sanctions. get over to a javers --

>> the rush hans were responding to u.s. sanctions and cut back on holdings of american securities here's what we know about what the russian finance minister said over the weekend. russia has already scaled back its holdings of american treasuries declining from 84% from march to may to 15 billion from $96 billion in holdings in u.s. treasuries. they're going to use ruin else and other currencies ib stead of the u.s. dollar in settlement and continue to decricrease ther holdings of u.s. securities. they were put into place by the trump administration in response, in turn to the poisoning attack on two people in britain that ultimately ended up killing a third person who was apparently uninvolved in the initial dispute altogether this was a former russian spy who resettled in britt and an living there with his daughter they were attacked with a nerve

agent. the united states and britain said that came from russia and therefore, sanctions were called for. the russians now responding to that we'll see if that has any impact in global markets as we get further into the day today, guys. >> any other time, eamon, we'd be worried about other countries sell off our treasuries. even as the russians sell them like crazy, so many others want to buy them. >> supply and demand, right? >> yep. president trump banning -- boycotting harley davidson over steel tariffs. harley announced a plan to ship production outside of the u.s. to avoid tariffs imposed by the eu in retaliation to trump's tariffs. in response, the president has criticized harley calling for higher taxes and trying to lure foreign competition to the u.s president trump said many plan

to boycott the company if manufacturing goes overseas. great. most other companies are coming in our direction, including harley competitors a really bad move, exclamation point. the u.s. will soon have a level playing field or better. harley davidson repeatedly declined comment on president trump's remarks. he met with 150 supporters and members of a movement called bikers for trump this was in bedminster, new jersey they back trump's agenda take a look at harley davidson shares down 15% so far this year. >> there have been a lot of -- a lot of the guys were basically saying we love harley and bought them because they were made in america. they will -- their allegiance is more to america than harley. i'm pretty sure. the biker types that were out at bedminster. >> that's one of the iconic american brands associated with the united states. what else is there budweiser. >> a couple of screw-ups the stock has not done as well,

been a lot of -- >> buyers are getting older. it's harder to ride a harley when you're older. >> it's not that hard to ride. it rains and gets cold there's a lot of times when it's like, oh, my god, how am i -- >> at the intersection of business and politics, president trump had dinner with apple ceo tim cook on friday and the first lady tweeted, melania trump says that potus and i enjoyed dinner with tim cook. big innovation and investment in the usa which positively impact our economy. that's a shnice shot there. >> i'd love to know what tim cook thought of the experience what do you think? >> i don't know. >> in corporate news, shares of bayer having the worst day in nearly a decade. >> he did show up. >> california jury ordered monsanto unit to pay after

using -- the man seeking $412 million in damages jurors awarded him $39 million for losses and slapped a $250 million fine on monsanto after find it liable for design defect and failing to warn users of roundup's risks. monsanto will appeal the decision much. knust just in from the maker of clothing brand like lee, wrangler and north face. they plan to split into two publicly traded companies. one will keep the vf name and sell apparel and footwear. the other will operate the jeans and other businesses it expects to affect it through a tax-free spinoff of the unnamed company to be a shareholder. >> mond low he is. mondelez -- >> the various brand out there. >> envious of that name.

mondelez is already taken. >> if this doesn't work out, you have a career in branding. >> right corporate renaming. >> corporate renaming. it was a big -- that's a huge business. >> i know. >> charge for the mond lows. >> they didn't pay anyone for mondelez, did they >> i bet they did. i think they had focus groups and surveys. yeah in other corporate news this morning, elliott management will say what's going on is making a big bet on nielsen the "wall street journal" reporting that they have an 8% stake in the tv rating company we got to get close to these guys now elliott wants nielsen to sell itself shares of nielsen higher in early -- >> out of home measurement. >> that's the problem. >> a lot of people watch us out of home. >> homes, bars, gyms trading floors. >> trading floors. i don't know, actually

we don't use them anymore. do you still like have to punch in what you're watching and you get $30 a month or something. >> 42 now. >> 42 d a month. >> i used to know somebody who did -- you have to have a remote you have to keep track of some of it. not clear that cnbc viewers would necessarily agree it's a pain to -- not going to -- >> imagine the daze of the physical diary, where you had to -- >> really? >> meanwhile, isn't brian roberts like oh, my god, i just see that over on this street in this neighborhood, they just switched off of bravo for three seconds and are now back on. they know exactly what people are doing at all times why do they need -- >> don't we know from set top boxes exactly what people are watching >> there's two issues. i always thought that one day,

the cable guys would be able to go to the viewer and say we'll give you a discount to trade away your information, privacy issue. the other is today, people watch on so many -- talk about out of home watch on their phones. ipads on this and that they actually collect the -- watch on their computers at the office to get the full 360 view. nielsen and others are trying to sample everybody that's conceptually the idea. >> hard. >> the aerate and the numbers that come out, it's staggering if you have a niche audience, too, one person leaves on vacation and ratings can go down by 40% >> small sample size statistical aberrations can be crazy. >> can do better let's look at the broader markets. joined by ed campbell, managing director and kathy jones chief

income strategist at charles schwab kathy, we'll talk about the turkish fear in a second but some of the stuff here that ed has, i'm sorry, you have to wait it's so compelling here. remains barely bullish >>b-a-r-e-l-y. >> i know. i know i heard. he introduced this phrase. it's a -- you're not -- what does that mean i have to give credit to marco hen for coining it. >> you don't like it, i see. modestly, overweight stocks. much less in terms of exposure than earlier in the year we're skewed towards u.s. assets in increasingly chaotic world, we see the u.s.is sort of an island of stability here it's difficult to be bearish on

u.s. stocks when you have 25% earnings growth, 10% revenue growth -- the numbers are peaking but even if they come down a bit from those levels, we think that you still want to be -- you don't want to be heading for the hills. you want risk in your portfolio and the u.s. is the source of strength in the global economy right now. >> what are you basically saying is the good news is priced in already and everything is getting long in the tooth and be ready to -- >> i think it's peak earnings. >> now you're saying we're not at bullish >> not crazy bullish. >> were you barely bullish a year and a half ago? >> no. we were not. more decisively bullish. kathy, what i'm worried about here -- turkish lira, you have good comments on this too

but in general, this inflation number that we saw last week, we thought things were rolling again. you think things are rolling over not necessarily getting stronger. >> in terms of inflation, the year over year comparisons now will shift last year we had a dip in cell phone pricing. expectations actually rolling over if you look at the tips break even market or the university of michigan survey or whatever we're not seeing a big lift in inflation even though inflation has been edging higher. >> that could be a negative for wage growth. we're on the cusp of it. >> it disappoints time and again. in theory, we should be getting higher wages we are in some markets we're not seeing it more broadly speaking partly that's good news because we're bringing in people who were sidelined at lower wages. that's not a bad thing they're coming in the labor market but it is holding down aggregate

wages. >> you think 3.75 on ten years and the route in turkey, while keeping things volatile, is not going to turn into a systemic problem. i mean, the lira is not that big, but as big as the thai bot. >> there is an eerie recollection of 1997 when the thai bot devalued and everyone said it's idiosyncratic and of course it spread the linkage between turkey and other countries is pretty small. even through the banking sector, it looks like a lot of the banks have already managed some of that risk. so it's not going to really hit their balance sheets that being said, you know, i think this route will continue for a while. we've been underweighting bonds all year. >> in terms of fixed income, that's really your fort -- >> i thought it was --

>> it's john fort. not forte. >> our colleague. >> yes. >> like to play in forts >> they do >> they all do, don't they >> we were in one in italy i got scared because it was so high i would not have been a great soldier. i realize that i don't think in any war if i'm holding the -- hugging the ground okay as far as -- do you like corporate bonds? is there a place where i can diversify away from equities where i don't feel foolish for buying here? >> neutral in investment grade and high yield >> neutral >> cautiously neutral. >> well -- >> the reason we want to move up from triple c's, you don't want to be in the lowest rated bonds anymore. one of our big things this year is that the year of easy money is ending.

as central banks pull back, you start to see where the excessive are. that's usually in the lowest credit quality bond. >> do you think we need to wait until september to really see these -- all these things resolved i do don't you? >> it's kind of -- >> we'll be here either way. >> i agree that turkey is probably a reason to stay away from em assets for the time being. the impact on the wider world should be fairly limited so our 9%, 10% expectation for the s&p 500 still holds here we may get corrective action but make it back in the fall okay thank you. talk about wow, tiger. >> something >> for some reason tiger is on the cover here and tiger is on the cover back here and the guy who won who -- i just don't think people understand, a

248-yard hole to just hit under that pressure. >> right. >> with tiger chasing you and hearing the roars. he's won back-to-back u.s. open. i think he hit a 5 iron 248 yards directly at the flag stopped, landed five, six feet from the flag. stroked that in for a two-stroke lead going into 18 brooks koepka is not getting -- it's awesome that tiger shot 64. but this guy -- >> the other guy played better, yet tiger gets all the headlines. >> i'm saying this guy is -- >> phenom? >> yes genuinely. gary player, who i love and -- i'll read it it's not 2:00 in afternoon gary player years ago said the athlete someday will take over golf and it won't be the slovenly type guys. >> that's what he meant. got it. >> he eventually said someone

like brooks koepka i like tiger he's a heck of an athlete too. check this out late drama in the final round of the pga championship tiger had the entire gallery on his side in st. louis. he made a charge he came within a shot of the lead before he had trouble driving all day long i think he missed the first nine fairways or ten fairways before finally hitting one. he did get his driver just from shear mental toughness, got things going on the 17th it didn't help he finished in second place. brooks koepka played really a mista mistake-free tournament. laser shot on 17 landed just a few feet shy of the hole he stroked that in for a birdie. then tapped in again for par on 18 to wrap it up there's a shot that tiger hit when he had to tiger, he had one putt that ended on the lip that i think if he gave it about five more seconds, it might have dropped in he had another par putt that bare cli caught a lot of the right side of the hole and didn't go in

those are the two strokes and he would have tied. he kept grinding and hit a 9 iron on one hole that almost went in. did you see it >> i think you were speaking greek. i didn't see any of this and i understand every word you're saying but i don't understand most of it. >> how much did you see? >> i was watching clips. it was pretty great. >> it was. >> tiger played awesome? >> yes. >> tiger played awesome. >> the other guy played more aweso awesome. >> he didn't play in the masters. in the last six majors he's played in, major tournaments, he's won three of them we were going to read interesting stuff. the only other players to win the pga and the u.s. open in the same year are guys like nicklaus, woods, gene sarazen, i think ben hogan. >> names i don't recognize. >> you recognize gene sarazen. >> some names i recognize.

>> it was great. he's an animal >> you can't say that. he's a beast coming up, a scary story out of seattle this is unbelievable if you missed this over the weekend, where an airport worker stole an empty airplane and then crashed it after flying for about an hour. we'll talk about the security implications because there are many we'll do that next back in a moment this is a tomato you can track from farm, to pot, to jar, to table. and serve with confidence that it's safe.

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this is the ibm blockchain, built for smarter business. thanks, janet. it's welcomemy happy place. store. you can learn how to switch to xfinity mobile, a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet.

and over here i'm having my birthday party. dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today. investigators trying to figure out how a man without a pilot's license was able to steal an airplane. bill le brebeau has more on this >> andrew, i'll be curious how quickly we hear from the fbi, the ntsb, the faa. here's the latest in terms of what happened on friday night and the investigation into how this airline employee who was working for horizon air, owned by alaska airlines, was able to steal a turbo prop, which seats

78 passengers or so. you saw it on the weekend we've been showing it all morning as well this is some of the flying that was done by this ramp service agent who was able to steal this airplane even though he doesn't have a pilot's license look how close he comes to going into the water there fbi and the ntsb, they're still looking for the data, voice recorder, the cockpit recorder, all of that information. that will give them a lot of clues in terms of did he have any help in terms of stealing this plane before it crashed after he was flying it for an hour here's some sound between air traffic control and the pilot shortly before the crash >> just flying around and he just needs some help controlling his aircraft. >> no, i don't need that ma help i've played some video games before. he played some video games before by the way, you can see on youtube a number of discussions

and video about how to start up one of these planes and what it takes. so if you can memorize it and understand it, you can do that as investigators search for the data and voice recorders, here are the questions that will be asked. there will be a meeting with the port authority in seattle along with airport officials and airline representatives about security protocol. did the pilot have any help? will the airports tighten security you can bet that's going to be a topic discussed not only in seattle but around the country and the days to come will airplane access protocol change guys, i've had a number of people who asked me, how was he able to get inside the plane remember, it was not at a gate it was in a service hangar area, if you will. it's a little bit out of the way, he was able to maneuver the tug so he could turn the plane around, climbed inside and clearly, knew how to start up the plane. which is by the way, not just

hitting one switch there are a number of steps to go through andrew, you've seen the flight simulators that you can basically play at home if you memorize the sequence and know what you're doing and intent on doing it, you can start up one of these planes. >> silly question. do you need a key? >> no. you do not it's a sequence of events. by the way, if you do those out of sequence, then you're not going to have the engine synced up it's not going to work >> but there's no code or -- i understand the sequence that you need to put in to start the plane and get it working there's no security measure like even -- obviously, i have to put a code in my iphone just to get it open. >> to my knowledge, no but you can bet that that's one of the things that will be discussed is, should the protocol change from here on out so that there is a specific code that only pilots get when they

go into a particular airplane? >> with a little bit of knowledge and obviously i couldn't but he worked there and everything i almost feel like i might be able to take off in a plane if i didn't care if i was going to be able to land it. isn't it harder to land a plane than to get one up in the air? this guy obviously wasn't going to have to land it anywhere. >> joe, have you ever done a flight simulator i've done a couple of them you think it's easy? >> with a little knowledge you know what i'm saying easier to push the throttle forward, get it going up to velocity where the wings basically take you up from when you get to over 100 miles an hour. >> right >> but i don't think i could land one given a little -- >> i don't think i could land one either you know, that's the challenge that was facing the air traffic controllers in this situation. they wanted to steer him away from populated areas

you can hear him a couple of times during the exchanges, hey why don't you go back out over the water. then you have the teams trying to steer him in that direction as well. let say he did say i want to try to land this i'm sure they could talk him through it i don't know if i was in that position to be able to -- oh, yeah i can land this >> that's the whole two-pilot idea whenever you're up in a plane. nice to have the backup in case. >> that's why we do, right >> instead of the -- >> it's required >> okay. thanks, phil currency crisis in turkey. the tumble in the lira and the potential contagion to european banks. as we head to break, a look at the s&p winners. coming up, the losers. so you just walk around telling people geico

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♪ >> announcer: welcome back you're watching "squawk box" live from the nasdaq market site in times square. as always, there's stocks, individual stocks mofrg this morning. tesla is one the company and ceo elon musk were hit by two shareholder lawsuits on friday the suits accuse them of fraudulently scheming to squeeze the shorts, short sellers, including through musk's plan to take tesla private tesla hasn't commented

reuters reported that saudi arabia investment fund showed no interest in the buyout plan, despite the fund taking a minority stake in the company. that contradicts a bloomberg report that said that the fund is working to be part of any investor pool that emerges to take tesla -- >> i've been on the phone all weekend trying to figure this out. given the state of saudi -- >> the public investment fund. >> and given the state of the ipo saying there isn't one, it's sort of unclear how you can decide to commit an extra ten or in some cases $20 billion, all of which would come due at one time they soon it's not like $20 billion to the south bank vision fund, which is something that would be ostensibly spent over the course of several years there would be sort of capital calls that come to you this would have to happen. there will be a date and time certain if in fact this were to

happen. >> also, papa john's going to cut royalties and the fees it charges franchisees in the u.s. and canada sales fell more than 10 poers in july amid the fallout over the exit of its founder. roche says the fda granted breakthrough therapy sat status to use an allergy drug to treat severe food allergies. u.s. equity futures at this hour are improving from the last time we checked down about 53 on sort of the angst about the turkish lira that's affecting local markets the s&p down 5 michelle has more on this. >> our top global story, in fact, turkey's currency crisis, the lira hitting a record low overnight. joining us is the chief currency status at mellon

so if i understand correctly, the turkish central bank didn't officially raise interest rates in their announcement. they did something akin to a stealth tightening, right? is this why we've seen the lira stabilize? >> i think a little bit of that. i think the one thing you can absolutely say is that you've had -- from the central bank you've also had some kind of control as to the -- that can be done with turkish banks. >> is it enough? [ inaudible >> is it enough? >> no. i don't think it is. if you look over the course of the last few months, it's been fairly clear that the markets prices in 500, 600 basis points of rate hikes. we're nowhere near that. we're going to have to do

something aggressive, it's going to have to be 500 basis points plus easily. >> if they give back finally, has that left the barn, now you need shock therapy in the financial market. >> i think the shock therapy the points about the -- story, it's a broader issue over the course of the last three years, the move steadily away from diplomatic -- pivoting towards iran the pastor story is part of a broader issue. i think that particular issue has come and gone. the idea that we get a rally back on the tariffs, i'd be surprised to be honest. >> how bad is the contagion in the rest of the ee mernging markets and will it impact the developing markets beyond what we've seen >> clearly, there is a degree of

contagion. you see it in the currencies like the south african coin. the rest of the global markets, perhaps less than perhaps you might think. i don't think the direct impact is going to be that strong it's the indirect impact the people started to look about who is next with sanctions is it india, is it indonesia is it about the guys with high level foreign dollar -- worrying about rising yield is it about how the guys who have sanctions against them start to react back. what does russia or iran do next that i think is the indirect story here that's if it's going to come back into the developing markets, that's where it's going to come from some interesting kind of comments from iran over the weekend. we have fairly strong comments from the russian prime minister on friday. it's been reduced to the exposure the sanctions started in april

clearly stuff is going on with a broader impact. >> we saw the numbers, how much they've sold off in the u.s. treasury simon, thanks for joining us simon derrick. in light of the lira's tum being, the ecb voiced concerns about the lenders to turkey. joining us with more on the banks in question is vince did he lart he is at intlfc stone financial. good morning, sir. help us understand which banks are most exposed at this point >> i mean, the three names with the largest turkish exposure would be bnb paribas in france and in spain in all three case, the exposure comes from a local joint venture with a turkish banking partner in terms of size, i would say the least exposed of the big three westbound bnp.

looking a the 10% of net income. the most exposed is bbva where you double the figures 10% of loans and 25% of the net income, which is -- to turkey. credit is harder to get, they use a different accounting method to report a turkish investment i would say about half of the dividend payment from the common stock comes from the turkish cash flow. >> walk through the permutations here the big thing that everybody worries about is the idea of contagion. is this something where you think this is literally -- i don't want to say -- around these three banks. how damaging is it these banks how damaging is it to county counter parties of the banks >> that exposure happened through a local turkish bank in which these banks have an investment let's say things keep getting

worse. the turkish fear goes -- against the dollar the big mess continues, they can't walk away. they can ride out their investment, give the keys to the bank, the turki isish central bk they could be writeoff that won't be pleasant but there is limited liability even in the worst case scenario. >> it sounds like you're not that worried. >> no. i mean, i think a lot of it is banked already in the -- these are banks trading between 0.5 times book to one. if you only had a bad scenario priced in, bnp paribas, you're talking about the most safe, sound bank in europe the jpmorgan of europe you're talking about somewhat of a territorial market for bnp, turkey is probably the fourth, fifth most important market if you think of bbva -- they're up more than turkey

it is going to be bad for the banks themselves i can't think of it as lehman brothers for the global economy. >> thanks for your perspective, vince. >> thank you coming up, lessons from the crisis author james freeman takes a closer look at the lessons from what happened in 2008, ten years ago. and previous crashes as well through the lens of citi group plus, tesla's board meeting to discuss taking the company private. we'll talk aut tbohe possible outcome. stay tuned you're watching "squawk box" on cnbc

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time now for the executive edge there are five major global market that have tumbled into or very near fair markets shenzhen down 25% from the 52-week high argentina down shanghai down 23%. turkey down 21%. russia close to a bear market down 18.8% from the 52-week high coming up, it's been nearly ten years since the beginning of

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if you looked at wall street's biggest banks today knowing now about the last ten

years, you'd have a hard time hearing about the stories of the desperation of the financial crisis our next guest says the crisis of 2008 had clear echoes of the past joining us now is james freeman assistant editor of "the wall street journal's" editorial page and co-author of "borrowed time: two centuries of booms, busts, and bailouts at citi." good to have you here. >> thanks. >> i haven't read the book, apologies. when i read the zpripdescriptiot seems this is citi -- forget 2008 they have been in trouble for a hundred years and needed bailout after bailout. is that the bottom line here it's in their dna? >> i don't know if it's in their dna. but it's in a lot of incentives built up over the years. anyone who went through 2008 wondering how did we come to this place where taxpayers have to bail out these huge financial institutions, we see in the citi history basically a century where it's a private,

independent institution and it becomes such an island of stability it bails out the government then in the last century since the federal reserve, it has this series of crises and needs federal help >> because of the crash of the central bank or make that linkage for me. >> i think it's interesting for me you look at the 1890s, twice the government is -- sorry, citi is coming to rescue the government. then you go to the panic of 1907 this is a largely a private rescue attempt citi played a huge role. you see a whole bunch of crises where citi is so strong that instead of a run on a bank, people are bringing their money to it. then all of a sudden, we get the federal reserve in 1913. and within a few years, citi is on this reckless foreign expansion, ends up getting in trouble and it becomes a big

borrower at the discount window. federal reserve bank of new york by 1920. >> the co-author is a former bank examiner. how did that help inform you in the book >> verne mckinley, former bank examiner now a scholar at george washington university law school he really came to me with this story and i think this is one thing that adds a richness to it he's gone through a lot of bank exam reports over the years. for anyone who looks back at 2008 and says next time they'll spot the problem, it's not encouraging. you go back over and over and over again, exam reports don't spot problems. the regulators don't see it coming >> am i drawing the wrong lesson here that once this bank had the backing of another bank, it became much more reckless as opposed to when it had to stand on its own, it was more conservative should i draw that conclusion? >> it's a fair conclusion.

you know, we can argue about how exactly it happened. but the history as i said is very striking. citi helped fund the union army in the civil war not just the federal government, it sometimes would bail out city governments that got in trouble. then in the 20th century, 2008, yes, it was severe but it was just the latest they got into trouble in the '20s, '30s, '70s, late '80s. history keeps repeating. >> thank you for coming on good luck with the book. >> appreciate it thank you. a lot more to come on "squawk" this morning. turkish president speaking right now as we speak. we'll monitor and bring you the highlights we're going to talk about their currency crisis next plus tesla's board set to meet to discuss musk's proposal to take the company private we'll talk about the possible outcomes in a moment

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global market alert. the collapse of the turkish lira raising red flags around the world. this thai baht can another crash drag down the global financial system? officials investigating how an airline employee stole a plane and crashed it tesla meeting to discuss the elan musk's idea to take the company private. ♪

good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with michelle caruso-cabrera and andrew ross sorkin i love it when we have everybody with three names >> except you. >> i'm joseph richard kernen becky is off today our guest host today, jason trenert. chairman at strategis. what's your middle name? >> richard >> mine too. u.s. equity futures at this hour, down 62. near triple digits i think early on the other markets around the world are taking it on the chin a little bit from the big global market driver this morning and that is the turkish lira

which i think tried to come back a little bit but nasty again. turkish president erdogan right now addressing a group of ambassadors to turkey. it's better when his central bank guy talks when he talkings, he says crazy stuff. what did he say? >> all kinds of things he likes to say that higher interest rates cause inflation he says this is economic war all the problems in turkey have nothing to do with turkey's economy. generally when he speaks, it is very bad for the turkish lira. turkey says it has an action plan to ease concerns. let's go to will am the lira is getting close to seven again.

>> yeah. that's the low we saw early this morning. so we've heard from the finance ministry we've heard from the bank regular lawsuiter. in terms of the banking regulator, they're trying to swap transactions on the lira and the central bank changing the rules that's something all the analysts have been watching closely. they are not prepared so far to make any changes to that rate of 17.75% erdogan there speaking to people publicly today he's been across the country over the course of the weekend making his case for this as an incident of economic wars. the phrase he kept using talking about traders throwing missiles. that has not proven popular with many of the turks i've been speaking to here today saying they do not feel like this has anything to do with the united states this is not something they're

prepared to blame on president trump who raised those steel and aluminum tariffs they are not happy to try to follow erdogan's advice to buy the turkish lira to trade in their euros and dollars. people here saying they're not prepare to do that to prop up the lira >> yeah, not surprising. people get very focused on preserving their wealth when moments like this happen thank you so much, willem. willem live from istanbul, turkey >> we're going to take a closer look at the crisis playing out in other areas sara eisen is at the stock exchange >> good morning, andrew. well, the big question is are we facing another ruble crisis or baht crisis where a plunge ends up spiraling into a financial and economic problem the contagion factor is key. remember back in 1997,

thailand's baht plunge set off a domino reaction. tanking their banking systems and economies. is its going to lead it to target other countries we're looking. on the surface what's happening in turkey with growing influence from the president over the economy and monetary policy and president trump's unique issue with turkey is unique. but other emerging markets are at risk right now. these may be exposed as a result of the jitters around turkey all of these currencies are under pressure there's the dollar getting stronger against all of them because they're all seen at risk by the markets from an array of bad policy making. rising interest rates from the federal reserve, debt pileups, and rising trade tensions from president trump and his trade war. these currencies are the first place you want to watch for

contagion. some other similarity, the debt bomb we saw back in russia the ruble crisis 1998, when it lost a big chunk of its value, it becomes more expensive for those businesses to pay back foreign loans. same in asia turkey has binged on foreign currency loans like thailand did back in recent years almost the same chunk of its economy. another big concern here is the debt and the debt that turkey owes in other currencies there is the number. we also know a little bit more about who is exposed to some of the turkish debt especially on the corporate side the financial times calling out friday three big banks bb of a, bnp paribas turkish banks have been lenders across spanish, french, and

italian banks. clearly the contagion factor is alive and well we'll see if it flairs one thing to watch is how they ring fence this problem. past currency crises, you've seen a lot of problems for a bailout including raising interest rates sharply to contain a currency plunge. fighting the currency plunge with billions of dollars and reserves so far what we've heard from president erdogan is he's asking the turkish people to exchange their money for lira it's not inspiring a ton of confidence >> okay. we're watching all this plus how it's affecting u.s. equity futures. the markets are manageable so far. not even triple digits at this point. the equity -- i don't know we were down between 50 and 70 points on the industrials. as we can or can't take a look, up to you. doesn't matter to me

we're down 52 and down almost 10 on the nasdaq, 5 on the s&p. joining us, investment strategy -- you're not just an investment strategy. you're a big deal. what's your title in. >> investment strategist. >> but there's only one. >> it's on the e-mail signature. >> yeah. you're the man all right. and portfolio manager at topefield. jason, have we said hi to you yet? >> yes >> here's your take on this. everything has changed and that's been confirmed by cpi that the 34-year bull market in bonds is over and everything that worked up until then is not going to work in the future. because it's going to be inflation, not deflation anymore. but that doesn't mean stocks aren't going to work stocks did well in the '80s when there was some inflation

as revenues outpaced earnings per share. which was a problem we didn't have for a year. we had revenue weakness, but earnings going up. now that could be good to revenue goes up but mar juns go down >> very good for equities. right? because equities are going to have pricing power think of industrials, technology they've got the ability to grow faster than inflation. i think the big risk is investors aren't recognizing the inflation taking hold in the united states. it's not strong yet, but it's widespread we're seeing it everywhere all the talk of tariffs. they kwaut to higher prices. we haven't seen labor markets this tight since the 1960s when you think about initial jobless claims and that sort of stuff. these are readings we haven' seen since 1969 when they were headlining woodstock labor markets are incredibly

tight. all these things equate to inflationary pressures that are building and what investors are doing is the exact wrong thing. they're doing the exact opposite of what they should be doing and when the ten-year treasury yield hit, 1.35% in june of 2016, from that day to now, investors have put over $500 billion into fixed income and pulled about $130 billion out of u.s. equity mutual funds as rates are going higher, the asset class investors should be moving toward are equities because they've got the pricing power. instead, they're going deeper into fixed income which i think sets them up for pain. >> those people think bonds and stocks are linked though when you say it's going to be -- anything that worked for 34 years is going to stop working i initially thought you meant stocks too you would think financial assets are sort of correlated no >> we have the biggest bull market in history.

the 10-year sitting -- >> which coincided with a bull market too >> inflation gave way to lower prices, deflationary pressure. and what happened over that time is investors could go on a fixed income and experience these massive rates of return that i don't think they're going to experience anymore yet they're still allocating their performance. >> going to get really confusing. have you noticed >> about what? >> what? hear no evil, see no evil situation? >> joe joe joe >> oh, gosh. >> i thought the hear no evil, see no evil. >> that is what i did, yeah. thanks for noticing. when i cover my ears, my eyes, and mouth you picked up on that. >> ooum still trying to get over the jackson 5, jimmie heni hendn the same stage

>> my favorite performer at woodstock, joni mitchell anyway, joe. >> yes, sir. >> bottoms up. >> we are. so our job is a little bit easier than joe's. >> tell us what's going to work in that environment. >> we're looking at individual companies so currency rusk and global machinations are irrelevant to us we're just looking at companies trying to look at their cash flow they can be anywhere in the world. so we do have that macro view. it should come as no surprise currencies are in trouble. brazil went first. few people on your show are talking about dollar strength. so joe and i differ in the sense that i'm looking at a macro analysis and it's much easier. we're looking for companies that have high cost, margin that will return after they pass those along to the consumer. and we think this is a great

environment for investing. >> you don't like financials >> we stay away from financials because they're opaque we can't look at them in the same depth as a technology naum. >> so industrials and information technology can eventually pass along the costs rising because of tariffs and inflation and their margins can be maintained. >> they are growing at this point in time. so it's easy to come on your show and talk about peak market, peak earnings. it's no surprise that people are talking about that the surprise is that these companies will emerge and that this is a great opportunity to put your money to work in the market >> and trenert's here. you know that's a palindrome >> it is like soros >> yes that's the coolest thing about you. >> thank you >> and you used to be at isi >> i know. i had had the whole thing going. >> you messed that up. >> i did certainly did.

>> so do you -- there's three joes here. so you're going to -- there's joe z.'s that's weird >> yeah. going to be a band yourself. >> that's weird. >> listen. i'm very much in agreement with both joes. but i'm very much in agreement with the idea that the policy mix right now from the trump administration is very much set up for inflation fiscal policy is very expansion nar. monetary policy as it relates to bank regulations is very -- you want to increase the velocity of money. trade policies are somewhat inflationary everything is gear ed -- versus real consumer confidence i'm sympathetic to this idea that for awhile inflation feels

good it tends to be politically popular and tends to be good for certain types of financial assets i personally like financials that's our biggest one and capex oriented technology would be part of our overweights. >> all right you'll be with us. >> yes, sir. >> not going anywhere. we'll talk tesla in a moment >> and joe and joe, thank you. >> if we could get the real jay z with us, that would be good too. >> although it's not -- his name's not joe >> it's a j. >> we were joking we are the genuine j.z. >> anyway, coming up, does the road to a private tesla run through saudi arabia elon musk is in the driver's

seat we'll have that story when "squawk box" comes right back. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

welcome back to "squawk box" this morning the tesla saga rolling on. the board set to convene this week to discuss the plan to take the company private. joining us now is partner at quinn emanuel and sullivan llp he was senior legal adviser to

mary jo widen. on the phone is gene munster guys, there's sort of two diverging stories here one is the practical canity of whether this happens there are disputed stories now saudi is not interested in this. bloomberg reporting that they are interested in this meanwhile, there's a legal conversation about weathhether,n fact, elon was telling the truth when he tweeted they secured funding. given the fact they still seem to be negotiating some kind of financing, what kind of implications that has for the company. on the investing side, let me start with gene. what is your sense and what are you advising investors who are interested or not interested in tesla to think about all this? >> i advise them this is a side show of going private discussion and ultimately the fundamentals of the business are slowly

coming together. i realize that this has two strong opinionated views on this, but i'm in the group that believes that the june results, september guidance, demand for model 3 is a bigger vision and story that will move this higher whether it's a public or private company. i think that's piece number one. piece number two like all of the tesla story, it's going to be a wild ride here it's not going to get sorted out in the next couple of weeks. i think this whole conversation is probably going to take three months and ultimately we think it will end in the next year with tesla going private >> gene, before we get to mike i want to ask one follow-up question it makes no rational sense at least in my mind if your ambition was to talk the company private that you would go over all these in the summer building tents to try to build these cars

to try to nail the number. if you plan to take the company private and i don't mean this disingenuously, it's not clear you would try as hard to make the numbers. you'd be focused on the long-term. >> well, by doing what they did over the summer, likely had a positive impact on the valuation. didn't have it when they -- >> that's the point. why -- if you're taking the company private from a valuation prerspective perspective, you're trying to buy it at the lowest possible price. >> well, ultimately -- >> to the buyers' interest >> i think that one piece is -- i think they would prefer -- i understand your point. but separately is at the point where they were massively running to hit that 5,000 number, at that point they were working hard to still be a public company and i think that some of the things that happened around that 5,000 attempt, the scrutiny around it, i think a lot of the negativity that maybe had an impact on some of the conversion

from the preorders, i think all of this is kind of in motion i think over the last month and a half, things have changed. and i think that even though musk has had an ambition of being private for a long time, i think that has become more acute in the last month and a half >> hang tight, gene. i want to go to michael for a second michael, if gene is right, this is going to take two to three or more months longer, it could be a longer process than that it ultimately suggests what we heard in the week last week that funding is secured may not be the case and i may be putting that politely >> i think you're right. that's exactly the question that investors and we have an indication that regulators are also looking at. he came out quite strongly saying that funding is secured and that's an important question what did he mean by that was funding secured? and if there's some wiggle room there, what was his intent behind that statement? i think that the next couple of

weeks and months will allow this to play out a little bit. >> what are the ramifications if his intent was -- is this an intent story i'm not sure that the s.e.c. looks necessarily at intent. that's not the goal here, right? >> well, i think the s.e.c. is going to be looking at potentially two things the first is whether or not the tweet itself complied with regulation disclosure. which is a regulation designed to ensure that any information put out to the market is put out broadly and not in an exclusive channel. >> we got that part. >> right so now the other question then is was the statement truth or -- true or false. when you're talking about truth of false, the s.e.c. does look at intent. not necessarily for criminal intent but the s.e.c. in order to bring a fraud charge does need to determine the speaker's intent >> 20 seconds. here's the question.

market manipulation. that's the other thing people talk about if the intent was to shake out the shorts jun unto themselves, it that the incentive is also to be long. >> it will depend on the facts and circumstances. >> it's a much longer conversation we thank you both for it coming up, a man steals a horizon airplane, performs stunts in the air, and then crashes. what this tells us about the security of the nation's airports and airplanes next. is made of. haty but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides. donate to your local y today. because where there's a y,

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coming up when "squawk" returns, the turkish lira in crisis veorshlde.one expert how worried insts ou b stay tune etuned. you're watching "squawk" right here on cnbc

♪ good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin joe is here. michelle is here papa john's offering financial help for franchisees that comes in a wake of a drop in sales for the pizza chain following the controversial comments of its

founder john schnatter papa john's is cutting royalty payments, food payments, and other fees and will provide funds to help with marketing and remodeling of stores trying to keep everybody happy at least for now. russia says it will continue to cut its holding of u.s. securities in response to sanctions. quoted by state news agency as saying russia will focus on using the ruble and other currencies rather than the u.s. dollar in international dealings the average u.s. gas price rose the price tag now of a gallon of regular gasoline at 2$2.93 per gallon vf corp. planning to split into two publicly traded companies. one will sell apparel and footwear the other yet to be named will operate their jeans and outlet businesses shares not trading in premarket right now.

shares of monsanto ordered to pay $289 million after a man claimed he got cancer from using roundup. stock is lower by 12%. story we've been talking about all morning. an investigation is now under way after a horizon air employee stole and crashed an empty passenger plane from the seattle tacoma airport officials believe that 29-year-old richard russell took the 76-passenger plane on a joyride before slamming it into a nearby island more than an hour later and is presumed to be dead switching gears, opec is out with a new report this morning jackie deangelis joins us with the big headlines of note. >> with the oil market under way, supply and demands are tighter than in the past few years. that's why this opec report is in such focus.

after the june opec meeting, when it was told the cartel was going to put supply back online, did it well, the saudis did not increase supply. iranian output did go down, but just slightly. overall, opec production went up as well. the ads came from iraq, ka wauw and the uae. the producers, the big ones are watching iran specifically the saudis, they don't want to ramp capacity until they are sure that the iranian barrels are going to come off the market that may not happen until november so where this leaves the oil watchers, they are still watching all factors aside, they should see seasonal pressure. but opec -- it also appears the saudis can make up for that iranian drop but right now we're trading a little bit over $67 today.

that iranian risk is still going to keep these prices supported >> $65 plus three and a half kst in the middle of your range. all right. thanks >> sure. turkish lira sending shock waves across the markets joining us now is chief investment officer at qf investment good to have you here this morning. the turkish central bank took different measures overnight as we watch right now, turkish leer ray back at 7 lira to the dollar it hasn't seemed to have much effect clearly what they did is not enough >> clearly not enough. turkey's problems are so big that they will require something speci special. it will most likely mutate it has the possibility of mutating into a credit crisis.

the lowest level of net international reserves of all emerging markets, they have a very large deficit that is they need significant amount of funding from abroad. just to stay in terms of spending where the economy is right now. and all of these things are hitting them together. in addition to the political crisis, a fight with trump so this is -- it seems to us that this is very far from over. >> erdogan claims that this is a worldwide attack on his financial system is it an attack or is it -- >> this is not an attack on erdogan. coming into 2018, there were two countries that were very exposed to monetary tightening from the united states. one is argentina who is a country that is very, very friendly to the united states and to the international financial community. and the other country, it was turkey argentina already blew up. argentina went and obtained $50

billion. in some ways the problems are larger than argentina's. but they are not raising interest rates so this is a classic emerging market crisis during a time of monetary tightening in the united states. >> a lot of people are trying to draw parallels between today and the thai baht crisis what is your opinion about the parallels? are they that strong or not really? >> there are similarities, but there are differences too. in other times in 1997 and 1998, the entire world watched on exchange rates has floating exchange rates. so what you're going to see as a turkish crisis continues to unfold, you're going to see especially weakness in emerging market currencies that are floating but in terms of the balance sheet effects that you observed in korea at that time, in

thailand, in the phil peenippip, they're -- >> could we have a banking crisis again in europe because of this? because of exposure to turkish foreign loans? >> i doubt i doubt you're going have a banking crisis in europe turkey is a relatively small country, right they -- clearly the spanish banks, some french banks have exposure to turkey i think this is a problem for europe as a whole. in november the european central bank is going to end its bond purchasing program so they would like to see private banks to step in and start to provide credit. so this comes at a time when the european economy is slowing down pop the ecb will stop its very, very expansive monetary policy in terms of buying bonds and then we like to see the banks. the banks are unlikely to step in and provide credit with this

environment in turkey. >> because it's so uncertain right now. thanks so much >> thank you very much coming up, he's here former cleveland clinic ceo, dr. to toby cosgrove. great american i'll fill you in in a couple minutes. he just joined the google cloud team as an adviser we'll talk health care and artificial intelligence as well when we tu rern with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites...

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welcome back to "squawk box. take a look at futures right now amid concern and worries about the lira, the dow jones off about 61 this morning. nasdaq off 10.a -- 10.5 points >> the turkish lira. >> oil prices right now at wti crude is now at $67.29 from expensive health care costs to the opioid epidemic, former cleveland clinic ceo toby cosgrove has been in the fight he joins us this morning as an executive adviser at the cleveland clinic he recently joined the google

cloud team as executive adviser to its health care and life sciences divisions you'd never know it. you're not, like, 48 years old in fact, you're a national treasure you won a bronze star. combat was -- you were right where it was being fought on enemy lines, right >> yes >> and we're in charge of the air force surgery. >> yes i was in charge of the evacuation of the casualties out of denang. >> won the bronze star >> yes >> 22,000 surgeries. >> 22,000 operations >> then the cleveland clinic anyway, thanks for all of that and i want to get and talk immediately because i showed you that "wall street journal" piece. because your concern about these stripped down plans are that people that sign up for them don't know what's included and wh what's not included. might not pay for drugs or something like that, but in the journal today, there's this piece about how it can make a

lot of sense for someone that has limited resources who's young and doesn't need all the bells and whistles of obamacare. is it -- it's not a clear cut answer >> it's not a clear cut answer the issue of finance and how much it's costing the country. there's really two reasons it's going to continue to -- costs are going to continue to go up unless we do something one, we got more older people. two, we've got more things we can do for people. all of those things continue to cost money we need really to figure out how we have a more efficient system. and really, i see the opportunity to do that is through consolidation which you're seeing across all health care right now and also use new technologies. >> in the past we've talked prescription drug prices do your views -- i don't remember you being as critical

of the drug industry because we both understand how expensive it is to develop a drug but there's clearly companies maximize profits they're always going to try to do that. and the government -- if it gives the drug company an unfair advantage, i don't know what the right number is for patent protection and extended patent protection or whatever, but is competition working the way it should in far as pricing drugs >> it has to be more on an international basis. right now we're paying for the development of drugs across the world. we pay substantially more than other countries by sometimes a factor of 10 or 20 >> how do you fix that that's what they're doing over there with price controls, right? >> so we have an international market in lots of things oil, you know, you name it why should we not have that same -- >> why don't we? >> because of the government protection of that >> i feel like pharmaceutical

companies have not pushed back hard enough against those foreign governments because we've been able to subsidize them couldn't we use the wto that everybody loves to talk about? i mean, there's got to be a way to convince wealthy countries that they should be helping to foot the r&d bill in the world >> one of the things we could do to draw our prices down is allow other countries. >> that would be importing price controls, right? >> that's what the market in that particular country says they're going to pay for a drug. and we -- you know, people are not dying in canada because there are bad drugs. and they're paying much, much less for the same drug than we do and i think that would put enough pressure on the pharmaceutical companies in the united states so that we begin to see it change the prices. >> but the quality of care in the united states is still probably the best in the world is that right? >> i think the quality of care in the united states as somebody who is really ill and then has

cancer or heart disease, the best of the best is good however, our statistics nationally as far as infant mortality rate are not great interestingly, if you take what we pay for health care in the united states which is more than anybody else does and you couple it with what we pay for social programs and compare it with developed countries around the world, we're in the middle of the pack so they're spending more on social programs and less on health care. and the social programs are frankly driving down the costs of health care and by the social determining right now. >> we said we'd talk about the opioid crisis. that's not apples to apples because of obesity rates and drug rates i don't know if it's an indictment of our health care system or -- i don't know. we're an embarrassment of

riches we have so much money and free time i mean, food is not necessarily the issue. in fact, obesity is more of a problem than malnutrition. >> i think you hit on something really important and that is if we just recently -- a group of us sat down in aspen and talked about chronic disease. if you take chronic disease and begin to look at what the major causes are, one of the major causes is obesity. causes cancer, heart disease, orthopedic problems, you name it and we are getting more and more obese as a country. 40% of people are obese. we have to address food and sugar in this country. a lot of the problems are at the end of your fork >> what do you think of that, joe? >> i don't know. i think anything in moderation i don't know whether sugar is directly correlated anyway with -- it's not directly correlated with certain other things where it's always mentioned by some people that it's correlated. but obviously -- or the way we

eat here, fast food nation isn't great either >> no, it's not. and the way -- the food, the amount of food that we have, the amount of lack of exercise we get is driving up -- >> that's lifestyle. >> it's the lifestyle. and it's spreading across the world. and you're starting to see it happen in places like india and japan and places -- >> opioids aren't helping. how can we -- you don't have an answer there either. have we peaked >> as far as obesity is concerned? >> as far as the opioid epide c epidemic >> i think we peaked i think we're starting to see the understanding of the problem get to the point where people are certainly prescribing fewer drugs. and people are recognizing how serious this is but the other issue coming in drugs are now being laced with fentanyl. and carfentanyl.

we just had an outbreak of deaths in ohio from the drugs being laced with very potent carfentanyl and fentanyl. >> a lot of things to consider so you're figuring things out in aspen. that make me concerned >> a good group of people. >> you know what i mean? >> experts >> can i ask you one question? buffett, bezos, and dimon all teaming up together. if you could handicap what they're trying to put together there and its success rate, what do you think's going to happen got a lot of headlines but i don't think we know where it's headed >> i don't think we do either. first of all, you've got three great organizations with great leaders. and you've got a superb thinker. very innovative.

and i think you'll see people hired underneath him to help so i think you've got great people coming together whether they'll be able to make a major difference, i don't know they only have about a million employees amongst those three companies. which is, you know, not a very big cohort we look after the cleveland clinic, 2 million patients a year to put it in perspective. and we're just one hospital. >> all right toby cosgrove, thank you >> great to see you. coming up, jason trenert manages investors, what his message is in managing the investors. check out the turkish lira stay tuned you're watching "squawk box" here on cnbc xfinity mobile is a new wireless network

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saving you hundreds of dollars a year. and ask how you get xfinity mobile included with your internet. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. our guest host this hour, jason trenert. chairman at strategis partners all right. let me quickly give you an overview we got a pretty good running rate still a lot of discussions on both sides about whether the tax reform bill was a success for the average american or not. then the latest is you saw how big the deficit is deficit is going to be much bigger we've got to raise a lot more money. but then word came out tax revenues were higher it's spending that is causing the deficit to balloon again

where are we in terms of government policy and the trump economy? >> well, listen. i think you know what my point of view is going to be but i don't think there's any doubt that the tax cut was the early returns, an unqualified success. >> not if we go back under 2%. >> it's not going to happen. second quarter earnings looked like it was up with 90% of the companies reporting. that's after a 22% increase in the first quarter. even if you strip out the impact of the tax cuts, you're still looking at double digit increases in profits i can say as a small business person, one thing that's very clear is that business confidence spiked with the advent of the election and has stayed high. there's been a lot of hand wringing and gnashing of teeth about the tariffs. but there is not much evidence to suggest it's having much of an impact.

in my opinion, the full measure of the success of the tax cuts will be whether you get a capital spending boom. in my opinion, you're starting to see some evidence of that, the companies are actually using their cash flows to invest in their own businesses that would drive productivity it would boost wages, boost profits, and keep inflation at bay. that's my opinion. so i'm quite bullish on the economy. i'm somewhat less bullish to the extent of which -- >> so what are you doing now >> and of course joe gives me a hard time about this i really do think this is going to be a period in which -- >> we're going to need jason trenert. >> this isn't a -- >> it's going to be expense i have >> it's not a profiles encouraged view that i have. but i mentioned before i like financials i like industrials energy capex oriented technology. i think the u.s. is a good place

to be. i think the dollar's going to continue to strengthen and i would be bearish on bonds. because you're going to have significantly higher nominal gdp growth in the next couple of years. >> but bullish on white collars. >> yeah. i think i'm bringing this back >> you are you and bob. thanks, jason. >> thank you coming up, are financial problems in turkey a potential financial problem for the united states we'll discuss next first a look at the biggers winners and losers in the premarket. stay tuned you're watching "squawk box" on cnbc you always pay your insurance on time.

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for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ turkey is crisis the lira hitting a low against the dollar we'll bring you a live report from the capital straight ahead. fallout from the trade war we'll talk to a commerce secretary about the impact of tariffs on american farmers. the national retail federation is changing its

outlook for retail sales this year matt shay will tell us whether it's an upgrade or downgrade the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera and the futures right now -- i don't know i don't know monday kind of a blah, rainy all weekend. they've come back. >> wow look at that >> nasdaq is now up 14 dow jones is now up less than a point. well, now it's down. >> turkey shmerkey >> turkey jerky. some people like

treasury yields, back to $2.2.8% >> we're going to talk turkey's crisis looking for an investor plan to ease concern lira coming off the record lows hit overnight. and willem marx joins us with more good morning >> good morning. just to give you an update, president erdogan speaking today saying he's going to speed up turkey's investment plans, try and meet some targets. we've obviously seen the currency not really recovering over the course of today but not sliding that much worse than it did on friday, of course in terms of the plans from the central bank, what they've said is they're going to try and improve liquidity situations for turkish banks. that's not going to have a massive impact on itself president erdogan, though,

really doubling down this rhetoric over the course of the weekend. speaking at rallies about the relationship with the united states describing this as economic warfare and really concerns amongst a lot of investors that things will not get better any time quickly. few discussions about an interest rate corridor but no main change a lot of the people i've been speaking to suggesting they really want to see an emergency rate hike as much as 300 or 400 basis points >> a lot of people have been calling exactly for that, willem but so far we haven't seen it. so thanks so much live from istanbul are financial problems in turkey a potential economic problem for the united states? steve liesman joins us now with a look at how global hot spots could affect the u.s >> i think there are two factors investors have to think of compares with previous ones stronger u.s. growth on the one hand and better capitalized u.s. banks and the belief in markets

that banks are better capitalized. here are the major sources of concern. you have them raising interest rates. and then of course there are tariffs and retaliation from tariffs if you think about both sides of the equation right there. moving along here, i'm getting two views on turkey. first hfe says turkey can allow to hammer eu institutions. while the fear of contagion will leave tradinger nervous this wk the problems appear more endemic to turkey than systemic to the gleebl financial sphere. the main downside risk to global growth and also inflation. so the history of these global

financial contagions show it's unpredictable. sometimes you wake up in the morning and no one cares other times global markets sweat and worry about a far reaching fallout from small financial shocks a new development you have to take into account, the u.s. administration not all that interested this time around in playing the global stabilizer. i think that's something for markets to factor in >> endemic versus systemic is good >> you like that >> if you do decide to rap about turkey -- >> rap about turkey, uh-huh. >> you love music. you were performing all weekend, weren't you? >> i was >> you don't ever write any rap? >> i've not written rap. i've written other songs but not happen >> turkey systemic versus endemic. >> yeah. that will go far, i believe. >> wow a song about -- >> if you rap about turkey >> economic raps >> a guy did an opera about the global financial crisis. >> i'm in it.

>> i'm in it too i did the guitar >> i did all the market reads. were you in russia the day they finally let the ruble go or did you come later for the aftermath? >> i was there and then went home we had a baby and then i went back i don't remember -- that day i think i was. >> the ruble was fixed at the time, right? so it's very different >> right. >> and they defaulted on the same day >> they defaulted and devalued on the same day which they didn't need to do. >> could have been one or the other. they did both. >> there was a great plan earlier on to devalue the currency to a lower level they would have gotten away with it but they let it get worse. >> because the leadership didn't want to. the political intervention was high at the top. it sounds very similar to erdogan. >> the story we wrote -- about back then, i don't know if you want to go through the history but the foreign banks wanted them to do one thing and the domestic banks wanted them to do

another thing. they did both. they worked against each other that's really part of pit. the turkish central bank has a good reputation. at least it did. until erdogan started to mess with it. it had a fine reputation and the turkish central banker was an esteemed guy at the grouping >> they know what they need to do they are not allowed to do it. you see all the machinations they did overnight pseudo capital controls without calling it that, et cetera you know >> it doesn't feel as connected as previous ones there are these smoldering fires. they're trying to phrase b.r.a.t. it doesn't feel like it's one big thing. >> currencies float. last time we went through this currencies were fixed. so this whole head of steam builds up. and yeltsin says we're not going

to devalue, we're not going to devalue. and on monday they devalue >> i have one concern i want to point out. which is some of the extra growth we had last year and some of this year came from overseas. it was stronger than expected growth in europe if that comes off, we could lose something of a quarter or a half point to our growth here if you do get weaker global economies >> steve, stay where you are i want you to be part of this conversation we want to bring in and talk more about what's going on in turkey senior fellow at the institute for near east policy joining us now. you're listening to this conversation i want to understand where you think the turkey/u.s. relationship is in a second. in terms of what's happening in turkey, where do you stand >> i think that turkey's problems are endemic to turkey meaning economically the country was already showing signs of slowing down it's one reason why turkish president erdogan moved from

november next year to this year. of course political problems with the u.s. and the general environment are exacerbating the problem. we're seeing two economic issues compounded with the kriets with the united states. >> turkey's really big right? >> it is >> greece's problems were endemic to greece. but everybody got concerned about the fallout from greece. i don't know how many times bigger turkey is from greece, but it's a couple full points there. >> but we think the banks -- we think there's only three sort of major banks that are really holding the debt and that's a very different situation. >> i hear that fewer banks hold less debt. is that it >> i believe that is part of the case >> i've seen two different schools of thought on the contagion issue. the one that a lot of my friends here in washington are talking about is that maybe that's not going to be the case maybe turkey's not -- european

markets are not as exposed to turkish economic downturn as people think it is >> i will say that a big difference here, and michelle you're going to shake your head on this in agreement greece never had the ability to change its currency. >> right >> there's a huge safety valve on this issue here which is that the turkish currency could float. greece was locked in and it could not float as a result. >> there was a lot of political intervention from the top don't do it, don't do it they're not going to default they could have let greece default early on and we would have been better off why doesn't he just release the pastor >> at this stage, it's become a crisis of misunderstandings and miscommunication president erdogan believes he could continue to negotiate with the united states because he has some asks. you know, there's a cleric who

lives in the u.s., his name is gulen. many believe he was behind an effort erdogan wants him extradited the problem is he did not really understand this issue of the pastor being under arrest in turkey got escalated to a presidential level a few weeks ago. when president trump saw this issue, he decided to take action erdogan and trump had a meeting on the sidelines of the nato summit during which it looks like they had a deal the deal was as far as president believes, he would help erdogan for the release of the activist in jail. he was returned and in return, erdogan promised he would release brunson. he was not released. he was moved to house arrest that was the straw that broke the camel's back as far as trump was concerned. he stepped in, started tweeting. now we have a problem on a

presidential level with turkey >> there was a headline saying u.s. embassy official in ankara have not put out a statement concerning u.s. pastor brunson so it begs to question there's some report somewhere. the markets were covered i don't know maybe there was something earlier that said maybe that -- i would think that eventually that's going to happen don't you think? eventu eventually >> at this point trump has said turkey has to release brunson. i think there is no way for the crisis to end unless erdogan agrees for releasing the pastor and so he can return to the united states. now, he can find a face saving measure, it's gradual. you know, maybe they move to house arrest again and then out there release them short of pastor brunson's

release, i think the u.s. is not going to de-escalate and washington has a large arsenal of economic sanctions. so we haven't really seen a full force of what president trump could do and i think while president erdogan gets this, he also knows he has a collapsing economy which has nothing to do with the crisis with the united states. so i think erdogan being a good politician is trying to maybe notde-escalate he could blame it on u.s. sanctions if it continues. perhaps that is his angle right now. >> i think we should point out that, you know, there's not widespread contagion but it's down there's also been some rethink of the federal reserve if you look at what's happened, for example, to the controversial second hike. or the questioned second hike this year for december we were up north of 60% about a week ago now we're down into the 50% probability. >> and you think that's people buying treasuries on safe haven

buying and maybe they won't hike as often because of the concerns about what might happen around the world. >> i think it's an interesting question i have to call the fed today to figure this out, but in a situation like this where a company had a problem with its debt, during the crisis and a little bit thereafter, we establish these swap lines where we give -- we take their currency and give them our currency it would be weird. but we're trying to do tariffs against turkey for the u.s. federal reserve to open up the debt needs >> there was indeed 30 minutes ago someone put out something. i don't know how reliable it was, but now everybody's quoting the u.s. embassy official in ankara saying there was no statement put up there was a statement -- some of it says they're going to be released from house arrest by august 15th. >> and the turkish lira rallied on that.

>> that's why the market came back >> right >>. >> but now they're saying they did not put that out kr equi correct? >> correct >> we want to thank you for joining us >> thank you scary story out of seattle where an airport worker stole an empty airliner, airplane, prop plane. crashed it after flying around for about an hour. we're going to talk about the security implications next and later on, tom vilsack about the impact of tariffs on american farmers stay tuned u' wchg quk x"n cnbc you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it?

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vote for... -wait, wait, wait. that's not a talent. any xfinity customer with an x1 voice remote can do that. watch this. i want to vote for... obviously not you. ooh, that guy. cast your votes during every live show. just say "vote for agt" into the x1 voice remote. welcome back to "squawk box" this morning the futures right now not as bad as they were before. dow off about 18 points for the morning. nasdaq looking higher up about seven, eight points now. we're going to talk about investigations in a second but anxiety still over whether there is contagion on the lira what investigators are trying to figure out now how a man without a pilots

license was able to steal a big plane. phil lebeau has more hi, phil >> and joe, hopefully there are some answers today as they analyze the cockpit and voice data recorders that have been obtained they got them late last night from the wreckage of the plane that crashed after a one-hour joyride that really it generated a lot of attention friday night into saturday morning. people saying how did this ever happen the fbi and the ntsb are both investigating how a ramp service agent for alaska airlines who does not have a pilots license was able to take this plane, not only take off but then fly around for an hour before he crashed into a wooded area on an island not far from seattle. here's some exchange between the pilot and the air traffic control giving some indication that this is what he planned to do as the flight was coming to an end. >> i'm going to try to do a barrel roll. if that goes good, i'm just

going to go nose down and call it a night >> not long after that, the plane did crash, again, in a wooded area on an island near seattle. so the questions now, what happened in terms of how was he able to steal this plane by the way, there are a number of these planes that are part of the alaskan airlines fleet if you fly into seattle, you see a lot of these turbo props security protocols will be examined we know sea ta-tac out there, ty are likely to meet this morning and discuss protocols. and the other question for the airline industry, guys, is whether or not security protocols in terms of who has access to a plane, will those be changed? will the faa come out and say, okay we need to be even tighter and more restrictive in terms of who's allowed to get into the cockpit of these planes. >> wow >> go ahead. >> phil, what i was trying to understand is obviously there'll

be a conversation out at the airport in seattle but is there a conversation at airports across the country? >> yes i don't know of definitive meetings at this point, but you can guess every major airport or mid-size airport and larger, they're having this discussion in terms of, okay, how do we make sure who's supposed to have access to the ramp has access to the ramp because you've got hundreds of planes especially in larger airports coming and going. you need the ramp workers to have access. at the same time, you've got to make sure that this could never happen again >> i can't imagine how there's no physical key to turn it on or some kind of code that's required to turn on the plane. >> right well, once you can get it powered up and you have the auxiliary power unit on the ground once powered up, if you know the sequencing -- look you can go on youtube and look up the sequencing for starting

up this type of a plane. i did it on saturday i'm sure i'm not the only person these videos are out there once you figure that out, then you can take these planes out if you have access to the cockpit i'm sure this is part of what the discussion will be with the faa in terms of how do we ensure that only the pilots who are supposed to be flying the plane have access to the cockpit >> all right, phil thank you. that would be good this is like -- there's always -- wham-a-mole. you think you've got security in the sky down a little bit better, then something like this happens. now we have to worry about airplane workers no one thought they would fly a plane if they weren't pilots you watch people taking flying lessons, you'd look into their background to make sure. >> i didn't know you could just

walk into a plane. and fly it coming up when we return, gas prices ticking higher over the next two weeks where they're expected to go over the next two weeks. later, the national retail federation e cor o matt shay will speak to us.

all right.

welcome back to "squawk box." "the meg" taking a top spot at the weekend box office according to comscore, the shark thriller took home $44.5 million in its debut weekend that makes it the studio's biggest opening of the year. megalodon is what it's about a 75 foot shark. somebody's trying to go back to the well with "jaws. they find it on the bottom of the floor of the pacific ocean and a lot of people calling it an entertaining "b" movie. but neither good enough nor bad enough to be that much fun i immediately was thinking, think if the next "sharknado" were 75 foot long sharks that were to, you know -- that were landing on land in new york city

from the sharknado i would combine -- i thought this was about a giant meg ryan attacking new york >> or meg tirrell. >> yeah. >> it got 48% on rotten tomatoes >> 48% is not good >> i only see 90% and above. i'm very strict. >> remember we had a whole conversation about it. >> i'm not going to ask you. >> okay. >> we rented this chappaquiddick dpp you see it >> is it good? >> loved it. i loved it just pull back the vail. >> i thought it was good >> you know he wore the neck brace. >> no, no, all of that i agree with >> but you knew he wore the neck brace. if you look him up, you can see him in that. and the actor looks like him >> are you talking about the film or the story? what's your commentary really about? >> you know what my commentary's

about. did you see who played joe kennedy? >> i saw the film. i watched the film >> you didn't enjoy it >> i watched it on the airplane. i didn't love the film >> my god. that pops a bubble >> no, no. it was just -- i thought it was well done. >> you see the part where they go, bobby kennedy must have been a wonderful sailor and joe kennedy said, no, not really it's just like everything. >> it's just like everything >> i'll see it >> you got to. coming up, trade wa for. president trump doubling tariffs. we'll with tom vilsack futures at this hour well off of the lows and on positive territory. ♪ hawaii is in the middle of the pacific ocean. we're the most isolated population on the planet. ♪

hawaii is the first state in the u.s. to have 100% renewable energy goal. we're a very small electric utility. but, if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution using smart sensors on their network that lets us collect near real time data on our power grid. (colton) this technology is helping us integrate rooftop solar, which is a very important element of getting us to our renewable energy goals. ♪ (shelee) if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪

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site in times square among the stories front and center, food distributor sysco they reported a profit of 94 cents per share. beating forecasts. revenue also topping forecasts then proxy advisory service glass lewis suggesting voting in favor of the merger with cigna that's the same deal last week iss came out in favor of the same deal. carl icahn is a s against the deal calling it a, quote, folly. meantime, i want to look at the price of gold this morning it's hitting a 17-month low. this despite an increase in safe haven investing. the safe haven money, u.s. treasuries and the dollar rather than gold. one place by the way i don't think it's been going at least

in the last two weeks has been bitcoin. >> is it below six >> give you price action on bitcoin right now. you can buy it for $6,456. >> it's up then. >> it has not dipped below that. >> i'm actually watching it now. i don't know why >> you almost bought some. >> i tried i was incapable of working everything correctly thank god. president trump officially doubling steel tariffs on turkey which go into effect today after a surprise announcement fright heightening tensions between the two nato allieallies kayla tausche joins us from washington >> a statement says the reason they haven't dropped puff turker

president erdogan says the countries have a deadline of 6:00 p.m. wednesday unconfirmed by the white house for brunson's release. turkish leaders have expected to put lira into the system there steel shipments still en route just like this one companies looking to avert tariffs by finding free trade zones, bringing shipments in through canada or mexico, or canceling existing orders all together "the wall street journal" editorial page termed the administration's tactic coercive economic diplomacy it was on display yesterday again with the president's support of a harley-davidson boycott. of course the company is initiating production moves to europe to soften the blow from retaliatory efforts there. the president calling it a really bad move. the question i'm hearing many

u.s. executives ask, is will they change ahead to get stock relief we'll see whether he changes course or doubles down >> so far the stock market seems to be aiding him people argue it could be higher if not for this, but i think so far it looks pretty good at least probably according to him. >> right but the issue despite the resilience of the stock market and many executives have said, you know, look, the stock market can resist some of these moves any time there is a headline, that there's been some breakthrough in talks. there's been some agreement that has been reached you do see the market rise by hundreds of points and that is something that voters like as well. so which of those sides of the coin does the president reach? >> good question thank you. >> for a look at how trade tensions are impacting u.s. agriculture, let's bring in tom vilsack. now u.s. dairy expert council

ceo. also a former agriculture secretary and former governor of iowa does -- what do you like governor secretary i can alternate. >> either is fine. or tom >> or tom. overall, before we get into specifics, your point of view on president trump's overall position on trade right now. is it nuanced? or is it in general? i think that there's a mistake -- it's a mistaken policy >> great question. and i think it is nuanced. i think on the one hand, the president's moves to modernize nafta made all the sense in the world. assuming it gets resolved and resolved quickly it's obvious that we were headed towards a conflict with china.

my concern there wasn't that we were going after china, but that we were doing it alone which made it much easier for the chinese to regulate against the agriculture. got good concepts and ideas, but i'm not sure the implementation is how i would do it but he's obviously president we're going to have to deal with the circumstances as he dictates >> wow all sounds so reasonable you almost -- you were almost hillary's running mate, huh? what about nafta that's nuanced too, isn't it >> it is you know, obviously in the dairy industry, we are deeply concerned about nafta. mexico is our number one market. we want to see a quick resolution to the negotiations we'd like to see what's working, preserved in mexico and what's not working changed. i hope our agreement will do both provide it without tariffs and

give us the financial experience eliminate a pricing scheme that has caused a great turmoil on the market i think that would allay many of the fears of farmers then you have pork producers who have concerns in nafta and also china. >> if people came down and landed on earth and heard the current u.s. president put on tariffs and is going to use taxpayer dollars to extend relief to the farmers that are being affected by the tariffs, do you think there's any way they would have figured that would be a republican president? i mean, it's crazy isn't it >> they would if they looked at the calendar the reality is we've got elections coming up. we had an august recess. house members were going out senate perhaps has a week or two of opportunities to listening to

constituents what they're going to hear ask a great deal of anxiety out there. they don't know how this all ends in the meantime what i have seen is -- where momentum and trade has been stopped we had the six best months in exports in the u.s. dairy industry in the last six months. the question is will the next six months have that trend that miegts not be the case. >> i think of a lot of people, a lot of farmers are still -- i think we had a poll cnbc with president trump there. i don't know how long -- i don't know how deep it runs. >> well, i think that's the question how long does it run i think if there is a resolution of nafta, i think you'll see a

lot of reassurance occur if this thing drags on, if canada isn't dragged into it or talks with mexico breaks down and we see an escalation in china, then i think you'll see deepening concerns and eventually people are going to understand that perhaps this isn't the right approach meantime they're willing to give the president and his team the benefit of the doubt and hopefully in the next several weeks we're going to see a movement on-and-a-half ka given the mexican elections and own elections. i think that would reassure a lot of folks the money that's going to be received from the government is fine, but the reality is it doesn't necessarily compensate those farmers for markets that are going to be lost far long period of time that's the concern here. especially with china. you lose a market for a year, you perhaps can survive. but if you lose that market permanently. >> i'm looking at just your

background you are an east coast guy. you moved to iowa, at your wife's hometown. you're from pittsburgh and hamilton college and all around here so you feel like you're an iowan now? specifically you're a hawkeye >> absolutely. no question about it we invite you all to the state fair it's the greatest state fair going on right now come out and have a pork chop. >> i want to go. >> and you were born into an orphanage. i was too. how old were you when you were adopted? >> a small child i was a baby >> me too. >> i was fortunate. >> you put that in your cv i'm going to put it in mine. i don't remember it, but it sounds good, doesn't it? >> it sounds awful >> sounds awful, but we can use the sympathy card with people and then we -- >> no, no, no. it's the greatness of america

that somebody can start off in a humble situation and, you know, be on tv every day >> right i was raised by nuns i'm still deathly afraid of penguins it's a joke. >> well, i was raised by the same order rosary beads have -- i have an interesting relationship with them i like to hang onto them but i'm not sure i like them when they're whipping around in the classroom. >> you know what it was a different time. i have great parents and i appreciate that we both obviously benefitted from all the work that the people did back then. mr. secretary, thank you appreciate it. >> thank you. >> have we talked about that >> which >> i don't talk about it >> little bit. >> it makes sense. >> it does make sense? >> yeah. that if you were adopted -- >> yeah. i thought you meant insecure. >> that speaks to your insecurities coming up, national retail

federation ceo matt shay is here we'll ask him about the expectations this year as we head to a break, here's a look at the biggest premarket winners and losers in the dow. we're drowning in information. where in all of this is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you partner with a firm that combines trusted, personal advice with the cutting edge tools and insights to help you not only see your potential, but live it too. morgan stanley.

our next guest has some upbeat news. thanks for being here. >> nice to be with you >> you just upgraded your assessment of what americans are going to buy this year retail sales are going up. >> we had a great first half of the year we had originally forecast that sales would increase between 3.8% and 4.4%. we've upgraded that now to a minimum of 4.5%. we know we had a great first six months the next three months, next quarter looks pretty solid we don't know about the fourth quarter. we know we'll get to 4.5% at least. >> you think it could go as high as 4.8%. that would be a full percentage point higher >> that was the upper end of the range. we thought what do we know for sure we know four and a half we feel strongly about but in talking to the ceos just in the last few weeks, i talked to a number of folks over the last four or five days everyone knows that we did better than expected these six months

we feel like we're going to continue to do well. but there are the unknowns you talked about some this morning about inflation, what's that going to do . >> why are sales up more than you expected >> i think they're up because we know the benefits of tax reform and regulatory reform and the fiscal stimulus in the economy has really started to show some positive effects consumers are very confident savings and credit and consumption are all up we know that unemployment rates are low. so we recognize that we can get higher than the 4.5% and we hope we will. you know, the reason we didn't put a top end on this the way we have looked before, we call it the ledge hedge. last time i was here he said matt you're going to go over on this i think we're on the upside. we could have a brooks koepka finish to the year or a tiger

woods finish in the year we could have a really good

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today american greed produced by scott cohn who joins us with a preview of what we can expect operation crook, line and stinker. hi, scott. >> hey, michelle this is such a great opportunity. i've been a fan of "american greed. now i get to produce one this is a good one it's a story of a high tech burglary crew, think "oceans 11" just without george clooney and brad pitt, that terrorizes homes to the tune of $10 million they have all of the high tech tools plus one very special secret weapon.

>> it finally becomes clear on the night that mikey margellios approaches the undercover van. another man is seen leaving the shop and driving off investigators run the plates and trace the vehicle to new york city police detective raphael aspacio. >> my first reaction is betrayal he's part of our team and he turned against s >> identifying the cop turns out to be one small step, one small twist in a cat and mouse game that would go on for five years. we'll have all of the twists and turns plus the one little mistake that trips the crew up tonight on the all new season premiere of american greed 10:00 p.m. eastern and pacific time on cnbc. >> i can't wait to see it, scott. did you write a lot of this? i assume you did and how great was it to hear

them verbalizing your script >> i wrote the whole thing. >> wow. >> you know, i'm used to writing for me speaking, but hearing my words come out of his mouth and with that amazing voice was just a real thrill. he really brings a great dimension to this show all the time, and it was really clear when i kind of got under the hood and started actually doing one for myself >> i'll bet. fantastic. congratulations. scott cohn, cnbc contributor when was the first time you were on cnbc, scott >> the first time that i was on cnbc >> yeah. >> was going on 30 years ago march -- well, we went on the air april 17th, 1989, and i was on the first day. >> you were ten years old at the time. >> exactly thank you. >> thanks, scott congratulations. let's get down to the new york stock exchange. cramer joins us now. it's, you know, august, jim, and we're all focused on the lear. it seems to be there may be some

undercurrent of this guy being released on wednesday. i don't know if it's true or not but the futures are positive based on that to some extent. >> well, look, i think that we always have to take a breath and we can read all the stories about how bad turkey can be. i added up the ten largest market cap stocks in turkey and they almost equal johnson & johnson. not that close but close enough. i know that the gdp of turkey is minimal versus a couple of our companies. i know that we could easily say, okay, the european banks once again are in trouble but then the eu back stops the european bank look, the market is going to go down after it goes up because people are going to panic because it's very easy to still panic on this. that's what happened from 1993 to 1996 when i traded turkey pretty aggressive. i traded arselick and yoppi credit the contagion occurred throughout asia and it turned out to be the greatest buying opportunity for most of the '90s

until you got to long-term capital. so i'm urging people to not panic but that's always kind of like deaf ears so much easier to tell people, listen, this is a seismic event. not unlike cypress was a seismic event. greece was a seismic event spain twice seismic. the irish election seismic it's just seismic. j >> jim, have you seen the twitter campaign to get you to dance for the eagles >> yeah, i mean, i gave a speech to the eagles. they're actually a serious outfit seismic. and i would prefer to actually treat them as if they're world champs rather than poke fun at them but you know what, it's important, you know, how dare you mention the eagles when it's turkey day because it's seismic. >> but i'm not -- >> hey, turkish lear -- >> the rams and the new orleans saints are both going to have

guys dancing along with their squads and -- >> that's -- that's important but, again, i don't like to dig any phi the team with my presence by the way, on page 177 i have a complete analysis how the turkish leader almost brought down the west so, you know, just in case people are trying to figure out how the movie ends. i wouldn't let fox have the movie so they'd make me look bad. >> i think you'd do anything if you could help the eagles out. >> went to the birds, gave them my speech that it's okay to fail, not okay to quit like my take no prisoners speech the year before that. >> amazing and you made a fan -- i mean, you're in the a fair weather fan, that's an understatement. >> no. i never trashed the franchise during all the periods when trash talk was in philadelphia listen, i'm a fan. real fans don't trash franchises >> i don't like the bengals. >> like the lira the lira this is the turkish lira not the

italian where they got rid of that that was seismic don't forget monty depasky seismic. you've got to come with this stuff. tectonic is another good work. >> endemic, not systemic. >> i love that. nu see you in a couple of mites. tomorrow don't miss ken rogoff he'll join us live at 8:30 eastern. stay tuned, you're watching "squawk box" on cnbc

as we hand it over to "squawk on the street", the lira, 6.72 some improvement the futures are suggesting a positive open. they had been negative throughout the morning because of turkey. not anymore. >> make sure you join us on the same team, dynamic team will be here "squawk on the street" is next good monday morning. welcome to "squawk on the street." i'm carl quentinilla here with jim cramer erred doe juan is talking about halting the slide. gold is near a 17-month low today. roadmap is going to begin with turkey's currency crisis

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