Transcripts For CNBC Squawk Box 20140815

Docket. Well be getting julys Producer Price index. Well have august Empire State Survey. Geopolitics once again dominating Global Market headlines. Here is the latest on the situation in ukraine. Ukrainian officials are inspecting a russian aid convoy parked just beyond its border. The developments suggest easing of tensions over the shipment, but it could be short lived. Nearly a dozen personnel carriers showed up. Nuri al maliki stepping down amid pressure. The its still plans to target terrorists on the ground. Soda giant cocacola buying a major stake in monster beverage. Price tag, more than 2 billion. Monster had transfer its nonenergy business to coke. Rare news in the Retail Sector lately, a winner. Jcpenney posting better than expected same store quarterly sales. The Department Store had a loss, but there they are in the premarket. Allibab alibabas first used says it is going to work out. Alibaba completed its purchase of a media unit less than two months ago. Thank you, scott. Good to see you. If you cant get carl icahn, the next best thing. Thats why the other networks yeah. Are you calling him this morning to get him on our show . Werent you at hit house this morning . Especially on a thursday. What is have you had monster . Because 2 billion, thats a lot of money for a company, i guess. But if i were coke, and there were upstarts that had some new ideas and stuff, wouldnt you just buy them . He was just on and this is if this is something with a lot of potential to take business away from coke, then well, this that universe. Especially as americans are drinking less soda. I understand this completely. First, green empty. Now youre going to need a memory. I can talk about what is happening today. What happened . Did they buy Green Mountain . Well, they have a stake in it. Lets look at the markets this morning. Did you see yesterday . Things that happen on the show, apparently wait a minute. Did you get a haircut yesterday . I got them all cut. I did, yes. Nothing like yourself, duty. That is and thats been growing for a while. Thats right. You didnt get that caught this week, right . No. Every two weeks, a haircut . Every three weeks. But you do the high and tight. You can be in like an officer and a gentleman basically. Lets check on the markets. 167 on the dow. And its been a slow, steady increase for this week and the last week after that retrenchment week which people thought might lead to a 10 pullback, you about did not. At this point, i dont know, i think you might have to think we go to new highs before i dont know if we go back down. This is going to be the best week in six weeks. Thats what you thought. You said you were going down. Here is our guy. Military vehicles, intersxe sxi. Does he not think about our portfolios . No, he does, very deliberately. The portfolios did get messed up. Lets say he loses 20 of his net worth, putin pep goes from 100 billion to 80 billion, right . Russian stocks. His neglect worth is 100 billion. The richest man in the world. I dont doubt that. And you cant get some people you dont like. Torture and kill them no, he doesnt do that. Lets take a look at the oil markets today because thats the one area for all the geopolitical tension where it all for us, where we try and watch it. 95. 47. The tenyear has been how long have we been between 2. 4 2. 3 and another note this morning pointing out, 2. 4 , its on its way to 2 he says this morning again. That doesnt mean for a better economy. It just means europe is the worst economy. Comparedive speaking, very briefly yesterday, where would you rather put your money . Its august and i missed the boat. The chevy chase european vacation, because you could go now at 1. 33 on the euro. Its better. People think that hes going to do full blown qe. Full below qe. Will we have time off at this point . Then are you available to do you like this gig now . Can you get up . You dont mind getting up early . Its okay. The shock hat worn off at this point. I like you. Thank you. Youre welcome. In a manly way. I dont know if anybody was trying to figure out how what quality of like you were referring to, but its like funny how. All right. Doug, quickly. Nothing happened there. The world is falling apart. Right now, the aid convoy, ukraine is being inspected by customs and border officials. And the 280 trucks are parked just beyond the Ukraine Border with red cross and russian representatives taking part in this effort. Who better to ask than jack jacobs . He was rolling his eyes when i asked scott about getting up early. You used to sleep yeah. You would be up and watch all night long. Youd be out on a patrol, come back, go to sleep. Invariably get to sleep for about 45 minutes before somebody is attacked at base camp and you have to fight all night. Not a great deal of fun. Scott and i are looking at each other we play ping ball. Yeah, its a little more serious. But if you see sleep, you cant even get to sleep in the thatter . Oh, yeah. A lot of times if you went to ranger school, for example, you would be out on a fiveday patrol with extensively no sleep. You would have to make sure the count got sent up to make sure you had everybody. And might be must be shooting bullets at you every minute . Thats the kind talking about the guy who was supposed to be watching is falling asleep and you see the guy coming through and he missed. Nothing will get your attention and wake you up more quickly than somebody arguably trying to kill you. Its good to have you here. In your heart of hearts, what do you think is happening here . I think putin is trying his best to squeeze as much as possible and see if he can get ammunition and weapons into the ukrainian levels. And i think you might succeed. I think what is happening is he will be able to drift into the ukrainian levels. Having a high degree of confidence that nobody is going to do anything. What are we going to do . When the mh17 went down, people are saying russians are terrible people, kill all of our countrymen. This is in the netherlands. Killed our country, lets stink, lets paralyze him. And somebody said, yeah, yeah, except we get our natural gas from russia and by the way, winter is coming. And it all dried up. None of the restrictions that are on the world. He knows not even the United States nor europe is going to squeeze him. Colonel, i know getting natural gas from the United States would take years. We havent exactly jumped on the stick and moved forward with this. If we were to do Something Like that, would that greatly diminish putin and russias power . Absolutely. No doubt about it. And right now, were not moving fast enough. Its interesting. We think about the military instrument of power. We think about if dm diplomatic instrument ooh power. We never think seriously about coalescing them all into one enormous capability to sympathy ewe rate events. Can i ask you about iraq for a moment . The significant avenue the discussion, what is going to happen and what the ramifications would be. What do you think now . Img this is a very big deal, indeed, and extremely positive. I dont think its going to change very much the difficulty iraq has in the north. Isis is going to continue to try to take over that area, is going to continue to harass the kurds. Were going to continue to have to drop bombs on small units of isis to keep them away. The key note is maybe thats all we have to do. If he leaves, does it not take some of the pressure off the president and the United States to have to do more . The short answer is youre right. But it really means that the iraqi army has to get serious about defending the entire country. Earlier, youve got the whole social problem between sunni and shia. There has to be a resolution to that problem politically in baghdad. Meanwhile, stuff is going to continue to happen up in the north. Were going to continue dropping bombs. Were going to have special forces there to train, assist, getting them back up to speed. Weve gone to have selected raids on arths up north. Not to say it wont be forever, but for a long period of time. And there is afghanistan, too. That is not the most we dont like any of our guys getting killed, but that is like did that shock you when you saw it . When was the last time a general was killed in the last time a general officer was killed in the was well, you could argue that on 9 11, in the pentagon, general maud, the three star, the only get chief of staff for personnel, that was killed when the plane crashed a couple before that, would have been vietnam . Vietnam. So were talking about 47 years ago. And that wasnt common then, either. By the way, including somebody wod been a medal of honor recipients in the First World War who is the first commander in the first infantry decision. Just as a note, you cant just say wow, afghanistan either. That is unbelievable. That is the country thats afghanistan is the least fixed place in which weve been involved recently. I mean, the whole reason is afghanistan is a mess for a different reason than iraq is a mess. Do you want to talk about gaza . Thats on the back burner. Yeah, at the moment. But those guys are not going to stop. Where did they get all the cement that they used it was coming from egypt. Thats one of the reasons hamas started to shoot at israel because al cici took over the sealed that border off. That made hamas put hamas in big trouble. That didnt work out well for anybody. But youre right. Thats still not over yet, either. But were on top of that. Were on top of this, yes. But pick up that putt, will you. So to both of you, the point about oil, steady and maybe even falling today on iraq seem glg comi coming. Humanitarian aid, you think . No, hes doing a great job. Some weapons, some ammunition that will be in there and i dont think the ukrainians are going to find it. Awesome. Thank you. Thank you for having me on. I like talking about you, dont you . We are a soft, wimpy generation. I dont want to take up too much of youre the people out there defending us that was 40 years ago, 140 years ago, are all kids. Literally, they are kids. Thats why they call it the infantry. Theyre infants opinion young people out there defending the country and we should keep them in our minds and our hearts. If you really want to get depressed, reading about the ultimate question of whether theyre taking your life or not. In hindsight with robin williams, they were talking about guys coming back here per day. I thought it was a misprint. That take their own lives. 20 a day or something. Posttraumatic stress. When we come back this morning, the kite will give the worth a clems more. The 45th anniversary today of woodstock. Futures are indicated higher this morning, dow futures up by about 50 points. Squawk box will be right back. Dont just visit San Francisco. water dripping and pipes clanging visit tripadvisor San Francisco. soothing sound of a shower with millions of reviews, tripadvisor makes any destination better. Welcome back, everybody. Ra new milestone for Warren Buffetts berkshire hathaway, closing above the 200,000 level for the first time ever. Berkshire reporting portfolio updates for the s. E. C. Lets get to kate kelly. Buffett announced a number of new or increased stakes yesterday as part of a rash of quarterly investment filings with Charter Communications being the biggest mover. Berkshire took a 2. 3 million stake in the company. Berkshire raised its stakes in a handful of prior holdings, including verizon and gm. Berkshire reduced its holdings in directv, where it sold about 11 million shares and conco philips, where it sold off 9. 7 million shares. Allergan, the drugmaker that has become a battleground in recent months abdomen it is pursued by a hostile bid. Now other institutions are piling in, including blue mountain, paulson, viking, york and saralond. Finally, carl icahn making news with an activist filing on the Media Company gannett. And arguing that the company is undervalued and should be split up. Unsurprisingly, since some of icahns activist targets have performance so well, it spiked higher this morning. What surprises you the most . Gannett is interesting. Anytime icahn gets involved, hes calling for Management Changes or structure changes, you tend to see a pop. Activists in general have raised the price of shares, what, 6 i think over the course of five years or so. Carl is a perfect example of that. Buffett, as you well know, always moves markets. Always interesting to see what hes doing especially with his new position. Suggest a vote of confidence that this deal may come together. With the berkshire stuff, who is doing the portfolio moves . Very good point. Ackman has had a great year. He has. I dont have a defibive list, but of the hedge performances ive seen, 25 through the end of june. Its remarkable, this allergan has been a huge winner, but also berger king, canadian pacific. You have to be careful. I know we talked about this yet at some point during the day. These are different kinds of investors . You know, buffett, icahn, they hold things for a locker period of time than maybe some others that youve seen. It came out yesterday i guess that in a 13f koocherman of omega, there were able to report that he no longer has a position at all. So over longer periods of time the. Right. And you always have to make that caveat. Im happy that we at least have a new batch. Until two days ago, i was using like end of march numbers. Its impossible with some of the big Money Managers that do momentum training. Who knows what theyre holding at any given time. Come in and talked about how to do an arbitrage on things. And one other thing well talk about in the 7 00 hour, david tepper. Some interesting moves there. He said it was nervous time during this quarter where were now seeing the filings. And it looks like he rm was. He pulled back on some financials and auto related companies. Thats interesting, too. That is maybe later, as well. Coming up, a positive report from jcpenney, a power shift in iraq and that russian convoy. Which of these stories has traders buzzing this morning . And as we head to break, stay a look at yesterdays winners lose rs. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. 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Tdd 18003452550 so you can take charge of your trading. Good morning. Welcome back to squawk box here on cnbc. I just i remember sorros what do you want . I just remember his huge bet on s p puts. He increased it. 2013. August of 2013. So its 16 and i think he had done it prior to that. Lets just do 1632 with 1955 now on the s p. So what is that, 3 1632 . 1632 and 1955. 323. Deviced by 1632. 323 divided by 1632. So hes 19 . Almost 20 . You round it up to 20. So hes right now, he needs a bear market to get even. Im joe kernen. He said it in august of who cares if hes saying it now . I just were going to because you dont its 13f. Its within a 13f and why do we listen to any if he was bearish 20 ago, maybe he has a chance to do more right now. Im joe kernen with becky quick and scott wapner. Anyw anyway, andrew is off today. Yes. Hes on vacation. And you graciously accepted to come in for this. Arent you glad. Making headlines, the wall street journal reports that the s. E. C. Is widening its probe of technology to include the companys auditors. The social Media Company was more than 6 billion before its shares plummeted. Where is whats his face . Cynk takes on a whole new meaning. Who did this . Is someone back in here . I mean, you know, how does that happen . Seriously, wapner, please. Something is going on. Thats just purely i dont know. The company made a lot of news in june when Trading Volume soared and the stock skyrocketed, even though the company had no revenue. It was described as development stage. Regulators want to know whether reuters or accountants are involved in penny stock fraud duh having about different questions. Now they have to move tight a new state to get a fair trial, right . Maybe. Seriously, look at that. Its outrageous. Its route rageus, thank you. Shes around. Paypal is currently in talks with bitcoin exchanges to integrate the currency in its exchange systems. That currency has been slowly gaining acceptance with businesses. Now, sprints new ceo says the company will introduce what hes calling very disruptive prices next week. He says his first order of business is cutting prices. Sprints new leader is telling employees, he wants to make sure every customer in america thinks twice about signing up with a competitor. Josh, good to see you this morning. Good morning. We talked earlier, were working on the best week in six for stocks. How long do we continue that . I think short terms, stocks are going to continue to melt higher here. You know the back drop outside of geopolitical headlines which are awfully tough to price, the back drop for stocks remains higher. You have a number of Fund Managers. Almost 75 of Equity Fund Managers that are underperformed the benchmark this year. And with the fed remaining in this slow, deliberate Interest Rate policy they currently have in terms of tapering and maybe tightening in 2015, youre still going to see a dry return. The trade of most pain, which is what traders in slow markets are always most sensitive to, the trade of lowest pain here is probably going to be higher equity prices where, in fact, maybe later on in september and october b you could ee a beta chase by Equity Fund Managers that are underperforming. These people are talking about who has it right, right . Is it the equity market that has it right as it continues to creep higher or bonds . 2. 39. The tenyear yield is as we see. I would suggest yes. The bond market is a tale of two cities here, scott. We have a long end of the curve being driven by domestic asset managers, domestic pension Fund Managers that need longer term assets. Its the shorter end of the curve. Right now, theres a huge short base in the two to fiveyear sector, but was anticipating perhaps the fed becoming more active. Now, given the inflationary back drop, given the wage and income backdrop, now it looks like the fed can maybe go a little more 2015 and the risks are until later in 2015 which means a Short Covering trade on the front of the curves is only going to bring those yields lower. Speaking of risks, are you bears i mean, are the bulls being too naive to whats happening over in europe . You know, europe is a risk. But i think what the bullish trade is in european equities, european equities are building in a form of aggressive stimulus by the ecb. As you know, the ecb has been here for the better part of a year, a year and a half. But european equities you would to build that in. At next weeks jackson hole meeting, draghis speech is more important than anything yellen will say. Thank you so much. Up next, are jcpenneys worst days in the Rearview Mirror . Samestore sales are growing, margins are rising and they are losing a lot less money. Theres something to be grateful for. Price check on jcp, up 46 cents. Well talk more about it when we come back. First, though, a quick check on whats happening in european markets. Germany up almost 1 . Squawk box will be right back. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. Welcome back. U. S. Equity futures at this hour are indicated higher again, 57 points. I dont know why. Putin seems sincere and nice, i guess. So things have tamped down. They dont think its going to be a weird incursion. Although did you see what Michelle Caruso cabrera sent in . There were like 20 convoy trucks that went over the border last night. And there were concerns about whether hes moving more equipment. Hes not on our side. No. And i hate taking sides. You take the village. I want to be friends with everyone and were all exceptional and everything. But if you were to watch the clinic and the way he does things, the last three years, has he not been just thats why he has a 90 approval rating. If youre russian, youre saying, this guy is awesome. This is amazing. Completely confound your enemies. And he does it so incrementally, that we go back to whatever it is were focusing on here. Why . Because he can, thats why. Even about europe which supposedly is on watch with what hes doing. Even they rolled into this thing where hes devious. You sort of just have to admire just the pure evil. And stay on guard. You need to stay on guard. Do you remember the alien in alliens . It was a horrific thing. Acid for blood and everything. But you had to admire what it was able to right . Alien like sigorney weaver allien . Now were back to im with you. Do you know what he told me the entire time i was pregnant . It will pop out of your stomach. Do you remember when that thats right. Game over, man. It was in there and you didnt know it was in there, what was that guys name, william not william, john anyway, you see it trying to get out and it pops out. We have to go, but they didnt tell anyone what was going to happen, all the actors there. Stuff wam came out, it splattered. The reaction on the faces, it was classic because they didnt know what was going to happen. Forget about the other news of the morning. Jcpenney in the meantime, lets talk about jcpenney turning the ship around, essentially. The retailer losing more money than expected. Joining us right now to break down the numbers, paul trussel. Paul, how do we look at this . I know things are better, but youre still talking about losing money. Absolutely right. We certainly give management credit for the progress they have made in this recovery. The Second Quarter results were strong. There were a few items in the print that raised our eyebrows have have us concerned about the imaginin gains. What was that . Frankly, the expenses which have been down now for the past year are now plan to be up year on yeefr in the third quarter. That is a concern. Gross margins are no longer planning to rise on a sequential basis. Pennys turn around began in the second half last year. Were worried about their ability to do 60 plus comp growth and actually up 2 rise in sales in the Fourth Quarter last year. Although, i will say when you watch a retail disaster, its really hard to think about how you stop something, how you turn it around. And i think you have to give them some props for stemming the tide at this point, right . Its no question. Theyve made a substantial progress and we do Credit Management for that. And we have a 10 stock price and, frankly, its there and we just think that stock is appropriately valued. At this point, its not a profitability entity. We do have them working there way back up towards 900 million in ebitda by frankly, this is a that has over 5 billion in debt on its books so i think you have to balance out the fact that theyre making progress with the evaluate of the valuation. You go back to expensive. I wonder if you have any more insight as to what theyre spending their money on. Sometimes you dont want to see your expenses go up, other times, you need to invest in the business. You dont want to be some retailer that starts looking threat there along the way. What are they spending their money on . The company cited theyre going to have higher advertising, expenses in the second half. In addition, higher salaries and wages as they continue to add bodies to the door, especially for the holiday season. And then also theyre planning on paying out incentive compensation for the first time in a while. Where do their sales increases come from, paul . The Home Department has really been no, excuse me, im sorry. I should have been more specific. We heard macys this week deliver a disappointment. Is jcpenney taking some sales away from macys after losing market share . Where else could it be coming from . Jcpenney is taking share from a number of retailers in our view. Macys certainly is probably one of them. But i think sears, i think target. If you think about the fact that the off prior to price retailers benefited substantially during jcpenneys decline. Couples like dsw and other specialty retailers. I think theres a little bit of, you know, sales coming from all of the above, quite frankly, thats helping jcpenneys. But pennys has a private label focus strategy. Were seeing a consumer that is preferring the brands. Thats a much smaller part of pennys business. We dont know about the sustainability of it as we move forward, especially into 15. Paul, thanks a lot for joining us. Thanks for having me. I watched this, by the way. Isnt it great . The chest burster. You guys are missing the point, though. Try when youre pregnant. When youre waiting but you can see a baby kick. I know. It looks just like alien. It is an alien in your stomach. Oh, brother. Coming up with a paint ball. You have a scar. I know. I showed the girls the other day. Youre on the team. I still have it. Its right here. Do you see it . Wow. Do you know whose fault it was . That guy on my team. Charlie. Charlie gasparino. I turned into charlie. Coming up, 45 years ago, woodstock kicked off. The beatles final concert has the fab four where . At Candlestick Park. So Paul Mccartney says the last concert the stadium will ever hold. Plus, we head to some top stories heading into the weekend. So lucky. Welcome back, everybody. Were in chairs this morning. Weve been talking about a great park. We have. Candlestick park. You want me to read this . Candlestick park going out rocking last night. Paul mccartney closing the venue that was home to the San Francisco 49ers and the giants. Socalled stick will be demolished, replaced by housing, retail, and entertainment development, and you asked have we been in there. I havent been in there. Its cool when you see it, right . Theres certain reasons why im glad im old and im going to tell you why. Number one, if i wasnt old i wouldnt have seen the moon landing. Did you see the moon landing live . No. I saw the moon landing live. I went to crosby field in cincinnati which was similar to one of these old parks. Then river front. Now thats gone. Candlestick, do you know who played there . Do you know who the giants were then . Did you get to watch willie mays . Ron mare shall. Youre with me there. Im with you on all of that. But i didnt see it. But candlestick. So this is the end of an era where those are the names that i think of, when we do. But, im going to miss it for the 49ers. I mean so many great memories. The catch. No. Those arent great memories. Yeah, they are. No theyre not. What are you a cowboys fan . No im a bengals fan. Oh, that was the awesome super bowl. Yeah, wasnt that great . Thank you. You know the 49ers. Joe, joe montana wasnt it dwight clark again that put a dagger on ken anderson. Kenny anderson it was great. Kenny anderson. Great cook. Anyway, all right. That was a great super bowl, man. Come on. Do you know who the greatest wasnt it great . Yeah, i am feeling good about the 75 and 76 world series. Big red machine. Mini golf as a career. This is i did not know this, in the new york times. There is the greatest female golfer in the world is this czech lady named olivia and her work ethic is incredible. She wins all the majors, you know there are majors . Not until this morning. Wins all the majors in miniature golf. She has diagrams of every possible bank shot that you could make. Thats what you would need to do. Its like playing billiards. Like being a really good pool player. Theres huge competitions in this country and around the world. In this country, too . Yeah. That i didnt realize. And around the world. Like i said when you play, scott, dont you sometimes you can hit a perfect putt and it does not go in because it you know, theyre not made perfectly and theyre not standardized, are they . They mustish the ones must be regulation, right in must be regulation fields that they play on. I can you know, i can yip putt. I have to do the claw. Do you get the yips in mini golf, too . I have to do the claw at miniature golf. Say what . And you know what . I used to use one of the long putters at miniature golf. You never use that at miniature golf. Do you go around, walk the hole, walk around . Lay down before you putt . Oh, you know it is vacation season and as people are going on vacations for the end of the summer, some of them are starting to wonder if its actually worth it or not. Because, all the work is going to pile up when you come back. A baby what . Its much harder when you have a baby. Joe wondered why i was doing this story today its because im getting ready for vacation and unpacking from maine that we just came from but youre not going on a plane are you . No. But i have so much to do. Its nuts. Its nuts. Theres a lot to do. Its stressful. You could even do it, you know, youre staying sort of close. We dont need to tell anyone. You could be going to the poconos. You could be i am staying close. Ill be around. So you could make a couple of trips. I dont want to make the trip unup and down. I need everything done and youre racing to beat traffic today. Getting out of town. So thats the big deal. Speaking of traveling. I thought this article new tactics in the fight against stolen luggage. Oh, yeah i want to hear this. Was interesting. What the tsa is doing to try and keep workers at the airports from stealing stuff out of your bag. Theyre now sending bait bags through, and leaving like things like, you know, mont blanc pens around or fake things to see if people will steal it. How does it work with the bait . Theyre sent through 3500 times, bait bags, ten items were stolen. Those agents were fired. In one case a tenyear veteran who had received commendations pocketed a mont blanc. Wow. And im missing a mont blanc, by the way. You are . I have been for like two years. They steal detergent pods. Oh, boy. When we come back, everybody. A monster move for monster beverage. Will cokes big bet on the energy drinkmaker set off a frenzy of deals . How does pepsi respond . We have a top analyst on set to break it all down. Dont just visit San Francisco. water dripping and pipes clanging visit tripadvisor San Francisco. soothing sound of a shower with millions of reviews, tripadvisor makes any destination better. So i can reach ally bank 24 7, but there are24 7branches . Its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. A monster deal. Coke taking a stake in the high octane beverage company. Who needs this deal more. The monster or the giant . Breaking records on the auction block. This 1962 ferrari just became the most expensive car in history. But should that price tag actually raise a red flag for car collectors . Our robert frank gets behind the wheel. And changing the world one ice bucket at a time. Millions are pouring in als awareness at an alltime high. So how will this windfall and all the publicity impact the race to find a cure . The second hour of squawk box begins right now. Good morning, and welcome to squawk box on cnbc. Its friday. Im joe kernen along with becky quick and scott wapner. Andrew is out today. While were playing this version jimi hendrix version of the star spangled banner because today is the 45th anniversary of the start of woodstock. Three days of peace, love and happiness kicked off on the state in 1969, and you didnt go to woodstock, did yono, no. No, no. I was 13 years old. I tried to get my parents to let me go to i think it was creedence, three dog night and some other band. And i was they said no way. No. Shot down. Good call by your parents. I forget who the third band was. Some unbelievable 1969. But this was amazing. Just legendary and the whole counterculture and when you look back, if, of course, you know what they say, if you remember you werent you werent there. Woodstock, Joni Mitchell who was not there and you know why, shes supposed to go, and she agreed to appear on the dick cabot show instead and didnt go. Said i cant miss my opportunity on the dick cabot show. Really . Then she had a show on cnbc. Wow. But i digress. The futures are up about 50 or 60 points. 58 points. So well take that. Good week. Best week since when. Best week in six. Best week in six, judge . Thats right. You checked into that . I did. Is that including today . Or what do we have to do as of yesterday because we ended at the august highs. Back in positive territory for the month. For the year. Well take it. The tenyear probably had a pretty good week, too. Unless youre a saver. And then youre going you dont know what to do at this point. Hello 2. 4 . Hello 2. 4. Where were we 2. 87 something. But then it remember we did the terrible gdp number we were at 2. 43 and that wasnt the low. Nope. Went back up to 260, 265. And here we are back to 2. 4 but nobody knows why. I didnt hear any theme music but ill read anyway. Youre asking for it. This is your are you in at all next week for its the judge. No. Youre not in at all next week . I am. But on the halftime show. Because shes off for two weeks. Do you want me to do you want me to put a good word in. Its all good. You can only be andrew . You cant be becky . Youre unable to do that . You got to be multi versatile here. Ill work on that. Thank you. In the headlines this morning its the busiest day of the week for economic reports. In about 90 minutes well get the july Producer Price index. Its expected to show slower inflation than we saw in june, and also out this morning, the Empire State Survey Industrial Production and consumer sentiment. Check out shares of jcpenney. The retailers stock jumping in premarket trading after it reported a smaller than expected loss for its latest quarter. And keep you can keep doing this. Improvement in sales at stores open at least a year. And consumers are snapping up the newest video game consoles like the play station 4 and xbox one. Industry sales were up 16 in july compared to a year earlier. Driven by hardware purchases, sales of the actual games declined with npd saying sales of new generation games werent enough to offset a decline in games design for the older machines. Why would you be distracted . You spend an hour a day with delta house like your otter with those guys. Belushi and dday on halftime. You really feel like that . Those guys . Yeah. Yeah it does. They throw food. Dont they . Might as well. And youre otter. Youre the guy that gets deans wife. Hello. No, wasnt it his daughter oh, it was the other way. Yeah, yeah, yeah. Mayors daughter. Oh, yes. She was in caddyshack, too. All right. Cocacolas spending over 2 billion to buy nearly 17 stake in monster beverage. That move is putting a jolt in shares of the energy drinkmaker. Check that out, up 21 . Joining us right now on set to talk about the deal is senior beverage analyst at jpmorgan. John, thanks for coming in today. Thanks for having me in. So is this a desperate deal for coke . Because thats how the wall street journal is papting it, a risky bid to jolt sagging sales. Im not sure its desperate. What i think is the carbonated soft drinks industry has been sluggish for the past several years and will continue to be. People are concerned about obesity, artificial sweeteners, what have you. Coke needs to do something. This deal makes sense to me. Im surprised to see it described as sump a risky bet. I dont think its risky. I would question whether coke should be going all the way in this. You know, why are you buying a 17 stake when you could buy the whole company. Because coke has a growth problem like most Consumer Companies do. If you buy it, you integrate it into your operations. You gets benefit on the revenue line. The operating profit line. And the earnings line. This will be modestly accretive but its not a jolt to the financials which is what coke theyds right now. Youd like to see a bigger deal take place . Ive been saying all along i think coke should be buying monster. Ive got an overweight rating on monster and new on coke. What is vitamin water meant to cocacola . It bought the whole kit and caboodle, so how you know much more about it than i do. So how did that go . I think vitamin water has kept them from making a big acquisition. They paid an absolute fortune for it. A couple hundred times trailing ebit when i bought it. So what happened is they went in, basically blew it out through all the walmarts in the country and when you do that the brand losses its cachet. But youre just suggesting that they should have bought monster. Wouldnt you call into the same trap . It depends on how aggressively you push it. I think what coke has learned from this is that energy is an entirely different category with an entirely different consumer. What monster has done so well is they know their consumer. Theyre not out sponsoring Dale Earnhardt jr. Theyre out sponsoring motorcycle races. Theyre sponsoring radio, things like that. Coke has a troubled coke has trouble talking authentically to those consumers. Monster can do it. If you buy monster, keep it separate. Let them talk to their consumers in the right way. It can continue to be successful. I think thats the big lesson from vitamin water. So you said youre neutral on cocacola right now. What would it take for you to actually change your rating to a positive rating . Ive been saying all this year that coke needs to do more m a. And thats not just from a stylistic standpoint showing that theyre focused on the troubles for the category. But its also a question of the financials. Getting the growth moving again. So this is kind of a half step there. I would say we need a couple of things. We need europe to get better. Because theyve got a huge profitable business in europe. And i think id like to see them actually buying in some total businesses, integrate them 100 into the financials. That will get earnings moving again which is what they need. Its an expensive stock to work youve got to grow earnings. They have the scale and the distribution to buy whatever everybodys drinking now, thats what i was saying earlier. Youre taking market share away from coke. Why dont you buy the company thats much smaller than you are. Youve got the money, just buy it. Its exactly right. And i think part of the problem is, they are loathe to make a big turn, i dont want to say away from carbonated soft drinks theyre proud because theyre coke. And if coke doesnt stand up for the category nobody will. Pepsi is not doing it. Dr. Pepper is not doing it. I think theyre loathe to admit that problem. I think they kind of realize it. Between Green Mountain and monster, what youre seeing is a tacit admission that they need to shift focus. John, thanks a lot for coming in today. Thanks for having me in. The markets been taking a cue from geopolitical headlines to some extent. Ukrainian officials are inspecting a russian aid convoy parked just beyond its border. The development suggests an easing of tensions over the shipment but reports do say a dozen Russian Armored personnel carriers showed up this morning near the aid convoy and joining us now rebecca patterson, Bessemer Trust managing director and chief Investment Officer and ed keon at qma financial a unit of prudential financial. Anyone that has decided that the world is just too volatile so i need to go to cash, thats just not been the case. I mean it almost makes you it almost makes you want to ignore this stuff and say unless it affects oil, its not going to do anything. Really. So, im fine. Is that is that okay . Is that a false sense of complacency to do that . I mean, i take your point. Stocks have been sloppy this summer. But were still looking like were grinding higher. Anyone who sold is not is thinking, why did i do this . And we havent. We stayed overweight and ridden through a sloppy summer. But you do see something going on in europe, clearly. We got gdp reports for the Second Quarter out from italy, france, germany, all disappointing. And germany in particular, you know, this is onethird of the euro area. So this is important. This is a big anchor for that region. The Business Confidence is turning lower and you wonder how much is russia affecting psychology. So the geopolitical stuff can affect the european economy which can then affect did the euro area economy is still one fifth of the Global Economy. So it matters. So for now im keeping a close eye on it. Weve got underweight developed european equities to try to protect ourselves from spillover because i cant predict whats going to happen there. I dont know how bad it might get. What about draghi . Well, draghi is thats the danger of being a colleague of mine put it really well. He sure talks pretty. And i think that sums it up so nicely. Hes good at talking down the euro, talking about what they could do and they have taken actual steps but euro area Monetary Policy is still so tight, versus where it needs to be. What does that mean though . Who said that . A colleague of mine. That sounds like deliverance. He got a pretty mouth. Where was this person from . My colleague david. He was doing deliverance, too. He was doing deliverance, too. You got a pretty mouth. He doesnt actually talk like that. When you say that he sure talks pretty he sounds like hes okay. We were just talking about nascar. Here we go. The tangent begins. Wait seriously though the danger of being im just going to move it back to where we were. Yes. Heres the problem. Youve got germany fullblown germany is still pushing france to do more fiscal tightening. France is saying forget about it. The whole euro area is slowing down. They cant do more fiscal tightening in the very short term if theyre going to do an more trick ural form fiscal tightening theyve got to have easier Monetary Policy to help offset it. Thats what im saying. Hes going to do full blown qe. When, when, when . I bet you its going to happen. Its a choice. I think were headed that way. Oh, yeah i thought you said that. What would you you basically said were not going to go gang busters, right. But were not out of the bull market. We would get returns roughly equal to Earnings Growth plus the 2 dividend. Hold about 10 . And were halfway through the year, roughly on track for that. You know we just had the 100 Year Anniversary of world war i. So over that 100 year period of two world wars, the korean war, the vietnam war, numerous smaller conflicts of different types and yet stocks gave a 10 return over that entire period of time. So, it doesnt mean that we should ignore whats happening in ukraine, or in iraq or elsewhere. But as long as you still have the economic engine working, and you still have Companies Generating profits, the stock market is going to want to go higher. So i think what well see this year is valuations will be roughly the same at the beginning of the year and the end of the year. And youre going to get returns you dont think stocks are overvalued at this point . I dont think theyre cheap. So if you look relative to longterm history, they look maybe a little expensive. But over the standards of the last 20 years or so theyre actually maybe a little cheap. I describe them as fairly valued. I dont think earnings i dont think that the p e ratios are going to change all that much. What youll see is the earnings will drive the bus. And weve started taking down small cap u. S. Stocks just a little bit, because the valuations stretch is a little greater there. Where yeah my former colleague recovers a small cap for Merrill Lynch has been signing a little cautious note all year and i think hes been pretty much right about that. We have moved money the same way you have a little bit out of europe, a little more towards emerging markets where we have the caution last year. The United States is kind of like a growth stock. Youre paying a little bit of a premium but youre getting greater suredy of earnings and i think you have a better overall Macro Economic background. Its interesting, too, you know, weve gotten some kind of slightly scary news out of walmart out of macys the last couple days raising concerns about the consumer again but when i take a step back to me thats part of the bifurcated economy we have the Bigger Picture yields down below 2. 4 the United States borrowing costs go down, home prices still rising alibeit at a slower pace. Gasoline thanks to brent crude going down 11 in two months. Thats a big move. Gas prices are down 6 over the same period. So the picture for the u. S. Consumer Going Forward into the fall, right now, you know, knock on wood, is looking very good. To your point on where the Growth Stocks so to speak. We think over the next few years. A lot of it is going to depend on how consumers behave. Are my children going to behave the way i did . Home ownership rates have gone down a lot for younger people. Even car ownership. Things like that. Is it just deferred . Or are they never going to go back. Is it a structural change. That we dont know yet. Okay. Thank you. Youre welcome. Have your husband on later. Mmhmm. Talking about ferrari. Driving fun cars. Driving fun cars. Is your wife going to be on . I dont think so. Okay. Be honest. Id be happy to have her on. Shed be much better than i would be. Good answer. Okay. Happy wife, happy life. All right. Up next another possible data breach at a retail chain. Another member of the club. A new investigation of hacking earlier this summer. Plus the ice Bucket Brigade rolls on. Cramer took the plunge among a long list of others. So is this viral video sensation actually bringing big money to the cause . Were going to talk to the Als Foundation just minutes from now. Stay tuned to vote. Which home is the best bang for your buck . Place your vote for the winning home. Go to cnbc. Com vote right now. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com so what ya got on deck . Skyfall. Lean in, then some pinterest, you . Twitter. Minecraft and then some hunger games. Boom. Wow, you guys are all set, huh . Oh yeah, new amazon fire phone. It comes with amazon prime tons of cool stuff for no extra charge. Really . It comes with amazon prime . Yeah, theres so much to watch. Ive been on this earth nine years, ive never seen anything like it. The new amazon fire phone, with a full year of prime included. Exclusively on at t. Welcome back, everybody. Another National Retailer is dealing with hackers. Supermarket chain super value is investigating a potential data breach. More than 1,000 stores could be impacted. The wall street journal reports that the breach appears to have taken place in late june or early july and could be due to Malicious Software installed by hackers on the retailers point of sale network. That was what happened with target and that was a huge concern. Coming up, cnbcs popular Million Dollar homes challenge is back. This time its bigger and better than ever. Were putting a price tag on steroids. Legally. And stick around and get ready to vote for your favorite house. Im sitting behind the wheel of the most expensive car ever sold at auction. Well tell you why coming up after the break. Ctricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. The ibm cloud is the cloud for business. Cnbcs popular Million Dollar home competition is back. This time with a twist. Were going to blow the roof off the 1 million price limit and take you inside some the most expensive houses that we could get into. Six multiMillion Dollar homes are battling out to see which one is the best bang for your buck. You get to determine the winner. Heres how it works. The first two homes are about to face off in round one. You can go to cnbc. Com vote right now and choose your favorite. But hurry because the polls are only open for a few minutes. One is the pious pad. One is the pop star glam. The winner that you select gets to move on to the next round. The loser is eliminated. To add to the fun were keeping the location of each home a secret until after we get a look so get ready to vote because heres the first matchup. Hallelujah. This 1924 tudor estate set on nearly 3. 5 acres of land was built as a convent. But converted into a residence a quarter of a century ago. Walk through the hand crafted front doors, into 15,000 square feet of heaven. The spacious three story mega mansion boasts five bedrooms and seven full baths. And experience a piece of eden at the luxury pool house or laze around the inground pool, tennis court or hot top. List price 3,995,000. Located on three quarters of an acre this ultramodern home was once the residence of pop star rihanna. Theres 11,000 square feet, including a kitchen that leads into a wide open living and dining area complete with a bar. There are seven bedrooms. And eight bathrooms. But the outside takes center stage, where the inground pool and hot tub steal the spotlight. Yours for 14,995,000. Okay viewers. Voting is under way. Its up to you to select the winner. Which is the better bang for your buck . Is it the pious pad for just under 4 million or the pop star glam for 15 million . You can vote right now at cnbc. C cnbc. Com vote. Lets bring in real estate super broker dolly lenz. First of all, dolly, tell us where the two homes are located. I would guess l. A. For pop star glam. Pacific pal sides, you got it. And the pious pad . Is in columbus, ohio. Great house. Really terrific house. Yeah, its beautiful. I love beautiful. And of course, its drool worthy. That explains the price differential, too. Yes, exactly. But the taxes currently are the same. Who would have thought . In the 60,000s per year each. 60 thousands . Yeah. Even the Columbus Ohio one . Yeah, 3. 44 acres on the Columbus Ohio. The other three quarters of an acre. Palisades. That was on sale. It will go up to 150,000. Both houses are amazing. The big big surprise is that rihanna has slept in the pacific palsides house. So that jacks up the price. Are we allowed to ask how that happened . Or maybe that might be never mind. Maybe its never mind. Okay. All right. And interestingly oh, it was her house. Well, thats you know, i didnt know what you were saying. I was with you. You were with me . Was like, well can you go into that . Was there a walk of shame involved . Exactly. And that house rents okay i didnt know it was her house. We did say it was her house. This is a tease here. Come on. 65k a month it rents for. Where the other house would rent for about 10k a month. These are big differentials also. Theres a lot to consider here. Which do you think is the better bang for your buck . I think its really hard to overcome Pacific Palisades rihanna house. That gorgeous, modern, beautiful structure. Its really hard. So i dont know. Which one do you think . I location is always everything. Location is everything all the way on this. Cant wait to see what the voters think. Thats whats exciting. We do have the pious pad looking like its winning. Looks like we just throw that up. Pious pad got 69 . Oh, my gosh. Pop glam got 31 . Wow. How many votes did we get on this, guys . Nobodys awake in california. Were still they couldnt vote. Pious pad is the winner. Pious pad is the winner by 10,000 votes. Wow. At this hour . Nobody from l. A. Is that in the neighborhood . Its not far. Really. Yeah. Its a small one in his neighborhood. Yeah, right. Les wexner the founder of limited throw in a Muirfield Village membership. On that block. How far . Lets do a google. All right, dolly looks like pious pad is the winner. And speaking for pious pad Lauren Bacalls apartment should be coming on the market very soon. Do you play golf . Do i look like i play golf . No. Stick around. Well be right back. Thank you. Have saved with progressive,oe so i get invited to quite a few family gatherings. Heck, i saved judith here a fortune with discounts like safe driver, multicar, paperless. You make a mighty fine missus, mlady. Im not saying marks thrifty. Lets just say, i saved him 519, and it certainly didnt go toward that ring. Am i right . [ laughs ] [ dance music playing ] so visit progressive. Com today. I call this one the robox. Welcome back to squawk box, everyone. Lets take a look at some stocks to watch this morning. Shares of Applied Materials getting a boost this morning. The chip equipmentmaker posting getter than expected results. Among the catalysts here, contract manufacturer spent more money on Technology Used to make smartphone and memory chips. That stock is up by about 3. 75 . Apples new iphone will r0r9edly have a screen made out of glass instead of plastic. The journal says the first sapphire display screens will come off production lines this month. Theyll be featured in the larger iphone and smart watch. And a bunch of news on chiquita this morning. Get it . A bunch. A brazilian juicemaker say they are extremely disappointed that chiquitas board rejected their takeover offer. Yesterday chiquita once again said it is backing a merger with an irish tropical fruit company. Check out chiquita shares, down by about six cents. One of those is an inversion. Theres inversions maybe thats the irish would be the inversion. We need to peel away some of the really bite into it. Cant bite into a banana. I guess you can. But you dont have to bite very hard. I mean, its well, moving on now before this takes another weird turn. Only you would think it was headed there. Really. I was its just a very soft mushy its not like an apple where you like that, right . Right. Pervert. Go on. Theres a reason why we get along. Yeah, right. Great minds. The ice bucket challenge taking off with the business community. Tim cook the latest executive to take the plunge. Tweeting out a photo at apple hq and challenging disney boss bob iger and dr. Dre. Its all the rage on social media and it all started right here at cnbc when i challenged Dick Costello who in turn challenged Carl Quintanilla and the list goes on from there as you know. Jim cramer doing it yesterday as well. The challenge isnt just about making a video and posting it on your facebook page. Meg tirrell joins us with a look at this amazing Public Awareness campaign. Amazing really it has become. Yeah, its really, really incredible. The Als Association says its an unprecedented amount of attention being paid to this disease. So lets talk about what als actually is. It stands for amy trophic lateral sclerosis. Also known for lou gehrigs disease. Its neurodegenerative disorder where you lose the function of your muscles over time. Its progressive. The prognosis from the time of diagnosis usually is two to five years life expectancy. About 5600 people a year are diagnosed with als in the United States. About 30,000 americans at any given time have the disease. And theres really nothing thats been shown to work for it. We dont know what causes the disease so efforts to treat it have been really difficult. The latest high Profile Program in this was in phase three and the program failed. Several other drugmakers tried to work in the space. Really theres not much out there for it. We did talk to biogen earlier this week and they said they were still working in this space. Theres no real effective therapy available today. And what biogen is trying to do is work with a number of investigators to really try to understand what goes wrong in als so that we can develop rational approaches to developing drugs for that disease. So one is the ice bucket challenge. This took off in the middle of july, it involves dumping a bucket of ice on your head, posting it on social media and issuing the challenge to more people. The whole goal is to raise awareness, and funds for ls. And its done just that. The Als Association says theyve raised 7. 6 Million Dollars since july 29th through yesterday. Compared with just about 1. 4 million in the same period last year. Now thats the National Plus the chapters. So it really having a huge impact. Its brought in 145,000 new donors to the Als Association. So its really making an impact. It started because of this baseball player, young baseball player in massachusetts pete frates so we should definitely remember his name when we talk about how this all started. As were all talking about celebrities that are doing it. This was because of one young guy who was a star baseball player, i believe at boston college. At boston college. I should tell you, too, that number was just updated this morning. Its 9. 5348. Thats great news. He how old is he . 20 something. 29. Hes 29. Diagnosed two years ago. Yeah. They have no idea yet what causes i mean you cant look for a gene to try to fix until you figure out what the underlying right. And biogen is working on that actually. Do you know it affects the nerves and the brain and the spinal cord which is where the nerves are. But also what biogen is doing a huge genome sequencing project trying to figure out what is causing this. Go backwards. Find out where the anomalies are and the geno type for people that actually come up with because its not strictly hereditary. Right. It may run in families. But they dont know. One thing thats kind of odd about it is it does seem to strike folks who are very active athletically. They dont know if theres a real correlation there. But you just see that a lot very athletic people, they look how long Stephen Hawking thats true its very different and you can get it when youre old. My mother got it when she was like 84 years old. Oh, gosh. And when youre 84, i mean its a scary way to go, because you feel helpless. But the life years loss compared to someone 29 or 30 years old, its not you dont look at it the same way. Even cancer should be expressed not if you kill someone who is 95 you should look at years taken away off a persons life rather than just, whatever you know, because we live to 130 wed all die of cancer probably. Lets bring in yeah, meg, thanks a lot. Lets bring in lance slaughter from the Als Association. Lance, welcome this morning. Good morning. Its a pleasure to be here. Thank you for having me. Can you currently put in your own words of just what this whole phenomenon has meant for what you guys are trying to do . Well it means a lot to the Als Association and other organizations involved in finding the cause, finding treatments and a cure. But i think during this time were probably most pleased and grateful for the impact that its had on People Living with this disease. You know, three weeks ago, there were half the population really didnt have an understanding about what als is or lou gehrigs disease. Now, millions of people do. And thats generated hundreds of thousands of contributors to this cause. So not only are we fortified with resources to continue our work, which is important to us, but its more important to People Living with the disease and their families. And if you speak to any patient or person living with the disease or a family member, youll see the excitement. And their spirits lift based on, again, this kind of recognition and awareness. Were just looking at video as you were speaking of apple chief tim cook, and Mark Zuckerberg of facebook, and phenomenon really is what this has become and youve got celebrities and people of all walks of life now doing this. Are you shocked at how this has caught on and the kind of money that is now pouring in . How would you describe it . Well, im surprised but pleasantly. I dont want to say shocked because when youre doing this kind of work, youre waiting for this transformational moment. And you work hard year in, year out to ensure that it happens. And i can assure you, this is the kind of transformational moment that we hope to arrive at when we have an effective treatment and a cure. So, i never want you dont sit in this work being shocked about anything. But tremendously pleased. You know, when i look the ice bucket challenge about two weeks ago i think we had raised on additional 50,000. And as you reported earlier, were now at 9. 5 million over the last two weeks. So, i am i guess somewhat shocked about that. But you know, equally important like i said is the number of the millions of people that are more aware about the disease, and the hundreds of thousands of people who have invested in this cause, and are eager to be involved. You know, programs like this one have spent an hour of programming time, if not longer, talking about brain diseases over the years. With experts here in new york city. Do you feel as though, you know, so much of the attention and dollars over the years have gone towards cancer research, and rightly so, obviously. But that not enough focus has been on these terrible brain diseases that were all talking about now, whether its als, parkinsons, things like that . Well for sures quite frankly decades weve been mobilizing the als community to generate support with the federal government. And weve been extremely successful with that. The federal government basically earmarks 80 million toward als research. Part of the reason is that weve discovered, scientifically, that veterans are twice as likely to get als than the general population. So i would never want to articulate that were underfunded from the standpoint of the amount of prevalence. Having said all that we do need more private funding. And there are Vital Services that need to be provided to patients and their families with the disease today. So in that regard, this is where i think we can make progress. But theres more people talking about the disease. You know im sorry. Twice as likely . Yes. Military veterans are twice as likely to get the disease. Why . We dont know. So the department of defense is investing about 7. 5 million each year to find that out. Is it and thats the statistically significant too because what is your normal chance of getting lou gehrigs disease, if its only what 50,000 so the normal rate is like 0. 00 something so to double is it is that really statistically significant . Its significant as it relates to what things may be exposing you to the disease or what activities may be helping to trigger a diagnosis. So its important. I can assure you, though, while we have so many military veterans that are currently in service, or have served, its a disturbing trend for the department of defense. And theyre willing to invest in it. Thats really strange. Theyre exposed to all kinds of stuff, obviously, but and you wonder whether theres actual behavioral or psychological component to it. Thats very strange. Isnt it . We dont know. And again, thats why theres urgency to find out. As you pointed out earlier, though, people that are active get it, so theres been, you know, a disproportionate number of athletes, high profile athletes in football and soccer, so, again, we dont know, and thats where the urgency sits. Its very weird. I wonder if its autoimmune because its just weird for the motor neurons just degenerate and you have we dont have any idea why at this point . Not at this point we do not. Really weird. Were working hard to find that out. Good. Good work that youre doing. Thank you so much. Well talk to you again soon. Lance slaughter. Thanks for having me. Okay. All right. Youve spent you guys have done hourlong programs if not more on these types of issues. Coming up. We are whale watching. The latest filings for investing titans are out including paulsons big stake in allergan. Then at the top of the hour we cook up some ideas on how to fix whats ailing the Restaurant Industry with bobby flay. I dont know we were showing a whale we may be getting a recipe for killer whale. Im not sure did we talk about the sea world thing . No, its whale watching as in the 13 fs, the big investors. Also a story about guys getting out of sea world or at least anyway iron chef advice on how to turn stuff around. Whale is delicious by the way. What would happen. If energy could come from anything . Or if power could go anywhere . Or if light could seek out the dark . What would happen if that happens . Anything. But parallel parking isnt one you do a lof them. Ings great. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. Welcome back to squawk box, v. It is shark week but this morning its a crocodile grabbing the headlines. Check out this video. A swimmer in mexico getting a little too close for comfort before escaping from a big crocodile holy cow look at that thing. That thing is huge. Whoa. An onlooker standing nearby on a bridge threw an object at the croc to throw it off. But my goodness. That guy is lucky. Hmm. And its its chasing him, too. I didnt see the video at first because i was reading. Look at that. Oh we were just talking about jaws and sharks. Its shark week, too, on watching it. All right. Scary. Launched Steven Spielbergs career. Kate kelly is croc watching, whale watching. Sifting through quarterly filings to see whats grabbing the attention of major investors. Nice to see you, scott. An interesting period with lots of activity from appaloosa Hedge Fund Manager david tepper who shifted his holdings pretty dramatically. Youll recall the Second Quarter which is the period yesterdays filings cover was the quarter where tepper famously noted that it was quote unquote nervous time saying unless the Central Banks in china and europe especially chose to ease Monetary Policy, and the growth picture in the u. S. Improved, he was keeping more of his money in cash and taking off some of his long positions. That bore out in his 13f filings where he reported yesterday as of late june he had reduced his number one position which was a spider by 3. 5 million shares leaving him with 1. 3 million of those. He also drastically reduced his stake in citigroup, cut the qqq and sold off delphi automotive. As a result of all that his holdings as of the end of june had totally changed to american airlines, gm, citigroup, priceline and google. And speaking of Technology Names where tepper now appears to have some big exposure, lots of interesting action in apple stock this past quarter. Tepper decreased the stake in the tech giant by 67,000 shares for a total of 1. 7 million making that his 16th largest position. Leon cooperman of omega advisers, whos been a fantastic stock picker in recent years and remains largely bullish at least as of delivering alpha a month ago, even as tepper had moderated his outlook a little bit took a stake in apple of 1. 3 million shares. At the same time however David Einhorn who has been bullish apple several years now reduced his stake from 9. 5 million shares to close to 14 million. A story i think was misreported by some others yesterday. But it was a decrease in as you were reading that i thought i saw its an increase. Its a decrease in some other News Services didnt take into account the stock split. So there was some miscalculations. But it was a decrease as it turfs out. All right, cool. Thank you. Coming up fast food and restaurant stocks giving investors heart burn lately. Red robin, noodles and mickey ds splumping big time. Were turning to bobby flay to get his recipe for how to fix whats ailing some of the nations biggest food chains. Plus the big weekend in monterey, california. The woodstock for billionaire car collectors getting under way. Robert frank is there for us. Ferrari price getting fast and furious. Last night a ferrari became the most expensive car ever sold at auction. Going to tell you about the price and whether ferrari booms can be turning into the ferrari bubble. [ male announcer ] dont just visit miami. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better. Welcome back, everybody. Pope francis is in south korea today. And kia could be finding a pitch man. The popes been seen riding around in a locally made kia soul car. He often makes official visits in a fiat. From cheap kia from an inexpensive kia there you go. Why are you being so judgmental . Cheap is a bad word. To a new record for the most expensive car ever sold at auction. That record was broken last night at the pebble beach car auction, where people are loaded im sure. Cnbcs robert frank are you out there joins us from the monterey peninsula. Youve done other ferrari stuff for us, too, robert. Those are the cars that sell the most at auction. It is amazing. I mean theyre almost a class unto themselves. Joe, as you know the big spectator sport here in pebble beach is usually golf. Last night it was car prices as those four days of auctions kicked off. And last night we had a new alltime world record. A 1962 ferrari was sold for 34. 6 million. Or 38 million when you include all the auction fees. Now this was a gto. And bonhams, which sold that car as well as the previous record holder a 30 million mercedes that sold last summer, they say basically prices are just going to keep going up as the wealthy love these top cars. Take a listen. Im absolutely delighted that weve sold this car. And im delighted that its made the price that it has. Now joe as you mensed ferraris are really a class unto themselves. And gtos are almost sort of mythical in the car world. The most desired. The most expensive car among the wealthy. This one was a 1962, and when you buy gtos, there were only 36 ever made. Its a very exclusive club. Some say the most exclusive club in the auto world. People like ralph lauren, we dont know who the buyer is. Its sort of a mystery buyer at this point. But the under bidder was a person from thailand. This is truly a Global Market. Collectors from all around the world in what used to be really an american sport or collectors world, and again, no sign right now that prices are going to go down. But well see. We got three more days. That was just the beginning. Its weird, robert. 38 million for a car. And its an old car thats old. The technology is old. What does a brandnew top of the line ferrari cost . Give me that, robert. I dont understand. Theres two kinds of people in the world, right . You know, you could buy over 100 brand new ferraris. Over 100 brand new ferraris for what it cost for this car, which is over 52 years old. Yeah. So now the good news here with age everything gets better, right . Thats what no. Thats what well theres drugs for that. Thats what happens. These people have too much money. Theres no bubble in collectible car market . 38 million for a ferrari . Yeah. Thats coming up in the next hour, im told. Oh. Which would you rather have, robert, a brandnew also by the way, joe i want to mention one thing. This car was actually expected to sell for up to 50 because in private sales gtos have sold pore more than 50 million. So people were disappointed and jay leno told me last night pebble beach the only place in the world where people would be disappointed for a 38 million sale. Wasnt that car in an accident . Well have more from jay leno coming up in the next hour. Wasnt that car in an accident or did i confuse that with another car sale . No. Youre absolutely right. And that is probably why this didnt go to 50 million, because again another gto sold recently for 52 million. A person was killed in this car in 1962 when it first debuted. This had a great race history until then. So maybe that spooked some people. Maybe thats what held the price down. All right, robert. We will see you again in the next hour. Mean time after the break, fixing the slumping restaurant sector. Tim love of cnbcs restaurant startup is here to tell us why so many food chains are having a hard time. Hell be joined by celebrity chef bobby play. Be still my heart. Also fraud investigators taking to the internet to find out possible information, facebook, tum blr, twitter and others being used to find possible perpetrators. Now companies are fighting back to protect user information. The ceo of reputation. Com will join us. 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So today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that American Made bag within a few days in singapore. Citi has helped us expand our manufacturing facility; the company has doubled in size since 2007. If it can be done here in San Francisco, it can be done anywhere in america. Restaurant stocks giving investors heartburn. Get in my belly celebrity chef and Restaurant Owner bobby flay and the host of restaurant startup tim love are here to tell us whats ailing the industry and how they would fix it. What is the soup du jour . Its the soup of the day. Mmmmm. That sounds good. Ill have that. Using social media to find fraud. Investigators turning to facebook, tumblr, twitter and others to crack down on perpetrators. Companies are fighting back to protect their users. We represent the Lollipop Guild the Lollipop Guild and in the name of the Lollipop Guild we wish to welcome you to munchkin land and lollipops gone wild. The sweet treat getting a makeover and going high end. As the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc. First in business worldwide. Im joe kernen, along with becky quick. Scott wapner is also here. Andrew is off. Hell be back on monday. Thats the good news. Bad news is, theyre leaving. For a little break. Very nice break. You took two weeks. Who takes two weeks off . You. Oh, thats right. Futures at this hour forgot. Ive been back a week. I need a vacation. Up about 50 52 points. Whats that . Its been good. Up 52 points. Or so. And its going to be the best week since when wapner . Best week in six weeks. Okay. Ive put that in my with me now on that . I put that in my memory. Best week in six weeks. Making headlines tis morning. This could be the start of another soda war. Giant cocacola buying a major stake in monster beverages. It tries to expand into faster growing categories. The price tag, more than 2 billion. And we talked to a beverage analyst earlier this morning. Lets listen to that. I would question whether coke should be going all the way in this. You know, why are you buying a 17 stake when you could buy the whole company . Because coke has a growth problem like most Consumer Companies do. If you buy it, you integrate it into your operations, you get the earnings line. This will be modestly accretive but its not sort of a jolt to the financials which is what coke really needs right now. Another stock winner jcpenney posting better than expected quarterly samestore sales up 6 in the Department Store reporting a loss but a smaller one than many analysts had expected. The retailer desperate for a comeback posting shares of gwinette are also getting a boost today. Activist investor carl icahn has reported a near 7 stake and also revealing he supports the Media Companys plans to split print and broadcasting. There is a food fight taking place between shareholders and fast casual restaurant stocks. Shares of noodles, mcdonalds, pot belly and others slumping as sales come up short. Jane wells joins us with a look at the sector. Good morning. Consumers willing to pay more for fresher food that takes a bit longer to make without traditional Table Service has proven a winning recipe. Fast casual sales grew 11 last year and forbes reports traffic has grown faster there than in any other restaurant segment for five straight years. So Everyone Wants in. But how many gourmet burger joints does america need . The shakeout or steak and shakeout in fast casual has started. The clear winner is chipotle. Where samestore sales jumped 17 last quarter. The Company Raised prices and still saw more traffic. The stock is up significantly for the year, 27 . The only other one doing better is el puyo loco. Which just started trading and is up 33 . Most are losers. Concepts that seemed hot are struggling. Pot belly, noodles, red robin gourmet burger, panera all struggling to show growth. So what do people like . Obviously they like fresh next but Consumer Reports asked readers to rate chains and burgers, the habit was in first but you had to go down to 10th place to see one thats publicly traded, shake n shake. Mcdonalds was last. El polo loco was second. Taco bell was last. And naturally, taco bell has just opened its first experimental fast casual restaurant in Southern California called u. S. Taco company. Look at those. Decidedly upscale foodie tacos like one with fresh lobster, garlic butter and slaw called the one percenter. Its reportedly for people who wouldnt be caught dead in a taco bell. Guys . Thanks, jane. Stay with us. With us now to sprinkle their Culinary Genius are two masters of the kitchen in studio bobby fwla the owner of fast casual chain bobbys burger palace which has grown 18 locations across the country additionally hes a restaurateur behind mesa grill in vegas, new york citys hot new spot gotto, and i didnt say it to you off camera and you had an affair with ari golds wife an entourage. The affair did not actually consummate. I tried very hard. That was classic. And they called you remember what whats his name the actor, my agent. Jeremy pifen. When he found out it was you, see i would have been insuited. He called you a ginger what did he call you . I didnt write the script. You know its not a reality tv show, right . Thats not real. Excuse me . There was no offer i got in trouble one other time with that pretending that aquaman was real. Also, tim love restaurateur and costar of cnbcs restaurant startup. Maybe youll be in the entourage movie, tim. Hes the owner of five iconic restaurants in texas including fast casual joint love shack known for its dirty love burger. Can i say that, really . I guess its cable. Some of the stuff youve said oh, yeah, because so first of all im overdressed. You guys are queue relaxed here. I look ridiculous. You can take that off. Okay, im sorry. I didnt get the notes. But i will next time for sure. I was wondering if you were going to wear a suit, bobby. Im ready. Its a business network. Yeah, exactly. And business is good. I would business is great. I opened bobbys burger palace about six years ago. We started now we have 18 of them as you said. And you know, its an oldfashioned business story. Two guys, myself, and my partner lawrence krech mar, im a chef, hes a restaurant professional real estate expert, and we like burgers. And we decided to open this place, bobbys burger palace. Theyre great. Yeah i mean we, heres the deal, we put up all our own money. We didnt take any investment. Theyre all company owned. We havent franchised one of them. And business is good. You know, were cash flow positive. And we have been since the day we opened. And it continues to rise. And so, we feel like were just beginning to grow this business. Its only been six years. You know, and were trying to get people what they want which is great food. People in this country, as you know, they want better food every day. And as a chef i feel like we can help deliver that. Its not just some story that got made up in a Conference Room one day we think we should do mexican food. We think we should do italian food. This is something that really stems from something we do every single day of our lives. People want better food. They want value. And theres this sort of buzz phrase fast casual. Chipotle is a great exam of that. We feel like were fast casual plus because we also give you some service. Its not full service. But we bring the food to you. We take it away from you. So youre not just standing around waiting for somebody to give you something to go. Would you franchise it . Its possible. Anythings possible. It would have to be the right situation. Because obviously the brand and what it is is really important to us. So control is important. Tim, do you know for a fact that if bobby came in on the show on restaurant startup and had this idea would you have definitely said thats well do it, can you spot talent like, does this guy have what it takes . Well, i mean, you know, with clearly with bobbys reputation that puts him ahead of the pack right off the top. No, but if no one knew who he was you think you could tell . Maybe from the suit, right . You know, id have to taste it. You know its all about the food like bobby said. Hes building a restaurant. Bobbys burger palace is built around quality and like he said hes adding a little bit added service. Which, you know, elevates his concept a little bit more than the others. Thats what youre seeing happen in the fast casual realm is you know in the last seven, eight years, theres been a 300 growth in the fast casual segment. Its almost a 500 billion business now. And if youre a restaurant professional who knows what theyre doing, why wouldnt you want to get into that segment . Its the only place where you see double digit sales growth. I mean year after year after year after year. And its clear that people want high quality ingredients, and some speed in their food. Especially during the lunch hour especially. Im thinking, too, we were just talking about mexican food. I always use that expression that the worst mexican food is great. I think about demographically whats happening and i think that anyone who finally tries mexican food youre going to eat it, that will never that concept will never get old, will it, guys . You know, i think that you know people talk about the burgers being, you know, has it had its day. And it never has. Burgers, its one of the Great American dishes. Period. People in this country, and in other countries as well now, want to eat burgers. In any economy. So its mexican food now . The Great American food people are looking at red robin this week and see what happens with that and theyre like, yeah, maybe tastes have shifted now towards El Pollo Loco and you say thats not true, people still love burgers. They do now. They did yesterday. And theyre going to tomorrow for sure. And i think that Companies Like red robin who have done so well, they look to people who are independent restaurateurs to see what the trends are at that very moment. We basically take a look at what our customers are saying every single day, and adjust in that way. The thing i love about bobbys burger palace is that every time i talk in i feel like every single customer is smiling. Im not really sure why. I dont want to ask them but i feel like theyre having a great time because they feel like theyre getting value and they feel like theyre enjoying their food. Quality of food is more important than ever at every level of the food industry. We have to eat every day but we want to eat good food. Are those your colorado locations theyre all smiling . We dont have any in colorado. Oh, you dont. Well thats an idea. Very happy in colorado. Wait a minute. Thats going to be the burger of the month. I just got it. Colorado burger. Tim, like five years from now is there something well look back on and say why didnt we see that coming . Youre constantly trying to figure out what thats going to be, right . Do you know . Right, well clearly i dont know but i can tell you when youre looking at a trend like what happened at red robin yesterday, and oodles when they came out their ipo exploded and then you just see it kind of fade off. People get really excited about restaurant investment because its a sexy investment. Its really you have this mindset you think oh, im going to invest and be a partner in a restaurant and i can go sit down and order a bunch of champagne and all my friends are going to show up and its going to be the greatest thing ever so people get a lot of excitement around having the ability to own part of a restaurant. And then you know, as bobby touched on i mean its just two guys that started his business. Im independent with everything that i have. And its a passion that goes behind the business, which in turn translates to quality of food and things like that. And when you see a Restaurant Company go public a lot of times that passion gets dispersed throughout a bunch of people and you have false money that allows you to expand quicker than maybe you should. And so you start losing quality, and you choose that over sales, and eventually it bites you right back. And so, what i think youll see in the fast casual segment looking forward is going to be more ethnic foods. You know chipotle does well. Mexican food is doing well. Youll see some asian, you know, like their new concept shop house. I mean its going to be its going to do well. Because its a little bit different, the food is a little punchier. I mean the burgers and fries are never going to go away. Its an American Food that we always want. We always crave. But the ones youre going to see really making big sales jumps are going to be the ethnic side foods. And you look at panda express. I agree. Can i ask you guys, though, im just interested because what you guys are talking about is great food. Theres always going to be a market for that but we have heard from Companies Like mcdonalds who have stalked about the broader troubles with the Broader Consumer at this point. Bobby have you seen that with any of your businesses . You know, not really. I mean, and we attribute it to just being good at what we do, and adjusting. Youre more price conscious. Were very look, ive been to your new restaurant many, many times already. Weve got okay. You could probably charge more for that food and you know that. And well be raising the prices today. You know where im going. Exactly. People have even said that. Value is incredibly important. The last thing i want anybody to think about when they come to my restaurant is, is it too expensive. Ever. So the idea is kind of to be on that bridge. Great quality, great ingredients. And not too expensive. And then everybody goes away happy. I always say, like, my message to the restaurant analysts out there, and im not a public company. Im private. But, dont get caught up in the hype. This is food. Take a look whats behind the curtain, and see whos actually making the decisions and cooking the food. And thats important. When how do you is it hard to get a table there . Do you say youre do you say youre judge one nra and they think im going to walk in no is it hard to, how do you have you ever used the term do you know who i am . No he says i know joe kernen. All right. In the door. All right. I havent had to say it before. You can get in that easily. Tim love good being quiet. New show is going great. Youre, youre, theres a picture of you on the west side highway thats so big that you can see every you know, blemish, i mean it looks good. It looks good. Anyway on thank you. Its a closeup of but you got the other guy with no hair next to you so you look a little better. Bobby flay, is here thanks. You know what about bobby fillet. Filet . Oh, yeah. Sounds good to me. Have you never thought of that . Well i have, actually. I knew it i knew it see. Youre a little late to the game but we can still change his name. All right. Thank you, bobby filet, thank you. Medium rare. Medium rare. Yeah. Bobby i want to tell you, i want to tell you congratulations on the new restaurant, buddy. Oh, thank you so much. I hope you come and visit us soon and congratulations on your new show. Did we say when its on . We talk about restaurant startup. Yeah. Okay. Never mind. Cant do it too many times. The Fastest Growing network in primetime. Thats right. We are. Ive heard that once or twice. There it is. Up next up next how far should social Media Companies go to protect your privacy . Investigators turning to facebook and others for information. Now companies are fighting back. The ceo of reputation. Com joins us after the break. And check out the squawk box market indicator. Youre driving along, having a perfectly nice day, when out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. 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Welcome back to squawk box. For 9 first time apple has started storing personal data of some chinese users on servers in china. The company says the move will help it improve the speed and reliability of its icloud service. Many tech giants including google have refused to build data centers in china citing censorship and privacy concerns. Becky . Facebook in a dispute with a Manhattan District Attorneys Office over government requests for users posts, private messages and other data. Foursquare, kickstarter, and tumblr now backing facebook raising the question how far should social Media Companies go to protect your privacy. Joining us is michael fertik, the ceo of reputation. Com. And michael, this is a really interesting time to be watching how this all plays out. What should these social Media Companies be doing . How worried should people be about using them . So i like that social Media Companies are trying to stand up for your data privacy, your data security. I like that facebook is doing it. I like that other companies which are smaller are also helping. The Smaller Companies have a harder time because its so expensive fighting warrant requests and subpoena requests. I like that. In this particular case its not really a good example of facebooks fighting the data requests. I think facebook has a loser on its hands in this case. Heres the story in this case. The Manhattan District Attorney has gone after some Police Officers and firefighters who have claimed disability. They say they cant work. And yet theyre living their lives, theyre fishing, theyre hunting, theyre doing sports, martial arts, and they and their families are posting the activities and photographs of the activities on facebook. And so the evidence under which these officers and firefighters are being charged actually lives on facebook. And so, the District Attorney sent warrants for just almost 400 warrants which were approved by the judge to facebook to get evidence cultivated and accumulated back to these cases. And 134 people have, in fact, been charged based on the evidence that has been cultivated. Why do you think this one is a loser, though . Well, because the warrant process was served. The warrant was served. The evidence has actually been successfully accumulated and collected by the District Attorney. And by the way, the evidence lives on facebook. They werent going on a fishing expedition. Theyre subpoenaing the people themselves, and their families who are posting these pictures. So its very important evidence in this case. It feels a little bit like a pr move by facebook. Feels like window dressing. But i think what theyre trying to do is send a signal, trying to send the signal that now theyre going to increase the costs to government to try to surveil you. I think facebooks come under a lot of pressure for the way it handles data. The way its been forking over data. I would say the problem that most people have had with what facebook has done to this point is what theyve done with that information themselves, not about handing it over to Law Enforcement agencies. Thats where i fully agree with you. I do have reservations about how social Media Companies use the data themselves. I think what your point is to quite correctly is concern over not big brother but the proliferation of little brothers. The companies that have our data and what they do with it. Thats why i started my company reputation. Com to protect against that particular set of problems. I do have a strong agreement with you on that point. I think people are very, very worried about it. So thats why i do think this does feel like a pr move by facebook. Is this a pr move that is more than a fake . They may be signaling theyre going to fight back against outside Law Enforcement agingensies and part of that is what weve seen with the nsa and all the problems that have come out of that. Do you think these companies are getting more careful about what they themselves are doing with the information . You know, i think that they are trying to toe a line. When youre a social Media Company, what are you . Youre a media business. The only product they have to sell is data about you. Thats all theyve got, right . So they have to toe a line between revenue and the pressure about privacy. The companies are run by good people typically and the people who work there are good people typically. Theres sometimes a real debate internally about whether they should handle data one way or another. On the other hand, theres a little bit of a religious conviction. This is important. Theres a religious conviction among a lot of the people senior and junior midlevel in these companies, theyre investors, that the opposite of privacy is something called transparency. And people should just stop worrying about something called privacy. That argument drives me crazy. It drives me crazy it also drives me crazy because its so consistent with their economic imperative, which is you dont need your privacy anyway, and were selling it. And ive had hard times michael where ive canceled my facebook account, i have pulled back from all social media at different times. I ended up going back on because i wanted to see pictures my cousins had posted at different times. So ive gotten back in i bet you behave differently once you got oh, sure, yeah. I do. But yeah you kind of participate i post next to nothing. I watch. Im more of a voyeur when it comes to a lot of this stuff. It turns out a lot of people on social medias are voyeurs. Theres a 1 190 rule. Might be interesting. A 1909d rule on the interin the 1 of people post everything. 9 of people repeat everything, and 90 of people observe everything and consume everything. So 90 of people on the internet are basically just lurking anyway. Theyre watching. Theyre consuming. Theyre looking at their friends pictures but theyre not actually posting much. One of the strong bre haf yore changes that we are seeing is that a lot of the people who have been on some of the longer legacy social media sites theyre basically letting their sites go moribund. I do have a facebook page. I basically dont post. I show up to see whats going on. What i have a hard time with around facebook, twitter and others, that facebook button, that like button that is on all the web pages you go around the web, the twitter tweet this button, that button is like a super cookie. Its following you all around the internet. En. Becky is not lurking on the internet. I kind of ham. Youre not chris hansen dateline. Get a shes observing. Shes not lurking. Theres a different word than we use in silicon valley. Lurking . Its not salacious. Just means im in lurk mode. Im watching you got to get with it. This is the hip language of silicon valley. Lurk mode means youre just watching, youre consuming the data. Michael well have you back soon. Thank you. Talk to you later. Okay. Love that. Scary. Im scared of you. Lurking not very often. San francisco saying goodbye to candlestick. Then is there a double brewing in the classic car market . Monday on squawk Box International paper ceo. Plus, we talk property prices and the state of housing. With the host of hgtvs hit show income property. Squawk box starting at 6 00 a. M. Eastern time. Right here on cnbc. Kid hey dad, who was that man . Dad hes our broker. He helps looks after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at Charles Schwab welcome back to squawk box. It was reminiscent of a scene nearly 50 years ago. Fans packing Candlestick Park to see Paul Mccartney last night. The stadium is as famous because its the home of the San Francisco giants, and the 49ers, of course. But its also known as the venue for the last concert by the beatles in 1966. What happened . Why did you stop . Because he told me to stop right there. That bothers me. Thats because we have Producer Prices coming up. We really want to make sure were here for that. Squawk box will be right back. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant recharge along the way. The green emotion project, funded by the European Commission is using the ibm cloud to make this possible by creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go. Take your business further with the ibm cloud. The ibm cloud is the cloud for business. Welcome back to squawk box. Breaking news. August empire. 14. 69. Just a tad under 15. We were looking for a tad over 20. Last time it was a tad over 25. A little light. Lets look at july. Final ppi. And that is up 0. 1. Pretty much exactly as expected. Its not as high as the last look which was up 0. 4 which stands on revised. You strip out pretty much everything i buy every day food and energy its up 0. 2. As expected same as the last look. If we look at year over year on head line its 1. 7. Exfood and energy its 1. 6. Miles away from 2 , right . Yields, under 2. 40 in the tenyear and of course, the big story continues to be things like the dax overtakes 9300. Boy they should hope for more strong ji gdp data, right . Back to you. All right, thank you, rick. Lets bring in peter boockvar, chief market analyst at the Lindsay Group and a cnbc contributor. And just overall every week when i read, and i really like that, that you do that. And you do that, you get paid for that . Some people do. They do you guys look at that . The positive things that happen. Usually 10 or so that you find and the negative things you can usually offset them with ten things. Pretty much. You can figure out where we are based on that. Where are we but do it for the last three months . I think the Global Economy is choppy. I define choppy as, some areas of strength, and other areas of weakness. Europe obviously is having its issues in actually growing. Theyre not necessarily contracting but theyre not really growing. Asia is a mixed bag. Hong kong reported its first contraction in q2 since 2011. China is obviously challenged with their property markets. The u. S. Economy is showing some signs of recovering. But pockets of issues with housing and retail spending and wage growth. So, its overall a mixed bag and i think thats reflected in this continued drop in yields. And a continued desire of Central Banks to try to bubble blow us to a better place. You didnt mention japan. Right, japan of course. Its a big looking for a windshield. Is that your view . Japan i think is dealing with the lack of wage growth at the same time theyre generating higher inflation and higher taxes. So, theyre going through another grand experiment of their own. Theyre bank of japans Balance Sheet will be double the rate of gdp than the u. S. And they need wage growth to offset higher inflation. And hopefully theyll get it. But right now theyre pretty challenged, too. So in this country do we just keep plodding along here with no wage growth, with, you know, the people that own assets doing pretty well, feeling pretty good. Everybody else sort of stuck in neutral. Get no help from washington on either getting out of the way, or doing something that might actually help. So this is what were stuck with, janet, and her friends just sort of helping us along . Yeah. Im in the camp that janet is at this point not helping. Hurting . Yeah, i think theyre inhibiting a natural recovery in the economy. Thats part of the problem you think . Yeah thats hard to connect the dots to most people that free money doesnt help somewhere. Well, i have this unconventional view that if you just let the Economic Cycle run its course wed actually be okay. Yeah. And that the u. S. Economy just needs population growth and productivity and well actually grow. Without the constant manipulation of the distortion of markets that the fed brings. Did jim grant send you a copy of his latest book . No, i havent seen it. It was about a potential huge recession or depression in 1921 that they did absolutely nothing to, and it went away immediately, versus the one that we reacted to strongly in 1929, and the one that we reacted to strongly in 2008. Making the point that, you know, you flesh out let it just occur, let markets set prices and you recover more quickly. The northern economy has this amazing ability to regenerate itself if just left alone. But this belief of doing something on the part of politicians, whether youre a Federal Reserve bureaucrat, or youre someone in washington to always do something distorts, and alters the natural course of an Economic Cycle. When do we break this malaise that were in. Is it elections that do it . Unfortunately, its going to actually have to be a rusting away of policy from the fed. We need actual normalized Interest Rates to see the proper allocation of capital. I know theres this belief that low rates good, high rates bad but theres 8. 5 trillion of savings out there. For every 100 basis points of short rates that go up, well thats an 85 billion Interest Income increase in peoples pockets. So there are some benefits for higher rates. Its not just black and white like this. And unfortunately i think its going to be the bond market at some point its going to be the inflation figures. The job figures that are going to force the feds hands to do this. But the fed is afraid of their own shadow. Here we are still with zero Interest Rates i think is pathetic. And i think that needs to change. And unfortunately its the market thats going to force their hand. But the fed has to stop being so afraid of the u. S. Economys ability to handle even slightly higher Interest Rates. Its hard to raise rates when german bunds are at less than one percent. Right but zero Interest Rates with an Unemployment Rate at 6. 2 , inflation moving closer to 2 , the high job openings since 2011. Still emergency tactics going on. 2001, its wholly inappropriate. And if it ever goes back down weve got nothing left. Do you think the bond market is what forces the hand or do you think they look at the numbers themselves and say okay we need to get ahead of this and maybe move earlier in 2015 than a lot of people are expecting . Im convinced the fed will never get ahead, theyll follow. Maybe it will be the bond market, maybe it will be the data. Maybe if we have a 5. 5 Unemployment Rate by year end and we have a 2 pce the fed will be forced to. And the amazing thing is that cpi is going to be 2 for four straight months. But because the fed convenely looks at the pce Monetary Policy is a little different than it would be otherwise. All right, peter. Not very optimistic for a friday but, its realistic. Ill have some positives in my summary. Oh, good. Whatfeel want that at home. It costs something, doesnt it . Yeah. Thats why youre here. Up next car collectors are about to find out if theres a bubble brewing in the auto auction market. Robert frank joins us from the pebble beach classic car auction. Its been called the woodstock of billionaire car collectors. Perfect name as we celebrate the anniversary of the original woodstock. Coming up the business of super suckers. First it was trendy cupcakes. Then it was cronuts. Now its lollipops. We talk handmade candies. The new sweet tooth trend. Has g, but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back to squawk box. The futures right now have been up 50 they havent moved much. Ive seen 52. 58. Up 52 again right now which would be the end of a pretty solid week. I did some work, some calculations. It would be the best week in the last six. Are you serious . Yeah, to determine did you know that back in positive territory both the month of august and for the year now, too. Really . Yeah. I think i came up with the best in six weeks. Why, did you know that . Did you read a tweet from me or something . You told me that in the six and the 7 00 but i forgot already. I thought that was my that was you own it. Okay. All right. Better be right. I got it from him. No. All right. Is there a bubble brewing in the car auction sector . Robert frank is at the pebble beach auto auction and joins us now. Hey, robert. Hey, scott. We seem to be entering a new phase in the collectible car market. Weve gone from expensive prices to just insane prices. Its less about Intrinsic Value now and more about four wheel safe deposit boxes for the wealthy. Lets take a look at these numbers, Sales Numbers for these sales at pebble beach last year, the auctions in total were about 300 million. Just over 300. This year its going to be between 450 million and 500 million for fewer cars. Now also for context just the top five cars that are going to sell this year, more than the total of 800 cars that sold in 2009. Now if we look at the question of whether this is a bubble or not, you look at what i call the law of trophy properties. Is this you have a growing number of rich people and a fixed number of rare collectibles. Or will this keep continuing . We are reaching a kind of high here with some of these values that its hard to imagine it going a lot higher. But, i said that a year ago. And so, you know, here we are at a new high, and better cars are coming to market, and theyre newer theyre newer buyers coming for these things. People that weve never seen before. Now a couple of warning signs that are flashing on the dashboard of this market. Youve got a lot of speculators, dealers and investors kind of creeping in to this market so thats a little more hot money than we had before. And also some of these prices are doubling and tripling just in the last couple of years. Yesterday i spoke to jay leno one of the greatest collectors in america, just got an amazing collector and a great car guy. He said hes bullish on this market because of all the overseas wealth. Lets take a listen. Theres a guy in saudi arabia who buys every aston martin, hes got like 212 of them. So whenever they come up he buys them. And thats just the db5 collection. Exactly. So americans used to vow the money. The guy from texas with the big cigar. Thats been replaced by the chinese and saudi arabia so its a little different. Youve got to compete on a world market instead of just a local market. Now weve got to remember, you know, so many people that i talked to the big collectors here, the buyers, sellers, basically say look, this market can only go up because of the supply and demand. But we forget in 1990, prices for these top cars fell 80 in the most recent recession they fell about 20 or 30 but it makes me a little bit nervous scott when people Start Talking about a permanent bull market in anything. They start saying this time its different. There are so many wealthy people, fixed number of cars. That makes you a little bit nervous. Robert, you know, people fall back on the scarcity value, whether its art, right, weve raised a question with you and youve raised it yourself whether theres a bubble in fine art and the other side of it is its the scarcity value and that keeps pushing the prices higher. At some point, though, you just wonder if it runs out of a place to go. Yeah, and a lot of it is driven, again, by the global diversity. You know, the last big crash we had in this market in 1989, 1990, you had a small number of japanese collectors who were just buying everything indiscriminately. What leno and other people told me is todays buyers are smarter and theyre just much more diverse globally and there are more of them. At this ferrari sale last year we saw thousands of people, a lot of them from around the world. So theres a case that if its a bubble it could go on for much longer than we think. And the correction may not be 80 , it could be 30 , 40 . Robert im going to defend you a little bit here with wapner picking on the cars. You know the i wasnt picking on the cars. Youve seen this rothko . Basically this is a summary of the rothko tt was it. That sold for 140 million right there. Thats my rendition of the rothko. You forgot the color. I forgot the color. Put a tie dyed shirt on one of those Little Things and spray some paint. Did you see the womans bed that she was she was in a bad mood. Thats what im saying. Did you see the bed . No, i did. It had ashtray butts and used prove lablgt prophylactics and it was a stage of her life from awhile ago and its got rumpled covers. Wasnt it like 35 million . At least you get a ferrari. Thats true. Instead of a crummy bed with you can drive it. Theres too much money all over the place. Its the sail thing. Im just standing up for the cars versus you know this thing. I love the cars. I cant believe a car is going for 38 million. He just had an argument off camera about how that the fed was actually the good guys in doing all this was that an argument . It was you saying i have no time for anyone that says that the feds actions werent helpful basically. Thats what i said . Sort of. And im saying, now you see all this money sloshing around. Ive got to get out of the paraphrasing business. What did you basically say . You cant say q1, 2 and 3 werent helpful . I just have a hard time accepting the fact that anything the fed has done hasnt been helpful in some way, shape or form. Im not going to make the argument scott there is another side. There is another side. Stanley drunkle miller delivering alpha we dont know yet. Theres another side that says its not just thats my point. We dont know yet. We dont know yet. It could be not just not helpful. It could be incredibly hurtful. Or it could do nothing wrong. Right . We dont know. The hyperinflationistas who you just pointed to the where do you think the art market and this car market where do you think this bubble who do you think gave the ammunition for the bubble . Okay so the fed just gets everything, everything thats gone on is all at the feet of the fed . I certainly think you could attribute some of whats happening to the fed. This is a long, long argument. People said the same thing back in 2001 that the fed let it run up for two long. Look what happened in 2008. Look any time you have any sort of manipulations people will say okay you cant smooth things out forever. Any of the problems therefore are your fault because you were manipulating. Well well see. But at this point, i dont you know, who is it that was in here that said it was mcculley who said that the fed saved the world and can take a victory lap and its case closed. I just dont know if thats if were going to end up in hindsight knowing that thats true. The point that druckenmiller is making is youve got to say look you cant say wow look at the great economy we had in 2006. Youve got to factor in 2008 and 09. Now were in 2014 and things have recovered a lot. We dont know where 2020 comes were going to be basically were saying this is an unended unfinished novel. Its never going to be answered. People will say look at the problems that were created no matter how far down the road. I dont say either. But are you firmly on the side of they were great and nothings wrong i didnt say that. Well im just saying i wish things were better. You do . But to suggest that the fed is the problem where things arent better i think to suggest everything theyve been is helpful but not hurtful. I didnt say everything was you know what would make me feel better, guys . A lollipop. Yeah . You going to do this on camera . No, read. Coming up lollipops getting do we need to hug it out . No. Lollipops. Getting a makeover. All Natural Ingredients fancy sticks and new flavors. Its all the rage. A closer look at the sweet treat in just a minute. Sweets. You like cherry . No. Strawberry, watermelon. Monday on squawk box, International Paper ceo. Plus we talk property prices and the state of housing. With the host of hgtvs hit show, income property. Squawk box starting at 6 00 a. M. Eastern time right here on cnbc. She inspires you. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. 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Some sort of berry. Mine a clear too. I need artificial coloring to taste good for me. Close your eyes and try. What are you going to do . Then you dont know if its clear or not. Is this your read . I was tasting the lollipop until i saw something about hemp, hemp fest. Lets get going. Seattles national hempfest, largest legalization rally and biggest expo. Marijuana is legal in washington state, and theres two lounges to obey the law and smoke pot legally. The weekend festival includes 120 bands, a hundred speakers, and a hundred vendors. What if the haze hits you . I dont know. Joe . Okay. Are you engaged in a fed discussion now . Is this where weve gone now . People said, god, out of your mind. No really . Normal suspects. Im not talked to by anybody. News today, the two supermarkets may have been hacked. The journal says a data breach at super value may have affected more than a thousand stores. Meantime, the parent of jewel osco says the computers that store credit card data for customers, theyve been hit by what are called an unlawful intrusion. No word if data was stolen. My lollipops going to be gone. Do you chew them . No, never. Do you . No. This has seeds in it. I dont chew it. A tootsie roll pop does not last. I heard that about you. The big business of candy. Squawk box will be right back. Dont just visit San Francisco. water dripping and pipes clanging visit tripadvisor San Francisco. soothing sound of a shower with millions of reviews, tripadvisor makes any destination better. Your studied day and night for her drivers test. Secretly inside, you hoped she wouldnt pass. The thought of your baby girl driving around all by herself was. You just werent ready. But she did pass. cause shes your baby girl. And now youre proud. A bundle of nerves proud. But proud. Get a discount when you add a newlylicensed teen to your Liberty Mutual insurance policy. Call to learn about our whole range of life event discounts. Newlywed discount. New College Graduate and retiree discounts. You could even get a discount when you add a car. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. I take prilosec otc each morning for my frequent heartburn. Because it gives me zero heartburn. Annc prilosec otc the number one doctor recommend frequent heartburn medicine for nine straight years. One pill each morning 24 hours zero heartburn. Well, forget cup cakes, everybody. Lollipops, the next big thing in the sweet space. Our next guest thinks so. Joining us, the founder of quinn candy. Thank you for being here. Thank you for having me. You used to be in the cup cake business, but now hard sweets, lollipops the way to go, why is that . Well, for me, cup cakes were a great way did it for nine years, a long time because im obviously very young, and then getting to the point where we wanted to do lollipops, and it was just an easier product to make. With cupcakes, for my business especially, we sold fresh product only. With the lollipop, a team can make, package, and move across the country to sell, so its, you know, in terms of business, a lot better how i wanted to do things. Makes sense in how you live your life because somebody has to make the donuts . Pretty much exactly that. Did you Research Beforehand . I looked into it and sales of candy that was not chocolate last year was about 10 billion, an increase of 3 , and they are looking for that to increase by another 1. 8 billion in five years. How do you crack in on that market . Well, the Research Part of it was basically that there was a big need for nonchocolate sweets, interesting to me. I didnt want a business where there was tempering and tricky things with chocolate so to move to hard candy, fruity candy was the way i wanted to do it, and that was the market. For me, the way i wanted to do things was natural and minimal inagreements, nobody was doing. How do you break into the business . Where do you sell it . I sell it, location in portland, oregon, our flag ship store. We sell through our own online store, various other online markets, and throughout the country. And l. A. , new york, everywhere. What have you been surprised by and anything that is jumped up to throw you off . Have there been anything you hadnt expected . The response to the candy itself is overwhelming. The ingredients we use have sort of really been something that people have really responded to, and we make the candy in oregon, a land of, you know, great places to make things, so people right now want candy that is a little bit more natural, doesnt have artificial flavor, no artificial coal already in it especially, so when i started out, that was a Natural Choice for me. I wouldnt make candy any other way than that way. I was not prepared how supportive people would be of the model and wallets, not just by saying i need color. Sorry, jamie, i need the color. I used to use karo on pancakes, it was clear because it was cheaper. I need color. Im sorry. What is this . It has no i think yours is peach. Im kidding. Thank you very much. My pleasure. Thank you, scott, youre wrong, but thanks. Squawk on the street is next. Good friday morning, welcome to squawk on the street, im david faber, live from the new york stock exchange, carl and jim enjoying the beach on a nice day. The road map this morning starts with anything but soda. Coke takes a stake in monster beverage, coffee,