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 fears of contagion spreading

across the globe the ongoing spat with the president and harley-davidson is not over trump applauds a boycott. plus more on elon musk and tesla hit with two shareholder lawsuits we'll get some details on that. first up to start the week, u.s. markets trying to shrug off the markets about the economic crisis in turkey where the lira has tumbled to a fresh record low, jim. >> yeah. >> climbing back to the flat line here and of course ongoing strength in the dollar sort of shows you where investors are sort of interested in being right now. >> i think it's interesting that larry kudlow, chief economic advisor, always very pro a strong dollar. here it's falling into his hands. they've been the only undercurrent in the entire earnings season was perhaps that the dollar has been too ccentua. i think it's important to understand we get caught up in the contagion in cypress, italy, they do have the third largest bond market.

>> right. >> all the top ten companies in turkey when added together do not equal the market cap of j&j which is not that big of a company versus some of the bohembohe bohemoths we had it brought a change from a secular government into a religious government as people recognized that the imf came in and took it over you have to be careful that that happened there was a contagion that was contained. it really isn't that much different from now it was, again, a country -- a western country struggling to be part of the west and then failed because of religious issues. now we have a country still trying to get into the west, been denied by the eu. i think it's important to remember that other than from mutual funds there really isn't that much contagion because we always want to worry about the european banks what do we learn time and again whether it's from deutsch bank, the eu bails out their own

banks. you might want to take a stab at deutsch bank i don't want you to do that. i want people to recognize that there is an element of fear that should not be stoked and i don't want to stoke it. >> you think it's being over played by the fact that it's august and there's really data light week >> yes, the vix was at 12. it would not have taken much i think that verdonia could have created -- that's a marx -- not a carl marx, grouch o marx if you go to the committee of tech dinner every year, well aware that the turkish government is perhaps the least free press government in the world. >> yes jails the most journalists

it's not a great bastian of democracy. this is not a country that fits in as a place that is a western country. >> yes which is why their membership in nato raises some eyebrows in certain circles. >> yes i want to keep that in mind. it's the reason why we're not going to have that many banks that lend to them because we don't regard -- many of our bankers regard the country as -- >> tesla, the story over the weekend with the shareholder lawsuits phil lebeau has that for us. good morning, phil. >> reporter: carl, this is a blog post from elon musk updating people about going private. also a first clear explanation, at least a more detailed explanation, from elon musk about the tweet that he sent out last tuesday where he said considering going private at $420 a share funding securied it's the last two words that got

a lot of attention in the blog post we're not going to read all of it it's fairly lengthy here he talked about why he wrote funding secured and he brings up the fact that there have been a couple of meetings with the saudi investment fund and in this announcement or this blog post where he talks about this one of the things he says is that he left a july 31st meeting with no question that a deal with the saudi sovereign fund could be closed and that it was just a matter of getting the process moving this is elon musk's own words. he writes this is why i referred to, quote, funding secured in the august 7th announcement. so there you have it elon musk going on and saying they are continuing discussions between tesla and the saudi sovereign fund about the possibility of them providing funding for taking the company private but this blog post essentially, this is elon musk and tesla's way of saying here's a few more details so that people understand why i wrote

funding secured and, therefore, you have an understanding of what was going on last tuesday and where the company is right now in terms of discussions with the saudi sovereign fund and other potential investors, though they don't go into detail on who those other investors might be in terms of funding taking the company private guys, back to you. >> yeah. phil, it's very interesting. there's a paragraph here talking about let's not get caught up in the $70 billion, 2/3 of the people would maybe roll into a new company. so the actual amount is i would say within reason of what the saudis and banks would give them, don't you think? >> i think so, yeah. and i think what they're trying to do, jim, this is all part of that massaging the market right now. it's about coming out there and saying, look, that 70 billion, that's a little bit extreme relative to what people might be expecting. we think that it's going to be a much more manageable funding area, funding term and,

therefore, i think as you mentioned this is something that potentially could happen if you bring the saudis in and others into it as well, but let's be clear, we're a long ways from that happening i think some people were thinking that perhaps there would be an ak filing with some more clearer details in terms of financials that's not going to happen any time soon, i don't think. >> all right interesting quotes here, though. i left the july 31st meeting with no question that a deal with the saudi sovereign fund could be closed. >> yeah. >> and that it was just a matter of getting the process moving. that's why i referred to funding secure >> carl, it goes -- and, carl, it goes back to your definition. is funding secured meend locked in or does funding secured mean i had an understanding we had a discussion and they made it pretty clear to me that we were pretty much set, therefore, funding secured it's going to be one, i am sure there are already skeptics and cynics who are going, oh, right. i don't buy this

but this is elon musk's initial explanation for the tweet he sent out last tuesday. >> it does sound to me that a tweet, which we know the sec's already said the equivalent of being on twitter is the same as being on, say, reuters it does say to me, perhaps, i know this is going to sound a little oxymoronic, that he felt the need to disclose it since he's had the talks and that if anything, had he not disclosed it, people could say, wait a second i'm selling the stock and he literally is putting together a bid at the same time phil, in a very odd way he may be saying to the government, i felt i had no choice i had to do this -- >> correct. >> -- because people are selling the stock. >> yes and what's your fiduciary responsibility as the chairman of the board to come out and say, this is what we're doing. you know, jim, it's that gray line there, but i think you're reading it exactly as elon musk and tesla are positioning this in terms of discussions were taking place we pretty much had an agreement

in place, not locked in, but an agreement in principle, so to speak, and, therefore, it felt like it was time to go public with the information >> certainly not fanciful if the saudis bought 5%, i've always said if it were really troublesome, they would have gone directly to elon musk and say, here, we'll give you the money. we know you're in trouble. the saudis bought it in the open market they do have pretty much unlimited fire power this is not a poor country and it's a country that is trying so hard to diversify away from fossil fuels. this will be a great way to prove that fossil fuels are the past, which is what they're trying to show >> right >> what about this estimate that he thinks about 2/3 of shares owned by all current investors would lol? >> i defer to phil you know that there are people who love this company so much the last thing they would want to do is give up their stake, including many people who came up on our air and felt aggrieved

that they wouldn't have a chance to buy the stock higher. >> i agree, jim. i agree. i don't know if it's 2/3 but i agree there is a large percentage of tesla shareholders, they not only love the car, they love the company, they love musk therefore, they want their tesla shares and they want to be a part of that >> all right new chapter. thank you guys we'll come back to you in a bit. phil lebeau. other corporate news on monday, netflix's cfo david wells is stepping down. wells joined the firm in '04 has served as cfo since 2010 company says he'll stay on until his company takes that role. he cites the strong financial position and says he intends to focus on philanthropy. interesting. >> yeah, clearly he's done an amazing job. one of the few cfos, carl, that i would say pop in my list of cfos to fall, i love david wells. he runs the conference call. he is masterful. he has tremendous knowledge.

those of us that follow david wells, he's legendary in his likeness not intellectual likeness but in his ability to be able to explain finances there are many people who question his credibility during the era where they were just spending and spending and spending well, who's questioning it now with that marquee cap? i want to wish david wells well. the people who run netflix are very different from most corporate americans. they don't take themselves too seriously. they're joyous david wells will be missed if only because he loves english. >> it would be a good show for you to do a profile of cfos. o. >> may is fantastic. you know who -- kelly kramer, who will be giving the conference call at cisco this week she's incredible

you've got these people who are so good and, again, why is it? they do more than the financials they talk about the vision and they let the ceo speak about what's going on with the company with the idea that a cfo can talk about the way that capital is being allocated in a way that when you read it you never needed to have a degree in accounting to read the netflix call because david wells is such a great spokesperson really remarkable. and i wish him well. he's done a fantastic job. >> singular culture at netflix, that's for sure. >> keep our eye on turkey this morning. for more on the crisis let's go to willem marx. >> reporter: good morning. we've had developments with president erdogan speaking to ambassadors. they're speeding up their spending on infrastructure in

turkey the central bank had an announcement about what they would do to shore up the liquidity for some of turkey's banks not necessarily looking to have an impact on the currency but certainly trying to take some sort of steps to try to calm investor's fears about the situation. we heard from the son-in-law of the president, of course, that he was going to be unveiling measures this morning. those are the measures so far, very small effort as welby the banking regulators to step in and try and impact the limitations on the spot here as well in terms of people i'm talking to on the street in istanbul, some of the conversations you've had with business owners, they're concerned about import costs. they're concerned about their deposits one of the big questions, mark, as jim was talking earlier about the fact that they have had the currency crises in the past. a lot of people are, therefore, open euro and dollar denominated bank accounts. almost half of the bank accounts are in a foreign denomination. those people very concerned about the fact that they could be controlling the institute

that's something the government has said they will strenuously not do given the opposition president erdogan has expressed in interest rates in particular being increased, it doesn't leave them that many other options to try to calm the currency frustrations we've seen over the last two days, guys. >> willem, if you had to compare the rhetoric today versus the defined rhetoric on friday as well, how would you do it? >> you actually want to follow the arc over the last few days, carl he's been crisscrossing the country, president erdogan up on the black sea addressing crowds of supporters talking about this is an economic war dismissing the lira as a storm in a tea cup it's not that clear to me where erdogan stands on some of these issues he does consider there's a fight for turkish survival he's encouraging people to go out and transfer the euros, dollars, goals into the lira whether he does consider this something that's a bit beyond him, something he's not that interested in.

he's never made it very clear what his views are going to be long term in terms of the economy beyond spending. that's been a big, big part of turkey's support has been cheap borrowing for the corporate side of things as well as the government how they're going to service those debts is anyone's question going forward given how expensive that debt will be. whether they'll be able to roll over these loans no one is entirely clear at this stage. >> still early days in this saga, willem thank you. in istanbul today. what a story we'll get to more on turkey. some of the impacts on other assets when we come back, the president firing another cell at harley tweeting a boycott of the motorcycle maker. take a look at the pre-market dow s&p down straight coming off the first weekly drop in six but e ths&p and nasdaq still up in a month. back in a minute r hours. not anymore, td ameritrade lets you trade select securities 24 hours a day,

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i think when you go to the white house, as harley-davidson did on february 2nd, 2017, you get an assurance from the president that things will be good, thank you, harley-davidson, for building things in america prefaced by a lot of countries are taking advantage of us. meaning we'll defend him so this is a direct slap in the face of the president that they're doing this now in reality, look, there's tariffs. they haven't been able to grow you definitely need to be able to put the plans there because there's such protectionism

i think had they not gone to the white house in such a triumphant fashion by the president, i think that the backlash would have been far less if you take advantage of the largess of the president and then go against them, you have to expect it i feel bad for harley-davidson they are not getting a break we have reports this friday. i don't think people realize the kinds of tariff pressures they put on our companies to try to sell heavy equipment and try to sell anything over there the tariffs are insane so i wish the president used an example of this was forced by our so-called allies and i think it's a shame. no, they one upped the president and made him look bad. can't do that. >> still a reminder to have a sitting president say this about a public company. >> whoa. >> it's unprecedented in modern times. >> it really is.

you have to go back to tr really blasting standard oil but harley-davidson does not have the staying power. standard oil was a little bit bigger in the united states. jpmorgan, standard oil, u.s. government we're going to get cramer's mad dash count down to the opening bell take a look at the pre-mart. re "squawk on the street" from the nyse straight ahead. and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you

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and that the advertising numbers could double over 2020, they're talking about the possibility that this thing is worth, well, more than 100 billion. and what i really like about it is that it has been a stealth story. you know, giving money to amazon as a pro forma of advertising dollars has been brilliant i'm going to give you a number we believe it is reasonable to assign 150 billion to 190 billion of value to it's merging advertising business think about that it's a cogent report i know that people feel amazon has a great return on investment when you advertise. >> they say operating net bigger than aws basically in three years. >> amazon web services is the

gold standard. everyone is fighting to have a shot at trying to beat amazon web services but there's a surge and needles to say, amazon is one of these companies that is firing on all cylinders. it's so well run prime is doing so well think amazon web services, that's the easiest way to on board amazon on board the best cloud system. >> and keep their target at 2100, i think. >> i know. >> reiterate over weight 1/mitell get the opening bell in 4 2 nus. don't go anywhere. the employee of the year, anna.

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they're not satisfied even though anyone who owns that stock has got to be plenty happy. they're going to bring out more value. the stock did run. i'm sure there are people that say, wait a second that's why it ran. i'm just impressed by them matthew boss out with a note talking about how retail can be very strong this week. we have macy's reports this week that stock's been creeping up to its high and mr. ginette has done a good job. many people feel that stock can break out. breaking out at 40, 41 unimportant time because this is not the season i keep reading good things about burlington wow. burlington's doing incredibly

well. >> interesting. >> be aware that the retailers, this is not when they should do well there's someone that says that's the strong dollar. that's not the case. it's not even impacting the gross margins. it is the consumer spending. tjx, the consumer spending it is a remarkable moment. nike being the most visible of the companies i follow. >> yeah. yeah. >> we are in the middle of back to school and all those inventory purchasing decisions are being made now. >> yes. >> denim and outlook though, i wouldn't -- just curious the way they decided to car of this up >> i've always said pvh, stuff like that. manny turico, he's made so much money. these are the slowest growing. biggest cash cows. it will be like netanyahwco, thl generate a good yield. vf used to be famous the rest will be a fast grower if the stock comes down it may be a great opportunity because

of how well this company is matched. >> you said we're going to get macy's this week we'll get cisco which today is up 4%. >> cisco syy, if you want to look at how the stock has been done, it's been remarkable they have very good organic growth that's the food service one. cisco's important as sysco memo to chuck robbins besides the fact that your falcons are going to be beat opening day on nbc, you do have to be careful because everyone is confusing cisco and sysco. >> best performing down component. >> tomorrow cisco the networking company which is really a software company each time it reports and more of a cyber security company they've done a remarkable job. david wells, kelly kramer. well, she's retiring i've got to make sure. >> macy's cfo. i have to be sure about that

because i respect her so much i don't want to say anything about someone -- yes, paula price now cfo. i do point out that i really think -- retiring next year. i really think that cisco could do well. the last quarter was not a blowout. dram prices are coming down. i know its flash memory is coming down. one look at western digital is telling you that micron wavering here even though it sells at the lowest multiple in the s&p even though the ne'er-do-wells, ford, but next time we speak to phil we have to ask. >> fell below 10 on friday as i recall. >> yeah. we have to ask phil because, remember, they didn't go and seek u.s. government help and they do have the f-150 but there's a lot -- they're really trying to say, listen, we're not going to sell cars other than where we're going to make money. no one wants that stock, no one. wow. >> some halo here on retail. kohl's is up a percent here.

nordstrom, alta. >> chapel trust owns that. nordstrom he does not think is going to have a good number. nordstrom is going up. nordstrom is becoming the gang that couldn't shoot straight if they don't get this right it could be three straight quarters i've been waiting for nordstrom. they have a men's store in the u.s. i think it's a great place to shop look what people want. they want tjx, inexpensive they want burlington, inexpensive. i was at a burlington in brooklyn the other day holy cow, the line at the register wasn't like they didn't have a lot of registers the line was incredible. i felt like they were -- here, jim, if you buy this t-shirt, you can -- we'll give you seven t-shirts i mean, the prices were insane. >> that's a deep, deep new york reference there. >> crazy eddie nice stores. i think people sometimes if you want to be in retail, you have to go to a burlington and the burlington is astounding in

terms of the number of people who are just buying and buying it was -- you know, its pipe rack, feels very inexpensive the prices are great one look at that chart tells you this thing is the great american stock. >> that's amazing. if david were here we might talk about glass lewis recommending for cigna express scripts. >> had a very big run. i continue to be impressed with that combination even though carl icahn isn't and i look at it's so hard not to be impressed. when you look at humana, anthem, s centine. these are remarkable performers. to be linked with a signal is a good thing for cvs i think it's going to do well now that i forecast that rite aid is going to be very challenged, challenged being -- let's just say it's -- i wish them the best of luck. >> yes i think i know what you mean

glass lewis says the rationale is both clear and reasonable and would give them, cigna, significant and immediate scale just as a rhetoric >> everyone was worried about amazon you do this to be able to protect your flag. cvs had a very good quarter it's like viacom had a very good quarter. all people carried about was the soap opera carl icahn using a curse word. the soap opera of national amusements, sherry red stone. >> sure. >> in the meantime bob backash puts together one of the finest ear residentice -- ear ras in recreation the term that he's engineering at viacom is real. >> takes us back to tesla. up almost 2%

361 here are people looking at this on the funding? >> well, when you read that letter and you recognize that the saudis -- where the saudis are in terms of where they want to be as a member of the world's really great financier countries, be away from oil and gas, be something bigger what could be bigger as a statement than to go in a partnership with elon musk to take tesla private that's got momentum. this has got some momentum elon is all anyone talks about i mean, it's really quite amazing. >> true. >> when you get together with -- like people see me, most of these people think i'm a dollar sign represented by a man. they often immediately say, tesla. i mean, i was surprised they don't say tesla. there's really a kind of sense of will i lose my stock? if he takes it private can i hold my stock? you know, i say, you ever heard

of greed bulls make money, bears make monies, hogs get scorned i'm not being a who hog. i'm only up 100 points there's a love for a stock >> you've talked about it. it comes up every time love love love. >> i just love it. >> towards the opposite end of that spectrum, papa john's up 2 1/4 percent. >> they're trying to help the franchisees. >> royalty fees, food costs. they have to buy a lot of pizzas >> long bow takes us to a buy. 52 target. they say when the comps settle up. >> long book this is important, but i think the one thing that people -- pat doyle taught me this the years he was running dominoes there's not a lot of brand loyalty. what people want is the best app. when the pizza comes, if it tastes good, you've got them this is causing people to sample domino's i think when you sample domi

domino's, millennials don't like to talk on the phone, they hate cash, okay when you order on your apple watch, you order on your cell phone, everything is taken care of, everything all i can tell you is that people may not come back to papa john's as easily as long boat things it's just not what people do >> right ten year is having the quietest monthly range since november as we're back in the 2.8s i know you've been worried about oil, drag -- a potential drag on the market but what about banks? >> i do think when you see this, i always look at jpmorgan versus square i look at those because square is doing so well sarah fryer doing so well. this is the out of regular finance into fin tech. they don't want jpmorgan at no price do they want to buy square there's no buyers of jpmorgan

which is ridiculous because it sells at 12 times earnings people pay to infinity and beyond to square there is the love for financial tech is so strong because of things like turkey where you come in and you say, well, geez, now i've got to worry about turkey i'll sell my jpmorgan. now jamie dimon has not spent a lot of time in turkey lending turkey but that's okay that's what people do. if you watch square, square, by the way, another loved company square will be there tonight, the thing that i'm always shocked at is people don't even know we use caviar which is the delivery service anything square touches is regarded as being the gold standard for financial tech. >> yes. >> rather remarkable because it is jack dorsey >> who's having challenges in his other gig. >> he's always got something >> run two companies you double your chances of things to worry about. >> going with the change-up. he's going to let the fastball kind of go away. >> square within a buck of a

record high again. >> incredible. incredible dow is up 10 let's get to bob pisani on the floor. what's moving? >> flat open good monday morning. three straight declines for the s&p 500. we'll see how that wraps up. obviously turkey is an issue modest declines in europe. the bank's down a little bit more than normal that's typical you would think their lenders, the turkish corporations some of the banks and tesla is down all of them are often the weak side so down about 1 to 2% here dollar's flattish today. we had a big jump on friday. emerging markets are generally a little bit on the weak side. south africa, brazil, taiwan, india. all down about 1% on that dollar strength that we've seen here in the u.s., techs and materials leading. banks are down second day in a row. you see the financials are weak here i keep emphasizing the main theme to bear in mind which is the u.s. is the place to be.

i want to show you the global markets are outperformance s&p 500 is up 6% year to date. the ishares all world, 50% is the united states only up 1% but if you take out the united states from the global markets, the global markets are down almost 6%. so s&p up 6% the rest of the world essentially weighted down 6% that's what i'm talking about. the u.s. is the place to be. earnings are the main reason we keep pointing out u.s. second quarter. why do we talk about up 24%? europe, 9% japan, 9%. it's not just a tax cut. if you take the tax cuts out it's up 15%. even without the tax cuts way outperforming the rest of the world. so, again, u.s. the place to be number one because of the strong earnings narrative number two, we have the gdp growth that we've been talking about. going to hit 4% here what's moving the markets here, that's it.

then we have the tidal wave of buy backs, dividends we had a limited tariff impact we have the rotation we talk about. occasionally value names come to the fore that's the good news here's the bad news. the markets are very tightly wound. a lot of trades in one direction or another we have record highs in all the indid i sees a lot of call buying out there, a lot of people betting volatility will remain low we saw that earlier in the year. that blew up here. the dollar is very strong. would have a lot of dollar bulls. we have a lot of treasury shorts out there. that's a lopsided trade as well. would he saw what happened on friday when you get all of the dollar bulls out there then you have a problem over seas a lot can happen quickly this gets to that debate, is there too much complacency out there? my heavens. i have e-mail after e-mail, no, you have to be careful here. we have slower growth. higher trade rhetoric. we have higher deficits and higher debt.

declining government revenues everybody keeps talking about. corporate tax receipts are down 30% overall. none of this has translated into anything significant for the markets. internally advance decline line remains a record high. that's the most important thing to watch if you want to see signs of the market. there's a significant talk about advance lines go south four, five, six months before it flips out. we're not seeing that at all advanced, new high stocks, it's been fairly modest overall because we've had a few stocks pushing the markets up overall, no internal signs of deterioration. i still say the united states is the place to be. flattish dow is up 25 points. >> let's check in with rick santelli as well at the bond pit at the cme group happy monday, rick. >> happy monday, carl. seems like the world didn't really come to an end. even the emerging markets is volatile, choppy, it is ugly as some of the debts denominated in

dollars maybe to service system held together. equities are higher. rates, highly unchanged except for the farthest maturity. look at a two year you can see we've come back a bit. if you look at two day of tens you can see what i'm talking about. yes, all yields look like they're up today because they were hit on a flight to safety trade on friday and of course 30 year bond being up a base point where all the maturities are unchanged. they hit the 30 year harder flattening the curve on friday so we are reversing some of that look at a two day of the dollar index, it's all about foreign exchange and there's some wild prints as you see in the middle of that chart. the point is the dollar keeps moving higher. as a matter of fact, we're now comping to june of 2017 and there's another flight to safety currency dollar yechb. dollar yen now the best level against the green backs since july of this year and finally maybe the epicenter. what has been moving almost

nonstop to the down side against the green back, the yuan the chinese currency that's the dollar versus the yuan you can clearly see the dollar at the best levels since may of 2017 carl and jim, back to you. >> thank you very much, rick santelli when we come back, we'll get more on the turkish economic crisis we'll talk to two ambassadors to turkey and get their perspective. as we go to break, look at the biggest gainers. we haven't mentioned nielsen yet. sysco, syy, mylan. dow is up 47 back in a minute

i think during the downturn that people were thinking there could be a boycott the company's in there buying aggressively, which i think is a fantastic skin of confidence >> wonder to what degree cook tried to convince the president to just stay or conduct our trade policy strategy. >> this is america's largest stock. i do think that tim has been instrumental in trying to spl explain to the president whether this is a great gem. that doesn't necessarily mean that things will be fine, given the fact that pete er navarro is

in there saying listen, maybe there needs to be some paint from some american companies >> on is list of top quarterly buy backs, apple has the number one spot, number two spot, down to five, maybe six >> they buy when it's down, they like to buy when it's down other companies say oh, it's hot, let's buy. >> we'll be back in a minute s&p is up 6. hi, i'm joan lunden with a place for mom, the nation's largest senior-living referral service. for the past five years, i've spoken with hundreds of families and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities

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conference if they put somebody up for sale or they restructured they get good, good numbers. >> jim, what's on "mad" tonight? >> brinks, you see the trucks, the rates are going up and mr. pertz has made great strides there's a lot more to it >> your cash has not yet met new industries. >> they don't take this money, but a lot of market stores can only be in cash. and that's not brinks' world and it has brought up the economy. when we come back, former ambassadors to turkey will weigh in on that country's economic in on that country's economic crisis which we're watching oncy

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opposeded to raising interest rates, he's been speaking to a number of ambassadors over at ankara, over at the presidential palace complex talking about the economic war that turkey is essentially fighting, saying also in reference to the united states, there's pretty experienced language the bullies cannot roughly famously encroach in those that are paid for by blood. traveling around the country, making the case for his supporters talking about the need to buy

the lira, to swap out their euros their gold is will. >> people were saying they do not plame the united states. a lot of them have their money in dollars and euros and intend to try to hold on to them, guys. >> not exactly an adequate response to a currency crisis. thank you so much for the update >> investors are focused on the parallels to the asian financial crisis remember, that was triggered by the crash in thailand's currency that spread to indonesia, the philippi philippines. ultimately bailouts from the imf. the question is turkey a similar spark that could ignite a broader crisis the currency in free fall, that massive debt bomb. this is why currency crisis is

such a debt bomb foreign currencies especially dollars makes the economy very vulnerable because when the currency loses so much value, that costs skyrockets that's why there's real worries about defaults and that was the ratio we saw back in thailand, there are also parallels with credibility questions around the policy mistakes the difference, though, turkey's issues, a president taking over the economy, monetary policy, the beef with the u.s. over the relief of a pastor that's pretty unique also emerging markets are in better shape, their currency markets are trading these days political problems, high debt loads, sanctions, deterioratini debt loads, and why we need to be watching currencies, in russia, south africa and mexico. the federal reserve is raising

interest rates and that takes the shine off of emerging markets and those that are facing economic problems are getting expose let's bring in our chief international correspondent. michelle, it's all about confidence right now and it doesn't appear that president erdogan is doing much to shore it up what is your take? >> i think he's doing things that actually destroy confidence as you have noted, the need to do a much more adequate policy response to use the word of central bankers, it would be increasing bank rates dramatically but he is not doing that, he's fighting against this global trend and then he has these self inflicted wounds if you look at what the dollar's done over the last few years when you look at the dollar versus emerging markets currencies, it's taken off like a rocket

em, eedgmerging markets from arn the world are withdrawing their currency if you are one of those countries is that that happens, you have to take steps that are much stronger than what president erdogan has done he's trying to do these contortions to do these stealth kind of capital controls about requirements when it comes to how many dollars or euros you can exchange but that's not going to be enough and you can see what's happened in the turkish lira today, or else you're going to get a debt crisisi if all of these bangs that have taken out loans can't repay their loans. >> even in european markets, asia is down, it didn't decline as much on friday, the big

disturbance and the question of contagi contagion, greece and turkey are both economists. and that's not quite the case when it comes to turkey. and therefore, yeah, we saw banks that's the biggest selloffs in the u.s. market both the day and on friday. one of the big reasons for that is that we have seen a safe haven trade pushing yields down. as opposed to people thinking, gosh, can u.s. banks be affected in the same way as they were in 2010-2012 for the turkish markets. enter the vulnerable ones in france and italy and spain, where do you stand on this kwee of contain judge, i think turkey's number 17 in the world can affect the entire global financial system >> turkey's been a train wreck

in slow motion, the key right now is that currencies do float more freely, as you highlight it we get lots of market signals in advan advance, it could potentially happen, so in theory, if you're running one of those banks or you're sitting in a position relate to turkey, when you go back to 2007, those valuations happened overnight it was a real boom and there were questions over what plitdicalplitd ical politically they were willing to do now you watch it happen in real time, so there's a lot more market signals out there that in theory should have given people the hint that they needed to shore up whatever exposure they had. >> thank you, michelle, for the perspective. >> joining us on the phone

ruchir sharma has been talking to us with the this for years. >> i believe your correspondents have seen that this is really a train wreck in slow motion, i mean turkey's been doing everything wrong that it can find in the foreign text books, massive amounts of debt, which his country took, and then on top of that, you have a political leadership that's following a very unorthodox policy i think this will probably be the most obvious crisis that i can remember in emerging markets. and i would be surprised if they're doing it >> in thailand, there were loads of bubbles in thailand, there were all these problems emerging over years that all of a sudden slowly hit with a speculative

attack on the thai bought. you can see the same thing about the real estate in this country in 2008. >> but you have to go to the source of why this is happening in turkey at this poupint in ti. you're getting to the key point here that why hasn't it happened just now, and it just goes back to the fact that every time we have higher interest rates in the u.s., that come bip nation has always been a lethal combination of assets across the world. in turkey in particular, 1994, 2001, 2008, every time the turkish currency has taken a dive, because it's always been most expose to foreign funding that is a critical point now which is that what is this going to mean for other countries and i think the single most important country to watch us

now is china and that's because china has been on a de facto currency peg. it's krcurrency has been weakening. so for this to become a true contagion, what you need is the chinese currency, because if the currency spins out of control, then you have the full -- so far we haven't seen that much evidence of that in fact the 2015-16 i thought was much scarier than it is now. the other emerging markets, if you look at the current account deficit. in fact, in agate, the current accounts now are in -- china is what we really have to watch because we have to turn this

account into a deficit obviously china is huge for the global economy for me this is the single most important take away is how dependent the global economy still is on the u.s. dollar, so much talk of the decline in the u.s., the american decline et cetera, but the u.s. dollar and the financial might of the united states just remains sort of unparalleled. i can't remember any time in history wherecounty threw ha dominated the financial system as much as the u.s. does. >> perhaps it won't lead to a contagion like it happened in 2008 perhaps president trump is getting credit in the u.s. for the tactics he's employing >> i think china -- the leadership has been very

focussed of late, just in the last few months about deleveraging, so i was there in china and i met the banking regulators, they're very focused on deleveraging and that is hurting the chinese economy, and they are very concerned about the trade balance. they want to focus on increasing the financial stability of their economy, the leadership understands that they are vulnerable given the amount of debt they have taken on. and they're concerned about the trade war. so i really feel that china is the country to watch because they're facing all these pressures and which don't always know what's really happening there inside, because things are obviously not that transparent so i'm keeping a close watch on the chinese currency that's what really leads to a full-fledged crisis. turkey by itself will soon be

forgotten. it's economy is less than a trillion dollars, i think any emerging markets out there that have the kind of volatility, like the east asian markets had in 2007 and 2008 and you have current deficits that are more than 5% of gdp, i don't see too many such candidates in eemergenamericmei today. >> morgan stanley, head of emerging markets >> we're joined this more by bank of america and quantitative strategy interesting that discussion, whether it's ex-m fears in that era of sanctions, trade worries, i mean the conversation is

coming back to u.s. resilience, or at least s&p resill yeniencre >> in this environment the u.s. market seems to be the best place to be. you're seeing concernings revisions much better, u.s. trends are seeing a my better aroundings seasons, within the u.s. and compared to areas like emerging markets so we think from a high quality asset perspective, the u.s. stocks look like a good bet right now. >> even though they have tallies of how many times tariffs are mentioned on conference calls. you think guidance in q2 are better than you might have expected >> if they wanted to lower guidance, concerns around trade, uncertainty, they have continued to guide in line or above consensus's estimates which has

obviously been coming up guidance has been very strong and the koucountries that have mentioned trade, cap x is very strong in the second quarter, over 20%. >> are you constructive and if some of these worries did reach into domestic plays, where are they sales, hiring, cap x >> the expectations for 18 and 19 are still very strong and so far as our other guest mentioned, the reporting has been very strong and the guidance has been very strong. in fact as of a new dfew days a the growth in earnings year on year have been 26% relatively 20% that was expected. so a strong beat on earnings, a strong beat on revenues, and companies giving positive

guidance, that is certainly a reason to be constructive. all the macroevents, and all of the trade chatter so far has just been noise. it will eventually translate into earnings, but until we see that filtering through in the report and in the guidance, i don't think there's a reason to be negative on the u.s. market. >> wasn't the other take away from earnings seasons that growth stocks in particular are vulnerable >> i think you have seen health care and tech to the up side, and health care saw a record earnings and growth. so i think from a growth perspective, you're still seeing the fundamentals there, so you did see a little bit of a rotation in july into more value oriented investments, so from a positioni ining and valuation perspective, but growth stocks still look strong. it. >> you recommend citigroup, it

was the biggest decliner on friday, it has a higher international exposure than some of the other bigger u.s. banks, are you fearful of the growing of the u.s. banks? >> we like it because it's cheap, 10 times u.s. earnings, the biggest in terms of markets is mexico and that's doing just fine, i think it's just a contagious, sell reflexively on the bad news we like stocks in general, because there's a very huge difference in what you have to pay for the value stock versus growth stocks. you're paying 22 times for value -- sorry for growth stocks, relative to 15 times for growth stocks. a slight advantage in growth stocks, but the same amount of

growth for 2018. it doesn't justify paying $7 more per dollar of earnings for growth stocks, at the margin, they like the value better than growth, we still like the u.s. market much better than any other place in the world right now. >> one other place on that front. you actually think small caps are not the best place to hide from some of these things? >> one of the biggest risks right now is their rev lage. and if we're in an environment of rising interest rates, and credit's seeing an issue there, you want to own large rather than that small, interestingly one of the best ways to make money in large cap stocks, investors are starting to care more and more about leverage, they're using that as a factor in that are stock selection

processes. so that continues to matter. >> good way to start money when we come back, we'll take a look at some of the biggest stock movers in the morning. we're watching tesla, as elon musk gives tesla a little bit of a play by play in terms of the saga turning private big show still ahead with the dow up 4, don't go away. xfinity mobile is a new wireless network

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the street." tesla ceo elon musk talked about taking his company private >> it's been six days that elon musk tweeted out that he was considering taking tesla private with funding secured now he has reach eed an explanation as to what's happening and what led to him putting out that tweet last thursday he said it was right for him to announce his intentions publicly, and he also said that the go private speech was based on something that happened at the end of jewel in the uly in fund he said i left the july 31st meeting with no question that the deal with the saudi sovereign fund was enough to keep the process moves.

musk writing the 420 beeout price would only be used for tesla shareholders who do not remain with our company if it is private. right now by my estimate, it is approximately two-thirds of the shares owned by all current investigatives would roll over into a private tesla so that's a little bit of information from elon musk about the funding. why did it take almost a week before we finally got some details from tesla regarding this blog posting that they put out about an hour ago. tesla says no comment. so we don't know exactly why it took six days for elon musk to write everything he's written.

but i'm sure this is going to be plenty of fodder for people to discuss whether the sec potentially has a case here against elon musk and wrote that tweet and wrote funding secure >> funding secured is a hash hash tag, it's a meme, it's viral. >> he said he came out of that meeting, according to his own words with an understanding that it was in place, that if he really wanted to go forward, that the saudi sovereign fund could make it happen at $420, that's essentially what you take away from what he released and what tesla released this morning. having said that, i am sure there are going to be people, especially the cynics outs there who say just because you have a meeting with somebody and they think they can make this happen, doesn't mean it's secured.

there's a lotthat happens long before that. so that's at least his explanation at this point. >> still, the real question, now, phil, i'm just looking, no question in his mind that a deal could be closed, right that's not exactly a letter of intent or a terms sweet or even close. >> if it was a price target, it would require far more certainty than what is being suggested >> now it comes down to intent, we have had more than a few specialists, people who have worked for the sec or consulted in terms of securities issues, now it comes down to the question of intent he makes it very clear here that likely a deal could be put together if they wanted to do it. >> i'll never go on vacation again, i missed a tweet storm and a currency crisis. when we come back, the

president backing the boycott of an american iconic brand, we have got the details "squawk on the street" will be right back, dow's up six points don't go away. you always pay your insurance on time.

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time know for our etf spotlight. the tech etf is underperforming. most of the notable tech names, good morning, mark, good to see you again. >> good morning, carl >> this major all trend in tech, where does it stand right now? where is it going? >> i think in terms of the fang names, facebook, amazon, netflix and google there's no question that the market enthusiasm and market valuations for those names have become reasonably robust

but right now i think facebook given that trade off, that's our number one pick here i think google and amazon gave you a few good quarters and netflix gave you a surprise. that's kind of where we are, we have got a mixed bag across tech >> on this facebook dislocation, 182 now is a far cry from 166, do you see it reclaiming 217 >> i think i do. you're close to a market multiple on this stock, i think what the company has been making, it's been so misunderstood by the street and

the market they are now going to start monetizing the two largest messaging applications in the world with what's app and facebook messenger and i think the core of facebook ad business is doing just fine, so i think the market way overreacted to the print and some of the guidance commentary by the company i think it's some of the most appealing risk-reward in tech. >> does that facebook move towards a subscription model versus advertising, and if that does happen, can it alter to multiple that applies to the stock when you consider what netflix is on. >> with whatsapp, that's a good question, i'm not sure what the company knows yet. what they do know is their core company is advertising, they're becoming good at inserting well targeted ads into people's

conversations, which is essentially your news feed for your story line on facebook. they can take that same concept and applying it to whatsapp. and so my guess is it's going to be almost entirely an ad driven model. >> sms is an immediate alternative for whatsapp, i don't think any of us would put up with advertising around one so surely it's got to be subscription >> you may be right, but i'll take the other side, it depends on how the advertising is presented. if it's not overly intrusive most subscribers are able to take content as long as they're ads that are pertinent to them but with facebook messenger, i

don't think they have had a negative impact on usage with facebook messenger i think they're going to apply those lessons now to whatsapp. >> now let's take it over to e herre herrera. shares of bear is -- after a man claimed he got terminal cancer from using the popular weed killer round up gasoline prices rising to $2.93 per gallon warner bros. shark thriller the meg taking the stop spot at the weekend box office, it brought in $44.5 million in it's debut weekend. and check out these pictures meteors streaking through the

sky above greece giving star gazers a rare opportunity to see shooting stars where the naked eye. the perseid meteor shower returns every year in different areas. th you're up to date carl i back to you >> when we come back, fears of contagio contagion, we'll see what it may mean for currency markets around the world, we'll be back in a moment, dow's up 39d -- 39.

welcome back the turkish lira continues to rock the currency markets. we are joined by peter

westmacott welcome, peter >> good morning. >> it you were ambassador to turkey when president you aerdo first came to power back in 2003 what's your take on how he has been for turkey and how things have changed in the 15 years or so since he first came to power? >> i think in the early years of erdogan's premier ship there was very good strides being made i happened to say he ed ted to few days we began negotiations here, there was a lot of economic reform, rapid growth, stable currency you know, a lot of things were going well in the early years and it began to fall apart eight or nine years ago i'm afraid currents rise by several things, but the movement is run by the

self-exil self-exiled -- since then it's been very tense between the two of them and in the last year or so, we began to see some of the old frigidity returning. >> would you consider the crisis to be self-inflicted by erdogan and is it possible for him to dig the country out of it? considering he is telling the currency that -- to have any form of confidence in the currency well, i think that is a problem. before the elections which president erdogan and his party won handily back in june, his ministers were saying, once these elections are over there will be abincredible kreblabin e boost to the economy

the president is since erdogan took over the government, they haven't seen those signs they would like, now we have got a number of things going wrong, exacerbated by a squabble with the u.s. president so i think it's a weakness of those economic factors that have been coming up for a lock time what i'm trying to understand, ambassador, is how does it ends? they got an attack on their kurn currency, but then they went for

a bailout. it would be pretty embarrassing for him to have to go to a bail kuwa out. >> it would be embarrassing. he's made a number of speeches saying it's all an authoritarian plot in fact there are a number of things they could have done, particularly putting out interest rates which i think would have helped stabilize the markets. but now it's contaminated by the stats which is about america demanding the release of one particular u.s. national pastor gunson, but some are worried about the u.s. consulate that are imprisoned in istanbul if you like, something less than normal legal process

so it's unfortunate. it if there was a way in which the u.s.-turkey spat could be diffused and if the turkish government took some of the more obvious orthodox measures then i think you could see a way out. russia to the imf, doesn't seem you could do a reform project. turkey is very reliant on capital investment. >> what's the risk of serious elevation in the geopolitical nations. particularly crashing out of nato or something more severe? >> i don't know what to go out to that place right now. i'm hearing right now that the palace in ankara, it's far too important the relationship between the two countries and the future of nato, and the

general geo strategic stability for it to fall apart between these two countries and separately there's a real need to address these economic imbalances which is is a problem out there. this is such an important issue, i'm hoping this is not going to spiral out of control, but what we're already seeing is a very severe question klein in the val - decline in the lira. >> let's take a closer look at the u.s. market in the wake of turkey's crisis, dow's up 29 points, the u.s. director of cash operations are cash in, the research this weekend was down right ugly and scary and all sorts of crisis déjà vus back to the ruble in '98 and the bolt in 97 does that concern you? >> no, because they're single minded they believe this is less about

true economic trouble in turkey and more about getting their pastor back out. and they think that this move to put the tariffs on turkey while their currency was nearly in free fall is an overt demonstration by the trump administration that guessing down here among the james bond crowd is that it's probably john bolton, might put back in with his history. and in a way you want to be careful of what you wish for, because in fact as the rumors now have it, the pastor is released on wednesday. the administration might feel empowered to try similar moves against other currencies to attain other things that they want to see. >> in other words this president is going to be a kurncurrency vigilante? >> i don't think he came in

looking for that he's trying this ploy here, and if it works in a matter of days, then he might say, we always have that to go back to. sanctions in iran, if you look at iran, they're in a very similar situation to turkey. the economy is coming apart, there are demonstrations in the street that wouldn't take much to push them over. >> russia, china >> lots of places you can use this >> so duke you buy the banks have that sold off 2% friday and they're back today, the u.s. banks? >> the u.s. banks don't have the kind of exposure that some of the european banks do. amount of the european debt is dollar denominated and the big selloff last week did some damage to the charts, the dax and other things out there look like they're

developing weakness. so i would be a little careful, i would tiptoe into it not jump >> as we go into obviously seasonably weeks, months here, rosenberg is tweeting about housing and recession, you got oil back 67. what do you think are going to be the potential major potholes over the next few months >> i think you want to keep your eye on the geopolitical, the midterm elections, the polls and other things will also be there. >> you think the democratic house is market negative >> i think the crademocratic hoe is market negative i think if the europeans were -- they are likely to take the house, and even if they didn't take the house, it would tie up

the united states for months and months and months, and that might be the goem of the russians. >> the dollar is getting stronger against everybody can the u.s. stock market go up in this kind of dollar environment? >> it is a problem and it's a problem because trade has been going reasonably well. and as long as we don't go crazy with the tariffs, you would think the international position in the united states would be good but if the dollar keeps soaring, our products are going to be far more expensive so it not going to work out. so the rising dollar as you aptly put it is going to be a threat first to the economy and slowing it down, and therefore secondarily to the market. >> kind of a confidence badge. thank you as always. >> take a look at shares of vf corp, making things like lee, wrangler, north face, are

planning to split into two companies, one is going to keep the vf name, will sell apparel and footwear dow's up six points, back after this ahoy-hoy. alexander graham bell here... no, no, my number is one, you must want two! two, i say!! like my father before... [telephone ring] like my father before... ahoy-hoy! as long as people talk too loudly on the phone, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance. 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... to show you the lowest prices...

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with no aerosols and no heavy perfumes. so you can spray and stay. febreze one. let's get to the cme group in chicago to rick santelli. >> good morning. good morning to ira harris we can talk about the lire and turkey and the many issues the heat at the bottom of some of these smoking issues isn't going to go away, but the one question everybody wants to know, if you're a u.s. investor and were worried friday, what

should you think today about how that in particular emerging market issue should impact your portfolio. >> people are looking for safe harbors. all of the things that have been out there to be discussed are coming to some type of fruition or as warren buffett would say, the tide is coming out a bit there are people that are naked there, and a lot because of fed policy. >> all central bank policy. >> all central bank policy, people are borrowed up, way too much when you get a double hit of declining currency that you payback in appreciating currency coupled with rising rates. >> bad politics play into this as you pointed out off camera. these things have been festering with regard to turkey. at the end of the day, the easy money is reversing albeit slowly, and all the things that may have happened, they just happen sooner, may effect the time line. >> yes but then you start to wonder is

that by design there's a lot of countries that need some type of relief on certain things >> so bring it to a head now. >> yeah. the more chaos -- >> the news with respect to the dollar, most say it is firming up more. >> it has. the fed has been in action, and it got to where the real yield in the united states on short term money is probably about zero we're not effectively at positive real yield yet, but it is climbing. and that effected many things, including gold. >> talking about gold, put up the chart. we have a gold chart of dollar versus chinese yuan against gold they're diverging in a massive way. off camera you had an explanation. >> right there are two theories about this because it is a perfect correlation. is it due to the chinese, when the yuan is weak, the chinese step back and only become a buyer. they have been the biggest buyer other than russian central back,

they only buy in exact relationship between how much the yuan appreciates versus gold then do they become a buyer? >> what jumped out at me, if two big buyers refraining from purchases creates the chart you're looking at on tv, what does that say when central banks don't become buyers about the other weakened economies thriving off cheap liquidity it is a good synonym for that. >> absolutely. the other thing with the chinese, the chinese secured ties in gold and copper. a lot of lenders took it as cko -- kol at ral >> always a pleasure to discuss the markets with you wi wilfred, back to you >> thank you very much. jon fortt has a look at what's coming up on "squawk

alley." >> with the looming potential of currency crisis, geopolitical risk, what impact could it have on tech and broader markets. we dig into that coming up on "squawk alley.

coming up later, we are joined by bill cohan on what he calls the dangerous bubble in corporate debt and we'll continue to follow the currency crisis in turkey on the watch for possible market contagion. >> maybe book another former british ambassador as well. >> you would like that >> do an hour of nothing but british. >> i agree then do the second hour of nothing but currency >> "squawk alley" coming up next after the break. we're putting ai into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain. that's smart for millions of shipments. in this lab, researchers are working with watson to help them find new treatments.

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good morning, it is 6:00 p.m. in istanbul, turkey and 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ ♪ ♪ good monday morning. welcome to "squawk alley." i am carl quintanilla with morgan