august 27, 2018. "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning, welcome to "squawk box" we're live in times square i'm melissa lee becky and andrew are off today taking a look at u.s. equity futures and how we're shaping up on this monday morning s&p looking at 8 1/2 and dow looking at 74 and the nasdaq looking at about 32 in premarket. the s&p 500 actually hit a record high. be watching that very closely. meanwhile overnight in asia markets soaring and reacting by china's central bank to keep the currency stable and green arrows across the board and shanghai composite up 1.9%. the move seen as a signal that they would not use in the trade war and seemingly halted a

ten-week slide over in europe, ftse is closed for a summer bank holiday and lighter trading volume across the board and the dax eking out a gain 0.5% of a gain. investigation is under way in jacksonville, florida, after a man killed two people and then himself. nine other people were injured by gunfire the jacksonville gun sheriff has identified the suspect and wouldn't discuss possible motives. rain tromfromical storm lane damaging parts of hawaii over the weekend. some of the island was still hit hard with up to four feet of rain many islands late friday night, elon musk changing course saying that he

will not now take the electric car company private. we'll talk to phil lebeau about the story in a few minutes the lead story in the "wall street journal." and you don't need much, really, to have an opinion on this so, he decided to drop the plan after some doubts arose as his team hustled to give the idea some form. so you tweet, i'm doing this financing is set and two weeks later your idea team is just starting to formulate the possibility of doing something that was an ill-advised tweet. i don't know how you say it any other way. >> it was the august 7th tweet which set off the whole thing and then his blog post he seemed to indicate about two-thirds of the shareholders will remain with the company when it went private and that is a critical factor in terms of saying finding a secure rate knowing two-third of the shareholders would stick with

the company. he seemed to indicate in the blog post that perhaps a lot of the private shareholders would not be able to remain with the company when it is taken private. like some of the biggest holders out there. so, that really raises the question as to whether or not elon musk acted in good faith when he tweeted on august 7th that this plan was sort of in motion and that funding was actually secured raises a lot of questions. >> a lot of questions. we know the sec is having a look at it and, of course, some shareholders that bought after that first tweet thinking it was secured may have some issues to bring, as well the latest question is whether the board have lost a little bit of their patience with elon musk and whether they're going to start to ask they were led astray about this, as well. and will they start to move to slightly change the leadership structure in some small way. >> it's been a while i have to get back into the

listening closely to -- what is it hurrica hurricane. >> what did i say? and it's hurricane >> no, it's potato, potato i just have to get back in to -- >> do you need a translator or something? >> you are making some progress, i thought. >> i had but you go back home for a little bit >> did you watch -- so, we were watching we were just talking about how we need to get, we have subtitles. i can't watch it and i feel like i need those here a little >> do you need an ear piece and they say what he's saying. >> i have one. >> that six-second delay i finish the sentence. >> you know, i thought about it because what time is it and i thought, before 6:05 will i mak

fun of will. no, i'm sorry about that berkshire hathaway -- >> the question is before 9:00 a.m., will you again the answer is definitely yes >> i know there will probably be another word because i know we'll talk about twitter berkshire hathaway is in talks to buy a stake of paytm. the economic, economic times saying berkshire would invest as much as $350 million and valuing paytm at $10 million if the deal happens, the first direct investment by berkshire in india and a programming note, next thursday becky quick is going "squawk alley" with big ratings by interviewing warren buffett there's no i in team, i realize that, of course, and i'm very happy for "squawk on the street" and that franchise i don't know, why can't they do

it at 8:00 >> maybe warren is not available. >> all right good luck. knock them dead. no, it's -- you know, we get him usually here >> share share. >> why don't we just leave the set. >> i have been told that i will be staying past noon at some point -- >> what do you mean? >> we're going to have to -- >> you're going to sub in on another show >> she was everywhere. it's a huge loss we all have to step up for the team so, i'm willing to -- >> when they said you're staying past noon. >> i've done "power lunch. it's difficult but i've heard there is even a possibility of even -- not your show, but the one in between possibly >> "closing bell." >> yes >> i believe miss quick is doing

a little bit >> i'm looking forward to that >> big team. china tighten its transportation sector just after a passenger was raped and murdered by her driver sparking social media outrage didi also removed two executives from their jobs. the second murder of a didi passenger since may. china's transport said didi had responsibility for the crime and impose new policies by september 1st to be review bide the ministry. the u.s. and mexico are getting closer to an agreement the two sides were likely hours away from reaching a deal and talks are set to resume at 9:00 a.m. eastern time. canada set off the latest round of negotiations and three-country nafta discussions are expected to stretch into next month.

honoring arizona senator john mccain and lester holt has a look at his legacy >> my country saved me and i cannot forget it and i will fight for her as long as i draw breath, so help me god >> reporter: john mccain's life was shaped by his wartime ordeal, by his years in the senate and by his own heritage >> i am the son and grandson of navy admirals and i was born into america's service >> reporter: he was a navy fighter pilot, known for his rebellious spirit. >> i was imature, i was reckless, i was cocky, but i also knew that i was going to follow in my father and grandfather's footsteps. >> reporter: he flew bombing missions over vietnam and escaped death aboard, and badly injured and thrown into a north vietnamese prison. >> lieutenant commander john

mccain >> i don't think there is any doubt i was near death. >> reporter: he was tortured, kept in solitary and turned down a chance to go home ahead of other p.o.w.s. finally released after five and a half years, mccain recovered with a renewed love of country and sense of purpose he got a job as a navy liaison and married cindy and moved to her home state of arizona, winning election to the house. and in 1986, the senate. >> this is a man that we'll all want to watch. his name is john mccain. now elected to the senate seat and retiring barry goldwater. >> reporter: mccain was a republican rising star he took a leading role in helping normalize relations with vietnam. >> it's very important for us to recognize that the war is over >> reporter: he became known as a maverick, willing to think for himself and to work with democrats on campaign finance reform and immigration

he set his sights on the white house, but lost the 2000 republican nominee to george w. bush eight years later, he won the nomination and chose alaska governor sarah palin as his running mate, making her a national figure. he lost to barack obama and conceded with grace and a sense of history >> senator obama has achieved a great thing for himself and for his country. i applaud him for it. >> reporter: he also didn't mind having a laugh at his own expense. >> this has been a historic campaign so why not remember it with our line of collectible products >> reporter: john mccain was elected six times to the senate. a conservative republican, unafraid to challenge his own party. >> we're getting nothing done, my friends we're getting nothing done. >> reporter: and his party's

president. >> cooked up by people who would rather find scapegoats than solve problems >> reporter: guided always, he said, by the lessons he learned from his father and grandfather. >> do what you know is right act in a fashion that you can look back and not be embarrassed, but proud >> reporter: near the end of his life, he looked back with tom brokaw >> i've loved my life. i can't tell you i've had the great honor of being involved in the arena. i loved every minute of it no one has had the wonderful life that i've had no one >> what do you want to be remembered for >> he served his country hopefully with the word honorably on it. that's all >> reporter: john mccain served his country honorably. >> we're american es and we nevr give up. we never hide from history, we make history

>> let's talk more about the extraordinary of life of john mccain joining us is judd gregg, governor of new hampshire. the overlap, he was there the entire time you were in the senate, right, governor, senator gregg? >> that's right. i was in the house we served together so, i spent about 25 years serving with john mccain tremendous privilege, obviously. >> and were you close friends, would you say? i mean, you worked on things together, obviously. but you guys have a couple cocktails every? did you socialize? >> we were not close friends we were just colleagues. i knew him very well and he knew me very well, obviously, because we worked together on a lot of things. i admired his infectious enthusiasm with everything he got involved with. that piece was right on point his commitment was to family and to honor and to duty and carried

it out with exceptional grace. his experience, obviously, of being held prisoner of war, i think, defined him he said it also gave him a great deal of leeway in the senate sometimes people understood he could be quirky and get intense about issues but everybody gave him a lot of running room because everybody knew it was just john mccain i remember when i was running in the campaign in 1999 and 2000 and john was running against george w. bush and he camped out here in new hampshire and held town meetings and i was supporting bush and in the end he carried new hampshire rather significantly, which was pretty impressive because bush was the heavy favorite going in. but it took him about two years before he would speak to me, again, because i supported george, president bush but after that, we got along

great and i used to seek him out for advice on defense issues and foreign policy issues and he was kind enough to seek me out for thoughts on domestic fiscal policy >> reading some of this commentary over the weekend. there was something about when i guess it was in what you were just talking about in new hampshire. he was running a maverick campaign back then and i guess one of his politicos was mike murphy and they were, before it got real serious, they were enjoying themselves and able to let it all hang out. and once he became a viable candidate, it's almost like, in the article there he actually caught the bus and now what do i do do you see that to some extent, it was the challenge of going for it that drove him at one point and then, i'm not sure what happened in 2000 or 2008, i

think president obama doubled his electoral, the electoral vote so, probably disappointing to him. but he definitely gave it a go >> i think you're right. i think when he started out here in new hampshire, he didn't really expect to win, but he was going to have a lot of fun and made some points and he had some points to make straight talk express and he went to town meetings and anybody could ask him any question they wanted and he was blunt and forthcoming and definitive in his answers and that caught on here in new hampshire. that is a new hampshire style that people liked. and then he became the candidate that was the opposition or the option to george w. bush and that was a very serious race i honestly think he would have beat barack obama, had he chosen joe lieberman to be his running mate joe was his close friend they went on a lot of excursions together and did a lot of work

in the senate together, they both had a wonderful sense of humor and i think it would have been a fusion ticket, which probably would have won, even with the fiscal crisis of 2008, which set his campaign back. >> he came back to washington for that i don't think that was necessarily the great moment in the campaign necessarily either. because i remember how that worked i didn't understand his vp pick because it it seemed like a hail mary pass before he needed a hail mary pass and i love lieberman, too, i wonder if that could have changed the course of history if he had picked joe lieberman, obviously. >> i think it would have sarah pailen w pallen was a clac mccain pick. he just loved to surprise people with his actions which were unmriblu unpredictable and you could see him waking up in the morning and saying, hey, i'll pick somebody from alaska to be my running mate and everybody would shake their head and would basically disrupt

the process, again joe would have given him connecticut and i think that would have put him over the top. >> all right, senator, thanks for sharing your thoughts with us this morning. senator governor bayh is going to be on later >> great guy >> he is fantastic. coming up, elon musk announcing he will not take tesla private but raising new questions like why was it released at 11:00 p.m. on a friday night when the decision was made on thursday we'll talk about it, next. as we head to break, take a look at some of the biggest premarket winners and losers in the dow. stay tuned you're watching "squawk box. this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. elon musk flip-flopping

saying the carmaker will remain a publicly traded company. phil lebeau has the latest. >> late at night the company posted a blog post from elon musk essentially saying we are going to stay a publicly traded company and here's the reasons why. we're not going to go into all of them. some of them revolve around trying to go privet and whether or not shareholders would be able to take a stake in the company and one statement summarizes everything the best when he writes, i knew the process of going private would be challenging, but it's clear that would be more timing and distracting than initially anticipated. i think a lot of people said that as soon as he tweeted out they were potentially going private. what is the road for tesla the investigation that is looking into the tweet and other tweets he sent out and those communications and whether or not he had funding secured a number of people on wall

street have been asking this question will elon musk now be forced to add a coo, someone else to take some of the management responsibilities off his plate and then whether the company can be profitable in the third quarter. what will wall street's reaction be joe put out a note essentially outlining, look, we'll focus on the fundamentals more but he put this statement out there events of the last past few weeks may have taken the blooms off the rose pretrading market down at the 307 mark and interesting to see if it holds there or potentially see the stock come back a little bit as the day goes on volatile stock since august 7th and no doubt that while this may end the discussion about going private, there is still a lot regarding that 420 tweet

>> the bar was already high when it came to tesla having to meet the production targts for the third quarter. but seems like the bar would be even higher when the company reports in early october at this point. >> right the main question, melissa, the model three ramp up in production those deliveries how much cash flow does it generate does it generate enough to turn a small profit even if that is the case, nearly everybody on wall street believes that they will have to raise capital in the third or the fourth quarter as they look to further expansion remember, i think they have about $970 million in convertible bonds that are coming due early next year a hefty chunk. so, how the stock performs over the next several months will be key to watching that, as well. >> all right, phil, thanks joining us with more, theresa goody and also former with the sec general counsel's

office how do you think the sec will look at this turn of events? what sorts of questions might it now have >> first, i think it is good that we have some clarity now and that this whole going private is now kind of blown out of the water and, so, there is clarity and the confusion to the market has now ended but questions from the sec are going to continue because with every blog post and every statement since his initial tweets, we've seen admissions from mr. musk that basically there was no reasonable basis to believe his tweets were true as it appears so far. and, so, this further statement that he made this blog post indicates another admission that basically the due diligence that one would go through to figure out how much your institutional shareholders can still retain with a private company contrasted to a public company, those are all things that you would initially usually discuss before making a public statement about an imminent tender offer

>> theresa, can you lay out the minimum threshold that the sec has to make in order to make a case against elon musk which would have a penalty and in your view have the blogs and the tweets, have they gotten the sec above that minimum threshold >> it's hard to say without being able to see all the evidence what whether or not this meets communications between different people and all of his social media and his snapchat if he has it or twitter. and all these different communications asto whether or not there was an intent to goose the stock price at that particular time. whether it was for squeezing shorts or for capital transactions if they needed or something production needs with their model, their model 3 so, it's hard to say what's going to be found whether intent to goose the stock price would be found but when you're making

statements you have duties with a public company and as the ceo with fiduciary responsibilities you have to make sure the statements you're saying are true, not false and misleading it lays out a clear and accurate of what is going on. so, the securities laws are intended to stop exactly the type of whimsical communications these appear to be where, if somebody makes a statement, investors then rely on that statement to their detriment so, suppose an investor heard or current shareholder heard or read his tweet and said, well, i'll get $420 at a minimum for my shares and because the initial tender offer proposal is never really the actual final offer, it's usually a bit higher i will get 420 and i'll go and

buy stock based on that. no reasonable offer to believe that a tender offer was coming and i bought stock based on that well, that's what the security laws call fraud because you're goosing the stock price up and i'm relying on your untrue statements that you have no reasonable basis to make in buying stock that's very serious. what the sec will find alarming when i did when i read the "new york time times" article in his interview is the fact that he says, well, i don't regret any of my tweets why would i? well, because a lot of people believed you and they lost a lot of money and, you know, i can't say with certainty because i haven't seen all the evidence and i don't know what the sec investigation is going to uncover, maybe there is something out there that he had a reasonable basis so far everything that i've seen each time he speaks there seems to be an admission as well there was not a reasonable basis >> theresa, we'll leave it

there. thank you very much. still to come, today's top stories including a potential strategy shift from uber plus a check on the market after big gains in china overnight. smaller gains in europe. we're up 80 points on the dow. a look at friday's s&p 500 winners and losers we're back in a couple minutes at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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welcome back, you're watching "squawk box" live from the nasdaq market site in times square good morning among the stories front and center, u.s. and mexican trade negotiators are closing in on a new nafta deals with talks set to resume later today. exports on cars from mexico to the united states. sign up before mexico's new president takes office in november uber to shift to bikes for shorter trips those vehicles are better suited for inner city travel, even though the shift would take money away from uber drivers. and a second straight box office win for "crazy rich asians." took the top spot with $25

million. that's just 6% less than it took in in its opening weekend representing one of the best holds ever for a summer release. let's take a check on u.s. equity futures holding in the green all morning long s&p hitting a record in this session. looking at nine points at the open and the nasdaq looking to add 33. let's discuss markets a little bit further chief investment officer and good morning to you both clearly, the markets got a bit of a jump late last week largely because chairman powell's speech was taken as fairly dubbish but you disagree with the market's interpretation >> chairman powell speech he discussed a number of topics as largely a lot of the comments he made from his june 20 speech were evident but as long as the economy remains strong, we'll be raising interest rates he said the next line, the

economy remains strong so, i think given where we had growth in the first half of the year, the market is now expecting a healthier pricing for december for the rate hike september is already priced and the long end of the bond market continues to kind of get compressed and stocks have been rising, down about 20 basis points long end that may just keep a lid on equity prices for a little bit >> jean, what is your take on the speech last week and what fed policy we're likely to see in the next six months >> i think it's interesting the fact that you look going forward, you know, the fed as your other guests have said, the fed will raise rates in september and november look at 2020, back in may the fed would raise rates 25 basis points and now the markets facing the fed would cut rates by 25 basis points we think this is interesting, potential signs of the economy

will slow as you have stronger dollar, you have potential ramifications of the trade war we think it's interesting how the economy could slow down 2020 >> but not until 2020. are you optimistic about growth over the next 18 months? >> definitely near term. we just finished earning season. earnings up 25% and revenue is up 10% profit margins near the end of this current business cycle. profit margins up almost 11% it's amazing this late we are in the market cycle >> did you see bullard investor, he was not just here, but went all over the place with the same message. his message was, i'm, you know, saying don't mess, we aren't going to try to beat the yield curve and the more you raise short-term rates when you're at 280 on the tenure and i ask him

do economic conditions cause a flat yield curve or the flat yield curve can cause a recession? and he seemed to thing the feds can cause it and i just wonder whether does powell, is he speaking for powell? is he speaking just for himself? he was so -- powell messes up, i know who i'm putting in there. >> so, bullard has certainly a little bit different forecasting framework from the rest of the fed, the fed presidents. he is one of the lowest ones along with neil and in his view less produck itivity and trend productivity decreases, the trend is going to be low. >> he said we are where we need to be. >> what the fed is trying to do, don't focus on that right now. they're trying to get you to focus on different, you know, different measures of the yield

curve that are not showing signs of imminent inversion that would typically proceed a recession. because what they're trying to do is they're trying to get to at least neutral right now they don't want to get to a tightening stance, but we don't know where neutral is. if you're an investor, it's in the 3% range that's the target range they're trying to get in to and that balances the risk of, maybe, okay, maybe things could overheat and we may have to deal with an inflation scare later or conversely, if things are not as good, if there is more supply side added to the economy and we don't have to go as fast, we keep things on an even keel. that is where they're trying to get in to right now. they'll decide when the time comes most likely in the second half of next year whether they want to go further than that for now, that's what they're trying to do don't pay attention to the yield curve, pay attention to us and what we're saying. >> the markets pay attention to

the yield curve. 21 basis point is the spread that reached just last week. for all intents and purposes, how do equity markets respond when or if that happens? >> well, you've seen this before historically speaking when we know the yield curve, you know, clearly, the recession happens 15, 16, 17 months. the fed has a difficult job. near term economic growth is so strong fed gop up 6% and durable goods very strong last week going forward. we're concerned about 2020, especially with the economy where tax reforms wears off and rates start to affect the economy. >> does this mean equities respond negatively >> again, fundamentals are super strong >> inversions or not >> equities will suffer. >> international growth picture is in the next year or two will we continue to see positive surprises or negative surprises in terms of what to expect

>> it depends on what region we're talking about. if we're talking about europe, i think most people are expecting a rebound in growth. if you're talking about emerging markets, that's where, you know, there have been some doubts. and these trade scenarios go especially in regards to china, the u.s. will incorporate, implement 25% tariffs on $25 billion of goods and that's a $70 billion tax all in on u.s. consumers and that's going to, there will be measures from china and our companions in the emerging markets are a little bit concerned. that is being reflected in the index which is down 2.1% so far this year over year. >> thank you very much gene, thank you. >> thank you. coming up, we have susan

talk to melissa. she's the ceo of premier inc the nation's leading alliance of hospitals and health and then we'll definitely talk about what we were just tweeting he was just at starbucks and he's on his way over >> what did he order >> i want him to coin a new term the new neutral because how can you have the same handle on the unemployment rate and fed fund, 3% how is that possible >> whose accent do you like to make fun of more mohamed or mine? >> it is not mocking the highest form of flattery with both of you >> yeah. and then later we'll talk about el mk'desi tonuss ciono keep tesla private you're watching "squawk box.

welcome back to "squawk box" major may

contradict doctors prescribe taking a low dose of over the counter drug to prevent a heart attack or stroke, new research suggests such a regimen doesn't help according to the study, the benefits did not outweigh the risk to patients who never suffered a heart attack or a stroke at this point, don't ever eat any salt, but make sure you do eat some because if you don't eat any, that's bad. if you eat too much, that might be good or bad do weknow anything about -- an study that is cast in stone. i thought a little bit of alcohol was good, now no amount of alcohol is good they go back and forth the hard thing is, a lot of times it's not a placebo group or a controlled experiment, it's data where it's hard to control all the different variables in a person's life and i think everything in moderation warren buffett i think he drinks

five full on sugary cokes a day. >> i know. >> he's 88 he's 88 and he has that many billion dollars. >> he's doing something right. >> people want to shoot their age at golf. no, i'm happy. >> little bit of moderation. always good. how much would you pay for your dream car this 1962 ferrari 250 gto shattered records this weekend selling at an auction for $48.4 million. there are only 36 cars of this particular type ever made. and the ferrari won the 1962 italian gt championship with the top speed back then of 174 miles per hour is pretty awesome looking. >> $48 million >> wouldn't bother warren could buy it. instead of his cokes >> i said to brian, what does a citation 10 cost

eight passengers, i think it's all you would ever need. you don't need a gulf stream and for 48 million, i think you can get two of them y think, instead of a car which is likely going to be in the shop a lot >> i don't think the person who bought this it's his commuter car. >> he flew out to buy this defense secretary james mattis has urged president trump to create a national strategy for artificial intelligence, that's according to a memo from may. consultants and planners working to forecast say that ai could be the next technic logical game changer. partners university scholars with the military. coming up, you have something to say -- or you're scared of ai >> yes, i'm scared have you seen "terminator" >> is that a movie >> there's a new terminator

coming, isn't there? >> new terminator. but you know they either like us or they absolutely don't need us at all any of those things could happen those scenarios. >> it's true >> be careful. we'll talk changes in the health care industry susan devore a network that spalanes more than 4,000 hoits d health systems she'll join us, next at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on.

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mergers and acquisitions are shaking up the health care industry, but consolidation isn't the only thing changing the system joining us now, susan devoor with premier inc welcome to the show. >> thank you >> so premier inc was born to basically unite a fragmented system what do you guys do? >> basically, we work inside the health care system trying to drive down their supply chain costs which is drugs and everything they use in health care systems and improve the clinical performance of health care sl. >> you've helped about 350 hospitals save about $18 billion. >> yeah. >> how does that trickle down to the consumer does the consumer's cost get

lowered, as well >> to the extent that we can help them aggregate their buying and lower the cost of care and improve quality, the consumer benefits from that >> when you see something like amaz amazon teaming up to try and lower their health care costs, is that the threat to the type of business that you offer existing companies or is it, in fact, something that backs up what you're already trying to do >> it's really helpful to us and we're helpful to them. if you think about these major employers, the question is are they going to have a netflix effect on insurance companies, meaning they're going to go direct to providers, health systems, hospitals, physicians, and they're going to try to lower the cost and improve the quality directly and that's what we do. so it's helpful. >> so are you working specifically with them and as a follow-up point, do you think they have gone into this optimistically and six months

has passed it's harder to do than they initially hoped? >> you know, they're not the only ones. so major employers like disney and walmart and others have been going direct to providers for a while. we have several of our health systems who have those contracts directly and i think that the challenge they have is they need to get directly at how care is being delivered. and get rid of duplication and coordinate the care. and i think they're frustrated with an insurance company's ability to do that so we have mobilized and are continuing to mobilize our network of health care systems to go direct but in order to do it, you have to have data you have to have information and you have to be able to create national standards of what it should be. is reforming health care -- you know, it seems right now that the biggest strides are trying to be made by the private sector we mentioned the berkshire alliance companies going directly to the insurers to demand better rates.

is that the way it's going to be is it going to be driven by the private sector or is there a role for government? >> you know, i think market forces work best so if you're talking about drug pricing, coordination of care, employers lowering their cost of care, going direct, i think, is the most effective i think federal and state governments, medicare, medicaid, have a role to play in standards and in protecting the clinical quality in some ways, but i think market forces work better when you're trying to lower costs and improve quality. >> there has been that role of market forces driving down the price of drugs and with scott got li gotleib, generics are moved faster to market in this whole discussion about drug prices, though, are you concerned at all that perhaps the drugs that are are unique drugs, the drugs that don't necessarily have a replacement are being swept up in this, as

well, and that will impede big pharma's ability to research and develop these drugs in the pipeline >> the last thing we want to do is stifle innovation i think what we need to do is create market competition. and it's proven in premier knows it you have to have two competitors to get that pricing to be competitive. and so dr. gotleib has made great strides in moving generics to faster approval he's creating and closing some of the loopholes that pharma uses so it's not a question of should they be able to have some protection for some pe period of time for their innovation, because you don't want to stop that you just have to have a reasonable time to let competitors enter the market >> overall with all of these optimization and attempt to drive down costs across the health care work which you're trying to do and these other companies are trying to do that directly, are we at a major infl inflexation point?

who are the losers is it the traditional insurance companies? i think we are at an inflexion point. i think anybody who is in between getting the cost reduction and getting the quality improvement doneat the same time has a challenge. >> susan, thank you very much, premier inc. coming up, mohamed el-erian, he's here to talk about the fed, trade wars and a lot more. "squawk box" will be right back. it's absolute confidence in 30,000 precision parts, or it isn't. it's inspected by mercedes-benz factory-trained technicians, or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event,

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tesla shares dropping after deciding not to take the company private. plus, the great trade debate, mexico and the united states reportedly near an agreement on nafta the second hour of "squawk box" begins right now live from the beating heart of business, new york city this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc we're live in times square i'm melissa lee along with joe kernen and wilfred frost with us now, mohamed el-erian. good to have you with us >> thank you >> the s&p 500 looking at about 8 points up at the open, dow up by 83, nasdaq looking higher by

about 30 shares of tesla are trading lower late friday evening ceo elon musk decided that he should remain the company should remain public that follows a tweet earlier this morning in which he said funding should go private. gasoline prices edge lower over the past two weeks the latest lundberg survey showing the average price falling two cents, but still about 50 cents higher than it was a year ago cargill is recalling ground beef saying it may be contaminated with e. coli there have been no reports so far of illness related to those products and washington news this morning, the u.s. and mexico are getting close to a nafta agreement. the mexican economy minister saying the two sides are likely

hours away from reaching a deal. talks are set to resume the this morning at 9:00 a.m. eastern canada sat out of the latest round of negotiations. and the country is prepare to go honor the life of arizona senator john mccain this week. he skied died on sunday after al with brain cancer. he'll first be honored with events in arizona at the beginning of this week and then on friday, and he'll lie in state at the capital rotunda in washington and former presidents george w. bush and barack obama are set to speak at the cathedral. he will be buried at the naval academy in annapolis senator john mccain was 81 years old and he is being mourned, his lost, by his mother who always referred to him as a scamp

his mother is 106 years old and he preferred match rick, but just doing a little background research, she always referred to him, he was really a bit of a scamp. she saw her son actually live long enough to see her son pass and that's sad to that extent, but 106 is pretty amazing. >> remarkable, yeah. >> an amazing woman and an amazing man, obviously we're following a developing story out of jacksonville, florida, where an investigation is under way today after a gunman killed two people and then himself at a madden video game tournament. nine other people were injured by gunfire the jacksonville county sheriff has identified the suspected shooter as 24-year-old david cats of baltimore. officials confirm kalts was in town for the madden nfl 19 competition, but would not discuss motives. overseas, china is looking to tighten oversight of its

transportation service didi. di did i removed two executives from their jobs. it's the second murder of a didi passenger since may. china's police and transport authority said didi had unshirkble responsibility for the crime. and berkshire hathway is reportedly in talk toes buy a stake in the parent company of indian digital firm paytm. berkshire would invest as much as $350 million, valuing paytm at $10 million if the deal happens, it could be the first direct investment by berkshire in india and a programming note, this thursday, becky quick will interview warren buffett ahead of lunch at 11:00 a.m. eastern time on thursday let's bring in our guest host this morning.

mow hamm mohamed el-erian is chief adviser. knowing how you normally are about money -- >> this sums it all up you get your starbucks delivered. i go stand in line and order and bring my other starbucks >> he always likes to -- mohamed, i did reference you earlier. i don't know whether your ears were burning i was talking about some of your comments about how something sort of resolves itself and the percentages that you gave and i thought it was interesting because -- and i was also kidding that you've evolved into -- we agree on more things now than we disagree on. i think you don't immediately say i'm a free trader, we shouldn't be doing this. you actually think that there's more of a chance of a favorable

outcome than there is of an unfavorable outcome. >> so if you're asking what the probabilities are -- >> yeah. >> i'll tell you it's 60 pi% tht we end up with something free and fairer >> so we get something positive. >> there's 25% that this slips into a trade war but there's a 15% chance of what i call the reagan moment for trade. >> that would be amazing >> that would transform the landscape for trade. from day one, it wasn't about whether the u.s. can win a trade war. it is how much damage would we incur in the process of winning this and i've said from day one that it's a matter of time until other countries realize that their best approach is to collaborate with the u.s. and fix things that are broken >> i think you -- i don't want to put words in your mouth, but the united states, in sheer size, is in the driver's seat. other countries need us more than we need them.

we were sort of shy about using our strength and our heft in the past and as a result, would you say we've been taken advantage of >> we are better off for two reasons. not only because we're big, but we're less reliant on trade in relative terms so we get hurt less. that's the key issue when you look at the game theory, when you decide to play a cooperative game uncooperatively, the first question you have to ask is who loses most because they will cry uncle first. the second issue is this was a judgment call. you could pursue it through existing multi lateral institutions or you can play a completely new game. and there were benefits, costs and risks and this was a judgment call from day one i think there are key issues you've heard me talk about property rights. there's a lot of intellectual property theft china hasn't evolved as much as it promised to evolve. i think this is going to

accelerate the process just to your point of how likely the u.s. is to come out on the winning side of this, on the flip side, are countries like china hurting more at the moment than they are letting on than perhaps people around the world realize so far >> yeah, they are. that's why they've let the currency depreciate by as much as they have but i think the key issue here is a bigger one, which is divergence we are seeing divergence growth pass, very different from three to six months ago when everybody fell in love with synchronized growth no it's about divergent growth paths and how the u.s. will navigate this. that's important for markets that's why you're seeing a lot more dispersion in asset values. >> how much can china soften before the u.s. feels that pain? >> it can soften a bit more. today, interestingly, and i think it's important to notice, they technically adjusted the

way they set the exchange rates to allow for the countercyclical factor which is another way of saying we're going to slow down the depreciation of the currency and they do that whenever they feel that the world is going to react a lot against them, weaken the currency, they step back and we saw them step back overnight through this, quote, technical adjustment >> in terms of our other technical risks, europe, you mentioned. are you suggesting europe is about to hit a weak patch again? >> yeah. i think the european growth rate is more uncertain because it's driven by what we call natural healing. economies heal you get out of hospital and you start walking and everybody is excited because you're walking the question is can you sprint and i'm not sure that europe can sprint yet and the u.s. is start to go sprint we haven't had the policy induced growth in europe

>> but if china is exhibiting signs of softness, even though it's defending the currency at this point, europe is showing signs of softness, can the u.s. go full sprint is the rest of the world is slow? on a relative basis, we will look stronger, no doubt. but can we actually sprint >> so i think we can certainly jog and sprint full sprint requires us to do a little bit more on infrastructure and i think that's important unfortunately that's been pushed back now because of the political calendar so the next phase was a serious infrastructure effort which enhances both the demand and supply side of the economy >> we are sprinting. and that's what worries me about bullard's commentary and i talked to him about it quite a bit. i think you came up with new normal i think you should come up with the new nooeutral he's making the case we're already there and that because you don't want to mess with the yield curve, you don't want to raise rates to the point where you're above the long end of the curb so how can we be at 3%, 3.9%

unemployment and have a neutral fed funds rate are of 3% that's like a different universe than any of us ever envisioned >> so i don't think anybody knows what a neutral -- >> it doesn't matter what we historically think of at 6%, 7%, %, it's above where it was so therefore it's tighter is it tighter at 3%? >> i don't know if you're aware of chairman powell's speech at jackson hall >> i read it like five times and then i listened to it on an audio tape not really but tell me. >> it's a must read. he tells you that the structural uncertainties are such that they are having difficulty detecting in realtime how the economy is doing relative to all the stars >> my point to bullard was we don't like to think that the world is global any more, but 30 basis points in germany

absolutely dea absolutely tethers our tenure. so that is causing the yield, but we're basing our interest rate moves on no inflation in the rest of the world when we may have it here and we may be inflating something even though we're being tethered to these lower rates in a -- you know, not because of what's happening in our country organically this could be a problem, it seems to me. >> so a couple of reactions. first, i agree with you that we shouldn't get too worried about the flat yield curve 20 paints points this morning. i would say not only is it overseas buyers, but viability related investment that's a noncommercial purchaser. it's liabilities so flat yield curve is not the signal of the past and i think that's really important. >> are you worried we're going to end up -- this has been our worry all along behind the curve. are you worried we're going toned up behind the curve?

>> i was worried for a while and i was one of the people who was worried the yellen fed would hike earlier but even two more hikes this year is more uncertain than what the market -- the market says september is a definite. december is about 60%. i am not sure the probability for december is that high. >> i mean, a lot of these things, when trump does a lot of things, it's like, this guy is nuts, this is abdomen ignorant vice preside viewpoint that he's expressing suddenly, i'm starting to think higher rates are going against what we're trying to do, some members of the fed started to come around with that viewpoint, that maybe you don't need to go all out raising rates. >> because they're seeing inflation pick up. so now they're much more confident about the dual mandate, employment and inflation. >> but we don't want to cut off what -- i mean, the good times are rolling and it's not because

of the fed any more. it's not because of easy money it's because of fiscal policies and tax cuts >> the handoff >> what you've wanted for so long is actually a -- >> i gave you that simple image. >> i know you did. >> markets were up here, fundamentals were down here and central banks were filling the gap. what we've had is fundamentals improve. markets actually haven't moved that much since the beginning of the year so that gap is much smaller. and what is the implication of that is we've had the beautiful normalization that the fed has been able to normalize or start normalizing without corrupting the economy. >> you have really come along. i'm telling you -- >> no, you've come along, joe. >> no, i've noticed a big change >> a big change would be having starbucks delivered like you >> all right still to comb, tesla shares dropping this morning after elon musk abandons plans to take the company private. could the company and its ceo be in for even more trouble but first, check out oil

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all-time high, but the s&p sit hundred on friday and was up 2% on the month, indicated higher again and the nasdaq is sharper. it's up 3% for august. also hitting a new high -- and i haven't done the math since november 8th, but since the election, but it's above 50%, closing in on almost 60% gains at this point. elon musk saying tesla will remain a publicly traded company. phil lebeau joins us from chicago with the latest. >> hey, will i'm not sure too many people are surprised by this decision from des la, t tesla, the board of directors reached this decision on thursday and didn't announce it until friday night they summarized a lot of reasons why they will remain public. one statement that really summarizes it best is when he said although the majority of shareholders i spoke to said

they would remain with tesla if we went private, the sentiment, in a nutshell, was please don't do this. so what's next for tesla there is still the fcc investigation focused on the 4:-20 tweet as well as some of his other tweets and communications that continues regardless of the company decide to go remain a publicly traded firm will it be able to achieve profitability in the second half and then you have a note saying the bloom is off the rose a little bit if you're a tesla sharehold shareholder. buried out this morning saying we expect concerns about potential funding needs will return to the forefront despite management's confidence the company will not issue equity in 2018 read between the lines almost everybody on wall street expects tesla will raise capital in some fashion in the second half of this year. as you take a look at shares of tesla, under pressure this morning following the.company's announcement that it will remain a publicly traded firm guys, i'll be curious to see

whether or not this quieter elon musk that we've seen over the last couple of weeks, if that continues or if elon musk returns to what we saw around august 7th when he was sending out a flurry of tweets, not only about the company, but a host of our subjects on a regular basis. >> a host of other subjects including going after the media, phil that was a -- that was a ceo who was, you know, in battle for his company against the short sellers. >> he's always in battle against the short sellers, embattled with anybody who has a different opinion on him and they put it on social media and he's always in battle with the media saying he doesn't get enough credit for what tesla is doing, we're always looking at the negative side of stories that's par for the course and it's been like that for a number of years >> what do you make of how musk is evolving the narrative, that it's no longer about the ability to go private, raise funds, but it was the willingness that he didn't want the change his

shareholder base do you buy that? >> i don't buy it. i think there are probably people who said, look, there are a number of things that you need to consider once you go private that i don't think he considered before he sent out that tweet, that 420 tweet if you look at things since then, it is pretty clear that they -- that he really didn't do a whole lot of due diligence and he pretty much admitted that as much so even though the blog post that came out friday night, there was some face saving in there saying, well, we could have done it and we think there was enough funding out there for us to do it. i think there are a fair number of shareholders, both institutional as well as private shareholders saying i don't think this is perhaps the best thing for you to do. >> phil lebeau in chicago. joining us now with more on the story, jeffrey osbourn, managing director the at cowen and company. thanks for being with us >> thanks for having me. >> you've been a bear on the stock. you've got a price target of

$200, so well below where the stock is trading right now in terms of the company and how investors perceive the company after all of this has happened on august 7th, does this impair the company's ability to say raise more funding, raise capital in the markets >> yeah. it's a good question i think certainly investors will ask a lot more questions with an ongoing scc investigation. it remain toes be seen how quickly this sec probe gets tidied up. but certainly subpoenas have been filed and even beyond the august 7th tweet, you go back to the short burn tweet and then the insider buys after that coupled with the blog acknowledging that he had discussions with the saudis. there's certainly a lot more questions above and beyond in our mind just above the $420 target tweetthat he -- you know, private tweet that he had on august 7th. >> what is the damage to the company versus what is the damage to elon musk as an individual from an sec

investigation, whatever fines may arise out of an investigation. could the company actually be insulated? >> yeah. i mean, certainly the board has hired their own attorneys. the company could be exposed and elon could be exposed. i'm not an attorney and in the best position to address that. in the eyes of investors potentially looking at a capital raise, if you were looking at a the ceo tarnished here and potentially the company having some financial liability, as well, at a critical moment where they're trying to expand internationally, ramp up a model three that's been in ramp up now for about a year, year and a half, it's certainly challenging. and then you've got 920 million of debt coming due next march. so they're certainly in a box right now and need to execute pretty quickly >> he have. >>, if the board redid the leadership structure that you had a new person at the top or alongside or just below musk who is taking care of all things administrative and corporate, but musk was still there and

still fully committed, what would that mean to your share price target would it be a significant game changer or not really? >> yeah. i mean, certainly bringing in someone with high volume automotive manufacturing in our mind, even if it's a coo would be a step in the right direction. the can happen problems the company is having seems to be in automation and robotics. we would take a wait and see approach especially with the debt coming due. there's a lot of financial liability and issues that the company has over the next three quarters it would be a step in the right direction and more importantly in the spring, the pay badge that elon musk and the board agreed to allows him to step down as ceo and more over to some form of a product development role so whoever, you know, this individual is that could potentially be brought in could be brought in as a ceo, as well and jeff, in terms of the $2 billion you're forecasting the company will have to raise, it

sounds like about half of that will be allocated towards covering the debt allegations that come due in march >> yeah, exactly you've got a couple hundred millions due this year in 2018 and then the 920 is due in march. so you are right, about half of it will cover debt half of it will cover the losses we're not modelling the company can profitable or cash flow positive in the third and fourth quarter. in our view, those are metrics that they can hit towards the middle of 2019 so a few quarters behind elon's plan >> got it. thank you so much. appreciate it, jeffrey osbourn of cowen >> that is not jeffrey osbourn, i'm sorry. and i thought -- ♪ on the wings of love >> you are not jeffrey osbourn, i'm sorry. you're an imposter and i was excited this morning, but i guess -- so we don't -- greco? we don't have jeffrey osbourn. >> jeffrey osbourn is the dude who sings this song.

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good morning welcome back to cnbc live from the mass dak market site in times square among the stories front and center, workers at walt disney reached a new deal for the company that increases minimum starting pay to $15 an hour by 2021 and that follows nine months of

contract talks between employee unions and the company union officials say that under the prior deal, many workers were making less than $11 per hour united continental is moving its stock listing to the nasdaq from the new york stock exchange that move will take effect september 7th. and the airline's ceo jerry laderman says the move was motivated in part by the company's efforts to meet cost targets. and crazy rich asians dominated the weekend box office for the second weekend in a row. the movie took in $25 million. the warner brothers film has taken in 76.8 million over the 12 days of release, which industry analysts say is unusually strong for a period that does not involve a holiday weekend. squawk sports news this morning, it wasn't the mets, mohamed, but honolulu's little

league team has made the state of hawaii proud. they defeated south korea yesterday 3-0 to win the little league world series and that is the third little league world series title for hawaii in 13 years. there had to be a loser. i watched the entire game, watched the end. and the little guys from south korea, they all -- you know, they just cry. because it's pure sport. it is pure sport it has nothing to do with money. the pitching was phenomenal. both sides the three runs, by the way, two of them were scored when the bases were loaded and there was a wild pitch, actually and they were -- the fielding that i saw, you didn't see this, did you? oh, my god, the shortstop from south korea, just some of the plays made by these guys and the pitching, these guys are 12 years old and they're throwing heat and, you know, hitting different parts of the plate it was really -- you know, the batters are trying to hang in there and fouling off, all these pitches, and finally hitting one.

it was really good it was really good to watch. >> stars by history make it into the big time or not? >> i think some guys -- not necessarily. you don't know if you're going to end up sixth when you're 12 it was six, six innings. and i remember the starting pitcher for hawaii had three more outs and those are quick outs the coach was great and, you know, they have a lot of cut outs where you hear the manager and what he was saying it's like good sportsmanship i had my choice of that and exhibition bengals football or -- >> so you've given up on your cincinnati reds? >> if i don't watch regular season, it's -- i'm going to get

some beer if cleveland ever wins a game and then the golf was, you know, bryson was so far ahead, i didn't watch meantime, the u.s. and mexico are getting closer to a nafta. talks are set to resume this morning at 9:00 a.m. eastern time joining us now, cord barfield, a resident scholar and andy greene, economic policy managing director with the center for american progress. a very good morning to you both. cord, i'll start with you. do you think canada will regret not having been part of the most recent discussion fess a deal does materialize, a two-way deal >> it may, but it's not clear that canada was actually invited in the canadienans accepted the fact that the mexicans were going on with the united states, but i think they figured at least initially people thought

that the problems between the united states and mexico were more difficult than those between the united states and canada, dairy aside. so they seem to think that they would be okay. the irony here is that as we started these negotiations months ago, the worry was that the canadians and the united states would make a deal and sort of freeze the mexicans out. and i don't think it's in reverse, but at least in these final stages, it's the mexicans and the united states who have gone forward with deals. some of this is stuff that really is bilateral between mexico and the united states >> claude, do you believe that timingwise something can be concluded before the midterms? >> i think they can certainly sign something i don't know whether -- i'm not sure -- they keep claiming, and you'd have to really cut corners in the congress because of the process to get actually something done, but i think they are -- they will try to get

something at least in principal across the board we'll just have to see i think it's -- the mexicans really want to get this done because i actually think -- there's been some reporting on the other side -- that the new mexican president would like to get this off the table before he comes in office. i don't think he particularly wants to put his -- on it. it would be best to get that out of the way because he has other things to do and i think that's true of the trump administration they seem to have decided for once, sensibly, that they don't have a lot of sensible things in my view in trade, that the best thing -- this is about a month or so ago, the best thing to do was to concentrate on china and to try and get things moving along with the north american free trade agreement as well as with the europeans i may disagree with the way they're doing things with china and others, but i think that was a sensible idea. >> andy, what is your take on

nafta and whether this will be an improvement in the long run >> the economic narrative of this country is to create a platform across north america. i'm concerned that the direction of the nafta deal may well be in that same direction. there's been some modest talk about reducing or eliminating investor state dispute resolution, strengthening labor rights, but there's a lot more than that. we need to look at environmental rights, look at whether the deal will raise drug prices, but we need trade that will create a middle class in america, and that's a high rise approach, not a low rise approach. >> and andy, what is your take on what factors should have been focused on in order to achieve a stronger middle class? >> look. we need to look at labor rights, whether they're going to get rid of the protection unions that exist in mexico. we also need to strengthen labor

rights here in the united states right to work laws are major problems cross border unions, sectoral bargaining, other things that reduce a race to the bottom where companies can say to their workers, take what i offer or i'm going to go to mechanics xi frankly i'm going to go to china. those are some of the key things that are essential we may see some aspects of these in renegotiated china, although it's far from concluesary. so we'll have to see i have a high degree of respect for usti lightheiser, but i have a low degree of respect for this administration overall based on the tax cuts that we saw last year that have gone to millionaires and the largest companies and have not raised wages despite the promises it would do so for ordinary workers. >> oh, god no, i wouldn't know where to start with that. >> claude, andy, we will leave it there

thank you very much. >> how much better could things be going in this country right now in terms of the economy and consumer kchs and business confidence that's like up and down and down is up and left is right. it's insanity. mohamed, if there is a u.s.-mexico announcement, does that boost markets or does it need congressional approval or is it the china issue the one that markets care about? >> it boosts markets for two reasons. one is lower risk of trade issues there and canada will have no choice but to join secondly, everyone has been asking why isn't the u.s. organizing a coalition to confront china and if you can deal with canada, mexico and the eu, then the pressure on china goes up. >> okay. more to come coming.up, this morning's stocks to watch. but first, we head to break.

let's take a look at u.s. equity futures. we are poised to perhaps hit a new record today nasdaq loongo uby0.ki tbep 3 reese witherspoon tonight dare to dream big.

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coming up, keeping our kids safe ask the parent of a preteen or a teenager what keeps them up at night, and many will tell you it has to do with online bullying and social media and threats that emerge in your child's online life. it would be good to know first, as we head to break, here is a look at the biggest premarket winners and losers in the dow. whoooo. tripadvisor makes finding your perfect hotel... relaxing. just enter your destination and dates. tripadvisor searches over 200 booking sites

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the new school year is about to get under way in the country. that means nerves and anxiety for parents. who are worried about keeping their kids safe at school and online we're joined by jartia how would we set something like this up? >> thank you so much for having me the easiest way to have it, go

to www.bark.com. monitor their social media, texting and e-mail, and then we'll alert parents when there is an issue. >> what do kids say when you say you want to do that? i want worried that they would say i'm worried you're going to see too much of what's going on. >> we don't give parents full unfettered access to the child's account. we are alerting parents to issues of cyber bullying, depression, thoughts of suicide. things you would want to know about. >> so you don't give the parents full access, but you have full access and you decide what the parents should or shouldn't see. that is another issue in itself, isn't it >> yes >> so as a team of parents who built this for our own children who keep their safer online, we don't wantour children's data just in the hands of anyone. so we use artificial

intelligence to scan and look for issues we don't have a team of people looking at your kids instagram 24/7 that's creepy. >> are there key words that the ai picks up or how does it detect what a threat may be? >> in addition to key words, there's emojis, there's text slang, there's ocr technology where somebody will post a picture and doodle on top of it. our technology picks up all of that >> what do we consider on the broader facebook debate of whether people are using your data when you make public posts on instagram you're accessing other people's private data how do you draw the line on that that is totally private between two people so if you have access to your child's data, that's overstepping the mark other

people haven't agreed to if they haven't signed up. have they not? >> when you're giving your teen a device that gives your child access to the world and the world access to your child, they're already agreeing to those items with google and apple. we have helped to save 33 lives because of our alerts. so the parents are thankful and grateful nine times out of ten, the parents don't realize this is happening in their children's lives. >> looking at some of the things in the 2018 case study, it highlights everything that you're talking about nine -- five bomb or shooting threats. nine instances of online grooming by predators, child

predators using online to get on cyber bullying, 135,000 cases. >> yeah. >> of cyber bullying out of watching 1.7 million students. so that's almost 10% >> well, here is the thing is i don't think people fully realize the scope of what our children are going through right now. i mean, sexting is the new first base it's a different landscape >> sending naked pictures? >> yeah. yes. it's crazy and these things are happening on school issued devices and accounts, right? so when we launched bark for schools for free in february of this year and we now are protecting close to 2 million students across the nation, because there's a real need for this >> how much does it cost >> it's $9 per family per month, unlimited children, unlimited connected accounts and free for any school across the nation >> quickly on the likes of facebook and snap and google, do you think all of them should be doing more and which in particular that stand out. when you hear their new announcements, their new data policies and their statements,

do you read that and think they've turned the corner or they're still covering things up a little bit >> there is so much to be done in terms of protecting children online and they need to do more given the resources that they have >> tatania, shakespeare. >> queen of the fairs. >> did you marry oberon or did you not? >> my husband is the complete opposite of oberon's character >> i'm deferring to you on this. >> i don't know shakespeare well enough romeo and juliette is about the sum of my knowledge. >> anyway, thank you very much still to come, this morning appears stocks 's stocks to watch and then later this week, becky will set down with warren buffett and catch the conversation live :0a.110 m. eastern on thursday. stay tuned so, the whole world is talking about ai. big, bold promises like...

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when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. let's take a look at some stocks to wooch this morning pfizer announcing positive study results for an intrimtal heart drug designed to treat a certainly type of card cardiomyopathy chipotle down greated point to go risks to the straint chain to

the comparable sales and margins to the country and china stocks are moving higher following the rite rise in the yuan overnight. mohammed, we touched on quite a few things i want to go to the emerging market picture turkey has been front and center where are we on the turkish story? do you think the worst is wind us or have they got a long way to go? >> it's hard to say. turkey has ruled out the two most powerful instruments, interest rate policy and some interaction with the imf so they're trying something completely new it's not even in the game plan for dealing with a currency

crisis my own gut plan is we're not only in the har of the plan. london is closed >> is the biggest aspect that we can see what can happen to a em with depreciating currency and therefore wakes you up about what china is facing as opposed to the impact that turkey will have on the global economy itself >> if you look at the four big risks, turkey at the lowest. other emerging markets, difference issue i think em currencies are still most vul early inble certainly companies are highly expose dollars to that so i would watch that really closely. >> and in terms of currencies themselves, they've obviously stemmed the fall in the currency over the weekend, albeit slightly to what we saw with 11 weeks of declines.

is that a serious risk for them given a very high debt to gdp service themselves >> the balancing act for china is tricky. on the one hand, you want to let the currency depreciate in order to protection your trade sector. on the other hand, you let it depreciate too much. so they're trying to strike the balance and you see this historically they let it depreciate and then they go into a period of stability and that is what we're seeing right now it's like watching the same movie over and over again. >> okay. stick around meantime, coming up, sturchs are pointing to a higher open across the board dow up by about 105. this is close to premarket session highs and nasdaq up by 32

russell 2,000, all indices sitting close to market highs. plus, a sneak peek at our cnbc documentary, bitcoin boom or bust, premiers tonight the at 6:00 p.m. eastern time jimmy's gotten used to his whole room smelling like sweaty odors.

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tesla is staying public. we've got details from friday's late night news dump and the problems ahead for ceo elon musk. trade truce ahead, new reports say a deal between the u.s. and mexico could be hours away, but canada is still on the sidelines. full analysis, coming up at this hour and the good, bad and ugly of bitcoin that's a new documentary coming up tonight as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box. good movrng and welcome back to "squawk box" here on cnbc life from the nasdaq marketside in times square. i'm joe kernen along with melissa lee and wilfred sfros.

s&p will trade at another record today if it were to close here it was indicated sharply higher about 34 treasury yields, i saw 281 earlier. crazy. where are we now on the ten-year, 282. tethered, i think, check out the germ german bund. it's staggeringly strange, mohammed i wish you would explain it. >> interpreter: love his act, but multi speed economies around the world >> 245 baifts points between the ten year in the u.s. and in germany. there's a limit to how much that

differential can increase. >> he can a walking mackenzy great terms for it, multi speed economies, you need to be able to look around corners you think about this stuff in the most pithy way to describe things and you're a word smith i'm complicating you >> who are you this morning? >> it's a kinder -- i mean, aren't you in a good mood when it's warm out? i am i think it's nice. >> it's the weather. that's it, mohamad speaking of weather, tropical storm lane is paralyzing parts of hawaii some of the islands were hit pretty hard, up to 4 feet of rain with many korea easy remaining closed late friday night, elon musk now changing source saying he will not take the electric car company private. he said the sentiment of the majority of shareholders was

please don't do this shared of tesla this morning, trading lower down by 3.5% paytm says berkshire would invest as many as $350 billion paytm is backed by softbank and alibaba. and on a programming note, next thursday, becky quick will interview warren buffett ahead of his lunch with the winning bidder of the annual glide foundation auction that's this thursday, not next thursday the united states is mexico are getting close to an agreement. a mexican official says, quote, we've contacted talks with the u.s. u.s. and mexican goeshds will mead today case la reports this is when they are likely to chart

announcement details and next steps. mohammed, we mentioned this earlier. if we see that sort of announcement, that would be a big boost to the markets, do you think? >> i think it would be a boost whether it's a big boost or not, but it would be a boost. and more importantly, the dynamics behind it because it improves the prospects of other trade tensions being resolved in a cooperative manner >> a blow to canada in the short-term >> maybe a blow to canada because they weren't directly involved, but i think canada will come on board and we move on from that and then the eu next and then the big one will be china. >> so this puts pressure on canada, do you think, mohamad? >> absolutely. >> so you do that one first. i thaw bilateral doesn't help anything so this is going to work, too, is what you're telling me? and it was crazy that this election in mexico actually played into the united states' favor? no one thought about that. >> i think it was interesting, the report that the new president wants to get this off

the table before he comes in >> okay. all right. talk more about 34 this in a bit. two separate studies failed to providest which would support a wider you're for xarelto, which is a sit to johnson and johnson. and curbman and wakefield, stock rated overweight in new coverage at barclay's and rated market overperform a new coverage at jmp securities let's get a check in on the markets joining us now, r.j. gallo at federated investors and mark ryan, america's chief investment officer at ubs wealth management a very good morning to you both. i'll start with you. on this trade issue that we just mentioned, is that something those sorts of headlines things that can take the trade issues a wait on both markets and growth off the table? >> i'm not sure it will take it

completely off the table, but i agree with what molamad said it is incrementally better news. while everybody has been focused on china, what matters a great deal more to the u.s. is what happens in mexico and canada so the subsequenting is important. as you start to kind of resolve these up, the last one you start dealing with in china, with regard to $200 billion of potential additional tariffs >>. >> we think the 4% growth is grog to slow, but slow to a pace somewhere around 3 the trade wars, the trade concern, seem to be improving somewhat or fading what is a better way of saying it. as trump seems to be willing to go from a multi front war to

concentrating on one front which is china >> we saw the dollar pull back is that important for the u.s. continued strength and is the dollar weakness going to continue do you think we've weaked for the rest of the year.? >>. >> earlier, we felt like the world was in a synchronized recovery that seems to have faded but that has created problems, putting pressure on em the recent turn around of that dollar strength is probably a welcome valve. it's probably good for broader markets as a whole >> mike, where are you on your risk weightings? >> the macro environment is still supportive i think the earnings growth is

still intact and this notion that it was all simply tax reform driven, that's being put aside because many move of it is organic. i think it's going to be more measured going forward >> what's your take on the dollar >> so before the dollar, mike, chairman powell on friday kept on talking about risk management and monetary policy, about how it's hard to see what's ahead. market says two heikes this year highly likely and possibly -- i should probably, not a hike in march. do you buy that? >> i certainly buy the one in september. i think it's still a close call in terms of what they do in deal or not they're going to be looking at the economic data. in the absence of that, i can the path of least resistance is to continue raising rates.

>> so dollar strength come back on the table >> for the next three months, i think the dollar can continue to strengthen we think after that it becomes more of a mixed back at least certainly for the next three months, we see dollar strength continuing. >> the divergence is obviously a dollar strengthener, but at the same time, the strength of the economy is growing its trade partners, that is some counter veiling winds in the face of the dollar strength. in the near term, we think it might be rolling over a a little bit after what had been a run in much of 2018 >> so what happened to the u.s. equity trade futures we see the impact of another round of tariffs in relationship to the u.s.-china trade spat and

that acts as a tax on the consumer or tax on business. does that forebody a decline in u.s. markets or do we trade through that, in your view >> there's an awful lot there. we have to say this continues to escalate as opposed to de-escalating the trade front. i don't think we're in the missed ft mids of a trade war what we're seeing is the administration has decompartmentalized these trade initiatives. that's in the headwind at the same time, if that leads to a further strengthening of the dollar, that's obviously not good for u.s. corporations >> but do you tell your clients, continue to favor u.s. markets versus the rest of the world or just tell them now is the time to reduce the u.s. overweight and go elsewhere >> we've certainly been the strongest equity markets and it's not that we think there's compelling value or necessarily a catalyst right now

internationally. we think having a more balanced portfolio makes sense at this point. >> thanks so much, gents coming up, the latest on the investigation to the shooting at a video game competition in florida yesterday. we'll get a live report from jacksonville plus, remembering senator john mccain we'll talk to his former senate colleague after the break. stay tuned see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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this wi-fi is fast. i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome.

in many cultures, young men would stay with their families until their 40's. welcome back to "squawk box. more on the break in trade news we brought you at the top of the hour kayla tausche joins us from washington with her latest reporting. >> hey, wilfred, you guys have been talking about it throughout the morning. the prospect of a nafta deal between the u.s. and mexico. the two sides concluded talks and an announcement will come today. we know both delegations from the u.s. and mexico are meeting again at ustr this morning our team on-site saw jared

kushner and some others walking in there this morning. the question now is exactly what a quote/unquote deal would entail because it would just involve these two parties and them canada would have to come back to the table. of course, they are racing the clock on this and the mexican side has been optimistic for a month plus worth noting administrative officials from the white house has been optimistic, as well but we have had some grains of salt being thrown on this prospect by the u.s. trade representative last week who said there isn't a deal. there are major issues after talks throughout the weekend in earnest in the trenches, guys, mexican officials are saying talks have connected and they expect an announcement today back to you. >> kayla, as you suggest, even more interesting, perhaps, would be to get a comment from the canadian side of this. what would they make of this would they try and suggest it's meaningless or would it be enough to push them to feel like

they have to join the party, as well >> canadian officials say the u.s. and mexico have bigger fish to fry once they work out their issues, we are willing to come back to the table. sort of acknowledging that is what they fully expected to do so we'll see what exactly this deal between the u.s. and mexico entakings, how much of those issue they worked out and how much are issues that they are comfortable coming on board with certainly there are many issues to work out and they are all trying to get a tri lateral deal by the end of this week, which is going to be a tall order. >> great stuff thanks very much we are learning more about the shooting yesterday at a video game conference in florida. kerry sanders joins you with more on this >> this is a horrific scene that

unfolded here. they gather here to compete and one of the players apparently pushed a pistol and started shooting all of this was life streamed on twitch what is remarkable here, you have a situation where just one block away there happened to be some firefighters from station one engine one who were doing some training. they heard no 911 calls, no calls on the radio they just heard the commotion and ran over here and this is sort of a shift of what's going on in our country. typically when there are shooting scenes over past decades, police officers would seal it off, paramedics, firefighters would remain outside until they knew that the scene was secure in this particular case, because it's the new protocols, those paramedics and firefighters went

straight in, immediately started working on the wounded i'm told by witnesses apparently a paramedic was working on the ground on someone who was bleeding and the gunman was to their the back but still, it raises the question of why somebody would attend a video game conference, pull a pistol and start shooting >> and presumably, there was no security screening as there might have been had it be sports even or a concert >> exactly this was going on a concert down on the water front here. it's the sort of thing where now those who are participants are saying maybe we need to have that type of security. as you point out, you have to do when you go to a football game clearly, security has become a focus of just about any gathering in this country these

days >> sad times we live in. kerry, thanks. kerry sandsers the country is preparing to honor the life of arizona senator john mccain out with events this week he died on saturday after a battle with brain cancer joining us now with more on the life and legacy of john mccain, former democratic senator and governor of indiana, governor senator we -- senator, welcome thanks for joining us today. senator, you spent a lot of time with him in the senator because your careers overlapped there for quite a bit. >> joe, we were friends. i had the privilege of being his colleague. we did work together on the armed services committee we did some traveling together the things that will remain in my mind about john mccain are first that he embodied some of the traditional virtues in this country that historically we've

embraced, things like duty, honor, country, humility and integrity. they're in too short supply today. and secondly, just like judd gregg, he embodied a style of politics that is in short supply he's willing to work across the aisle. and that's why we were able to, you know, collaborate on things. we disagreed on some things, but we tried to focus on the things we have in common. i think our country would be well served if we had more john mccains and his style of public leadership >> it's been posited that his foreign policy that he led there a lot and a lot of the ideas have been sort of front and center in terms of the u.s. being internationalism and i don't know whether it's nation building or what you call it, but it seems snap that's kind of gone out of vogue at this point.

and we may be are wondering whether we need to insert ourselves into every situation around the globe do you think we need to get back to his stance on that? >> well, a couple things there he was not a naive man he was a realist and he knew that it was a dangerous world and we do have adversaries that wish to arm us. he knew our foreign policy had to be based on a foundation of strength and our ability to project that strength when necessary to protect our interests. so that was why he was always a strong proponent of a vibrant military secondly, he knew that the world, as much as we might like it, parts of it won't go away. you can't get involved everywhere we don't have the economic strength to do that. but where necessary, we have to have allies because they make us stroker and we have to engage in some dangerous parts of the world because some of those problems, if left unattend will

fester and get worse and ultimately be more difficult to deal with when we have no choice so he was a realist with a foreign policy based on strength, an internationalist, but not in favor of getting involved, you know, everywhere >> talk about public service, senator. i can't imagine how proud you are of your twin boys that on saturday one enlisted in -- after going to harvard, both of them, one enlisted in the marines and the other in the army and susan, your wife, was able to attend this, but missed the graduation because she is faced with the same thing that senator mccain was faced with. heloblastoma can you comment on what you know about the disease .how things are going and hopefully prognosis is positive. >> well, you're very kind to mention that, joe. i'm very proud of my sons and the decision that they have made i think john mccain would be

proud of them, too it's a tough disease the prognosis for most people who have it is not good. but we're fortunate that -- and my wife has been battling this now for just about 3 1/2 months. we're fortunate she's getting the best care in the country they've got a great team at the brain cancer center at duke under dr. henry freedman's leadership and she's been getting immunotherapy, keepo therapy, she just finished 33 days of radiation therapy. but she got off of her sick bed to travel home to indiana to watch our sons take their oath and so i guess the best thing i can say, joe, is it's tough, but there's still hope so we're praying and we're focussing on her care and we're cautiously optimistic. she's getting another mri which will be big so we're hoping for that i will also say cindy mccain was very kind to reach out to us when she learned about susan's

diagnosis. joe biden has called repeatedly. as you know, his son tragically died from this illness when he was much too young so to everyone out there, there's hope and we're very grateful for your prayers and, joe, it's very kind of you to mention. >> we will keep susan in our thoughts and prayers neither of your sons plan to make a career out of the military, either what inspired them to take this break from moving on into, you know, go to harvard, i figured they both had probably big plans. what inspired this, do you think? >> well, that's a great question i think for our son, bowe, who is named for his grandfather and his great grandfather, both of whom did serve in the military, he's an idealistic young man he said he's been given so many benefits in our country and it was because of the sacrifice of people in the military, i wanted to do the same thing for future generations. so he's truly a patriotic young

man. but i wouldn't be surprised if he didn't do some active duty in the marine corps he's excited about it. he's going to quantityco on september 8th coming up here shortly. his brother, he has a job offer from mackenzy. i heard that name mentioned earlier. but they said to him, look, we'll keep the job open for you. go do your service in the a army he'll be an intelligence officer. for him, i think he thinks it would be good to get out of his xhvrt zone in addition to being patriotic. so he's looking at not only serving the country, but hopefully honing his leadership skills in the united states military >> senator, thanks best wishes to you and your sons and susan and your entire family we appreciate your spending some time with us today >> it means a lot, joe thank you. still to come, defending against artificial intelligence, we'll tell but a memo from the defense secretary. right now as we head to break,

here is a look at the biggest premarket winners and losers in the dow. back in a couple of minutes. you always pay your insurance on time.

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defense secretary james mattis as urged president trump to create a national strategy for artificial intelligence. he he says threats say that a.i. could be the next technological game changer in warfare. wents to check this out, right, will >> we are, indeed. air guitar finalists squared off on friday. the finalist went to japan's nagatura her prize, bragging rights and a hand carved guitar called the flying fin there we go. >> i think he would be good at that, joe. >> guitar hero was -- you

actually had to actually play. >> it's a hard game to play. i think it is, yeah. but it makes you feel like you can be great. >> air guitar, i think, is easier >> i guess that's what makes you great right there, the actually mores. >> you're doing pretty well with you're singing jeffrey osbourn >> i don't like things like that go i'm sorry. coming un, netflix looking to cut out the middleman, in this case, that means apple. this wasn't my favorite. stay with me tonight this is like syrupy. we can't play stay with me >> you can sing it after the break. >> play it on my iphone.

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good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq marketside in times square gas prices are falling to $2.91 a gallon prices should continue to edge lower with abundant supply and weaker demand. netflix is said to be working on a system to sign up new subscribers would you that would cost apple money the system would direct new users to sign up outside of its apps that run on apple devices that would mean that apple would not collect its commission, typically around 30% on such sales. netflix is currently the third highest grossing app in apple's

store. on twitter's ceo, they will testify on the hill to explain more about how twitter monitors and polices content. let's check in with mohammed el-erian earlier, he was thinking maybe i get to lead another interview with mohamed, because i need to know about 2019, 2020 and 2021 are we absolutely going back to 2% near term in 2020 or so, maybe late 2019 because of population growth problems and because of productivity? are we -- are we still on a sugarer high that can only last so long or is that sustainable for -- like it used to be or have things changed? >> are we absolutely going back? the answer is no two things are happening today

we're boosting up both actually and potential gdp. so, no, we're not going back to -- necessarily going back -- >> will we be stuck at 2.3, 2.4, or could we do 3 and above >> we can do three >> for four or five years, knowing that's nonconsensus you know that. >> no, i know. people are looking at the length of the recovery and saying it's gone a long way and the fed is tightening what i stress is the handoff i think the handoff is critical. we've gone from monetary stimulus to much more durable policy stimulus that impacts actual and potential growth. so i think that handoff is really important we need help from the rest of the world. so the hope is that europe and china get their act together and you get back to synchronized growth >> but basically you're saying we need an infrastructure. we need some other kick spending here in the united states. >> correct and hopefully after the elections we will go back to that issue and that's been on the table for

years. everybody knows that we need to boost actual and modern -- >> we didn't want to blow out -- the one thing that scares me now is we're back to trial dollar deficits i'm all for trying to get corporations more competitive, but it did add -- what are we add, 21 trillion or whatever does that ever come home to roost? for a conservative looking at trump's policies, conservatives, he's not addressing entitlements which is maybe something we need to do. and we're -- you know, i can we're bringing in more revenue, but spending is increasing more than it should and so -- >> so longer term -- >> more infrastructure we have to do it that way? >> longer term, we need to do that but that is a fraction on top is the debt indicator, and you just mentioned the deficit and the stock up there but the bottom is really important. how much is this economy growing? how many incremental income are we generating? if you're increasing your debt to generate sustainable growth that moves potential, that's a good deal.

the concern is when you increase your debt and you don't do anything to gdp growth, and i think that's a really -- >> that's what we had, you know, i would argue in the previous administration when you wanted to do -- >> so here we go whatever truce we had -- >> no, you're actually telling me things are going to be okay even though the deficits are -- >> a lot of what we -- >> but you would add to it with infrastructure >> yes a lot of what president trump has done was actually discussed under president obama but could not get through congress don't forget how different congress is. congress did nothing for quite a few years. >> i didn't hear the bully pulpit on this stuff i heard it on climate change and gun control. >> you saw the jobs initiative all these things the infrastructure -- >> we went down for after two years. so a deep recession, they spent the first year and a half on obamacare, basically they did the $800 billion stimulus but after that, they raised

taxes on weltalthy people they were initiatives, he talked maybe 28% i'll go to, but you never used the bully pul pi t to try and raise corporate taxes. >> so there was a window in 2009 and 2010 to get a lot done but the problem was congress's mind-set was this is like a cyclical band. that was a mistake that we didn't realize earlier on that it is structural issues and that this was a shock that's going to be with us for a long time that was the big mistake by 2010, the tea party and everything else, it became very difficult to pass anything through congress >> so fast forward to the midterms if for some reason the republicans lose the house, does that then make you less confident about the growth prospects two, three years down the line because the prospects of an infrastructure bill passing diminishes >> hopefully the infrastructure -- i mean, the irony is both parties agree. >> or do you think it's

bipartisan still >> it should be. both parties agree on the importance of modernizing our infrastructure and it has so many payoffs over the medium term that you would hope that -- >> all investigations all the time you see the axias piece. there's two dozen investigations that nancy pelosi is going to embark upon, starting with trump's tax returns. did you see the list that's being circulated around -- >> yeah. and that's a risk. that's a risk. >> two dozen different investigations all they're going to be able to do is -- they don't have time to do anything other than investigation. >> let me end with one thing don't lose sight of other central banks. but what the ecb does and what the bank of japan does is going to be really important for us, as well. >> does europe handle the removal of monetary policy as well as the u.s. that's a -- >> so when i think of all the challenges that chairman powell listed in his speech on friday, now multiply that by a big

number and that's europe multiply it by an even bigger number and that's japan. so it's not as easy. >> mohammed is sticking around with us. meantime, coming up, the good, bad and the ugly of crypto currency we'll give you a sneak pk ne xtee hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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the price of bitcoin, about $6,700, but still one of the lowest prices we've seen since its peak in december bears say it's the beginning of the end. bulls say it's a great time to buy. watch bitcoin boom or bust some say it's a bubble, others say it's a scam and even others say it's a revolution. >> bitcoin is a religion >> i value this above my life. >> this is fundamentally one of the most important inventions in the entire history of human kind do you believe in god? he architected it that way because it had to be that way. >> the way you speak about it is very adamant, like you're talking about religion >> more like revolution. >> yes, revolution because bit

county isn't tied to any banks or governments, crypto banks sea it as a way to revolt against the status quo >> you're talking about taking down governments, displacing governments which is the backbone to society as we know it >> img it will topple empires and will create a new empire >> and if you think that's radical, you haven't met roger ver. >> i'm not here to be popular. i'm here to speak the truth. >> ver earned the nickname bitcoin jesus. >> bitcoin allows money to instantly be teleportered anywhere around the world without any permission from a bank or government that's a liberating thing for all of human kind. >> you sound anti-government >> i'm pro peace the difference between working for a living or being a sleeve, yet when government goes around

and forces everybody to buy their health care, they use it to fund wars all over the world, people turned a blind eye to it. >> a push against centralization, power to the many it's no wonder the bitcoin movement has been compared to occupy wall street but there's a plot twist >> mofrts st of the crypto curr, the top 1% hold the value of it. if they decide to liquidate today, there is no regulation to stop them from doing that. >> guess who is believed to be one of the biggest players controlling the crypto currency supply none other than mr. decentralization himself regularer ver. >> they called you a fraud, you might want language media and exchanges for unsavory profit

and you're a pump and dumper >> i suppose you could say i was the first person in the entire world to get involved in it and all those other allocations are completely baseless. i've never done anything of the sort and if you have evidence of that, i invite it to be made public >>. >> we cover a lot of ground in this documentary whether you love it, hate it, don't know much about it, tune in tonight in the meantime, let's get more on bitcoin and where it stands right now. as an investment, as a store value, as a currency, bring in paul of "the wall street journal. paul, it's great to see you. >> hey, melissa. how are you doing? >> the latest we're al all following closely in this space and whether investment would allow an etf, that it would reject the nine etfs that had been applied for one of the reasons why they objected in the first place is

the idea that the market isn't liquid enough, that the market is subject to price manipulation has your reporting born that out in terms of that happening today? >> well, i think -- i think the sec's concerns are very salary lid. they're -- it's almost, again, you mentioned irony in the documentary. here is another irony. for a currency that makes a big deal out out of a public ledger, there is not a lot on the exchanges. you don't know really know who is doing that and for what purposes as opposed to traditional capital markets which have a lot of oversight built into them. the exchanges themselves do a lot of watching on what's going on their exchanges so they can see any kind of manipulations. even with that that, you get

people trying to game the markets. there is no trans parentsy and insight into who is doing what is there other market manipulation absolutely how much of it there is, we don't know >> and that is a problem in and of itself. >> exactly and unless there is, we don't think it's right to give a blessing to these etfs >> the approving in the etf has been looked at as many but if you start that, you'll have to underpin it. but there are others who think that this is not right unless you have it on your own doeken, on your own stick,

you're not an owner. >> and that rift you end up devt get to bitcoin some of the exchanges people trade on have a custodial aspect to the business. they hold the bitcoins for you you're not in control of the private keys the purist view, you download the bitcoin software and have your own wallet and keys you own the bitcoin. it's yours nobody else can have access. those two views are not going to go away. and the custodial view, you don't hold it yourself that's going to be easier for some people, for a lot of people that's going to be attractive because of that. you're giving up some control over the bitcoin itself for somebody else, you know, you're giving up access for control and you are comfortable with the

trade-off. some people will feel that way. >> when we think about last year when the bitcoin debate was at the forefront of the discussions, one of the big bear arguments is people felt they would never get formal endorsement from central banks is the issue as relevant as that is it an example of where it's failing to get formal endorsement and therefore share prices fall back >>well, i think those are two different things i think the fact that the fcc would not give the blessings to the etf. you can look at it them as holding back an approval i don't think, at this point, that the whole idea that existed a few years ago that governments are never going to approve this. they're never going to let it exist. they're going to try to squash it i don't think that is relevant anymore. i think we've seen enough from governments from central banks not that you're a central

banker. >> i figure the feds say it's going to be regulated more in this country that's bad because people like it because it's not regulated. on the positive side, the rest of the world doesn't want to depend on their crappy currency. it would be nice to have a real currency they can use to trade with especially if you're venezuela does one offset the other? does the global nature of bitcoin make it viable to the future >> not on its own. but the potential is there and i think we're at the point, to answer your question, i think we're at the point where you can see good governments are not looking at this anymore as something they need to clamp down on, outlaw, drive it out of existence. they see it as some potential here to have something that can benefit people. >> yeah. they're trying to figure out ways to regulate it. make it something we can use in

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time for your stat of the day. apple has jumped about 12% in the past month after similar moves, the trend tends to continue. with the stock outperforming two weeks later. our guest host this morning has been mohamed el-erian. we talked about chairman powell. he listed the risks to the economy. which is the most realistic risk >> ting would be -- that's the key issue. and if we don't do that, then growth will not be -- i think we can. and we are doing so, but that's the key. that remains a big positive. >> the best case is 3 % average. >> it is. >> like i said, i watched mission impossible and the mask. i thought you were going to do

that and be larry kudlow. >> i needed the voice, as well. >> i wish they didn't use it so much throughout the movies i love the movie. >> it's unbelievable. >> he broke his ankle. i know he was limping thank you. thank you, melissa you're a workhorse you're working way too much. and you. i'll see you tomorrow. make sure you join us tomorrow "squawk on the street" is next ♪ good monday morning. i'm carl quintanilla with david faber. final week of august begins. futures up after friday's closing high it looks like we may have some news regarding a potential bilateral agreement with mexico. plus, thha