hi, everybody, and welcome to "power lunch. tyler mathison is out, and this

hour junk bonds are on fire. yields are falling to record lows as investors look for returns in the riskiest part of the market why is this happening and is it cause for concern? >> so good to be with you in person yesterday we had a three-minute edition of "power lunch. we should go the whole 60 minutes this time. >> we will try >> the cyber threat is not just corporate networks at risk but credit ratings as well find out which sectors are well protected and which have the most to lose and show mean the money. there are more remote working jobs offered and these are high-paying ones we'll dive into the new normal for this labor market. "power lunch" starts right now but let's kick off the hour with a check of the market. pear seeing things slide down 0.2% the nasdaq the worst performer down 1.25% we mentioned the declines which

is unusual for a declining rate environment. in the bond market the ten-year yield is still being pushed lower and approaching some key levels it dipped below 1.3% in the past hour it's just above at that level right now. right to the bond report and rick santelli is following all the action at the cme. rick >> reporter: and there is a lot of action. we start out with empire at $43, an all-time record since record keeping. but maybe the 24-hour charts of 10s and 30s will show you how yields plummeted today again we auctioned and anybody who bought in the auctions big, big winners. they're pleased. if you look at 10s and 30s and open it up to february if we close under 1.29 in 10s and 1.925 in 30s we are below. these are fresh low closes going

back to february when the federal's dovish yields are going down in the dollar index is going up. you can see we're hovering in a neighborhood for fresh closes. eamon, back to you >> if i may i have a very simple question for you why are bond yields sliding? why are we now 1.29. you heard what jeff gundlach said is it about the fed? >> reporter: of course it is it doesn't matter who is right or wrong right now you can't afford to be anything but long and part of it is technical a huge part is large institutions but like he said today, he said

the same thing i've said when you look at wages, fork lift operators, some of the people that work -- the baristas at the coffee shop -- these wages have gone up we can debate how much inflation is sticking. i agree with jeff gundlach a good chunk of it is going to be and that may be enough to leverage the xwryields back higr when it's soup it just isn't soup yet sticking with bonds, junk bond or high-yield debt, those yields are hitting record lows themselves and a shifting economy boost the market yields are so low they're now below the inflation rate >> this is fascinating for the first time on record i'm curious why. >> our next guest says it shouldn't be surprise. there's too much cash and not enough attractive assets let's welcome in the senior u.s. rates strategist please explain does this fundamentally give you

a bullish feeling about this environment or a terrifying one? >> it definitely gives me a cautious one thanks for having me a very limited set of bonds out there. a lot of money in the system in general and all that have is pushing yields lower ten-year treasury yields, we just continue to move lower and lower and i think what the market is reading is the fed is not really going to let inflation run away they're not going to let inflation shoot higher it's taken out that premium that was priced into markets earlier and you have a lot of investors just trying to chase returns right before we hopped on i was looking at some of the returns for the year the treasury is down 2% on the year the investment corporate market is down about 1% on the year if you look at high yield it's up investors are chasing return

>> but, gennadiy, help me understand this, if you buy a junk bond where the yield is l lower, you are locking in a loss who does that? >> if your alternative is locking in a loss on a u.s. treasury, if you look at the same calculation for a ten-year treasury you're locking in a bigger loss. >> some people are chasing smaller losses >> exactly it's loss mitigation to some extent >> that doesn't feel good. >> and that gives me room for concern. inflation will go down, that the spike will be transitory to some extent i do agree with that and folks are chasing returns to make sure they can preserve their capital to some extent >> how does this play out in the junk bond market in particular you're taking on the highest risk and historically you do

that because you want the highest rate of return if you're now taking on a high risk to guarantee a low or negative rate of return here, does that wipe out investor interest in junk bonds altogether how does that work >> well, i think it depends on what happens next with the fed as rick was saying they are certainly the biggest player in the market if we have an uncontrolled sell-off or, for example, if they spook the market and tell us that they are backing away tomorrow, which i don't think they're going to do, that could push yields higher and that would be the worst case scenario we're hopeful the fed moves cautiously and doesn't create another temper tantrum that's what we're getting so far. you're right it is a risky part of the market and there's not a lot of room for error. >> at the same time if you think about what's the benchmark, yes, we're talking about 4.5% return

that's trailing the cpi but it's still above the ten-year yield, still above the implied inflation rate real rates at negative 1%, you're doing great when does the real rate start to rise >> unfortunately, it's very expensive to be short real rates at the moment. i think it's going to be very difficult. i 100% agree with the fed looking to taper with more fiscal stimulus on the way, so more cash in the system, more investable assets in the system, rates should be higher especially in the real rate part of the curve it's just difficult for the market to price that in at the moment so part of this is a little bit technical. part of this is you just don't -- you're not being paid to be short real rates at the moment i think in a few months' time

once we get through the summer, once we get into the early fall, it will be a lot more feasible to be short interest rates and the market will see real movement we expect rates to move higher later this year. and i think that could spook maybe junk bond investors or ig investors in general >> whenever anything happens for the first time in history it's worth paying attention to and figuring out why that's happening. what does it mean? we've seen jay powell all over our tv screens the past two days describing a lot of this and you wonder does the fed have a plan to land this airplane safely it seems like a real -- there's some risk here there's some opportunity here. and you wonder in washington do they have a good enough plan to dial all this back when the time comes to that? what do you think? >> i think they're trying to i think they're doing their best

what i took out of the jay powell testimony you're probably going to see a lot more discussion in the months ahead you've seen a lot of focus on how exactly, what is too fast? does the composition have to include both treasuries and mortgage backed securities is one more important than the other? all of those things the fed is discussing at the moment and trying to make sure not to get it wrong i think the cost of getting is wrong for them is absolutely enormous if you're in jay powell shoes, you're moving as cautiously and slowly as can you to make sure you don't pull the rug out from under this market. >> a historic discussion thanks so much for being here with us. a busy day for ipos today. several more names coming to market today let's go over to bob pisani for the sizzling start to summer listings what's going on over there >> reporter: good to see you, eamon. i'm happy and unhappy. the tidal wave of ipos continue. i'm unhappy about the pricing action that i'm seeing let's take a look at f45

we were happy, mark wahlberg was here we got pictures with marky mark. it was a great morning i enjoyed myself look at this price at $16 it opens at $17. so everybody makes money right at the open. it's $15.80 right now. it's below that -- $2 below where it was right at the open a membership col sship collecti at $14 opens at $13.15 and has broken even, $12.98 look at phillips edison on the nasdaq a lot of people interested in this they do neighborhood shopping centers. a big emphasis on grocery stores as an anchor for the neighborhood shopping centers. so they price at 28. they go to $28.43. it's $28 nothing is happening this has been a tren a little bit of money made on the first day and then really nothing after that take a look, 15 ipos this week

the tidal wave continues the average ipo year to date has made 18%. it's up. most people aren't buying in at the open the after market, the day after from there, the average ipo is down 9%. the day after the first day of trading. and there's only 53% that are trading above the ipo price. is that good or bad? we're in a historic high we should see 60%, 65% at least trading above the ipo price. eamon, my point here is great news to see all these ipos continuing to come in the second half of the year but there's only a small group of people, those people who are getting it before the initial allocations that are making the real money i'd like to see that change. eamon? >> bob, thanks great news there and great news to see marky mark. i hope you had your funky bunch dance moves in full effect today. >> reporter: i got my picture. and coming up, a new era of cyber threats potentially putting corporate credit ratings at risk. new analysis from s&p global

plus as lumber prices plummet, say that three times fast, some prices are going down. one wall street firm says there are smart bets to be made in the sector we'll tell you what they are and as we head to break here is how u.s. bankcorp and morgan stanley are trading post earnings morgan stanley doubled its dividend and increasedts ybk. i ♪♪

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welcome back to "power lunch. let's take a look at the lumber-related names in stocks in play. goldman sachs of weyerhaeuse and boise cascade and louisiana pacific at sell ratings. the price of lumber has been on a roller coaster ride, reversing dramatically from its highs earlier this year down more than 30% on a year-to-date basis, just a year-to-date basis. goldman likes weyerhaeuser those shares still down half a percent, eamon, in the trade today. >> dom, thanks so much meanwhile, the white house continuing to crack down on cyber security risks with initiatives to coordinate the ransomware response over the vast federal bureaucracy forming a cross government ransomware task force the department of homeland security and justice department launching a website now to

report and respond to cyber attacks. and the state department is offering $10 million rewards to help identify hackers. all of this coming as s&p global ratings put out a report warning that cyber risks are more relevant than ever to corporate credit ratings so with us now to discuss that is tiffany tribett thank you for being here explain how the ratings agencies look at the cyber problem, something new under the sun and yet you're tasked with figuring out how to rate the risk how do you do it >> sure. i like to always say this might be something that seems new but it's the most recent iteration of what has been an issue that has always been a problem. we have fraud, criminal activity cyber is a new area. it comes back to risk management and how to integrate cyber security into your overall risk management framework >> have you begun the process yet of giving down grades based

on cyber security risk has any company been downgraded because that have? >> i can speak to a cyber attack in where we've seen down grades following attacks and i can speak to high level where we are looking in our analysis in the preparing against an attack. just because you have a cyber attack it doesn't necessarily mean it will be an instant down grade. we've seen the municipal side that i cover, atlanta and baltimore have come through without an impact on their credit princeton community hospital was a small issuer that did lead to credit action. similar situation on the corporate side the colonial attack that didn't lead to a downgrade but downgrades with the solar winds attack following those events there. >> so how do you differentiate all these guys have had attacks. they've all been kind of crippling. how do you say this is a credit risk that one is not. >> that's a great question it comes down to a framework we

look at that goes back to first question, what do we do before there's an attack? the three areas we like to simplify, the overarching industry standard for what you're looking for in assessing cyber risk, we like to bucket into prepare, respond and recover. doing the things we want to see -- cyber hygiene protocols, staff training, identifying your assets, do you even know what you have on your systems are you protecting those assets? and then when we have an attack, you're really assessing is there ample liquidity in place, can you get your systems back online how long was this attack that's one of the differentiating factors is just how long did they have access to those systems. and so that's where we're looking from a credit perspective. on the longer term we're looking at your reputational risk. have you lost trust, is there contingent liability from a data breach things like that. >> in cyber security they borrow

a term of art from the military, left of boom and right of boom what you do before the attack and after the attack talk about the left of boom piece of this. can you possibly issue a down grade to a company on cyber security risk before the attack happens? we know after the attack, everyone can read it in the newspaper. what's interesting and important for investors is to know what might be coming in the future, therefore, which companies have the weakest cyber security now do you think we'll see credit down grades based on cyber risk before there's any particular attack >> sure. and what i would say cyber is something we've look at for a long time and we're just growing more transparent in how we speak of it. it's an esg factor we look at it under a governance factor for our esg analysis. ab when we say that, if you have a weaker governance, weaker risk management in place there are certain elements across the different sectors where we'll pick that up in a rating

we've had issuers that have attacks that were already at a weaker rating owing to a weaker management score kind of factoring in some of that weakness in the governance around these risk management issues and so while you might not necessarily see it called out cyber specific but where you see us assessing risk management and governance is where we're incorporating the cyber security into our analysis. something else morning for management teams to be thinking about as they think about their credit worthiness. a fascinating conversation thank you, trififfany tribbitt. we'll take you live to miami next plus, further ahead, why inflation could prompt the largest social security cost of living adjustment in decades we're talking 6% stay with us icy hot. ice works fast. heat makes it last. feel the power of contrast therapy,

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welcome back, everybody. a quick check on the markets here the dow still fractionally lower down 25 points and the nasdaq off the lows now down about 1% technology is the worst performing sector of the day >> time now power movers first up biogen down more than 6% today the cleveland clinic and mt.

sinai announced they won't administer the drug to patients. the fda chief telling a reporter to move on after being asked about its approval reporters love to be told to move on, by the way. the stock down 16% >> never a way to get people off the story when you handle it like that. shares of just eat, the parent company of grub hub, delivering order growth of 47%. but analysts at citi say they continue to struggle with profitability. >> and finally, raymond james upgrading delta to strong buy from market perform. the analyst saying it is too hard for market valuation. now during the pandemic many people fled south making florida real estate and miami very hot in the wake of the surfside condo collapse some are worried about other buildings in the area diana olick joins us live with more diana? >> reporter: kelly, miami has long been a tale of two condo markets, those built before the year 2000 when strict new

building codes from hurricane andrew went into effect. most of them in miami beach, and those built after 2000 that's the glassy towers you see behind me. now after the building collapse, that divide is even wider. >> listen, no one in their right mind will buy a condo built before 2000 unless they have a safety certificate for the structure of the building and it doesn't exist today. >> reporter: florida condos are required to go through an inspection every 40 years but he says buyers cannot see those reports. >> no condo i've ever seen, and i've been here since 1993, has ever openly shared that. there's a lack of transparency by design. it is a south side market. >> reporter: and even more so since the great covid migration to the sunbelt pending condo sales in miami-dade county were up 86% in june from a year ago prices up 25%. and exclusive new numbers show older condos seeing much more

action, 259 sales per month in the first part of this year versus 154 sales per month for condos completed after 2000. now real estate agents tell me it was barely a few days after the collapse before they started getting phone calls from bargain hunters looking for deals on condos kelly? >> diana, this is fascinating. one of the questions i have, tea these images are so powerful of the condo collapse and we were all so shell-shocked what does it take to turn that market around, to bring buyers back to say i think these condos are safe, valuable, they're worth the money? is there something out there that will turn this thing around >> reporter: it's those certifications it's showing them they've been assessed, they've been valued, looked at. the engineers have gone through them and that's why you need that 40-year certification we're talking about. and that's why the condo boards need to disclose that to potential buyers there is plenty of demand for

these condos but, again, people are starting to look more at the new build because they know that's new technology and new building codes for the older build they need to see that certification and if they see it and they have it and they know what potential repairs might be in the future that are going to cost them as owners, then they'll be ready to buy in again >> fascinating to hear there's so much demand it looks gorgeous down there those buildings look awesome up ahead on "power lunch" here's a job, there's a job, everywhere a job-job -- >> i love that you had to read that >> who writes this a new study reporting more high-paying jobs across the country than ever before plus, while china continues its corporate crackdown could this make valuations more appealing to investors and moving closer to an oxycontin settlement as key states drop their opposition th authacos xt empire pain auorbo wt mene

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wow! cheer on team usa with xfinity internet. and ask how to save up to $400 a year on your wireless bill when you add xfinity mobile. get started today. the oil market is closing for the day so let's go over to pippa stevens. oil dipping again today, building on yesterday's losses the market digesting what a

potential jum in output could mean after opec and its allies reportedly reached a deal on production policy. they've yet to release an official statement let's get a check on prices. wti crude down 2% at $71.68 after falling almost 3% yesterday. brent crude dipping 1.75 to $73.47 it's a little bit confusing here because one of the narratives has been that supply can't match demand and targets for oil are all over the place suggesting we simply don't have great visibility into what the picture looks like that said a number of wall street firms remain optimistic energy aspects saying this morning that, quote, fundamentals remain solid and the sell-off is a buying opportunity. ubs says inventory decline will push wti to $77 between now and september, kelly back to you. >> pippa, thank you very much. now let's zero in where jobless claims fell to 360,000 it's high but the lowest since march of last year this as high-paying remote jobs

are still on the rise. check out this chart from the job site ladders for the first time there are now more remote working jobs offered than roles in any single city like san francisco or new york >> it goes straight up >> it's not slowing down right now and these are jobs paying at least $100,000 a year. for more on this trend, chairman and ceo of recruiter.com it's good to have you. there's so much debate about what the workforce will look like as, listen, at least from the people who i speak with, come labor day everyone in large part is going, quote/unquote, back to normal i see a story like this and i think, or are they >> i couldn't agree with you more two weeks ago when i was on your show we talked about the theme of chasing candidates. that was the recruiter index you see an increase in salaries, an increase in shifting. we have a very strong advertising and media practice now half of the jobs now that we're seeing on our site are

actually outside new york in terms of remote. so pretty incredible that these jobs -- sorry, the remote jobs we have on our site equal those in new york. it is now half of those jobs are actually now remote. 54% of the jobs in our financial services practice, which pay over $100,000 are now also remote but what's interesting is that we're seeing financial clients think about, gee, i need to open up offices to where all these employees went we're seeing florida now as a new location i'm remote but i don't want to be remote. the other thing we saw recently the other day was a chief remote work officer and if you go back to the '90s -- >> do you have to be in the office for that? >> he's in the living room >> a cheap remote work officer, amazing. in the '90s, all the big companies start to have a chief digital officer. we need someone at the helm of

everything going on in digital a chief remote office worker a company not embracing remote workforce will lose their employees. >> let me ask you this, the word everybody uses is serendipity. you have these serendipitous interactions with your colleagues at work, these moments when you go out for drinks after work at the neighborhood bar those are all the reasons employers and employees are saying we have to come back to work, but a lot of remote workers say that's not real. you can't measure that i don't even know what that means. serendipity is overrated i want to do some laundry in between conference calls who wins this battle, this hammerlock between serendipity and the laundry machine? >> look, i think today the candidate wins it's a candidate's market. the talented candidates are in high demand. and if they're demanding hybrid or remote workforces, the companies have to adjust to those workforces now i think what you're seeing in some of the financial institutions are, hey, i know

you want to live in florida for a variety of reasons, let's set up an office in florida so you can come in, forcing workers to come back full time might not work for everybody but it's going to be the candidate -- certainly the highly skilled candidates, the high-demand roles, those are the ones that drive this market. >> evan, give me some of your bigger picture musings on what this all means because if we now have no geography replacing geography as the biggest place where jobs are available, doesn't that have huge implications for everything just mouuse on that for me. >> if you want me to muse i think the great resignation, what we're hearing people talk about, is going to actually come in the great shift i think that used to be that when you were rapidly downsizin a company, you had that personal relationship you walked by the secretary's desk and you're like, gee, i go out to coffee with him or her, i

don't want -- it's going to be really sad to see those desks empty. if desks are just boxes on a video screen, that's did go to be be a lot easier to see that adjustment i think companies will be able to scale up and scale down much, much faster than they used to and be more apt to actually scaling up and scaling down. you look at the growth of the gig economy with 35% of all adults having some sort of side hustle, side gig, that's also a trend that we're seeing growing. and as geographies start to expand and the need for labor starts to expand you're going to see that, gee, can i go outside of the u.s.? english speaking people that are to the north, to the south, overseas as well, just filling those roles. >> again, it feels like -- i think about surfer dudes in el salvador you can take -- can you work from in i where and that opens up a lot of possibilities. just sort of additional thought on this as i'm hearing him talk, why couldn't our cafeteria have the equivalent after giant video

screen with everybody's little faces in the boxes, and you could walk by it and almost pick one and go, like, hey, jeanette, how are you doing? >> that virtual serendipity. >> they may not like that. >> not everyone wants the camera on in their house while they're doing laundry. >> that's going to be the job be of the chief work from home officer who comes up with all those interesting strategies >> little people in boxes all over the offices maybe >> maybe robots. wheels they can wheel around. >> evan, thank you very much for conducting this thought experiment with us playing out before our eyes. now china's tech heavyweights lost nearly a combined $1 trillion amid the business crackdown could this provide a discount for would-be investors our traders are going to disss atomg nt.cu

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welcome back to "power lunch. it has been a challenging year for china tech alibaba, badu shedding over $550 billion in collective market cap since their february peak weighed down by regulatory

concerns with many of the names now trading at a deep discount to historical valuations is now the time to buy. let's debate it with our "trading nation" team. michael, it is hard to ignore china. this is the economy that will outpace the u.s. in due time so is a little bit of regulation enough exposure? >> i don't think so. i believe this is a big opportunity to own the biggest and best tech names. from a business and fundamental perspective these are secular growth stock now granted that's hard to handicap and in summary, like you said, china's economy is big and it's recovering rapidly and if you have a chance to own the biggest search engine, the

biggest social networking company and the biggest e-commerce company in that rapidly growing economy, i'm in and i want to invest here. >> looking at these stocks, we talked about valuation do any of these names look attractive to you? >> well, seema, just because a stock has cheap fundamentals does that make it a necessary buy from a technical perspective? when you look at charts they're in down trends and down trends to me say stay away. when you look at the major names, one was jd.com am if you look at jd and overlay that with a 100-day moving average, that line offered great support on the way up it declined nearly 40% i'm focused on the $80 level that is key chart resistance as

well as that longer term 100-day moving average now we would have a stock that's in an uptrend with attractive valuations and that's when it becomes a buy for us >> jd among other chinese names higher on the day. good to see you both thank you. head to our website and follow us on twitter. thank you very much. now after years in court, the sackler family is finally moving closer to a settlement over oxycontin-related deaths some are saying the deal doesn't do enough. what does it say about our legal system and corporate america we'll discuss that next.

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i'm rahel solomon and here is your cnbc news update facebook is taking down some 200 accounts used by hackers in iran, part of a spying operation targeting military personnel and people working with defense and aerospace companies. the biden administration is ending large-scale old growth logging. it is sharply cutting back sales in alaska's national forest. conservations are cheering the move, but alaska's governor has vowed to fight that decision and we knew that jeff bezos would be flying with the oldest person ever to go to space well, now they've announced he'll be going with the youngest person, 18-year-old dutch student oliver damon will be the first paying customer, his

father at least, taking place of the still anonymous auction winner who bid $28 million and then had to give up the seat because after scheduling conflict that person will be on a future flight back to you, eamon >> we've all been bumped from a flight before. >> did not know that was the reason >> that's like first, first, first class. thank you so much. and now a difficult milestone to mark. u.s. drug overdose deaths hitting a record in 2020 the cdc reporting more than 93,000 u.s. overdose deaths last year, the most ever, an increase of 29% the biggest one-year jump since at least 1999. the cdc has said opioids account for more than 70% of all overdose deaths. 15 states agreed to additional penalties which could lead to a settlement with oxycontin maker purdue pharma.

a long-running controversy surrounding purdue pharma in a new book "empire of pain." he's still asking whether the punishment fits the crime and joins us now patrick, the question here with this proposed settlement is the legal process has now run almost its entire course. does this represent justice, though, in your view >> i think in the view of most people who have been watching this closely it really doesn't.. purdue pharma is a privately owned company, owned by members of the sackler family. part of what's fascinating about this in bankruptcy, the way you guilgot there this is a company that pled guilty to felony charges but in between the family took $10 billion out of the company the only way it ends up in bankruptcy is the family takes all the money out of it so the family has been sitting on the

sidelines of the bankruptcy process, having made a huge amount of money from the sale of opioids, taken this money out and they're basically going to put up money in order to make this go away and be issued a permanent grant of immunity in the bankruptcy process despite the fact that sackler family has not declared bankruptcy. >> i read your book a few days ago, it's on its way to being the best business book of the year in my view. you follow the family from their immigrant roots through the empire building they did in a lot of ways it feels like the god father, immigrant families come to the united states and build an empire to where they're in control of some of the top elites in u.s. society. what's graggravating and frustrating is you get to the point the money corrupts

everybody, the doctors, the lawyers, the fda, the justice department at some point, the money just assumes the system there to provide checks and balances. so i wonder what the lesson is as you look at purdue and look out to the future. because there's a new trend of esg investing. where investigatoors are trying find a moral underpining how do they make sure they're not investing in the next one of these? >> it's a great point. the book is focused on the family but it's also a system failure and the idea you have the drug, oxycontin that's generated an estimated $35 billion in revenue since it was introduced in 1996 with that amount of money it does have the ability to corrupt all these different institutional safeguards that we as consumers expect to be out there protecting us.

it's hard. in some ways what we're seeing with the resolution of the bankruptcy is the bad guys are going to get away with it in the end. they're going to ride off in the sunset as you're thinking of investing, how do you operate in an ethical way in an environment the safeguards aren't there. one thing to bear in mind is reputational risk. the interesting thing in the bankruptcy is the states said they'll accept the deal but they're going to get an archive of tens of millions of internal documents from purdue, internal emails, depositions what have you. i think that's going to create a reputational cost, specifically for the sackler family that's going to be really difficult to outrun in the future i think that would be an issue for anybody looking to do business in the potentially reckless way in which purdue pharma has. >> that's an interesting point, patrick. i guess my question today is

about the overdose epidemic we saw last year. i think in many ways the drug issue is headed through the court system, felt like maybe this chapter is behind us we've acknowledged the problem we're trying to do something about it. and then you wake up to a headline like that, just tell people what is the state of drug abuse today? >> it's very, very severe crisis and one that i think we weren't on the ball because covid, for good reasons, was in front of mind for people. but in the background the overdose crisis was growing out of control this started out as a prescription pill problem with companies like purdue. it is at this point largely a heroin and fentanyl problem, not to say there isn't addiction with fda pharmaceutical approved products but most of the people dying are dying from heroin and fentanyl we're finding that there's a huge population of people in the

country who are struggling with addiction to these drugs and we don't -- we have not resourced this correctly we don't know enough really in terms of having done the work and made the effort to figure out the demand side of this problem. and address it there, rather than look purely at supply side solutions, which has been the american tradition when it comes to problems like drugs >> patrick, i could talk to you about this all day, unfortunately we are out of time the book is "empire of pain" if you're going on vacation this summer, you might want to take it with you. it's a fascinating deep dive thank you so much. >> especially as the problem has continued. up next what growing inflation can mean for social security we'll look at the surprising numbers. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap!

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and paths are not always the same. - i'm so proud of you dad. - [man] i will tell you this, southern new hampshire university can change the whole trajectory of your life. (uplifting music) there is a big way inflation is having a real impact on people, the c. o.l.a. could be 6% next year for people on social security. >> if you're collecting those payments, yes, get ready for a big raise. at least the folks at the senior citizens league have their numbers correct. they estimate because of the wider spread cost rise for products across the spectrum, the biggest cost of living increase since 83 would be in effect, 6.3% it was 1.3% last year.

it's driven by the cost of food and specifically gasoline. one of the bigger points of debate in figuring out that c.o.l.a. has to do with the way it's calculated. the methodology used right now looks at costs that maybe aren't as necessarily relevant to senior citizens. there is a movement by many advocates for seniors to use another measure of prices that weights things like health care costs and housing instead of things like food and energy and it might make more sense only because older people don't spend as much on things we all do, but spend on things like housing and health care cost. >> if inflation is up, it may feel like a raise for people who get it at the beginning of the year but not the end of the year >> that's a key timing nuance as well it goes back to 1982, '83, they changed the timing when the payment effects were made. i want to put it in context. if you look at a chart of just

what those cost of living increases have been over time, check this out back in 2016 we got nothing, no raise whatsoever same with 2010, 2011 you go back to the late '70s, early 1980s when ronald reagan to the elected, it was 14% >> so typically the big adjustment can be followed by a small one. >> maybe if it's transitory. >> our show is transitory. "closing bell" is right now. >> welcome i'm wilfred frost at the new york stock exchange. nasdaq seeing declines around 1% >> i'm sara eisen in washington d.c. today we have an interview with janet yellen in the show. what's driving the action in the final action of trade. jay powell testifying for a second day to congress, this time in front of the bank committee, facing questions about