Transcripts For CNBC Squawk Box 20160817 : vimarsana.com

Still there, 46. 21 for wti. Lower by. 37. The biggest market story is the dollar. Dropping to lowest level since brexit yesterday. Has since recovered on hawkish fed speak. The last 24 hours, atlanta fed president said two hikes were a possibility this year. Euro cost you a 1. 12. New york fed president suggested the central bank could raise rates as soon as next month. Two key events to watch today, st. Louis fed president James Bullard will speak and then well get minutes from the last momc meeting. And it is. The euro will cost you 1. 12. Pound 1. 30. The yen is at 100 yen dollar level. It had fallen below that yesterday. Violating what ive asked them to do. So now were back to maybe a couple of hikes when i think the probability had the hikes moved out to 2017. Well see. They love to pretend they might do something to get the benefit of whatever. Theres a lot of rumors about whats going to happen at jackson hole. About whether theyre going to say negative Interest Rates arent working like we thought and therefore theres going to be a shift once again. You know we have a special show planned. Yes, we do. Special all problems are solved by bigger government more spending led by stieglitz at seven. We like to do both sides. Today its going to be gig government is the answer. Spen spend more and all will be well. Youre leading all of that. Youre leading all of those. Its great to have a Nobel Prize Winning economist on the set. Its an honor. For a whole hour. Number one, you know its not an actual nobel prize that was stipulated by all fred nobel. You know when you can give a nobel prize to Milton Freedman and paul krugman, its not exactly like a medicine or physics where you actually know something. Its chemistry or medicine where its a factual. This is like, how about the nobel peace prize. How about that baby. Thats for what youre going to do. I know for what you didnt do. Jimmy carter, i think al gore won one. So, im not supposed to egg you on. Who said that . Yes, you egg me on. Anyway, earnings. Alert Home Improvement retailer lows out with quarterly earnings. 1. 31 a share. Also missed forecast in same store increase of 2 was only half of what analyst predicted. That stock is down 3 . Bryan nagel. He is glad he has a job to cover. Its not steel. Hes glad hes not covering the steel industry. On todays economic agenda, Weekly Mortgage applications. Also watch the eia Weekly Oil Inventory number at 10 30. In more earnings news, retailers. Weve got more reporting today. This is the strange way that we people report. We get everybody else on a normal calendar year and retailers because of christmas or whatever. They have a different type of year. You just heard about lowes. Were alsz going to hear from staples and target. After the bell, cisco and also on the retail front, jcpenny holding analyst today. A year after he took the helm at the Department Store chain. In the middle of power lunch. Im excited about that. Thats right. Thats the other show i do this week. Right. Its a long thats five hours of live tv though. Nobody else can do that, do they . I wouldnt know. Unless the guys that called into some big news event. They might be on the air for five hours, but other than that you may be one of the few people with you get paid a lot. You must. To have the ability to do that. I hope its appreciated. In Corporate News this morning, cisco reportedly laying off 20 of global work force. This according to Technology News site crn. The cuts are expected to be announced within a few weeks. In the process of transitioning to a more software driven player like so much in the world right now. Other stocks to watch today. Urban outfitters getting a big pop today. Posting stronger than expected earnings. Helped by higher demand for name sake brand and shares of p popeyes. Cutting revenue sales growth forecast. Cree shares are getting hit this morning. Led light maker. Posting Quarterly Results below estimates as its outlook is also weak. I dont think you can actually be a light emitting diode maker. I think you make equipment that utilizes diodes. Only god can create light, right . Because it was darkness, in the first week. Day one or two, wasnt it. Day one. Do you know, slaus berg . No. Our currency guy. Hes a renaissance man. Light is pretty fascinating. It travels quickly. Its going opposite ways. Its still the same. Im still trying to figure i think theyre the same. Were going to get to boris in one second and talk about the currency markets. First breaking news this morning. Donald trump is shaking up campaign leadership. Nbc news learned that Kelly Ann Conway has been promoted the role of Campaign Manager. Paul manafort will stay on as campaign chair. The cofounder of conservative news. Will join. I want to win. Im bringing on fantastic people who know how to win and love to win. Kelly ann conway frequent guest on cnbc. She is and she is a when she believes something or is behind someone, you can. Shes tough. Shes unwavering. Weve known her a long time. I think it was four years ago she was running newts campaign for a while. Yes, i remember. I remember a few times butting heads. I cant believe i was thinking romney might have been a better candidate. At that point, newt was saying some things about romneys Business Career and questioning it, and, you know, it seemed like give the other side even more ammunition to talk about. I remember this, yes. So kelly ann, i couldnt land a glove on her then either. In a trench, shes your gal. Yes. It was not a surprise to me when i saw that. She was a cruz person, but you can and shes been on recently when ted cruz was viable candidate, but she always left open the possibility if trump did win, she would back the republican nominee unlike so many other Establishment Republicans seem to be in some type of hypnotic trance and they dont really all they can see is trump. They dont understand. I dont know. I dont understand a lot of them. Right now, let us head to thank god we dont play the barry man that low song. With andrew he probably likes that. Copa cabana. That shirt looks good. Youre a caratty man. Bruise on the inside. Theres some taekwondo going on later today. Maybe well go over and see that. Were not going to show you that video just yet. We got to tease that for the rest of the week. Well show you that the end of the week. You were not supposed to show that photo yesterday. Lets talk a little bit about whats going on here. It was an exciting day yesterday. Specifically in womens gymnastics. Simone biles proving shes nothing short of golden. Taking the top spot in a new perfect performance. Her teammate took silver. Capping off incredible olympics for the entire u. S. Womens Gymnastics Team and we caught up with team member madison cochan about the legacy. We wanted to inspire little girls to keep believing in themselves. Every member on the team had an injury at the beginning of this year somehow so we just never gave up and just kept pushing towards that dream. We had some other news in Beach Volleyball last night. Not in the good category. Kerri Walsh Jennings lost her first match ever. She and teammate april walsh will go onto face another team from brazil for the bronze medal today. I think we save our best volleyball tomorrow. Im so excited to play with april and do this together. Today sucks. Right now is horrible, but were going to go watch video. Clean it up and leave here happy. Thats my mission. I got to say, to see those women crying. I was crying this morning talking about it. Meanwhile a big political story here. I want michelle if you could to weigh in on this. This is going on in a country where political turmoil continuing in a big way. Yesterday suspended president rousseff could be called a coup and calling for early elections unite a country in recession. There coming at the same time interim president is not planning to participate in the closing ser mceremony this sund you could hear the boos. So thats whats going on here. I dont know if michelle, do you have a view on the politics of all this. Yes, so while his policy platform is far more traditional, more conservative. Almost the entire Brazilian Congress is deeply under suspected by the brazilian population and reports in the paper that at least a third or maybe half of them are underinvestigatiunder investigation, including him, involving this huge scandal. You think the Political Class in the United States is unpopular. Its really brutal down there. Im surprised we havent seen larger protests. Yes, it is so were going to anyway well continue to bring you the political story and the sports story. We have a lot coming up. Back to you. In looking back at that incident where they were crying. You were crying 12 hours later. It was fresh to him. Didnt you admit that during finding dory with those animated fish there were a couple times. I teared up. I did, but those women hugging each other and crying at the end, im just saying. Like i said, this is that movie was so stupid, there was an octopus driving water somewhere in mark carn rin coun there was nothing to cry about. I would commend you from crying here. Im questioning the previous crying. Ive also cried at wins, not just losses. Kmo simone biles has been pretty incredible. And michael phelps. There have been a couple of tear jerkers. As you get older, you never know. Whats going to make you cry. Yes. I cry every day. Some people think thats good. Full on weeping, i try not to do that a lot around you know, a lot of times wins a Golf Tournament and their kid runs out or something or if they look up and their father wasnt there and things like that will do it. Sometimes. Right . How about you i dont know. Im russian. We dont cry. I literally dont remember the last time i cried. You cry every time obama raises taxes. I cry every time donald trump comes on tv. Or whenever someone doesnt agree with distribution of capital. Andrew. Yes. We could talk to you and yesterday theres no delay with you and you were tossing to phil in chicago and were here watching you. Its unbelievable. Technology. Technology at work. Im going to see you in just a bit. Like i said, good shirt selection. Thank you, joe. Lets talk about the dollar. The Fashion Police right here. Yes. We are going to get to later well talk to andrew. Some guy was mugged in new york city, do you know what they stole, andrew . His toupee. They stole this mans toupee. Joe, does that mean youre using your. You dont wear a toupee. Im not going out. Did you see this . You didnt read this yet. Hair today, gone tomorrow. Muggers take wig. Hes devastated. I hope this does not become some you know how important hair is to men. Right. You can be super smart. I dont want this to become some type of crime spree. Thank you andrew. Really, whats more absurd, that or talking about raising rates again in september. The market is kind of absurd. The biggest economy in the market rights now is what the fed is saying and what the market is doing. Theyre saying show me. The dollar has gotten destroyed. Today is the first day weve seen a bounce because they came out and said were going to be serious. I really doubt september will be a rate hike. I think at best, if youre super bullish, they will come out and september and say were definitely going to go into december. Why are the members of the fed talking as if there could be two this year. It can always be a possibility, but given the fact this is going the be mid election season and even though they claim theyre not political, i think in the midst of the election to raise rates and risk a temper tantrum by the equity market might be too controversial. Speaking of equities. Lets get the equity angle. What do you make of this talk of the possibility of more fed rate hikes this year coming from the fed governors themselves while the market doesnt seem to be pricing it in . Well, tii think the fed is going to continue to talk hawkish. The market might seem complacent, but i agree with boris. I dont think were going to see a fed hike in september. I really dont think were going to see one in december either. I think the market is getting jittery because they know its a potential. Its on the table, but i dont see it happening in the near future. What if its not fed rate hike. Lets put that aside for a second. Have you heard intense rumors of whats going to happen in jackson hole. Focus on lack of efficacy of negative rates. Making people save more when they thought it would make people spend more. If the rest of the world thats focused on negative rates suddenly decides thats not a good idea, is that almost like a hike . I think this is whats happening. The rest of the world is starting to realize os terrety doesnt work. And i think that is really good because the populous across the western nations are starting to realize what they are doing isnt working out. Japan, by the end of 2017, the bank of japan will be the number one shareholder of the top 50 nikkei companies. Theyve thrown everything including owning almost all of the nikkei into this. Where is dollar yen right now, at 100. Which is awfully deflationary for them. They cant get anything going. If japan gives up on the negative rate idea, what does that mean for the markets . Is that bad for equities . Do i sell dividend and buy financials, for example . I think theres a little too much focus on whats going on with Central Banks. At the end of the day, its going to matter what happens with the companies. The companies right now are turning a corner and earnings are getting better. I think the investors are focused on what Central Banks are doing and what Monetary Policy is doing and should be looking at whats going on with the skperngs what the companies are doing. If its good for companies, company can go out there and make money. We know the dollar has gotten weaker. Thats going to be good for the market. I think investors are losing focus on the fed and not enough on whats going on with Actual Company earnings. I hear you, absolutely. However, when interests rates are so low, in many cases negative, youre far more willing to pay for a yielding stock. Weve seen multiple expansion pause investors are willing to pay more for a lower stream of erp simply because theyre getting paid more. So to say that people are too focused on the fed, okay, maybe thats the case, but theyre very focused on what the fed, the decisions that have been forced upon them by the Central Banks of the world. Right . Do i buy a negative yielding thing somewhere over here or do i buy a stock that maybe im not convinced about the earning stream, but at least its paying 3 . Right. So thats why the u. S. Market has been grinding higher. A lot of investors are confounded by that, but comparativelily if you look at relative valuation, things arent really the stock market isnt that expensive. Youre getting a earnings yield. Compare that to the tenyear treasury of less than 6 . Looks very attractive. If and when Interest Rates start to rise, that equation unravels, right . But i think its a question of its such a disparity. I dont think its going to happen right away. Jumping the gun if they think theyre trying to get ahead of it. The question of Interest Rates rising it has to rise continuously. Im talking about the long end, not the short end. Even if the fed does hike rates, its a stutter step process. Until they can hike rates continuously, you dont see. Not even talking about the short end. What if the long end starts to act independently. We dont have time for that discussion. What did we see in japan last week. Right and thats the danger of qe blowing up in our faces. Said it could happen. Karen, thanks to have you. Boris, as well. Coming up. More of this mornings top stories. A winner in the auction for gawker. Plus retailer target expected to report this hour. Were going to bring you the results and reaction from wall street. Right now, take a look at s p 500 winners and losers. Youre here to buy a car. What would h your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Welcome back. Time now for the executive edge. Univision has won the auction for gawker media. The tv Network Digital plusher e which is a Spanish Language network, has agreed to pay 135 medical for the bankrupt log network. Gawker filed for bankruptcy after hulk hogan and peter thiel won a settlement. A bankruptcy judge will have to sign off on the transaction. Andrew, youve covered this story a lot. Ive discovered unny vision a lot. What do you make of this . Theres a couple of points here. On the unny vision piece, the biggest part to know a Spanish Network trying to go off millennials. And the other piece you know they recently bought the onion. Theyre trying to get into the space. Te request is whether it works. What happens as a result of the settlement and whether peter thiel and hulk gohogan end up getting money. Theyre in bankruptcy. Theyre clearly creditors. There might be a settlement. How much they get, that 140 million nobody thinks a judge is going to uphold that. Does it come down . Does nick denton end up with something or nothing. These are some of the sort of questions within the new york media circles that are being asked. Initially people say why would a Spanish Language Media Company want to own a piece of the onion, gawker, but remember the chairman of univision. Hes been able to monetize in dramatic ways going to what were the big cartoons from japan that were so hot for so long. The transformers . Was it the transformers . No, no. Before that. No, oh, come on. Little turtles with the. Teenage mute tannin gentleman turtles and then pow eer ranger was the big one. Sold to abc. He would understand the pricing here. The onion was priced less than 200 million based on the stake they bought. In the modern age, these arent very big prices for these products. The real question is whether they merge the businesses together. Fusion lost 64 million between disney collectively before they ended that joint venture. I dont know where they stand right now. Tv as we all know is a tough business as a startup in the business. So they have thus far struggled at least to go into the black as we know. Still trying to clean up univision to get it to ipo at some point. Wasnt that the dream. That is the dream. The other question is whether the quacker brand remains at all. Thats another big piece of this. Didnt get just gawker. They got a bunch of stuff. This is dead spin, the sports network. This is life hacker. The entire network, but the gawker piece has been the hardest piece to monetize because advertisers have struggled to want to be next to it, if you will. The final question is peter thiel says i won the game now. The company had to go bankrupt. Now maybe im willing to settle at a completely different price than i did before. I dont know. Well see. I started my career at univision. My first job was at univision. I was a researcher and then a field producer. We like telemun doe here. Yes, we do like telemundo. Thats true. Its the better of the two. It is. Better programming. Right, exactly. Thank you, andrew. Better corporate parent. Retailer, target just out with Quarterly Results. Company earned 1. 23. Revenue is essentially in line with forecast. However comp Sales Forecast fell slightly more than expected and target lowered same stores forecast for the second half of 2016. Were going to dig through the report with retail analyst. Thats coming up at 7 15 a. M. Write that down. Coming up, a shakeup in the campaign. Kelly ann conway. Former manager Paul Manafort will stay on as chairman. Well talk about the changes next. Formercongresswomen, th nan. Caller ing for fast food. Youre out of luck if youre looking for chicken mcnuggets. They only sell ice cream here. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Announcer dont let salmonella get funky with your chicken. On average, one in 6 americans will get a foodborne illness this year. So, learn the right temperature to cook each type of meat. Keep your family safe at foodsafety. Gov. Just a few weeks out from the president ial debate and donald trump is shaking up his campaign. Naming Kelly Ann Conway Campaign Manager joining us now former democratic congressman harold ford and former republican congressman, hay worth. You know kelly ann . Yes. She gets up for breakfast and has a big plate of nails. Shoots them right back at her political adversaries. He walked in and i could see, harold, the fear in your eyes. Ive been on the show with her. Personally, we have a great deal of like and respect for her. What she will bring to the campaign is probably two things, we were talking about this in the back. Shell bring more purpose, more direction, more substance to the campaign. I say hopefully because i think when you have to serious dan datas running, they bring out the best in each other. The body politics suffer when theres not a seriousness on both sides. I can disagree, differ, and point out deficiencies, but its great to have two strong candidates. Shell help with the balance being directed at the campaign worrying this could have a real impact on the republican house. Its weird about the down ballots. I dont kwies understand it. If youre losing a state by six, it doesnt hurt the other down ballot candidates. If youre losing by double digits, theyre definitely going to lose. Is that a hard fast rule . I can see how that works, but i dont quite understand that. I would think people all politics are local. I would think they have different ideas about whether they like rob portman or wlavr it has to do. I think it has to do with turnout models to a certain extent. The point being when you get sufficient amount of motivation from the top of the ticket, people are just going to vote a straight ticket. You see it all the time. Thats why in midterm elections republicans tend to do better than in high turnout president ial elections. If theres a high turnout for democrats, certainly in swing districts, that tends to be the case. Also we havent talked about the bannon guy at all. Bright bart organization. Yes. Hes been very positive about his style. Ive stopped following just about everyone on twitter because i couldnt take it anymore. I still follow bright bart and i only follow two people. Bright bart and news busters and harold ford. Im challenge rating, but this guy is like minded with donald trump. Steve calls himself a nationalist pop list. Blood and soil. Hes completely in line with that point of view. And. Blood and soil. Thats what he says. I have heard him say that personally now. Ive seen people say the convention, the post convention bounds for both candidates, in terms of favorability, is back to where it was preconvention. Do you think theres a lasting halo for Hillary Clinton at this point . She seems to be been fitting in two things, one the Trump Campaign continues to stumble. Two, i think shes beginning to find her own voice. The selection of cain was a smart selection. They look good together and sound good together. Theyre in sync. The more she finds her voice and can be consistent with it, the stronger shell get. Theres a lot of time left and a lot of developments will happen. I was watching newt gri30 ye political life. Shes at 57 look at her and just she should be much further ahead. One of the familiarity contempt. Theres some other things that may be in her resume that breed a little contempt. Of course. What we know about her and what keeps being revealed about her is she is highly manipulative. She is self serving, one of the aspects that has yet to be fully delineated is of course the role of Clinton Foundation dealings in what she did as secretary of state. Its particularly galling when the point is made, but look at the good the Clinton Foundation did. Look at how much money the Clinton Foundation has hoovered out of the pockets of don anymore donors only a small percentage which went to nominally good causes. Its shameful for people to say look at the good. Theres often talk about whether or not theres going to be an october surprise related to the Clinton Foundation. Do you worry about that . I dont. State Department Says its going to take 27 months to get the emails together. I can appreciate the narrative. I differ with it. I think theres a lot of good things the foundation has done and continues to do. I think this campaign is going to be litigated on who has the right vision, right set of policies to lead the country Going Forward and unfortunately for i understand some of the frustration from the republican friends because they have a candidate who is unable to stay on message. We have a candidate, whatever people want to say, she has a plan. She has an agenda. You may not like it, but shes finding her voice and consistency. Shes still walking the line between, you know, there was a piece the other day that some of the progressives are mad that she seems to be courting sen trus. Others say she is far left of her husband bill. She wants to actually get back closer. That add. When you see that add. Is that trying you know the one with heres the pyramid and corporations who have never paid their fair share, even though its 35 . And all these other rich people and they never paid their fair share and take that money out of the private sector and create these some of these nebulous holes and filling up jobs or something. Im not sure what she has planned. When you see that as a guy in the private sector, do you just understand that as politics. Some of it is that. We all know theres a checks and balances in this system. I think there are some imbalances and some short comes in her tactics that have to be addressed. The corporate rate has to go down, not up. I would agree. Especially if we want the bring dollars back. That whole ad, its like dont believe anything she says. I wouldnt go that far. She has a public record. Her family name, her brand has a record. I think people can extrapolate from that the way she might govern. As someone who sits in the middle of the party. I would hope theres a balance that goes about. More often, im going to agree with the way she the middle of your party puts you a rocker fell lar republican. I feel very comfortable in the middle of my party. The middle at this point. Is way to the left. Well, thats right. I would say i view you based on your party closer to like a liberal sort of mod rale conservative at this point, knowing you. Im proud to be a blue dog doc democratic. Thank you. All we can say is she runs the finances of the federal government the way they run the Clinton Foundation, very little is going to get done with your hard earned money. The government would get rich. Yes. On a lighter note, i love you trading reference earlier. Bruise on the inside. Thank you. Coming up the top of the hour, our guest host will be Nobel Prize Winning Joseph Stiglitz. First lets check in with andrew in rio. Thanks. When we come back live from rio, womens golf kicking off today. Lexi thompson when we return live here from rio, back in a moment. Welcome back to squawk box right here live in rio where the best female golfers in the world are going to be hitting the greens today right here in rio. Teeing off for gold in round one of womens golf, one of the biggest stars competing here, lexi thompson. This is an opportunity she would not want to miss. I was a little surprised. Its their decision, not mine. This has been a dream of mine and any time i can represent my country is the highest honor i can have. I wasnt passing up the opportunity to be able to say im an olympian. Thompson became the youngest winner ever of a l pga tournament. I wouldnt say its paid fairly. Its not my say. Weve added ooltd of tournaments on our schedule. Ooded a lot of sponsorships. Were doing the best we can. Hopefully that changes over time as well. The 21yearold golfing star told us about an occasional golfing partner of hers, president ial nominee, donald trump. I played with donald quite a bit. My home course is Trump International in palm beach florida. Hes a character. Loves the game. Pretty good golfer. Shoots high 70s. Its a riot to go out and golf with him. Hes a lot of fun. Lexi tees off later this morning and we will be watching all of it. Cool. Of course, andrew. Thank you. Coming up, target posting a beat of 1. 23 per share. What they say about the future. Big through the report with an analyst in the a minute. As we head to break, quick check of european markets right now. Germany is lower by almost 1 . Yep. Stirred it. Mmhmm. Drowned it again. Mmhmm. And now just feel if its cold. Yeah. Cool. [camera shutter clicks] [whistling a tune] smokey just gave me a bear hug. I know. I already posted it. Welcome back to squawk box. Were in the chairs for a couple of buzz stories that caught our attention. If youre frustrated by sitting at a red light, audi has a new feature that may help you relax. Starting this fall, some 2017 audi models will feature trafficlike information that will tell you how long it will be until the light turns green. They plan to add additional cities as Traffic Signals are upgraded. There you are in the car. That was not supposed to that was not anyway. Can we its no porsche, though, was it . That was a porsche. That was a 900 horse power like milliondollar and there was too much traffic and people driving like idiots. Okay. Thats the shot i wanted to see. Because you can see this big strapper here. Get that off. Go to the three shot. You want to see how wilfred is . Were sitting with lurch here almost. But i dont know if have you ever been in the chairs . No. Its nice. Its comfortable. Im doing my best, but theres no way i can sit up straight. Theres no way to we gave you this story because youre english. Okay. Ive got it. The British Government has come up with a new way to halt tax avoidance under a new proposal. Accountants who helped clients avoid paying taxs could be fined. Currently clients are only fined if the loopholes they use are successfully challenged in court and arent held responsible. Theresa may has pledged crack down after the use of offshore trusts. Ive read this story. Its not major, major news. But what is interesting is theresa mays approach. Shes being much more Center Ground than center right people are expecting. Did we use the right words . Are we talking avoidance or evasion . Avoidance is the duty of any citizen of any country to pay the minimum amount of taxes. Thats legal. Now, evasion is where you can go to jail for the techniques youre using. Are we talking about evasion or avoidance . We should not have used avoidance. Right. But shes also clamping down on executive pay. Switch actually very bright. The labor party at the moment pushing to the left. You know shes thinking she can bring some people to her side. If she can get through brexit, she could be in a strong position. You dont need to take all the deductions that youre entitled to. Dont do it. Donate them. In fact, the flip side, give 50 why not tithe. Give 50 to the government. If you really want to. Not only dont take your legal deductions. But just go ahead and write a check for 90 . If you want. If you think thats patriotic. If you think thats a good idea. Im not saying i do. I wish they would be lower. Im talking to the general idea. To the Mainstream Media take on taxes. Coming up discover how a lexus master craftsman turns an ordinary experience into an extraordinary one. Get great offers at the lexus golden opportunity sales event. Lease the 2016 es 350 for 329 a month for 36 months and well make your first months payment. See your lexus dealer. Tmom didnt want another dog. She said its too much work. Lulus hair just floats. Uhh help me doorbell mom, check this out. Wow. Swiffer sweeper, and dusters. This is what im talking about. Look at that. Sticks to this better than it sticks to lulu. Thats your hair lulu mom, can we have another dog . laughing trap and lock up to 4x more dirt, dust and hair than the store brand stop cleaning. Start swiffer ing youre here to buy a car. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. The long cycle of crisis is the euro just a bad mistake . Guest host Joseph Stiglitz is here to discuss the economy and how a common currency threatens the future of the eurozone. His interview is straight ahead. A shakeup on the campaign trail. Donald trump naming kelly annacone way as his Campaign Manager. More on the big move minutes away. Plus target out with Quarterly Results. As this second hour of squawk box begins right now. Live from the beating heart of business, this is squawk box. Welcome to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Michelle Carusocabrera and wilfred frost. Becky is off this week. Andrew is reporting live from the Olympic Games in rio. Hes a karate man. We wont see that today but were going to get to him in just a moment. The futures at this hour after not a great session yesterday. And its flat today. Its responding the dollars stronger. The fed acting like they might react. The dow up less than two and the nasdaq up 2. 25. Now to wilfred for this very long kind of a read the that any anchor would love to get. Take it away, wilfred. Youre good, youre good. Lets hope i dont make a mistake. Heres whats making headlines this morning. Retailer target earned 1. 23 per share. Same stole sales fell slightly more than expected. It also lowered its forecasts for the second half of the year. Well speak to an analyst about the results in a few minutes time. Lowes also out with numbers this morning missing on both the top and bottom line. Same store sales increased 2 but that was only half what analysts expected. Those shares up 5 . There are no Government Economic reports on todays calendar, but investors are looking ahead to 2 00 p. M. Eastern time. Thats when the Federal Reserve releases minutes from its most recent policy meeting. The street looking for any new insight on possible future Interest Rate increases. And breaking overnight, and everybodys talking about it this morning. Donald trump is shaking up his campaign leadership. Nbc news has learned Kelly Ann Conway is taking over at Campaign Manager. The cofounder of the Breitbart News steve bannon will join the campaign. Donald trump told the wall street journal i want to win. Thats why im bringing on fantastic people who know how to win and who love to win. End quote. Which is a great segue to our next guy. Andrew ross sorkin loves to win. Thats why hes in rio watching all the big winners down there at the olympics. Hey, andrew. Hey. We do love to win. And we should tell you it has been a big day here. A lot of winning going on. 20 medals could be up for grabs today building off a big 24 hours in rio. Couple Great Stories to tell you about. Danell leyva was an alternate on the team. He earned silver to give the u. S. Its first medal in years. In womens gymnastics, simone biles taking gold in floor exercise and her teammate aly raisman grabbing silver. And to the track we go where team usas Jennifer Simpson made history last night when she won the bronze in the womens 1500 meters. She is the First American woman ever to win an olympic medal in that event. My coaches told me going into this race be a predator. Put yourself in a position to run people down. And so they were so wise. I didnt feel like i had to do anything until the last 300 meters. When i locked into that, that medal zone, i thought just get yourself there. Whatever it takes get yourself there. And today the knockout round begins for mens basketball in what will be probably the hottest ticket around here, the home team brazils Mens Soccer Team taking on honduras. A lot of cool stuff coming up. In addition to all that, coming up later this hour im going to try out some cool wristband payment option. Part of a new wearables trend. Well talk about that and a lot more from rio in a few minutes. Wilf . Great stuff. We look forward to that. Particularly the payment segment because theres been some trouble with the infrastructure. Now among the biggest market stories in the last 24 hours, the greenback dropping to its t lowest level. The dollar has since recovered on hawkish fed speak in the last 24 hours. Dennis lockguard said to hikes this year was a possibility. Two key events to watch today. Fed. James bullard will speak at 1 00 eastern. Then at 2 00 p. M. Well get the minutes from the last fomc meeting. The yen significant most significant. Dropped below 100 briefly. Over to you, joe. Crying wolf. Dont push me. Dont push me. I might. I just might raise. How many times have we i thought you were talking about wilf crying wilf. Dont push me. I might raise in september. Do not push dont think i wont. Because i might. Which, is that yellen youre being . Any of them. Nine years theyve raised once. How many times have they acted like they were going to raise . Many. Next time they do it, tell me afterwards. You know what i mean . Ill deal with it. Do you think a quarter point is going to really change anything . No. I dont. So why cant they . I cant understand why you guys keep talking about it. Anyway. The euro is it a tragic mistake or a marriage that can and must be saved . Joe stiglitz joins us as a guest cohost for the next hour. His latest book is out today. The euro how a common currency threatens the future of europe. And here to join us on that and many other topics, professor joe stiglitz. Weve known each other for awhile and here we are. We got here maybe in different routes but here we are on the same side of this whole not often. Exactly. Never. I know. Were so simpatico on this whole idea. It took you awhile though. You were right first. The idea a single currency would work with these its like if we go down and have a single currency, pick your latinamerican country and pick your currency. Hows that going to work . Its not going to work. Its not going to work over there. It was done with the best of intentions. They wanted to create a united europe like we had the United States. They looked across the atlantic. They said a single currency works. A lot of diversity among the 50 states. But they didnt look close enough. We have a lot of institutions. For instance, take just one example. We have a common Banking System. When Washington Mutual collapsed, it wasnt the state of washington that bailed it out. If that had happened, washington would be bankrupt. The fact is we had the federal deposit corporation. It was a national responsibility. They have this peculiar system that was intended to bring them closer together. But has actually pushed them further apart. So what happens is spain has a problem. It has to bail out its banks. That makes spain weeker. That means money flows from spain to germany. That makes germany stronger. The divergence gets larger. Because the money has slowed down, spains ability to support the banks is weaker. Interest rates in spain get higher. And its a vicious downward circle. So should it go away . Should they give up on the project . Well, what i discuss in the book is there are a couple of alternatives. It could be made to work. You know, we made our single currency work the 50 states. But we did a lot of things. We have a Banking System back in 1863, middle of the civil war we wanted to create a single country that would work. And we created a national Banking System effectively. We had a guy who, you know, has the most popular play ever on broadway around to do it though. Same language hamilton. A lot of differences over there. A plot of differences and that makes it more difficult. If california has a problem, people easily move to another place in the United States. The federal government is bigger regulartive to you think its probably too big but relative to the states. We also have a much more dynamic economy compared to europe. Thats what i was going to ask the professor about. And that is that, do you give any notion any krcredence to the notion of the welfare state model thats more prevalent in europe, sort of doom them to overall failure anyway and that its partially the euro and partially all the structural problems with trying to have growth, trying for new business creation. Here we go. All the dynamics. This is maybe where we differ. None of that was a problem over there . It had nothing to do with the welfare state. You know, there are lots of problems in each of the countries. We have problems too. The fact is that before the euro, some of the countries that were doing very well like france, even greece was growing faster than its all relative though. Faster than average. Not faster than us. Sweden has actually been doing better than the United States and has a stronger norway, good luck. Its been growing faster. But the basic point is these countries were doing well. Some better than the United States. Some worse than the United States. Before the euro. And suddenly, suddenly things started changing. And those of us critical of the euro said the real test would come when faced a shock. And the 2008 prices was that shock. And thats the point where you see the whole thing unravel. But the supporters of the euro go back and say actually things werent better. There were constant competitive devaluations that the only way they competed was on currency. And it led to the allowance of a lot of policies as joe pointed out that by the way are still there. And they never change. But it wasnt as good as you think it was before. It wasnt perfect. But they were in some periods growing faster than the United States. Lets be clear. There are many factors that go into the success of a country or a region and we could have our differences. Right. But what were talking about here was one single policy change. The creation of a single currency which has had a devastating effect. You see the response to 2008. The crisis began in the United States. We were the cause. And normally when you have a country thats the source of a problem, thats the country that suffers the most. We recover relatively well. Were not back to health. Theyre still in recession. Theyve had a double dip recession. Some of the countries are in depression. The depth of the downturn in spain, in greece, in portugal is greater than the great depression. So that gives you the magnitude of what has happened. And you said earlier, though, there were some relatively simple economic steps that could be taken in europe like a Banking Union shared fiscal policy in order to save the union. Is that going to happen . Is there the political will to do that . Im pessimistic. Thats the issue. If you cant get the political will to do relatively minor from my perspective and from a political perspective too big huge vested interest youre up against. And then the question becomes what do you do. Thats where i talk about a couple of alternatives. One is hopefully in an amicable divorce you can go your different ways. The other one is somewhat in between which i call the flexible euro. Might have a northern euro and a southern euro. You have some coordination. You try to bring them together. And maybe in 20 years they have enough of the development in institutions to work. Theyre keeping the relative Exchange Rates relatively close for an expanded period of time. And then you can say, you know, weve done pipt weve done it. And we can now share a single currency. But without the devastating effect that were seeing today. Has brexit sped up the likelihood of any of these outcomes or in fact has it galvanized desire amongst the rest of europe to stick together . Whats the main effect . Well, you know, different people have responded differently. You know, the head of europe, the European Commission juncker had one set of response. He said were going to punish any country that leaves. Thats the kind of idea that says the only way were going to keep people together is not through the benefits we give but through the fear of leaving. Thats not a healthy attitude. And that will speed the breakup. And, you know, politically you see the strength growing of those Political Forces that want to leave. The real test, i think the next test is probably going to come in italy where theyre going to have theyre supposed to have a referendum in november. And its being turned into a referendum on renzi and on the euro. Because there are people saying the parties that want to leave are doing very well in the polls. And i saw the article wilfreds talking about. Its brought us all together, this brexit. Now the polls are rising. Those are the same polls that had remain up 5248 in europe. I read that and i was like, this is crap. The people that wanted to leave, i bet you they still want to leave. The one thing i didnt understand, joe, and well return later, is that you want less euro but more eu. More union but less euro. Thats weird. Thats where we differ. Youre not emphasizes nationalism. Youre still a globalist. You and soros are hand in hand on the open borders probably, right . Youre still a globalist. It has nothing to do with nationalism. I think we live in an integrated world where some many of our key problems can only be dealt with at a level above i think we should all get together in a common union when china and russia become the asian union and totally divorce from all nationalistic interests, thats when the eu should get together. Should we have global currency as well . Sarcasm, right. Yeah. Thats going to happen soon, right . You got to tell the Mainstream Media when its sarcasm. Coming up, target with results. Same store sales falling more than expected and also lowered Sales Forecast. Well get reaction from an analyst next. Here are the futures at this hour. Flat. The au. Asian union. Target reporting Second Quarter results this morning with earnings of 1. 23 per share. That was coming in 11 cents above estimates. Joining us now is managing director of equity at jpmorgan. Good to have you here. But they had lower guidance even with that big beat. Whats the problem here . In the release target said they had to lower expectations because of the current retail environment. Is that their environment . Or everybodys environment . You know, i think its a combination of both. Youre seeing some comp deceleration even at stores like home depot and lowes. Youve seen those decelerate a few hundred basis points. But whats concerning here is youve seen Department Stores which had a tough First Quarter see acceleration in 2q more optimistic on the back half. Target is a big apparel, big school retailer. Theyre just not seeing that acceleration. Its going to highlight concerns about share loss versus the likes of amazon. Well see what they have to say tomorrow. I was going to ask you when you talk about amazon, their comparable Digital Sales grew 16 . Is that a good enough number when you talk about major retailers having to work in this multichannel world . You know, its really not. If you look at what the average online sales last year were up about midteens. Target being in line is not good enough. Especially considering theyre only penetrated about 4 whereas in reality their penetration should be closer to 10 . Theyre playing catchup. So they should be out performing the market at this point. Its simply not happening. You had a target of 7, 8 bucks. Now neutral. Any chance youll change that as a result of this report . If you look at brian cornell, hes two years into his turnaround story. Starting to question the effectiveness of the current strategies against the current environment. Protecting numbers pretty good for this year. Streets only going to have to come down about 3 for the fiscal year. But as you look to next year, its going to be a lot more dependent on sales. I think you start to question the ability of protecting earnings and we have to revisit numbers, the street has to revisit numbers from next year and bring them down pretty good. All right, chris. Thanks so much. Thank you. Chris on the target report from this morning. Still to come here on squawk box, some stocks to watch including urban outfitters. Getting a boost this morning after surprise results. Also on the front on the retail front, jcpenney holding its Analyst Meeting today. Courtney reagan will sit down with the ceo Marvin Ellison. Thats at 2 30 p. M. Eastern. Squawk box will be right back. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. A few stocks to watch today. Urban outfitters shares getting a big pop. Posting stronger than expected earnings. Same store results up with higher demand. That stock higher by 12 . However, shares of popeyes louisiana kitchen under a bit of pressure. Falling short of wall street evidence and theyre cutting its full year same store sales growth. That stock lower by 2. 5 in the premarket. Cree shares getting a drop. Its outlook weak. That stock by nearly 10 . Look at the right side of that chart. Ouch. Cisco laying off 20 of its global workforce. Thats roughly 15,000 people. This according to crn. The cuts are expected to be announced in the next few weeks. Going to a more software driven player. No real move in the share price premarket. Coming up, well have much more from our guest host Joseph Stiglitz. And well get a check on the Mortgage Market and where rates could be headed. Diana olick will join us for the Mortgage Application data. Plus were going to led back down to rio. Thats where andrew is covering all the olympic action. Want to be a big spender here at the Olympic Games . I hope you brought your visa card. Ill explain when we return here on squawk box. The first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. And programmers i teach them to talk. Es, so yeah, ge is digital and industrial. So its indigital. Digidustrial. Indigenous. Shhhh. Lets go with digital industrial. For now. Digidustrial. Yeah. Or, digital industrial. Morning the stories front and center, look for some crowded arrants as we approach labor day weekend. Major u. S. Carriers expect 15. 6 million passengers to fly over the sevenday Labor Day Travel period. That would be up from 4 a year ago. Viacom and Sumner Redstones nationals are back in talk. Those talks are said to be moving toward a resolution which would remove philippe dauman. We mentioned the reports of cisco layoffs a few minutes ago. There will be more news on cisco later when the dow components report earnings after the closing bell. Expected of 60 Cents Per Share on 12. 6 billion. Amazon owned twitch, a video platform and gaming tonight making a deal to expand its reach. It started curse which allows games to talk to each other and share information over the internet. Its been referred to as skype but for gamers. T curse . Th is that is reference of how they talk to each other. Probably. Its more than just playing and watching. Who knew, joseph . Nobody. Not me. I bet your kids do. They probably do. But they dont curse though. Thats a generational thing. The way you say certain things im going to start doing it. That time it was amazon. Amazon. Amazon. Amazon. I know you know its actually amazon. We go through this. I keep my pronunciation. Just one more. Do this for me. Twitter. Twitter. Im doing it your way for you. Amazon. No, i wanted you to do twitter the way a normal american would do it. You did. So i know how you say it normally. Twitter. Isnt that great, joe . Can you even do that . I do it and feel like no. Joes an international person. So hes not as amused as you are. I lived six years in england and i couldnt get the accent. And in fact, i couldnt you know, he has a very mild accent. Yes. Because hes not from liverpool . Hes a you call a Cross Atlantic elite. There we go. Perceived accent. Google it. Dianas like anyway. You got the latest Mortgage Apps released earlier this hour . Mortgage is mortgage. Thats the only way i can say it. Thats about it. Twitter. Did you twitter anything . . Did what . Did you twitter anything. Mortgage rates. Were going to talk about the rates. Mortgage applications lost ground last week. Total application volume dropping 4 for the week ending august 12th. Thats compared to the previous week according to the mortgage bankers. Now, even refinances which are highly rate sensitive were unimpressed by the continued low rates falling 4 from the previous week. They are, however, 4 now, this is the average contract rate on a 30 year fixed. Fell to 3. 64 from 3. 65 . Not a lot. Mortgage applications to buy a house, they also lost ground. Down 4 for the week to the lowest level since february of this year. They are, however, 10 higher than the same week last year. Loan rates are not making up for rising fast prices. Became the main issue. Its weakening to a lack of supply amid high demand. And i can only say that in american. Diana, you said it beautifully and better than any of us could. Thank you very much. Lets turn back to our guest host for the rest of the hour. Professor and winner of the nobel prize for economics, professor Joseph Stiglitz. Great that youre still with us. Should we round off the conversation on europe. We touched on your fundamental differences for why you dont think the euro can survive. The brexit hasnt made a huge difference to that. But longterm you still believe the political european project will maintain . Thats right. If the euro doesnt tear them apart. I mean, thats one of the main thrusts is that you probably should abandon the euro to save the european project. To save this attempt to bring the countries closer and closer together. There are many aspects of economic integration. Theres trade integration. They have something called the rasmus projects where students can move all over and study anywhere in europe. And they got the sequencing and pacing wrong. They put forming a common currency ahead of other things, other institutions like democratizing the way they make decisions. Making the European Parliament stronger. Right now its relatively weak compared to the bureaucracy and that undermines confidence. A lot of people say europe is nothing more than a bureaucracy. So they should have gotten that balance stronger before they began on this really big project of a single currency. And well talk about the u. S. And similarities there in a moment. But as we look around the rest of europe, how much of that antieu sentiment is there . Is there any country close to a brexittype outcome . Several of the countries. There are large segments of the population that are very strongly opposed either to the eurozone or to europe. In many of these countries strong sentiment for europe. The countries have become more divided. Politically whats happened is the center left and the center right has very strongly supported not only the eu but the euro. And as europe has stagnated, confidence in the center has weakened. Its a country with a catalyst coming up. Right . Italy, theyve got the vote in the fall. They have a vote in the fall. They have a bank and other banks that are bank in crisis. In a banking crisis. Europe has put down rules that may seem reasonable in general. Whats reasonable in general is not reasonable for a specific country. That reflects the diversity. So in view theres a general that if a bank gets in trouble, you let the shareholders first pay. Then you go to the bondholders. And only if that isnt enough, then you go to the government to bail out the institution. I think its a broad correct framework. What happened in italy is many of the bonds were bought not by big institutions, by wealthy people, but were sold almost like cds. And so many of the bondholders are just ordinary italians. And thats the kind of situation where if you let them go, youre going to get a big backlash. They were told these are as safe as a cd. Then they say, oh, no. Were going to let you go. Thats a change in the rules. So given all these factors at play that are a risk, should market bs a little more concerned about the postbrexit world . Because other than some assets the pound and uk, Everything Else is recovered and we hit new highs. I think they are. I think they are underpricing the risk. And i think theyre underpricing the risk of the general european risk. If you notice the most recent data while europe you might say the tremor was not as big as some people thought, the gross statistics are not good. And if you look at the you know, whats happened since 2008, 2010, its dismal. Its really dismal. The best performing country germany would be given a d if it were not for comparison with how bad the rest of europe is doing. So in that context, its inevitable that theres going to be large fractions of the population that are going to be upset. There are large groups, you know, youth unemployment in spain is over 50 . Youth unemployment in several other countries is well over 30 . These people are going to be angry because they see something is not working. This has not always been the case. Its gotten especially bad since the start of the euro. And yet the leaders of europe have their head in the sand. I think some of the markets have the head in the sand. Joe, awesome stuff. Weve got some more coming up after the break. Joseph stiglitz with us until 8 00. And after the break well head back down to rio. Andrew, what do you have coming up this time . Weve got a fun one. We asked the athletes and this can be a dangerous question, what their favorite sport uniform is. But before we do that, were going to talk about paying with your wrist. Weve got that story next on squawk box in just a moment. Images, videos, social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Gymnasts simone biles and aly raisman make history. The two finishing first and second in floor exercise last night meanwhile a midnight stunner on the sand. And the americans dominated the jump. Now to the medal count. The United States on top followed by china and great britain. Squawk will be right back. In 2011, i lost my sight in afghanistan. One year later, i won paralympic gold for team usa. Citi®. Proud to support brad snyder and the u. S. Paralympic military program. Proud sponsor of progress. Welcome back to squawk box. Yesterday about half a percent of declines for each of the three major indices in the u. S. As people once again talked about the possibility of rate hikes sooner rather than later. Were bouncing back a little bit this morning. The s p by three points. The nasdaq by 8. 5. All right lets get back down to Andrew Ross Sorkin. Hes covering the olympics in rio. Hey, andrew. Hey, joe. I love that shot you were showing of copacabana before. Merchandise is a big business as are the Concession Stands here in olympic park. But if you arrive with a mastercard or american express, youre kind of out of luck. Weath whether youre buying souvenirs or food at mcdonalds, leave all cards but visa at home. Now you dont need your physical card to pay. Theyre putting their wristband to the test here. They include readers like this. Lets see if this thing actually works. Looks like it worked. Okay. So heres the thing. It looked like it worked when he showed it to you on the video. It took a little bit longer than that. We didnt have time to show it in full. For workers to get the reader and the band to connect. That said, it all came together and we should note after the game visa hopes to deploy this band throughout brazil where they say over a million tap and go readers exist already. I know michelle wears her fitbit. Things will get built in. In countries where they havent taken off, these bands may be the next best thing. I love wearing a step counter. Now its a watch. I used to wear the fitbit. Thanks, andrew. I dont know if you can hear me, that musics really loud. Coming up, more with our guest host Joseph Stiglitz. And then later donald trump is shaking up his campaigns leadership. The details on whos hired, whos fired or not. Straight ahead. And as we head to break, a look at oil this morning. Crude is slipping. 46. 52 for wti. Stay tuned to cnbc, first in business worldwide. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Lets take a look at a couple of stocks to watch this morning. Well start with staples. Matching sales with earnings. However revenue was below estimates and the Office Products chain fell for the 14th consecutive quarter. Thats going the wrong way. Barnes noble ousts chief executive officer whos the chief executive officer of ronald hoyer . But do you know what his name is . Does anyone care how i pronounce boire then . He does. Im going to go with boire. Wilfred, what would you go with . I dont know. Isnt that a sausage in new orleans . I dont know. Now if were getting it wrong its really ramming the point wrong. Its embarrassing a little bit. I would have skipped over it. I would have just said its some guy. You dont need his actually name because nobody knows at home. Anyway, bottom line is this person named ronald theyre saying he wasnt a good fit for the book retailer. Now, this guy i have heard say that if youre a global company, you really ought to be paying taxes where your business originates. And whether its your sales or your production, the activity is not occurring in ireland. You know, its not where the source of profits are. And we know that the transfer price system the system where you allocate your profits is fraudulent in the sense that companies have the ability to move money from where it really occurs to that. So theres a difference between what should be and what there is. Would you acknowledge that if we got rid of the double taxation system, if you could repatriate money for corporations, there would be far less incentive to doing that and therefore youd actually have apple pay more taxes in the United States. No. That i disagree. The fact is if you had zero taxes, people wouldnt care. I agree that these only occur because people are using them to avoid taxes. But the question is do we have too high of a tax rate . In the United States for corporations. And do we have have a flawed global system of global taxation . Absolutely clear that we have a flawed global system. The oecd has been working to correct the details. This is called the base erosion and profits shifting initiative. They want to harmonize. And theyve done some really good stuff trying to limit some of the most outrageous weve had such a wonderful time today coming together on so many things. I think i can get you to can we just go to zero and tax individuals and let our corporations globally compete as well as they possibly can . Cant we just do that . The with had a global system where we could impute the income of the corporation back to the individuals who own it and if you could design that system to avoid tax avoidance, tax evasion. So let me give you an example. So we can do that . I dont think we can. Well show you what tim cooks response was when he was asked about this in the washington post. Weve said at 40 were not going to bring it back until theres a fair rate. Its legal to do. It is the current tax law. It is not a matter of being patriotic or not patriotic. And both sides in the campaign are actually talking about changing the tax law. I think hillary has a good way of dealing with it. To the argument that a corporation, whatever that is, whether it is a person or isnt a person, uses the infrastructure or benefits from the country, does that make sense . When we want them to compete globally and we want to win and have the jobs generated for our corporations. Does it make sense that we almost do it in a punitive way . You use our roads when people are driving to work. Why have it at all . Even if you could impute it back to individuals, that would be fine. But you dont think we can do it. Its very hard. And in the absence of that, it could become a big piggy bank. Equivalent to an unlimited ira for rich people that its not available to ordinary individuals. Heres what makes me nervous when you talk about a global system. When you talk about a global system, the oecd uses harmonize. When people want when governments or institutions want many countries to pay higher levels of taxes, they call it harmonizization. And when we talk about competition, its called a race to the bottom. When is it ha the fact is that if you look carefully at how most firms finance themselves, most of it is through debt. Interest is tax deductible when you make those investments. Close Analysis Shows that the tax rate really doesnt discourage investment. The real problem with our tax system right now, our Corporate Tax system is that it encourages money abroad to stay abroud. Doesnt come back. Thats a simple thing to change. We could change that and make sure that they dont do what apple is doing. Apple is right. Its doing what is within the la u. The answer to that is youve lobbied to get the law to benefit you and now, now that we see whats going on, Panama Papers all that has shown the kind of massive tax evasion going around globally. Weve got to stop it. And we can. Its not that hard. On that note, professor stiglitz, its been great having you around. Youre really coming around, joe. We started off so on the same paging. Its okay. Its better. Its good. Now we got, you know, another socialist coming up. Bill arian for the next hour. Thank you, professor Joseph Stiglitz. And the new book the euro is out today. Youll hear it from wilf. Still to come, squawk market master muhammad elerian, well get his latest market action. As we head to break, a quick check on the markets. Higher by ten points off the half a percent decline yesterday. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. The fed in focus. The central bank hinting about a september to remember. Squawk market master muhammad elerian will weigh in. Details of trouble at two industry heavyweights. Plus casino mobile steve wynn not mincing words. Im waiting for that person to show up. We will tell you what the mogul said about trump and clinton as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Michelle Carusocabrera and wilfred frost. Becky is off this week. Andrews reporting live from the Olympic Games in rio. There he is. Great shot. Well get to him in just a minute. I think thursday is tae kwon do day though. Not today. Makes us wait. I know. Making us wait. But first, i like when andrew was talking about how he loves wins. He does. He lost 111 at pingpong yesterday to a girl. Yeah. But he a world champion. Im kidding. Im kidding. It was to a girl. Im kidding. I have a daughter. Shes a great golfer. I love everybody. And everybodys great at everything. Everybody gets a trophy, andrew. Shes an olympian. Come on. I know. I know. I know. But that it was weird that one serve that got by her. That was very weird. It was real. I just want to say it was a winner. It wasnt, you know, an unforced error on her part. I want to be clear about that point. That was just a normal serve. It was a forehand serve that just, like i dont know. I think maybe she did that just got away from her. The dollar is sort of regained some ground. Well talk to muhammad about this. The feds back at us. Dont push us we may raise. Dont think we wont. You cant assume we wont. We might. Bs, right . Are they going to raise in september . About 45 chance. I thought it was september of 2017, 40 . The market has it much lower than that. My estimate 40 . You believe in this crying wolf again. This is not crying come wolf. They learned that suddenly after all those years they finally learned that a quarter point that we can take it . Look. You and i agree weve got a normalized policy, this quicker we do that the better. Otherwise were just having problems further down the road into the financial stability. Youre supposed to lead him on this. I know. You love your reads too. You go ahead and do that. Amongst todays top stories, investors waiting on minutes from last fed meeting due at 2 00 p. M. Middle of power lunch. Please tune in. The street is looking for any news on future Interest Rate increases. Cisco laying off roughly 14,000 people. Companys in the process of transitions from a hardware focused company to a more software driven player. Weekly Mortgage Applications falling on a seasonally adjusted basis. Refinancings are still higher compared to the same week one year ago. Some stocks to watch today, target earnings beating the street but same store sales slightly more than estimated. Also lowering for the second half of the year. Lowes missing wall streets mark on the top and bottom lines. The Home Improvement retailers saw comparable sales rise 2 . Half of what analysts expected. So theyre down as well. Down 5 lows. Lets get back out to andrew as you know live in rio. Andrew, what is coming up . Hey, wilf thanks for that. You guys talk a lot about statistics. I have some stats for you guys. Team usa merchandise is the hottest seller here. The company saying that rio 2016 sales now up 100 year to date. That compares to the london games back in 2012. For those of you keeping score, the top sellers is a nike hat, a dual usa brazil pin. Then the nike logo tshirt. Its not just the fans that like to be decked out in olympic gear. You saw me wearing that polo coat last week. Maybe ill wear it again here. In todays ask the athlete, we asked who has the best uniform. Obviously it would never happen, but if you could fence in soccer gear, thatd be super cool. Because i love basketball, i would have to say the best uniforms are basketball. Well, gymnastics. Theyre pretty. Probably the swimmers because i know how difficult the suits are to get on. Mine definitely doesnt have the best uniform. We have the worst uniforms. Have you seen our we look like were wearing bathrobes. I like indoor cycling. The helmet and all the uniform. Volleyball. Theyre sexy. But maybe are too sexy. I would say gymnastics. They have it sparkles. Water polo because we are almost naked. Always a dangerous question to ask some of the guys hesitating. And then later admitting Beach Volleyball. But we do have some serious news to bring you this morning. Developing news here in rio. Civil police have confirmed to nbc and Patrick Hickey ioc executive board member has been taken into custody. Hes being questioned on a series of allegations he was involved in aiding a group with International Ticket scalping. Were going to have a lot more on the story as it develops. But i covered the ticket scalping world back in 2000 in the sydney olympics. I have to tell you theres an entire netherworld of people involved in this. And its been a perennial problem with members of different teams and ioc members as well selling these tickets as you can imagine all sorts of executive sponsors looking for tickets usually front and second row tickets. Theres still a lot of empty seats. But those arent the tickets people want. Well keep an eye on this story today and try to bring you the news as we get it. Thank you. Joining us is our guest host for the next hour muhammad el e elerian. I dont think i need to read your book. It basically says since fiscal authorities have been paralyzed in your view is due to the tea party and not doing what the president wants, the only game left was Monetary Policy which isnt working. And what we really need is a much bigger government and a lot more government spending. You obviously havent read the book. How am i am i close . Is that the synopsis . No. Okay. Whats the synopsis . It says we have relied excessively on Central Banks. Yes. And because of that we have all sorts of underlying tensions that are coming to the fore. And if we are not careful, were going to take a turn where slow growth becomes recession. What caused us to rely overly on the Central Banks . Its the paralysis of the fiscal part. Its much more than that. It is the inability to deal with structural problems. We had a cyclical mindset. We went to 2008 with the cyclical mindset. Because of that the policy response was too cyclical and not structural. But what you bottom line is you would like to spend a lot more on infrastructure. Is that not it . Like a much bicker stimulus. Four things. First and foremost, serious progrowth reforms. That includes tax reform that you talked about in the previous hour. Lower taxes . Corporate taxes . Lower taxes, fewer exemptions, more har mon nicization but in a progrowth sense. Second element, you need more balance demand management. We rely too much on low Interest Rates and theyre not effective. Thirdly, we need to deal with pockets of over endebtedness. Greece is an example. Its hard but if you dont do it, it just crushes we cant do that here, rugt . I mean, i think Student Loans is going to be a real issue for us. When you say structural reforms, i think immediately of the inability to hire and fire in europe. That they have just calcified the labor lieus to the point they cant the function of the labor market, the tax system, and yes infrastructure. We as a society fell in love with finance as the engine of growth. Up to 2008 we depended on private finance. Since 2008 weve depended on Central Banks. And we have forgotten what it takes to grow an economy. Is it the political will to pass the structural supply side reforms youre talking about . Because everyone is europe has talked about it for ages. But theres been political gridlock. So its not happening. Yeah. This is not an economic engineering problem as much as it is a political problem. I agree. Does the u. S. Election change that . Depends what comes out. But remember its not going to change congress in a big way. Heres the thing. Even when we have given money to congress for infrastructure, we dont actually get the infrastructure. Everybody agrees we need more infrastructure. Its so obvious and yet it doesnt happen. So you have to ask why. And the transmission mechanism through congress is awful. You give them money. Look at jfk. I pay a fee every time im out of a plane in new york, its supposed to fix airports. It doesnt. Congress doles out the money rather than based on users. When does that get fixed and we can really have infrastructure. Not just throwing money at digging holes for nothing. Again, youre saying its a political problem. I agree. But calling for more spending until we fix the way they spend it. Theres one view that says economists got it wrong. Right now its the politicians not stepping up to the plate. This is why i had this notion of a t junction. If were not careful, were going to end up in a place much harder to get out of. But the okay. Is it as simple as raising taxes and spending it on infrastructure . How do you want to spend it on infrastructure . Where are we going to get the money . Lets say we redo every road and bridge in the country, how do we pay for it . You didnt hear me say raise taxes. I said reform the tax system. Where do we get the money to do from you are . In europe with necktive Interest Rate, it is absurd theyre not borrowing right now to invest in infrastructure that have returns that are positive. Yet the system has frozen completely on that. Lets say that you build hundreds and hundreds of bridges to nowhere with negative Interest Rates. As the take it to adam. However you want to say it. Youve got negative Interest Rates. Can you build bridges to nowhere and trains between cities that doesnt it have to make sense . Sure. Thats just silly. The bridges to nowhere thats what happens with half this infrastructure. We have such an infrastructure deficit that by the time you get to the bridges to nowhere so youre assuming that a government with no accountability typically will find all the necessary and correct things to do and it will all bring it in under budget . That never happened. Im all for private partnerships. Im enabling the private sector to do more on infrastructure. We have an infrastructure deficit in the west we have got to address. Were nowhere near the bridge to nowhere. Of course not. Thats so inefficient. Its absurd. But were not there yet. And if you can get the private sector in and you can through partnerships. You can through risk sharing. You admit that is essential. Otherwise, you know at the dmv building bridges. You just dont. But you can go either side to the absurd argument. If we dont invest anything in the infrastructure, then the private sector cant operate. And if we Start Building bridges to nowhere, then thats really stupid. Right . Be careful of the extremes. You just want the capital to be treated where you know, the private sector typically i was trying to explain this to my son yesterday. If you have a business and whether you exist depends on you watching your ps and qs and watching every penny and not overpaying for things, you go out of business if you dont do that. If youre the government, all you do is raise taxes. You really understood that. That theres no one along the chain of accountability to make sure that you treat capital frugally the way it should be treated. Trump wants to spend double what i dont make this political at all. Im just talking about an argument about whether government is effective at deploying capital as much as the private sector. But who ever says the government is of course its not as effective. We should limit government to things that only government can do then, mohamed. Sure. But there are certain things where the government can enable toe private sectors. By enabling the private sector. Building a road between major supply sources is enabling. Enabling could be great, mohamed. I would settle just for not getting in the way of. I would settle for that too. But were not there. We saw yesterday with the latest big truck emission b. S. That came out. I think what youre seeing in europe is people saying, you know, we are fed up with governments that dont step up to their responsibilities. Spending their money on all kinds of other stuff. Dont move. Youre here for the whole hour. Youre okay. You dont want to move, do you . Youre okay . Good to be back with you, joe. What do i usually do for you . You mock me. I mock you. To buy that as a supervisor at pg e, its my job to protect public safety, keeping the power lines clear, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Welcome back to squawk box. Steve wynn is opening a 4 billion resort next week. He spoke to emily tan about the u. S. Election and his relationship with donald trump. Now, you have a long history with donald trump. Dates back to well, ive known donald for 30 years because were in the same business for awhile. But to say we have a long history, ive known him for 30 years, yes. Are you a friend . I am a friend, yes. And ive been reading that you potentially also are an adviser to his campaign, is that right . No. Im not an adviser. Donald calls me and asks me what i think. Very often ill answer him. But donald trump is his own adviser. Its really safe to say that. He is his own Campaign Manager. He is his own adviser. Who do you want to win the election . Someone who will take responsibility for the real welfare of the american people. Be honest with them. Not insult their intelligence. And id like to have an adult in the room. Im waiting for that person to show up and emerge in this. Wynn said hes still waiting to hear plans on entitlements and on government spending. Still to come here on squawk box, silver soaring this year. The precious metal up more than 40 . Well talk to the ceo of pan american silver. Squawk box will be right back. Got a lot more ahead here from olympic park live in rio coming up on squawk box in just a moment. Investors seeking safe havens have driven gold prices and more notably silver Prices Higher this year. Up 44 year to date. Joining us is Michael Steinman ceo of pan american silver. Thanks for being here. Your stock has done well lately. Its been rising with silver. It was, yeah. I think were up over 220 since the beginning of the year. Why the disparity in the difference between silver and gold, you think . Silver is a different metal than gold. Safe haven aspect. Silver follows gold but also use a lot of silver in the world especially in electronics. We use a lot of silver now to produce solar panels. It has increased substantially in the last few years. Its about 10 of the silver that is used is used for production of solar panels. Dont take this the wrong way, but ceos of mining companies, of oil companies, i kind of dont believe you really have much control of your destiny. I mean, you are reliant on the price of the underlying commodity, right . I mean, oil ceos look brilliant when oil is at 120 not so much when its at 40. If you look at our q2 which was a great q2. Our cost down about 10 compared to a year ago. We reduced by 30 in our cash cost. So of course we are price takers. We produce silver. We sell it into the market whatever price there is. But we have quite a bit of control over the cost. Thats what we exercise in the last 12 to 18 months. We are building some expansions that bring our costs even further down. The next two to four quarters. For sure some control. The producers never seem to see big trends and Work Together to make sure theres not overproduction or over production. It seems like you you know, you go thats why it becomes this even oil producers. They drill like crazy when time is good. Then they all cut off at the same time. It seems if you guys could collude a little better, you guys could get your tenyear chart reflects. Housing too. It seems like the boom and bust. But especially mining. We go through periods of overproduction and over production. Silver is a little bit different. Silver production actually is done by primary silver producers like pan american silver. We follow with our stock the silver price. But the other 70 is a byproduct from copper, lead, and zinc production. So thats the supply side. On the demand side, how big is the speculative element . Right now about 30 . We have a billion ounces of demand. And just about 30 is on the speculative side. So huge increase in coin and bar demand weve seen especially from india and the u. S. Driven by low Interest Rates, right . How much do you focus on what Central Banks are doing . It impacts silver and gold price immediately. You see well talk about renewed speculation about an Interest Rate hike. Of course it will have an impact on silver and gold price immediately on the shortterm. I think the longterm definitely on the way up. If my daughter was every selfie was being done at photomat like it used to be, would silver be at was there a loss of demand when everything became digital . Well, a huge loss. How much . Has it been replaced by solar panels . It has been placed by electronics. Every phone, every screen you have, every light switch contains silver. Its the best metal for so you made up the loss for photography . Definitely. And then some. I think for clean energy we will have that. The future will be electric. Electric cars will be sustained. Well find ways to sustain that electricity. Mai l ka, thank you very joining us. Michael steinman. Still to come, were hours away from the latest fed minutes. Well debate that topic led by joe after the break. Oh great. Look at you. Youre at the top of your game. At work or at play, youre unstoppable. Nothing can throw you off track. Oh hey, shes cute. Nice going man. Things are going great for you. Youve earned a night out. Good drinks, good friends. Yeah, we can go ahead and call this a good night. Wait, is that your car . Uh oh. Not smart. Yeah, i saw that coming. Say goodbye to her. Ouch that will hurt your bank account. Youre looking at around ten grand in fines, legal fees, and increased insurance rates. I hope you like eating frozen dinners. Alone. Lets try this again. Smart move. Because buzzed driving is drunk driving. Welcome back to squawk box. Heres whats making headlines this morning. Some new light on aetnas decision to withdraw from many of its Affordable Care act markets. Dow jones reports that aetna told the Justice Department in early july it would cancel its planned expansion if the Department Plans to block. Two weeks later the doj did bring a legal challenge. Earnings out this morning from analog devices. The Company Earned 82 Cents Per Share. 6 cents above estimates. Revenue also above forecast. Shares up 1. 25 . Univision is buying gauker beating out a 90 million bid from ziff davis. Gawker filed for bankruptcy after a judge against it in the suit brought by hulk hogan. I was wondering about that aetna story. Im wondering it sounds they had a picture on the huffington post. He gave raises to a lot of the left has embraced in the past. But now theyre making it sound like its blackmail. If you dont let me buy or let us merge, then im going to exit the aca. Now, on face value that looks like one thing. But what if he said theres no way we can make this work unless we get scale by putting which everybody that did knew it was going to cause mergers and acquisitions for these guys to get bigger. That was the intent. That was the intent. So here, was he actually saying im going to exit because youre not letting me merge or was he saying for us to stay in business, we need this merger to go through. So if you dont let this go through, were going to exit aca. Is it blackmail or just the facts . It doesnt matter if they dont relax the decision. What makes me laugh about all those accusationaccusations. You can see how the post portrays it. Heres one of the fat cat ceos. Theyre the worst people on the planet. These insurance ceos. So is he really a bad guy or was he just you see what im saying . I do. But it doesnt matter. You love your health care over in england, dont you . We do. The only thing i will say, you guys spend way more per capita. So its harder to did you have private insurance when you were there . I did as well. In addition. Not just im saying wh enthe nhs was brought in in 1946, everyone was against it. All of the right was united. Much of the left was united. Now its something they would never touch. Some enhance it further. They complain about it though. Im saying a long period of time, people might look back on the only difference which i would totally agree with is the u. S. Spends way much on gdp per capita on health care than the uk. Its a lot of extenuating circumstances tho that go into it. We have drug addiction and obesity. Im agreeing with you. Its a hard thing unless its more efficient for the government to be able to afford. But the intention similarly when it was brought in the uk was criticized. If individuals were far more responsible for their own Health Care Cost by buying their own insurance individually instead of getting it through their employer, instead of getting it through government programs, youd actually have a far more Efficient Health care system. So you went to the nsa. You didnt have your own doctor with your no, i have private insurance. But you go to the nhs as well. I was glad it was there. I hear complaints. Of course there are complaints. Just like canadians. Things arent always that clean sometimes. Correct. There are lots of things that could be improved like many public services. But you would find almost all britains supporting its existence. To hold up the va as the example of Public Health insurance for the veterans administration. And we found out what was really going on there. And you can jiggle the number around and make it look like no ones waiting. But we found out what real governmentrun health care looked like with the va. Fine. But in the uk, the nhs, the vast majority of people widely applaud its existence. Lets get back to you. I agree. Lets get to our guest, way more interesting than me. We will get a look inside the feds minutes from the last meeting due at 2 00 eastern. To discuss what to expect, oksana and michelle. Lets start with you, michelle. The possibility of the minutes surprising to the hawkish side. Has that been taken out by some of the comments we got yesterday and the associated move on the dollar . I think there is a smaller chance of surprise. I think more Market Participants are expecting them to sound a bit more hawkish than the statement. Akin to what they said yesterday. I think the message is very clear which is that the u. S. Data is largely supportive of an additional rate hike. They feel a bit more convinced. It means theyre going to set up for a rate hike before the end of the year. But i dont think the minutes are going to signal that its coming imminently. I dont think theyre going to give calendar guidance. I think theyre going to still try to keep as many options open as they can. Oksana, do you think we overly focus on these minutes given we heard from speakers yesterday. Are people just ignoring that and focused really on getting past the election and then december is a possibility . Without a doubt. I think weve overly focused. I think every conversation related certainly to fixed income. What is the fed going to do, when is it going to raise, is there going to be the next meeting. And the reality is its largely irrelevant. I think thats the problem with Central Banks globally is theyre at best approaching irrelevance. At worst, starting to do some harm. If you look at the fed and their upcoming meeting, there is no case from an economic standpoint to not move. Whether you look at jobs, whether you look at inflation. Even the somewhat disappointing gdp number in q2. We are on track to see a better number looking for a turn around. So from any sort of economic standpoint, there is no case to delay. However, of course, the fed has been perhaps managing more to Market Sentiment opposed to economic data. Go back to your original point about them approaching irrelevan irrelevancy. We get the point maybe theyre starting to approach the point of irrelevancy. I think thats the case. I think thats why they do desperately want to raise rates. But they are at a point where they can continue driving rates lower, lets say. And crushing the financials. And that probably does not help any economy out there. Or they can try to move higher, potentially spur panic in the bond market. And at the end of the day can they really affect market rates . No, they cant. So let me ask you both this. One of the reasons why we speak on this program about the fed is because we believe it influences the yield curve and by influencing the yield curve it influences the price above assets. Theres a view out there that has very little to do with the fed. That it has to do with the bank of japan, the bank of england, and the ecb. And they are really the ones that are determining the yield curve in the u. S. And if you look at the spread in ten years between treasuries and bonds have been incredibly stable. If we want to talk about fixed income in the u. S. , shouldnt we be focusing more on other Central Banks and much less on what the u. S. Is doing . So i think this whole idea that because rates are being kept low with extraordinarily accommodating policy elsewhere that theyre going to stay low in the u. S. As well. Perhaps theres some truth to it. On a real yield basis, they are not that far in the real world. Theyre trading between minus 50 to minus 1 . The u. S. Is one of the worst ones out there. Make no mistake about it. I think if the fed was to proceed with a hike, you are going to see it move higher across the board. Thats what we saw during the taper tantrum without any fed move. I think that that you referred to, the stable relationship, will continue at a different level. So yes, the bank of japan matters. Theyve essentially got into the equity markets at this point and theyre on track to become one of the largest holders of the nikkei stock average. But i think the fed certainly sets the tone here. See, i kind of disagree. Im not sure that the market will move very much even if the fed hikes again. Because you do have continued accommodation of other Central Banks. I think for nominal yields, it matters what inflation does. And Inflation Expectation is low. If generally the belief is theres still a lot of slack in the global economy, i think its going to be hard to see an environment where rates head much higher. Remember, they hiked in december and Interest Rates are lower now in the u. S. Than they were thats the point. Right. Two points on that. I think that the equity market will actually continue to be resilient. Much more so than people believe right now. Will rates move higher . They may not by much. But remember where they are now. Even a ten basis point move from here on a percentage basis is pretty detrimental. Were going to have to leave it there. Thank you both very much. Three ladies on the set. Coming up next, were going to head back down to the olympics where andrew ross you do think im a lady, right . Where Andrew Ross Sorkin is covering the action in rio. What do you have coming up . Thank you, michelle. When we come back, what topic has come up here in rio repeatedly by tourists and locals in town for the games. But does it involves sports . Hint, it has something to do with a particular u. S. President ial candidate. Well talk all about it when squawk box returns. Welcome back to squawk box. Here in rio one topic that doesnt involve sports repeatedly has that come up is donald trump. Seems everybody has a view about him. And the view actually may matter. L. A. s mayor recently hinted his campaign would affect the bid for the olympics in 2024. Theres a trump hotel just located miles from olympic park here. Thats where we went to get a sampling of views from a man on the street. He speaks a lot of truth. He says a lot of things that people are afraid to say. But sometimes a little controversial for me personally. I dont like donald trump because he doesnt like the immigrants and the mexicans and the womans. I prefer hillary. We have a lot of character who say a lot of crazy things but in the end they dont do anything. Hes very controversial. But hes saying a lot of things that people are thinking and i think its a kind of new honesty that people havent seen in politics before. I dont really like donald trump. I dont really like Hillary Clinton. Im leaning more towards gary johnson maybe. Im still deciding. Im not sure. Of course fair to say hard to draw too many conclusions from these particular conversations, but no matter what the opinion is of donald trump, clearly a fascination for people around the world. We had our cameras out there for several hours. And we tried to we were trying to find video just to keep it balanced. It was there were some people who liked him and probably more that didnt. I imagine thats maybe par for the course. Thank you very much. Its the international perspective. Of course it doesnt matter in terms of the election, but its this is true. It does not matter in terms of the election. You bet. But interesting anyway. When we return here on squawk box, move over facebook. Pinterest is stepping up its ad game. How the platform is getting a piece of the market. Thats coming up in a couple minutes. Dont go anywhere. I asked my dentist if an electric toothbrush was going to clean better than a manual. He said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Bacteria can hide in food and make you ill. Wow announcer but you can keep bacteria from ruining your day with 4 simple steps clean, separate, cook, and chill. The roadchip to food safety starts at foodsafety. Gov. Content sharing company pinterest stepping up its ad game. Julia boorstin joins us with more. Its called promoted video in beta. Pairing these with featured pins to allow people to immediately take action with click to buy and learn more buttons. The social sharing platform with 100 million monthly active users is well positioned to use ads to drive purchases. Pinterest says threequarters of the content consumed comes from businesses. Mary meeker reported that 55 of people on pinterest are there to find or shop for products. Thats compared to just 12 for other social networks. Pinterest says early results with brands including garinier are positive. According to Market Research firm millword brown. And now pinterest can tap into the 10 billion market for digital video advertising which is dominated by alphabets youtube and facebook with live videos, and twitter which has been investing in nfl games. Now well is have to see if this grows the 11 billion valuation and help them move closer to an ipo. Guys . Thank you, julia. Coming up, a market call from our guest host mohammed eleri elerian. And dont miss an exclusive interview with Marvin Ellison 2 30 eastern eastern time during power lunch. Its been one year since he took the helm at the chain. Ask him how its going. Squawk box will be right back. What if a company that didnt make cars made plastics that make them lighter . The lubricants that improved fuel economy. Even technology to make engines more efficient. What company does all this . Exxonmobil, thats who. Were working on all these things to make cars better and use less fuel. Helping you save money and reduce emissions. And you thought we just made the gas. Energy lives here. Welcome back to squawk box. Signs of trouble in the hedge fund irndsstry today. Researcher hfr says the average hedge fund is up 3 through the end of july. Thats less than half the s p 500s increase. Hedge funds have posted three consecutive quarters of withdrawals that hasnt happened since 2009. And the wall street journal is now reporting problems at two of the industrys biggest names, tutor investment and brie van howard. Investors pulled more than 3 billion from brevin howards Flagship Fund from the first half of the year and two key tutor hedge funds said to be down about 3 this year and yesterday the firm cut its work force by 15 or 60 employees. Is that why they created the word, do you think . Do you take any satisfaction when you see things like that . People getting two and twenty and cant even match the s p. Yeah. And they have the aura or in the past of actually where past performance does guarantee future performance and as we know every mutual fund says that. Past performance has nothing to do with 20 basis points the feel by many trackers. Think about that. And no better than, you know theyre worse. Exactly. Our guest host this morning is mohammad el erian, aliens ally yanzs chief economic adviser. I wonder if the new normal environment is a new normal for hedge fund guys. They are not as good at figuring out whats happening in these unprecedented times. I guess its not as clear which way to bet on a lot of the markets given where we are . When Central Banks with the Printing Press in the basement get more and more involved with markets, they distort all sorts of things including correlations between Asset Classes and its really difficult to navigate this world. So either you just bet on central bank being effective forever and thats what the stock market has done, or you try to be a contrarian and you have been to incredibly tactical and thats really hard to do. It doesnt surprise me that smart money is having more difficulty and be they will until Central Banks stop having such a large influence on markets. Is the bank of england leading global yields at the moment . So i think that if you were to put the answer is yes. It used to be the bank of japan and then the ecb and then we saw last week the bank of england has had the biggest influence so far. The but if you look at effectiveness, i like looking at effectiveness. You have a bank of japan which is either ineffective or counter productive. Next to it you have the ecb getting there. Then the bank of england and then the fed. The big question for markets is the whole spectrum shift this way and if it does its bad news or do they remain effective which is good news for markets. Finally going to give up the negative Interest Rate experiment. I dont think they give it up but they dont press it any further. Its very difficult for Central Banks to declare its made a mistake. I think that she shouldnt have gone there but they did. I think theyre realizing that the Collateral Damage of negative Interest Rates exceed the benefits and you get counterintuitive results. People save more. The Financial System starts fermenting. Thats the opposite of what they wanted. Negative Interest Rates were supposed to make people spend less and theyve gotten the exact opposite reaction than what they wanted. And theyre starting to flag fragment the Financial System which means the Transmission System becomes weaker. A recognition that negative Interest Rates actually weaken Central Banks. Nerp is dead . If i were to tell you nerp is dead tomorrow the ecb and bank of jan japan would go back. Its hard for the central bank to declare that they made a mistake i dont expect they will go further negative. They will use more qe. Have we got the global bond market in a bubble . We have seen japanese yields start to pick up. The bank of england we saw easing, but did see inflation tick up yesterday which could be a catalyst to stop being able to ease as much as they are. I think japan is peculiar in the sense that people have lost confidence in the bank of japan. I dont think thats the case for the bank of england yet. What the market in japan is telling you, particularly the currency market, where the yen has appreciated, is that the bank of japan no longer has an influence on markets like it used to. If they are no longer going to push deep near negative Interest Rates would that signal a time to buy financials . I think you need to look at financial for many reasons including this, but remember, theyll push further on qe. Right. And still moves the long end of the curve. Still moves the long end and flattens the curve which means that thats an additional headwind for the financial. So dont look for them to move the policy ways more negative, but i expect they will do more qe. Even if the u. S. Hikes, you give that a 40 chance in september. Right. We dont see the long end really move it. Just flattens. Just flattens. The long end is being determined by what happens overseas. The short end is being determined by what the fed does and you see the flattening occur. You felt pretty good about bank of england leading the whole world. Youre behind in gold medals, you know that, way behind. Well. Even though you think youre closing i applaud the fact that the u. S. Is leading and they will be the deserved winners. Gold medals per cap py ta oh, you could be an economist, you can slice and dice any way you want. I think the fact that the uk is coming second albeit behind ill give you that. Is it good to be the worlds leader in the ridiculous Monetary Policy experiment. I wasnt i know but im wondering if thats a badge of honor. Im more fearful than mohammad is about the situation in the uk because if inflation keeps picking up because the currency has fallen, we could be in a tricky situation. Nice to have inflation anywhere. Thank you. Thank you. You dont think really. Focussed on me instead. Oh, yeah. Yeah. Deflection. Ask him mean i love you or not. It does. It does. Thanks. [ inaudible ]. Right before we go, andrew tell us what you have coming up tomorrow from rio . Hey, thank you. Couple things, first of all, vegas now taking bets on the olympics, so were going to talk about that. The first time in 15 years. Also another installment of ask the athlete and also, i went on a visit to a restaurant where they have over 32 cuts of meat on the menu and yes, i tried most of them. Well talk about all of that when we see you tomorrow on squawk. Delicious. How did you like my pronunciation . Did he say it. Close enough. You its that sounds italian. It does. It might be similar. Latin and spanishp. Spanish and portuguese. Thats right. Thats right. Youre good. Yeah, yeah yeah. Thats right. Cant wait to see you tomorrow, andrew. Theyre all related. Similar. Kind of related like the way we speak english. Just barely related. I think more related than us. I think youre right. We will get a final check of the markets this morning. The futures have turned positive up about 10 points on the dow and we get the s p indicated up 2. 25 and the nasdaq up 8. Not a great session yesterday but look at oil, almost back to 46. 5. Thought it was going in the 30s, but it didnt. Thank you both. Join us tomorrow. Squawk on the street is next. Good wednesday mork. Welcome to squawk on the street. Im Carl Quintanilla with sara eisen and mike santoli at the new york stock exchange. After the biggest drop in about two weeks stocks setting up the possibility of backtoback losses. Something the s p has done once in a month and a half. Retail earnings, fed minutes on the docket this morning. Europe in the red, although uk unemployment at an 11year low. Bullard speaks at 1 00 eastern and oil