Transcripts For CNBC Squawk Box 20240622

There is all on very light futures. Oil stocks have been trading in nearly the same direction every day for the past month. Asia overnight. Were not being big moves. A fallout for that massive explosion in china continuing. Shanghai was up 0. 75 . We have some news to tell but. I cant believe this is real. Apple planning a big announcement in september. But the big question is whether we can expect more than an iphone in maces. The new speculation this time is about a car. I know weve talked about it before. But this is totally different now. The Guardian Newspaper reporting the company is building a selfdriving car. Its looking for locations to test it. The report says apple is further along than many suspected. If you read through the story, its real. Assuming the reporting is right, they talk about the location of where the offices are, the garages, all of the things that they tested and built out, the people that called on the record. Theres a guy on the record from one of these tracks that they use to where you would test your vehicle. So but theyre called project titan. Thats the name of the car. In the meantime, take a look at appear aels stock price right now. 116. 37 up marnlally on that news. The ear story this weekend, amazons chief jeff bezos firing back at a story in new york tiles. If you went inside the paper, it watts four pages long and it described a culture that encouraged the employees to put the company before employees. Women with children that felt they were being pushed out, the environment that had coworkers reporting on each other if they were underperforming. They describe amazon as a place where overachievers go to feel bad about themselves. There is a system actually that was reported about a messaging system. Where you would write to your boss not anonymously, i dont think, but maybe to hr to say i was just in in a meeting, and this guy was awful. It was quite incredible. Nonetheless, mr. Bezos responded. He said the article doesnt describe the amazon i know or the caring amazonians i work with every day. I strongly believe anyone working in a company that really is like the one described in the New York Times would be crazy to stay. I know i would leave such a company. But hopefully you dont recognize the can happen company described. Howeverly youre having fun working for the company and helping invent the future and laughing along the way. So many people say i worked at amazon and, boy, was it a tough place. Having said that, by the way, these are white collar workers. They have a choice of where to work. These are high paying, high functioning jobs. And he has created something quite incredible. The question, of course, is the churn thats discussed in this piece quarterback they come in a year or two and thats the model, is that a sustainable model . Clearly jeff bezos is firing back. Theres a lot of notable tech xrchs. Many came out in his defense says, this look, this is a start up culture, its a successful company. Sit has out of context written all over it and that is the idea that it was cherry picking. Although i think they talked to more than 100 current and former employees. Obviously, there were some things in that that were very distressing. You could probably retitle that article some people upset at location. It got a 52 approval rating, over 5500 comments. 82 of the reviewers support jeff bezos. And i read some of the stories. Two years ago, somebody wrote great company, but terrible for some people because it was built to be darwinian. That was a comment from a viewer in 2015. There is a start upculture and there is a reason this company is so successful. But i think buried in that story, some of the more troubling treatment of women, the lack of female xrves, the fact that the well who had a miscarriage and was on a jet a day later, there were some anecdotes. Horrible stuff. My point was that if you think that largely Corporate America is on your side as a worker, youre probably wrong. Yeah. Listen, its a tough world now. The competition for the top, the best jobs is harsh. We all know people that have been pushed out. Maybe im just old and cynical, but it is a competitive and dog eat dog world. I dont know if it was on the New York Times or elsewhere yesterday about why amazon could be a tougher place than some of the places in silicone valley. We compare it to silicone valley, you but theres less competition regionally in seattle than there is in silicone valley. In silicone valley, they give you free lunch and this and that because everybody can literally walk across the street. Lets be clear. Some of these policies that these corporations have about free lunch, free this, free that, its designed to keep you there. Keep you at your desk. Exactly. This is designed to keep you at your desk and working. But they also have maternity leaves and paternity leaves. Adobe just came out with a very good policy. Six months plus to a year. Thats great. And well see how many people take that. I dont know. I think the point i think to your point, actually, that its one more like a brutal retailer than a technology company. Even though most of it thats the other thinl. If youre just focused on the retail element of amazon. Because now theyre the biggest. This story would have been written about any Large Corporation is my point. Why amazon . Maybe this is a company that this is a company thats clearly trying to take over the world, right . Right. And if you dont think going into amazon that that is what youre going to go i mean, yeah, they have relentless. Net flick is trying to take over the world, too. And they just came out with a policy thats a little more generous, if you will. Zai compare the two. Theres always been sort of this world of secrecy inside of amazon. Jeff bezos has been a colorful character who does not talk a lot. There you have it. Weve got another three hours to go on this. Donald trump over the weekend tipping his hand on Foreign Policy and immigration in true trump fashion. The gop candidate landing his chopper with much fanfare at the iowa state far. Refs all business when it came to the middle east and immigration. He sat down with chuck todd on meet the press over the weekend. I want to take away their wealth. For years, ive been saying dont go into iraq. They went into iraq, destabilized the middle east, it was a big mistake. Now were there and you have isis. And i had this was going to happen. I said iran will take over iraq, which is happening. And isis is taking over a lot of the oil and certain areas of iraq. And i said you take away their wealth. You go in and knock the hell out of the oil, take back the oil. We take over the oil which we should have done in the first place. A mid east strategy from donald trump. Plenty of news to discuss over the weekend with steve forbes. Let us highlight some other stocks to watch in todays trading. Kkr led a team of investors that bought the company in 2011 for just over 11 billion. Warren Buffetts Berkshire hathway to invest, it held 8. 5 million shares of charter up from about 6 million at the end of the first quarter. And randus planning to sell computer chips under its own name for the first time in the companys history. Not the mention the time its been in court suing chipmakers for patent infringement. Lets check on the markets this morgue. Seeing positive momentum in the u. S. Futures. It is early. Dow futures look set to open about 13 points higher at this hour. Lets check out oil which has been such a mover last week, reaching a 6 1 2 year low. Brentd crude oil, down although nos as much as whats happening in the u. S. The tenyear treasury yield is lower this morning, 218. Hard to believe. Treasury yields continue to fall. And the euro is weaker against the u. S. Dollar. Dollar strength against the yen, as well. Everyone watching the yuan last night when it came out. And it pretty much said it right where it closed on friday indicating this isnt going to be a one way devaluation down. So the focus will be on china, theres gold, up 3. 11. 15. Having a bit of a rebound. Minutes from the last fed meeting are due to be released on wednesday. Joining us now, Karen Cavanaugh and bill lee is here head of north America Economic at citigroup. Bill, well talk to you about the economy in just a moment. But this could take stock of where we are. The dow is down 2 for the year. Not too dissimilar to what happened last year and midaugust to the end of the year, we saw a 7. 5 rally. Is there reason to think that well see that again . If that was the case, it would be people making a lot of money, right . The markets are by definition unpredictable. The u. S. Has become a safe pavin and people look at us as a place to park their assets. Now the question is, how long will maybe our dollar and our bond, but not so much stocks lately. Where is the growth . U. S. And people if they want to buy growth, they come to the u. S. Have you been telling your clients to buy throughout this period of volatility . Yeah, absolutely. I think there is different from last year in that the earnings arent really ahead. Last year we had a time of earnings growth. This year earnings are at an alltime high. Were not really seeing that growth. We have this headwinds, we have some tailwinds and its a tug of war between that. U. S. The economy is getting stronger, the consumer is getting good. The jobs numbers are good. Housing is gaining steam. Theres a lot of good things. And the latest retail sales number was an affirmation that the consumer is strong. So the u. S. Economy is getting better. And theres definitely a tailwind. The consumer is spending less, given the change in income and wealth. But right now, potential growth is. 5 . So anything thats closer to, theyre doing really well. This is a miserable recovery by old standards. But now what do you mean its a miserable recovery . When was the last time you saw 2. 5 to 3 growth . It used to be 4 , right . Used to be when . Back in the 80s. The average growth in the u. S. Economy is about 2. 5 over a hundred that was still a collaboration to some degree. Thats what im saying. Now we have to ask why is it that were not seeing it . A lot of it is technological deepening. We say that. Its kind of like labor force prapgz rate. Everybody highlights how its dropped. If you go back 50 years, its up. Yes, were off the peak, but were just going back to where some people are choosing not to work, maybe saying home for whatever reason. Im just wondering and im being prickly here in the morning. I said prickly. I got it. If we see 4 gdp growth because we had it, we only had it for a couple of years. That is the point. Its a recovery. It is a recovery. It is. Its just not im not saying that we four as a recovery. It is a recovery and we have gained back what we lost in the great recession. But the consumer is continuing to spend. 2. 5 growth . Well take it. And retail sales, alltime high, automobile sales, like i said, housing experience have gained steam. The jobs market is the best in 15 years. Thats all good news for the u. S. Consumer. I dont mean to cut you off, but we have walmart, home depot, and this is the week. Not to belabor the point, i just dont know why we would consider Consumer Spending to ever surge again when college is 50,000 a year. Homes are 30 more sxaenzive than they were 30 years ago. A new car is 36,000. 150 a month for your cell phone. Why would we ever expect Consumer Spending to boom line it has . Its not as big as it was in the past. Were getting more income, lower prices, but its not as big. Finally, buying Consumer Discretionary . I always like Consumer Discretionary. Consumer discretionary is doing well. Consumer is a game changer. I think thats a bright so the. Lets start the week on a high note. Thank you, bill and karen. Good to see you both. Get to go a tougher story now, the death toll from last week anticipated deadly chemical explosion in china continue to go rise. Eunice joins us now with an update. Good morning, andrew. The death toll stands now at 1134. The initial blast happened last wednesday. We saw the big concern now is the greater impact this blast could have on public health. The authorities over the weekend confirmed that there were 700 tons of sodium cyanide on this site. There are now 3,000 soldiers there on cleanup duty. Some of them are chemicals experts to help neutralize the cyanide. But there are racing with tile. The rains are coming in overnight tonight. The concern now is those rains could wash some of the sigh ya night into groundwater or could trigger chemical reactions that would cause other blafrts. The government has been showing that its taking this situation very seriously. The chinese premier was on the site over the weekend saying theyre going to be a very deep investigation and multiple investigations into who is responsible for the matter. Also, the news conferences have been broadcast on state tv in a sign of transparency. What is willing interesting is in a sign of how sensitive the government is about this situation, the communist party Party Published an editorial which pledged that there would be no cover up with these blasts. The public, though, very concerned and very critical. Many people have been protesting o streets. Some of the homeowners have been asking for compensation. Some of the relatives said they still need answers. Generally the feeling is there has been enough information and the government has mishandled another crisis in this country. Eunice yoon in beijing, we appreciate the story this morning. Talk to you soon. Crude Oil Prices Testing lows not seen since 2009. The exclusive results of cnbcs latest oil survey is straight ahead. And stash wars fans are apparently geeking out this morning. Well check out some star wars land right after the break. First, on this day in history. Heres a little healthy advice. Take care of what makes you, you. Right down to your skin. Aveeno® daily moisturizing lotion with 5 vital nutrients for healthier looking skin in just one day. Aveeno®. Naturally beautiful results® welcome back to squawk box this morning. Disney has not one but serval new star wars movies planned for the year. Bob iger unveiling some renderings of what the star wars land would like. This is the song they played at the tavern and the name of the band, remember the band leader was that stupid elephant named max rebo. Well tell you a little more about tims that youre looking at. It will be disneys single largest harnd expansion. No timeline on completion. But when you talk about big investments, we talk about when bob iger said about buybacks and all sorts of different issues. These guys are spending money, investing money and i imagine making a lot of money on this. They do. The price team astronomical. Is there a chance and i know there are competitor this is business. Im not knocking a competitor. But is there a chance these star wars movies its not going to be good . No. Why is that . The last three were disappointing to many card core fans. Disappointment is relative, right . Im annoyed because my sons name is the same name as the lead role in the new movie and i didnt know that. Hes going the be tagged . No. It will be like the number one name next year, i suspect. And then youll be a trend setter. What is the name . Fin . Yeah. You cant really bet against star wars. All right. The crude oil prices dominating market chatter over the weekend. Jackie joins us with the latest cnbc crude oil results. Youd have to see the last three star wars movies to know if this one is going to be any good and i havent. But lets move on and talk about these oil prices and what we found in our second exclusive oil survey. We polled analyst traders and major investors to get the price on pulsing now that weve seen oil prices in lows not seen in more than six years. What we found is a smift in expectationes. Revisions downward in expectations for pricing. The shortterm, september, october time frame, 62 of respondents told us they expect prices to range between 30 and 40. Indicating the bottom not just yet in for wta. What we found, which was interesting, was that most of those polls were split on how crude would finish the year. So previously, the majority thought that we would see 60 or 70, a bound back by the end on her yooft the. Now theyre more split, more than half thinking were going to finish the year between 30 and 50 for wti. The majority of people believe supply is impacting the factors. The dollar was the next most popular factor. When it comes to u. S. Supply, 41 of those polled believe it will fall by the end of the year. But the other 60 saying production is probably going the flat line or rise from here. If they are right, thats the most important variable that will support these prices moving lower for the second half of the year. Its been eighteen incredible wipeout. And no one saw it coming. Some people no, there are some people that saw it coming. Its 9 of the population. Theyre not all oil related, but its a big part of the u. S. Economic recovery story. Some of the stuff i hear about, you can buy oil in the high 20 range in north dakota right now. Did you know that . Thats ex transportation. That doesnt include sending it where you need it to go. But you can get oil cheaper than and by the way, this is the options free day for oil. Right. So we could see some volatility. There are huge betts both way. We could see a huge move day for oil. Which direction, i have no idea. Investors like andy hall saying this move took him off guard because people were expecting to see these prices supported even though, brian, that the fundamental did point to this downward pricing trend. What was interesting about this survey, most people think theyre going to stay lower longer than what they were thinking. All of a sudden everyone is like, i saw low oil coming, of course i did. All right. Jamie, were you caught off guard by oils second slide . No, not at all. We expected this. I was getting comments from clients that had been quite upset that we had been bearish for a number of months and finally it did break in the way we expected. The reality is there has been way too much overfly and too much excitement about the fact that the u. S. Was start to go slow down. But we dont need it to slow down, we need it to drop production. And do you think we will see a drop in production . Weve seen a drop in rig, but will we have a drop in actual production anytime soon . Right now, we do expect youre going to start to see that. But what we think needs to happen is you need to have wti prices bro 45 for two consecretary ifr quartzers. And the problem with this is the market, the Financial Guys are still quite bullish and im not sure theyre going to allow it to go for two full quarters to give us the kind of cure that we need in order to balance this market. The bull case we legislature, and what i mean by this is prices coming up and production going down is that the new fracking technologies drain wells much faster than the only drilling and production methods. In other words, were going to deplete many of the existing wells faster. When does that come into play in terms of supply and demand . This has been talked about quite a bit. Thats an important measure. But what we found is it ends up increasing the production across the entire time. While there has been some concern by some companies that this is something that slows down production in the later months, our view is that it actually brings up production across the entire time span. So that is not a place where youre going to see some downside. Curious, jamie, what this new decision, the deal that the Commerce Department means for prices. On friday, it was reported that theyre now going to allow u. S. Crude oil exports sort of in exchange for mexican oil. Is that a precursor to the u. S. Opening up policy . If so, what does it mean for prices . I think this is one of many steps taking place from the Obama Administration. You saw some of their changes in policy between christmas and new year that allow refined condensated exports. Its enough to help things a bit so youll start to see a slowdown in the the these spreads that weve seen between wti and brent. So it will help, but out doesnt cure the whole problem. And does saudi arabia just keep pumping . So saudi arain why is going to wsh in my mind, keep producing at very high levels. Its concerned not just about shale, its concerned about iran coming back into the market. The next couple of months, youll see production from saudi arain why ra arabia come down. But dont be fooled by that. There are crude burn, that will start to be russed. But they are going to keep reducing at high levels. Jamie, thanks. Have a great day, okay . Thanks so much. Coming up, when we come back, another big debut for universal. Biopicks straight outta korchl ton. How it just added to universals report breaking surgical. That and a lot more in just a moment. If you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. But hurry, offers end august 31st. Share your summer moments in your mercedesbenz with us. When a moment spontaneously turns romantic, why pause to take a pill . And why stop what youre doing to find a bathroom . Cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Welcome back to squawk box. We have a new winner at the top of the box office this weekends. Universal pictures Straight Outta Compton taking the latest installment at the box office. It raked in 50 million over the weekend. This is the part of the show why deservedly show. Im going to out universal. Theyve done over 2 billion already this year. Domestically at the box office. Its the fast he to 2 billion by far. Everything universal seem going has done this year has been a hit. Engineer as it world is a big one. The question is when vinnesters are going seize this as repeatable income. Unlike disney, people believe they can do it again. This is a theme park company. But when you look at those films, they have given them a different type of multiple andite waiting for the multiple. And its not just a year of hits. Youre doomed if you do, too, because you have to next year, thats the point. Brian roberts who runs comcast says, so, how do we look at this year . I thought Straight Outta Compton had a brilliant marketing strategy. The fact that they had dr. Dre released an album on apple music the week before which went crazy. It was a good test for apple music, as well. This went viral on social media. The lyrics, i grew up on this album. They change a lot of stuff. Youre straight of of compton . I was born in gardenia, which is nearby. Anyway, the thing about this thing is that i looked at it and i had, my god, that actor playing ice cube looks just like hill. Then i realized it was his son. Youve got to check it out. Wurchb other story for you today. This is obama plotting his life after the presidency. Did you see this . No. He needs to raise 1 billion. For what . Hes looking to raise 1 billion. Trying to figure out what to do with the rest of his life. Hes had reed hoffman in to see him. Tony morrison was there. So theres been this sort of number of people trying to help him think through this. If you saw over the weekend, who was he playing golf with . Clinton. You may want to start a global foundation. And hell be based in chicago . Do we know that yelt yet . The library. They found a location that they want in chicago. However, so he could be in chicago, but one of his daughters is here in new york. Hes thinking about potentially an office at Columbia University where he went so maybe he has a dual office here and there. Maybe spend more time in d. C. , as well. I think there is a guy were going to be seeing a lot. What hes going to be doing, i do not know. Starting a global foundation. I think you have to be in new york. A billion, thats the number. I disagree with that comment fundamentally, share ra. You went to college at columbia. I went to college in new york. I went to graduate at columbia. Coming up, the candidates hit the iowa state fair. Lots of fried food on sticks, but the Main Attraction was still donald trump. Will his policies on the mid eastern immigration keep his at the top of the polls . Next on squawk box the its more than a network and the cloud. Its reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced Technology Solutions, including an industry leading Broadband Network, and cloud and hosting services all with dedicated, responsive support. With centurylink as your trusted technology partner, youre free to focus on growing your business. Centurylink. Your link to whats next. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Welcome back to squawk b box. At this early hour, futures pointing to an early start for wall street. Looking now, futures planning higher. Dow futures up 3. S p just went negative, but its pretty flattish at this early hour and the nasdaq in the lead so far this morning. Nightmare weekend for many east Coast Airline passengers. A computer glitch affecting air Traffic Control computers resulted in the cancellation of more than 400 flights. And numerous delays. The faa says the computer problem is not the result of hacking. Lets talk president ial politics. Putting themselves on display at the iowa state fair over the weekend. Donald trump eclipsed his opponent. How much longer can the donald come mate the political process . Thats the question this morning. Chief meist and Economic Policy adviser to joe biden, we have katie packer, political consultant and partner and a former Deputy Campaign manager to mitt romney. Good morning to both of you. Good morning. Good morning. Every weekend rolls around and we think donald trump is going to flame out and hes not only not flamed out, hes doing better in the polls than ever. How long does this last or should we be taking him much more seriously than we are . Well, ill jump in. I think its going to last longer than we think. It already has. And i think whats interesting now, you mentioned going into this segment that the donald is starting to kind of unload some actual policy ideas. That can actually we sound against him in an interesting way. Thus far, if you Ask Donald Trump whats he going to do, he used the same bravado and trumpisms that you always here. I got this. Im going to fix it. Im a tough guy. Im rich. Now hes start to go articulate, here is what ill do on the border. He hear he has a tax plan coming. That changes the dynamics and puts him much more in the same mix as other candidates with their policy platforms. But look, at this point, you dont count the donald out. You dont count the donald out, but what is the Tipping Point . That is the thing that people are trying to figure out. Well, i think at some point here, hes going to have to actually articulate positions and have to sort of stand up for, you know, how and why he has changed his positions. Two weeks ago, he said lets get rid of all the immigrants but then well bring back the good ones and allow them to stay. Yesterday, he articulated a very, very far reaching plan that would basically require a state in order to move all of these immigrants outs of this cup. It would require things that are just frankly unconstitutional like, you know, moving children that have been born in this country out of the country. That is going to get some traction with some element of the republican party. I tent to think that those voters are already in his camp and i dont think this base of support is going to grow much larger. But as long as the meet ya is completely dominated by donald trump and captivated by him and sort of running the trump show all day and all nice, hes going to maintain this fascination for voters. Did anybody get upset with his batman comment . Did you see this . A great video of a child who says are you batman . He says yes. It upset my nephew who thinks hes batman. I did not see that, but hearing it, it does not upset me. Theres many more things that donald trump has said that upset me much more than him admitting hes batman. Lets talk about Hillary Clinton again for a second. The other thing that emerged over the weekend is this idea that joe biden may be back. That emerged even brr this weekend. But now al gore may be thinking about a run, as well. Everyone thought hillary had it locked up. Increasingly, theres discussions about this. I tend to be in the camp that thinks that largely hillary has much more of a lock than people think. Its not over by a long shot. Lets not forget person did iny sanders. But if you look at Hillary Clintons favorbility among the people who are going to vote in the democratic primary, shes ahead by a huge long shot of everyone and theres the money that he has on lock which makes it very hard for the Vice President to jump in at this late date. So im skeptical about the vp running and im really skeptical about al gore. I think thats just a rumor. I think campaigns matter and i think if a candidate were to jump into the race, we might see some of these numbers change. Shes been campaigning. I think shes incredibly weak. I think the fact that candidates are talking about it at this late date when the democrats hoeps hoped she would already be crowned the nominee is saying something about the weakness of her candidacy and the fact that Bernie Sanders continues to draw these massive crowds where he goes should be something that is troubling to democrats. If i could respond hold on, if somebody else were to jump in, in either party, what would be politically the last date, you know, sort of the trade deadline, if you will, for politics . When is the latest somebody would comp in and still be viable . Illustrate all depends on whether or not theyve got somebody thats willing to fund a super pac on their behalf. The rules have all changed in the era of super pacs. If they have somebody willing to help bank roll their candidacy, it could be very, very late. So i guess just responding to something katie said, theres certainly evidence of weakness in Hillary Clintons campaign, but only if you look at the general. Again, if you look at the primary voters on the democratic side, i see much more strength than weakness. Were going to leave the conversation there, guys. We appreciate it. Happy week to you this august. Coming up, netflix looking to get a bigger piece of the major market. Launching its first Spanish Language series. The shows writer will tell us the appetite for the new dramadey drama returns in just a moment. Ah aflac . Aflac i thought you said this guy was the best . Oh, hes a horrible stylist. Gah . But hes the best at paying claims fast really. Mmhmm. Paid mine in just one day. One day . Yea. Aaaflaaaac in just one day, we approve and pay. One day pay, only from aflac. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. If you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. But hurry, offers end august 31st. Share your summer moments in your mercedesbenz with us. Welcome back to sidewalks. Streamers are paying millions of dollars for the streaming service, the head writer, netflix mexican dama di. He doesnt speak spanish. I want to get to netflix and story telling and how you think about that whole world. How is it possible you are a show runner which effectively means you run the show, write the show in spanish. How do you write it . How do you think about writing . How do you cast the actors . Well, i speak a little spanish, not provincially at all. The way it came about is that the director, he is mexican. When netflix approached him and said would you like to do a television series, he said, yes, i would love to, but im not happy with the quality of the writing here in mexico. Nothing against mexican tv but there are a lot of telenovellas, a lot of game shows and sports, he as an intelligent viewer of sports wanted to have an americanstyle television program. So he figured ill hire a bunch of marine writers and well translate it into spanish. How are you, are there certain phrasing or jokes . Sure. That might make a lot of sense if english but make a little lessens in spanish . Well, you avoid those types of jokes. One reason i bought the the jokes, one reason im connected. Im a writer that replaces character. All the really great funny stuff comes from the character in situations. So we avoided doing club choices or phrases because it would be pointless because what is clever here will not affect us. What about casting an actor . Casting an actor. That was a bruise, guys handle the casting. Because it was in spanish. We would watch the tape and say, oh my gosh, cease great. I dont know. They have one particularly good looking actor. Joachim ferrara. Yes. He explained a lot. He exploded over the interyet. Its overwhelming. He is loving every second of it. This hit on august 7th, how is it doing . Is this the new netflix model for going internationally, going if various native languages . Yes, i think it should be. Netflix is i believe the Worlds Largest television network. As of now, theyre in 15 countries, japan is coming up, spain, italy. Portugal. How do you write a show that could be consumed all in one day . I will sit down with a box of candy and eat it. I would think that you know a serial or a longstanding program, do you have to plan the entire show out in advance, because i would think you would dwoipt over time like oh wait next episode, i got to make this happen. You got to change the entire way you structure your writing i imagine for binge watching. Yes and. My feeling is a story is a tore is a story, if its a twohour movie, you tell it that way. If its 13 hours, you stretch it out. There will be a 1st act, a 2nding a action 3rd act t. 1st act thereby three or four episodes. Before you go enthe first day have you finished the entire season . Yes. Is it more like tv where you are writing you have time to change your mind i guess . Well, we wrote out the entire series. We started filming, but then after we block shot, shot the first six episodes, then the second six. In between, there was a lost rewriting, we learned a lot. We saw what the actors could deliver, what was working, what wasnt working. So we had time to course correct. Three weeks in mexico, we do a lot of rewriting. So whats the difference between this experience and working for Traditional Television . Whats the difference . The difference is that it was so freeing and so liberating. Partially because of netflix. They trusted the film makers. The tv makers, they trusted us. There werent a lot of notes. Usually when you work on a network, you have to get everything approved, every story line. Every stript. Ever outline. Could this show work in english . Yes. Are there sub titles . Yes. Will they ever bring this show, would you ever do this in english as well . There are no plans as of this moment. If asked. If you did, it would have to be about the jets . About the jets, you know that, right . No, no, just in terms of the problems of a team, right, that would be fodder for you. You talk about the format. Hes already got it done in english. You might as well film it. It will provide you limitless fodder as a writer. There is limitless fodder over the world. Can you bring in joachim . Coming up, will the candidates come up with the right tax plan for america . Flat tax champion steve forbes will tell us which president ial hopefuls will have the right tax reform. Plus he weighs on everything from china to the feds next move. First in Business World wide. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . The trump political machine. Ohio, donald, rock them republicans. Donald trump gobbling up fried butter and pork chops on a stick at the iowa state fair and revealing some of his middle east and immigration policy details. The oil shock. How will iran play into the future of crude prices . Former Energy Secretary Bill Richardson is our special guest. And where are americans spending their money . There is a sale at penneys. The retail details of the changing habits of the consumer. The second hour of squawk box begins right now. Live from the beating heart of business, new york city. This is squawk box. Welcome back to squawk box, right here on cnbc first on Business World wide, along with sarah eisen, also got Brian Sullivan in the house. Joe and becky are off. We have a guest host for the hour to tell you about. Forbes editorinchief steve forbes. We have a lot of ground to cover with him, from mechanics to the state of the economy. First before we do that lets check out the markets. Things are setting themselves up on this monday morning. Right now things look it i call it almost but marginally 6. 5 points higher. S p 500 im call tag flat as well. It was down, now its marginally up. Sarah. Its positive flat. By the way, crude oil is back below 42. 41. 90. 41. 65 earlier today. Those have been trading at a range together. Those are back to 2009 lows, almost . If we adjust for inflation. We are below 2009. Or march 2009. We were in the high 30s in 2008. If you do the dollar adjustment, todays dollar, we are getting there. All right. In the headlines this morning, coming to disneys theme park. Disney ceo bob i caner has plans over the weekend to bring star wars themed land to disneyland and dizfully world. We are will have more on this story a little later on the program, what exactly star wars means to disney as a property. Samsung resources will restructure. It was bought by investors for 7. 2 billion back in 2011. We are keeping oil hovering above that sixandahalf year low. This as producers continue to pump crude in this country and around the world at a record pace. Now, concerns about demand out of coin and japan as well him with ehad a bankruptcy on thursday night, which was an offshore oil company. Hercules offshore, it went bankrupt thursday night. They were worth 1. 3 billion. The equities wiped out. Im looking at these bonds, i built the screens. Some of the bonds par a year ago, now 60 cents on the dollar, this is first year capital. This is not, this is secured debt, not unsecured debt. Its going to be a wipeout i think. A big weekend for the candidates. You have lots of photo ops. Fried food on sticks. Then donald trump. More on this Wild Campaign stop. John harwood, trump in iowa, how was it . The big news was he also sat down with cluck todd from meet the press for an interview that matched the first position paper in the campaign. It was on immigration. He said he was going to get rid of birth right citizenship, which is the american principle that if are you born in the United States, you are automatically a citizen because you think thats being abused. He said he was going to complete the wall. He said that all of the 11 million Illegal Immigrants in the country right now are going to have to leave the country. Even though experts say that is impossible for the United States government to do. Heres his exchange with cluck on that point. We have to make a whole new set of standards and when people come in they have to come in. You are going to deport children . No, we are going to keep the families toke. But they have to go. They have to go. What if they have no place to go . We will work with them. So this, the issue discussion begins with, continues with donald trump and you also had over the weekend Hillary Clinton making fun of the email controversy. She made a reference to opening a snapchat account. I love snapchat. The messages erase all by themselves. All right. John harwood. Thank you for joining us bright and early this monday morning. Not so bright i guess. Thank you. Joining us to continue this conversation for the next hour. Steve forbes, forbes media, the chairman editorinchief, of course. What do you make of mr. Trump . Are you friends with mr. Trump . I bet you are. For a number of years, absolutely. Can you get behind him . We have to see, the immigration cling, thats not going to happen. What im looking for is what his tax plans are going to be. Ive seen very, very low rates. Which got my interests, well see what he puts out on that. Are you taking him seriously . You have to take him seriously. When you get that support t. Whole immigration thing shows what happens when you lay politics with a sensitive subject for years,ed a this administration has done. Are you at all mistaken to have counted him out. To have suggested he is a side show and this burns out . Well, you look at the democrat side, Bernie Sanders who would have thought at this stage of the campaign, hed be ahead of Hillary Clinton in new hampshire. There is a lot of anger, discontent. Worry where the u. S. Is at. Where the u. S. Is going. The elections four years ago, so the reason, the question is whether you actually think you will be voting for this man at the end of the day or the frontrunner who people think about jeb bush or others like that will actually be there. I think when the Campaign Starts to shake out, will you see that after the debates next month. 17 is going to shrink. Come january when you get these real contests, it will be down to four or five. Thats where the rubber hits the road. Arent Bernie Sanders and donald trump similar in candidates . They are similar in who would have tapped. Who would have thought an aging pan from vermont would get tens of thousands of people coming to his rallies on the west coast. As candidates, its a different thing. They attract crowds because theyre a little bit extreme. Right. They say say stuff. Theyre antiestablishment. Is their success, them or is it just that theyre not the other people . Well, they each have their own querks, we might say, or personalities that people find, people know donald trump. They know from nbc, a hugely successful show. So he was a known quantity. So when he went out there. People didnt have to get to know him. Bernie sanders they had to get to know. Both have tapped into this extreme discontent thats around the country today and the question is, who is going to be able to tap it at the end of the day . There was a little bit of that in the early 90s. You sa saw that in early 70s, early 80s. We go through these periods zpli think of you as an establishment guy. I dont know if you think of yourself as an establishment guy. Gold standard, i dont know. He has a flat tax . He does, indeed. He has momentum. He was an advocate. You saw that passing reference to the thing, never led with the thing. If you are going to run on a good tax plan, you got to put it out there in the forefront, which reagan did 35 years ago. He had 30 across the board proposal to cut income tax rate. He made that front and center. He always helped himself in the debate. No, he came across. He did not come across most members of the republican establishment publicly, if not officially, privately, are scared of donald trump, are, cant even believe this is going on and are praying that somebody else is agitated . I tried this twice before. In terms of how the race is going no shake out. There is not one event that does amend. Its going to be debate, discussion, putting proposals on the table and one thing. You think the issues help talking on the merits of the issues help him or hurt him . I think people are going to say, gee, i love the guy. But is this the way to go. It depends on what he puts on the table. The immigration people know, were not going to deport 11 Million People. What it underscores is by golly this next administration has to deal with this once and for all instead of letting it be a political football. Do you think something changed . Do you think it started out as a vanity thing, i have great ideas, now has really started to take running for president seriously . He has always flirted with it. He did it in 1988, he was in the Political Reform Party in 2000. Looked at it seriously in 2012. I think this time he figured, hey, im in the time of life you do it or you dont. Ive done everything else. Chief rates success. Lets take a flyer on it. Did you watch the full interview with chuck todd . I ask id. Do you see where he said where do you get your military advice . He said from the shows. Ill read the quote. Do you watch your show and other shows. You have generals and certain people like that. Thats not where a president ial candidate should be getting military advice, is it . Well, a lot of things he put out in this campaign, a normal campaign would not do. Part of his traction is people know, yes, have you formal advisers and thats where, what a normal campaign will do. I have a serious candidate. But you also get a lot of information, especially in this Information Age of going to the internet. You missed the great jack be i the way. Here at nbc. There are some good commentaries on tv and on cable. Why wouldnt you . The fact that he says it shows he does not fear or play the rules like anybody else. Hillary clinton, you mentioned Bernie Sanders now, what do you think happens to Hillary Clinton . Well, unless she gets, i dont know how you turn that campaign around. The only way you can do it. She is starting to do it now is come out with certain issues saying im more left than Bernie Sanders and elizabeth warren. The ship has taken on water. They havent fixed out how to get this email up. Do you think they show up . I think theyre all looking and saying, maybe its my time. Al gore. John kerry is another one who is looking. And the irony, because they have no bench and the irony is this party that says its the party fouft. People pointed out all their candidates or possible candidates are eligible for social security. The party of the future is old. How old is biden . Theyre ready for social security. Hillary clinton is kind of laying low on purpose. Right . Shes going to let people destroy each other. There is not much to destroy, combern my sanders has shown. So in terms of laying low, that was a nice strategy. But these investigations are not laying low. She hasnt figured out yet how to get those behind her. Okay. We will continue this conversation. I heard an interesting argument the other day. We have done great things for the republican party. Even if he loses, he brought more attention to the republican party. That first debate, absolutely right. People saw serious people on that stage and so, yes, shes been the party favorite. They focus on everybody else. 24 Million People f. You werent there, you would have had 4 million. Even more within we host the debate. Coming up the china fear factor is the worst over after last weeks country. Tv evaluation. We will hit some of the currency market tensions and actions next. Plus, jeff bezos is firing back about a socalled bruiseing work place, his statement coming up right here on squawk box. Its more than the cloud. Its security and flexibility. Its where great ideas and vital data are stored. With centurylink you get advanced Technology Solutions from a trusted it partner. Including cloud and hosting services all backed by an industry leading Broadband Network and people committed to helping you grow your business. You get a company thats more than just the sum of its parts. Centurylink. Your link to whats next. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm, theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. Welcome back to squawk box, the futures right now, well call it marginal on virtually dow up 6andahalf points, s p up again marginal tlichlt nasdaq up marginally by five points. We should tell you a deal right before the break, pentair acquiring erico global. A small deal but important because pentair a month ago they released that news the end of june and he suggested they needed to pursue consolidation. Here we have it. Consolidation has begun. That deal supposed to add do them 10 . Now in cisco the food company. Not cisco, the other company. You have to watch out with this season. Chinas current devaluation taking currents markets by surprise, it was the biggest drop in more than 20 years. Caused a lot of concern. But this mornings calm is the worst of the shot behind us or will china fear factor continue . Here to break it down is the global head of fx strategy. Last week they were deporting global deflation. They were so concerned about their economy they were trying all sorts of moves this week it seems like it was an okay thing to do. Whats the rightancer . We definitely got a lot of i would say wild questions, okay, its out of control. Do they have enough control to control the situation . So ill give you two numbers. They have 3. 6 trillion in reserves. You can lock at all the liability of the country of what they owe foreigners is 1. 1 trillion. They have the whole liability structure controlled three times over. I think they can control it. This is what they want to do temperature. Question you want to ask is how much do they want to move the currency . They sent a signal last week, okay, were moving in this direction. Partly because i dont think we request extrapolate. I think in the short term we will see more stability and next week it will be how weak is their economy. Is eight good thing or a bad thing for the Global Economy and Global Markets . There is a lot of discussion on both ends. One camp says its great. Theyre going to help rebalance. China will get more competitive. It will grow again. We need. That the other camp says it will cause all sorts of ripple effects in the currency war. I think if they have a currency that gets gradually more flexible, the problem is if it moves like 10 in the short term and we have been used to a stable currency, its going to shake things umm. It could potentially all the insurance i inference the fed is going to go in september, that kind of thing. It can be upsetting for people that made certain investments based on the assumption of it being stable. The current economy is 0 gain. I think your point, sar remarks both parties are right. It will help some, hurt some. And think, of course, when you have a country. Cy moving, it goes up and down, depending on which side you are looking at it from. But if you have very big moves in very big currencies, that volatility in st. A negative. I think the equity market is negatively. Barons had their best article titles ever this weekend. You say you want a revolution, which i thought was very clever. Although, people are making you on twitter jokes. I dont follow those. I dont follow shes a currency mavin, goek, whatever. Down u downtown josh brown asked me out, clever. You made a point, na that, lets not forgot the wuan has stringened and it can be up from 20 years ago. If you compare to korea or japan, in the last year, they had a strong currency. Is this a sign, though, that china has not, the authorities dont know how to grow the economy now . Theyve piled on a lot of debt, especially since 2008 they had a stockmarket bubble, a property bubble. Now theyre going to adjust the currency. Is it stalling and they dont know what to do . I think thats actual willty right way to think about it. They have a real economic challenge at hand here. Okay, what are we going to do with the currency . They cant move eight couple percent. So they have been over investment for a number of years. There are certain things like acid prices and now are deflating. So thats a huge challenge and they are going to have to deal with that challenge for years to come, regardless of how they meet it. They would make a lot of reforms in the mid1990s that led to a decadeandahalf of growth. Is this regime now going to be able to make real free market reforms, continue to liberal a iz the economy . There are over 40 million businesses in china. They will hurt ali baba and it would be a savior for those small companies. This is a currency thats managed very, very different from what we are used to in other countries. On the currency side, they are moving 20 a more liberalized market. The imf has been commending them for that. Thats a mixed signal. China has a demographic cliff coming up in the next 15 years that will make italy and japans problems look small. They are an aging, you got about 30 million sort of 20 to 30yearold men who are not married. The one child policy is coming back to bite. It is going to come back to bite them. You look out 15 years in china. It will be a great country. It will be a huge country. They got a lot of dem dprafk issues. We will traunk for coming in. Coming up, it is a ung jle out there. Is the Work Environment at amazon. Com really survival of the fittest. A utopian darwin nightmare. Jeff bezos a fighting back about the New York Times about the company being a bruising structure. Squawk box returns in just a moment. Everyone loves the picture i posted of you. At t reminds you it can wait. We got a couple birthday shoutouts. Tech legend turning 71 today. He is probably celebrating with a yacht race or on his hawaiian island. Yes, remember, he combot the island of lanai, the entire island. Are you talking to me, oscar winner of good fella robert deniro, he was in Silver Linings playbook i thought he was awe. A good movie. I got teary at the end. It was nice. Ps i love you. You are a crier. New this morning with eshould tell you amazon chief bezos is a bruising place to work for. If you havent, you should. The story describes a culture that encourages employees to put the company before family and health, also a Work Environment that would have coworkers reporting on each other if they were underperforming. There was a Computer Program that allows you to message people surrunticiously, some say its a back stabbing environment, overachievers go to feel bad about themself, now mr. Bezos is responding from a letter amazon employees obtained by geek wire saying it doesnt describe the amazon i work with or amazonians, i believe anyone working in a company like that is the kwun one in the nyts is crazy to stay. A lot of activity on twitter over the weekend as well. Steve forbes is here, what do you do . Its a tough place to work. Its got that rep takes. Its not known as a cuddly company. It has a high turnover. That has been known for years. They still, though, have a culture of success. So hes right in the sense if it was this darwinnian new kenzian place to work, it would failed a long time ago. You go there, this is an environment. You perform. You put in a lot of hours. Jack well tweets out an arising tocracy winning. How about working 90 hours a week. Amazon, some thought it was scathing. Sort of the eye of the beholder for the reader. We will come back in just a moment. When we do, what happens to the Global Oil Supply if sanctions are lifted in iran . We have the results of cnbcs new oil survey. Plus Oil Secretary Bill Richardson will join us. Back if a moment. More data means more freedom to do. Whatever. Thats why at t is giving you 50 more data. Thats 15 gigs of data for the price of 10. Because the more data you have, the better. And right now at at t get 300 credit for every line you switch when you trade in a smartphone and buy any smartphone on at t next. Welcome back to squawk box, right here on cnbc. First in Business World wide. Front and center a fresh reading on the housing market. The National Association of Home Builders is out with its latest sentiment, expect it to different slightly from last month. Americans are waiting forever to buy their first home. The typical first time home buyer now rents for six years before buying. Back if 1970s, the average was just over two. 5 years t. Median age of the First Time Buyer 33 up from about 30 back then and tens of thousands of protestors gathered yesterday across brazil, called for the impeachment of the president. Many demonstrators blame the president for a vast Corruption Scandal and the countrys worst economic slump in 25 years. A quick serious point on this. We talked about it on power lunch last week. Everybody is focused on china. I get it. Im saying, watch brazil. Its the 7th biggest economy in the world. It is a major import and export market. The economy literally imploded. Inflation is running out of control. The stockmarket is down 20 in 90 days. Their currency has gotten across. This is a huge global story. China superseded it. I think if china wasnt out there, brazil will get more attention. Its a big story. And the host of the upcoming olympics, worth notebing on nbc. Question should also tell you the slide in crude prices is dominating. Jackie deangelis is here with exclusive results from cnbcs latest results. Good morning to you gows the boost if u. S. Supply are shaping up the gas landscape, we have analysts traders and Major Energy Fund investors how they thought saudi arabia would react in the latter half of the year. Saudi said it would make small production cuts after the summer. 95 of our respondents say they dont expect to see anything meaningful from the country. Then there is the issue of iranian oil. When is it going to come to market . You could argue the additional supply online has already impacted prices. I am still told when it hits it could trigger another move down. What itself time frame . The majority of those polls are forecasting next year at some point and not this year in the 4th quarter. Then there is the demand side. Will it increase . Will it balance out the supply . Respondents were hopeful, 45 say di manned will rise by the end of the year. When they were asked which region will have the most impact . The majority said it was china. There are multiple reasons we need to be worried. Finally we asked them about break even prices, saudi arabia has waged a price war on u. S. Shale producers. More than 40 think they brought the rates down to 45 to 55 bucks a barrel, which means this price war may not be as simple for saudi arabia to win as they were initially thinking. Only if there is a win. Thats the big question. It could be a race to the bottom. If a lot of people get hurt. You know, i know you have been out there. You talk about the boom in the United States, you go to willison north dakota. Midland, texas had the highest per capita, people making 20 bucks to start at a fast food restaurant. You wonder if that will all go away. People tweet me every day and say we are hurting out here. People have moved. They pack up everything they have, when i was in the last time i was if willison, checking out of my hotel, it was about 4 00 in the morning, we were early hit. This car rolls up. An older car, filled with stuff. This guy gets out, started talking to him. He moved up from savannah, georgia. Drove all night, a couple nights straight. Hes 19yearsold looking for work. I wondered. Where is that guy . Is this going to slow down . This weekend they said 176 jobs were lost globally. They were citing swiss resources, a chain that looks for jobs in oil. Clearly its taking a toil. This is a huge contrast from the 1980s texas gas a depression t. Rest of the u. S. Economy was bombing because we had progrowth policies then. Today the u. S. Economy is not booming. So the energy thing is to hit harder. We are not absorbing those lost jobs. You are bringing up interesting points, which you always do, in 1986, of course i didnt live through it. You read about it. My dad did a gas station in the early 80s. He got wiped out. Which is that in 86, saudi arabia saw some weakness in the u. S. , opened up the caps and drove the u. S. Oil bomb out of business. You wonder if thats going to happen again this time or does saudi arabia no long ver the power they want . Thats the summer make, opack and saudi dont have the power. We are saturday of taking over that sort of control seat. Sar remarks you mentioned the story about exports with mexico before you know that could also be a big game changer. Its a small piece of the pie right now. If we start exporting the dynamics law shifts once again. Oil prices are not going to be helped by the strong dollar. When the dollar is weak as it was in the early part of the last decade, thats when commodities bomb t. Dollar goes in the opposite direction. Crushes commodities. Lets talk about this and the Global Oil Market and other stuff. Joining us is former new mexico governor Bill Richardson. He served under president bill clinton. We have steve forbes with us as well. Governor, thank you very much, im sure you heard our dialogue a. Lot of people dont talk about it. Your state, new mexico, actually has a pretty good oil boom going on as well in the southeastern part of the state. It doesnt get the attention texas does. Whats going to happen to the oil boom . What is going to happen to those oil workers . Well, you know, new mexico is like in the entire oil patch just starting to hurt. We got shale. We got oil and gas. Our budget. Our education depends a lot on oil and gas royalties and were hurting because right now as you mentioned in your dialogue, there is an oversupply. Be i the way, iraq and saudi arabia are drilling more. China, the Main Customer the demand is substantially less. And this is why it does make sense to lift the oil export ban. It makes no sense. Its a relic of the 70s and the 80s. Because this will allow us geopolitically to deal with the russians in eastern europe. They use natural gas as a political weapon if we have an export of oil there and then with our allie mexico that is having energy reform. I think there is a problem now. This iran oil is going to be out there probably late in the 84. And what you are going to have is i think oil prices. If they start going under 40, thats going to hurt the u. S. Economy. But this mexico move means i believe but countering the negative geopolitical trend that is happening. And the mexico news crossed very quietly on friday, governor, we thought it was a big deal. It was hard to sort of read into it. They are using the word swaps, not sale. Do you believe this was kind of a blefr back doorway to clever back doorway to open up without option up the oil export market . Yeah, it was a clever move. You know, late friday at 5 00 p. M. We politicians when we want to put out bad news, thats when you do it. But, yeah, i think its a clever move. Basically, were trading heavy oil for light oil. You know, its not quite a swap. Its not quite a lifting the ban. But it is a signal and its a signal because mexico is having Foreign Investment in their oil sector for the first time and thats good. And i think geopolitically this makes sense as i mentioned earlier, as we deal with the russians trying to take over ukraine, the eastern europe, a lot of those oil countries, all those the poland, eastern europe, and you know europe, too, theyre strangled by the russians using natural gas as a weapon. So we should step in. We should go beyond that oil exports swap with mexico and get it done. Governor, steve forbes here. Do you foresee more permissions for lng, Liquified Natural Gas facilities, having those permissions stepped up for a Global Market for this natural gas at home. We have that price discrepancy between the u. S. A and the rest of the world . Well, you are right, steve, i would urge that we continue. I think we have approved seven or eight lately. I think the department of energy has moved faster than it has in the past. But, yeah, we should do that. I mean, this is a potential export market for the United States. Its more jobs. It helps the oil patch. It helps us geopolitically. It makes no sense not to approve these lng terminals, you know, with strong environmental safeguards, you know what happens, steve, is you got several buracracies having to okay it. It cant just be one agency. The department of energy. You got several agencies in the mix. And they ought to streamline the process to make those approvals more substantial and a lot quicker. Hey, governor richardson, just to push back on this idea it is a net positive. I understand your argument about the geopolitical benefit of letting us export oil. It will be great if our allies can buy from us instead of from iran, but there are those in the industry, refiners, mainly, who say this will lead to higher gas prices for the u. S. Consumer. Its going to be higher fuel charges, theyre going to have to pass on as their refining gets a little more competitive. How do you push back on that . Well, sarah, that is a slight possibility t. Price may go up a little bit. At the same time, gasoline, home heating oil, they were gone down a bit. You see motorists all over the place this summer driving everywhere. My point is this, i this i the net benefit for the United States in terms of jobs, of rebuilding the oil and gas industry, continuing the shale revolution, geopolitical benefits, is a plus. Of course, you know, nothing is perfect. But i would say that if we continue with these oil export waivers, its going to be good for the country. Yeah, there may be a small cost in the price of gasoline, but not substantial. Bill richardson, it was a real pleasure to have you on. Governor, thank you so much, sir. Well see you again. Thank you. Take care. When we come back, its a busy week for retail reports, reports from walmart, home depot, lowes, target and more. We will find out what to expect as a mixed bag for consumers lately. Well be right back. Welcome back do squawk box. We have a big day ahead for retail. Walmart reporting and gas prices are down. Cash is in peoples pockets. Thats the theory. We listen to what macys ceo said about gas prices last week here on squawk box terry lundgren. I think that is spending in the lower channels. I dont know that for sure. That would be my guess and my forecast. I thought we would get blor of that share than we did. I still think the consumer gat a raise if you will. I think the gas prices will stay low for some period of time. So that should continue t. Consumer is saving money. You see the Savings Rates are high. Joining us with his take on all this the ceo of jay rogers world wide. It is a theory that somehow gas prices go down, people will spend it on retail. Weve talked about i. You dont agree with it. I dont like the story. Gas prices are higher than they were in january because of refinery issues. You keep saying oil going down is not gas going down. If you are in michigan, wisconsin, california, alaska, you are angry. The other angle of that even if you do believe good oil prices are lower and that actually its affecting people at the pump, its not bringing people in to boy retail. They may be going to restaurants, home depot. Theyre not going to walmart. Despite what my be you had di think, energy costs are down. Usually theyre up. Go back ten years. Pick a time period. We can make the number work. Year over year, energy costs are down. Energy costs are down year over year for the consumer. Therefore, it should be going into lower end consumers, right . Walmart should be a better target up to penneys kohls and macys, theyre not. Terry was right. Yes, they got a break. More were working, wages were rising, energy costs are lower. They didnt go to macys, they didnt go any place either. What is going on . Is that an operational problem at macys . Is that macys fault or you are saying you are not going anywhere. Im saying traffic in the mall has gone down 4 or 5 . That business is moving online. The other thing happening is durable goods is higher. It shouldnt be more than about 30 of personal consumption expenditures now, its about 35 . It gefr gets above 38 . Its way too high as brian notes, its all going into cars, houses and lower and hd and its not going into apparel. Big ticket stuff. By the way, i know you guys live in the city. I live in the burbs. Where you drive. Every time they cut gas prices, they raise tolls in new jersey. Do you pay your own bills . Health care costs are up. College savings costs are up. Everything is up. So gas prices, the average american uses a thousand gallons of gasoline a year. Gas prices go down 50 cents. Its nice. Its not grand jury to change the world. The savings are also up. Which is a problem. You know what people do when gas prices are down, everything shows they drive more. Macys, nordstroms wins, for example. Nordstroms won. They have a very low base. J. C. Penney a low base. Clearly hit the numbers. Everybody else missed the numbers, penneys retailing 101 going back to what they know best. It works for them. Nordstroms, they came from the rack, which is off price or it came from online or online offprice. Did not come out of the department store. So its a unique set of circumstances for them. There are a lot of stores out there now . We had a lot of stores for most of my career. Its only gotten worse since amazon came on the scene in 2000. I say all the time we ahave a retailer that sells at cost, has zero cost of capital. Thats a problem when you are another retailer. Thats a big dome. The other thing that happened about the same time amazon came on the scene is fast fashion retailing came on the scene. So weve seen reduction in price, apparel, every year since 2000. Im curious about walmart and target, both big stores that are both going through transformations. Your honor theing things around. Who is doing better at it . Its funny. I am a fan of walmart. I am not a fan of target. The reason is not because i dont think Brian Burnell did a good job. I think getting out of canada is a good thing and doing things 101 making the store look pretty ter, better brands. They have strategic issues. What are they going to do about their pfresh grossry offerings . They wont be a better Grocery Store than walmart or kroger. I dont see how they fix the red card Discount Program you get 5 when you walk in the door and use the card. That will cost them going forward. Is there an argument you made the reason nobody is showing up at Retail Stores is there is no new fashion . It doesnt look different. We used to make that argument every year, at some price we sold at all. So its a cost problem or a price problem. Not so much a fashion problem. That explains the th hot leisure product and nike and under arror are doing better. 100 of the growth came at ath hot leisure. Its a funny fashion, but its still fashion. Stretchy perhaps is more important . Nobody bicker looks better in athleisure, nobody. You do not want to be in stretchy . Have you been to america lately . Its that way. I know you fly through louisiana and new york. Drive, stop across. Stand in line in walmart is what hes trying to tell you. Im not a fashion forward guy, but its obvious. Obviously. You cant see the pants. I have the biggest, i am wearing the biggest fax accessory of the year right now. Pocket square . This is it. My daughter is 11. Soes talking about phones, not clothes. Its expensive. They dont care. This is what matters. Have one good outfit to take a selfie with, are you fine. Itser isfying as heck. Walmart is doing a good job at retailing 101 be i the way, they are improving their differry. Sears, j. C. Penney and kohls are stepping into a ring together. Who comes out alive . Kohls, that will be a win if retailing. Right. But all of those guys are in prubl u trouble from the point of view competing and driving themselves. One quick question. Minimum wage, how bad . Minimum wage is probably not as big a deal as the move from the exempt and nonexempt employees. Were doubling the threshold, when you have to pay overtime. Its a big deal. It could affect as many as 13 million, despite the government saying 4. 7 million in toys. They will not be looping this show. Its a good time. The aca is kicking in this year, too, with i is fairly expensive if you are a retailer. Tough on the expense side right now. Coming up. More from our guest host steve forbes and the economy and donald trump and later on, will the fed raise the rates for the first time in nine years . I will try my best, america, to produce better music. We are being after this. Can a business have a mind . The speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . You totalled your brand new car. Nobodys hurt,but there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. What are you supposed to do, drive threequarters of a car . Now if you had Liberty Mutual new car replacement, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. New car replacement is just one of the features that come standard with a base Liberty Mutual policy. And for drivers with accident forgiveness,rates wont go up due to your first accident. Learn more by calling switch to Liberty Mutual and you can save up to 509. For a free quote today,call Liberty Mutual insurance at see Car Insurance in a whole new light. Liberty mutual insurance. Wonderful, crazy mornings. We figure you probably dont have time to wait on hold. Thats why at xfinity were hard at work, building new apps like this one that lets you choose a time for us to call you. So instead of waiting on hold, well call you when things are just as wonderful. [phone rings] but a little less crazy. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back, everybody, 7 54 in the east. Let us get back with our guest host steve forbes. Yes or no question . The fed rate is raising rates in september . Who knows . Yes. That was conviction. That was conviction, my friend. Why, why, why, you dont care . No, i think its very important to get real prices in the credit markets again, so the longer they delay, that uncertainty is out there. The more that hurts investment, especially for small and new businesses. The quicker they do it, the better. They let this go on until december. That will be another drag. People will be reading tea leaves, holding back, wondering what they do. Get it over with, done, do it. You dont think the strong dollar is good for them . The dollar is strong. The fed didnt mean that to happen. Which means they dont know what theyre doing. One of the reasons that the dollar the strong is you cant lend anymore. Banks, small banks, especially, getting crushed by the doddfrank and the big banks are always told, get ready for a new round of fines. Where will the economy be a year from now . How will that affect the election . The economy will be up in the rough 2, 2. 5 . It will be a huge issue. Most peoples incomes are not going up if real terms. When Health Care Costs are factored in. The exchange prices, the high deductibles will be killing people. That will be helping donald trump . That will help the republican nominee who will win the election. Who will be . Ill tell you next time. I dont know. All the guarantees of television. Thank you for being here. When we return, some of the latest moves by the worlds Biggest Hedge Funds, one month from the fed meeting, will the Central Banks raise the rates . Thats the debate. Straight ahead. The countdown is on, one month away from the fed meeting. We will have former fed governor larry lindsay. We are going whale watching. The Biggest Hedge Fund out with their latest investment moves. The big winners. Why several power players are getting out of alibaba straight ahead. Kfcs Colonel Sanders is getting another makeover. They cant grab some super funny hollywood actor, throw a white suit on him and try to pass him off as the real Colonel Sanders. We will turn why the chicken chain is turning to another alum. Whats the matter, Colonel Sanders . Chick season. The third hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Squawk box right here on cnbc, first in Business World wide, we turn the music up a bit. Along with sarah eisen and Brian Sullivan. About 90 minutes away, oil prices slumping again this morning, crude dipping below the 42 level, the pressure comeen on fears japans economy is slowing after disappointing gdp data. Meantime, american crude prices rose, the price is 41. 90. We have more on oil in ten minutes. Check out u. S. Equities musts in the meantime on this monday morning. Its been like this all morning, through marginal, up and down, nasdaq up marginally 3 points. I dont want to tell you. I will call s p 500 and dial a hunch for now. Brian, sir. Among our top stories at this hour, german chancellor Angela Merkel reasureing the imf will take part in the bailout. This patient is putting pressure on merkels government ahead of wednesdays vote in the german parliament. In Technology News the Guardian Newspaper reporting apple is building a selfdriving car. It is actually far enough along to look for locations to test it. Apples project is called titan. Its further along than many expected. It is considering a formal naval base in San Francisco as a possible testing facility. On this weeks economic agenda. We will get the manufactures, today, tomorrow, Housing Starts in july, wednesday, you get the Consumer Price index and minutes for the last fed meeting. Hopefully clues on within they raise rates. Thursday the jobless claims the week my will be an existing home sales. Take a look at tesla shares. Morgan stanley raised the stocks by 66 . A bullish call 465 is the new price target from 280 t. Firm says beyond auto production, tesla may but nikkeily positioned to dominate the world of shared mobility. Very bullish call and shares are up a little more than 5 in early action. I am reading doug katz who the price target ramp is tone deaf and a further reason wall street is not to be trusted. So two sides to that story. The Morgan Stanley analyst jonas was bullish on tesla, he was waiting for signs to materialize before he raised his test target. I guess we are seeing it now. Hedge fund power players are announcing regulatory filings. Kate kelly is here with more. Yes, digging through the quarterly managers out there. The words were threefold in my view, technology, media and energy. Energy was certainly a big theme for the quarter with the hedge funds diving into more troubles names, perhaps in an effort to do bargain hunting. Baupost private hedge funds became one of the big effort holders of cheniere energy. They add to an existing stake by 1. 6 million. That also followed carl icahn who who took a stake in that stock. David einhorn relied on an overly High Oil Price looking at metrix going forward. In the media sector, Prominent Players were adding in. Einhorn added to his portfolio, sized at nearly 2 million shares, carl icahn adding to his Stake Holdings in tegna, a Digital Marketing player, he has a 15 million share position. Leon coopermans omega bought shares in 21st century fox and jana took a stock in time warner cable. Icon einhorn and many at apple sized at 2. 5 million shares. Einhorn despite the setbacks of late in his name, which makes it interesting to me, added to his holdings in micron technologies. It was a mixed bag. Obviously, technoling is hard to generalize, depending on the name and growth strategy, apple very flat this past quarter. So i think a lot of people across the board close to add to their position there, maybe thinking it would be a good time to get in at this price. We wanted to ask about samsung resources, which declared bankruptcy. Is this the largest casualty . Yeah, its interesting on a couple levels. They said theyre going to declare bankruptcy. Theyll probably do it in midseptember. That itself plan right now. Theyre trying to get some additional creditors to sign off on their current playbook, which the board approved on friday. There is a bit of a with thele going on in terms of the bonds holders. Some saying we should have waited a little longer, offered new da that different terms, others saying this is the best route. Why its significant . In 2011, this was the biggest of the year, a 7. 2 billion. They were private. It was the largest oil and gas buyout ever. Basically, kkr was wiped out, totally, they had more than 4 billion wiped out. It really, its a unique situation for some reasons. For one thing, its a natural gas player. It has been cheap for so long. Oil has been a little more of a focus as brian knows when we think about Companies Really troubled. But it very much could be the first in a wave of bankruptcies assuming crude prices dont recover. What we got to remember about the crude price decline, which is so different than the ones we had in the past. This is ever leverage, baby. 2. 2 trillion junk bond. Weve never seen the kind of leverage from oil and gas companies. So we dont know whats going to happen. Its no not just an oil price wipeout. This is a credit issue. I look at all kind of bonds. Tear bonds are at 60 cents of the dollar that parred four months ago on first tier structured credit. What i said sounded important, its boring. You see su lily is breaking the zaire. Zulily. Liberty interactive buying zulily, its 18. 75 per share in cash and stock. Zulily will continue to be operated by its current management. This add to the qvc piece of the liberty empire, if you will. And congratulations probably goes out. This is you know the cofounder of zulily. This is his second big win. He was the founder of blue nile the diamond rings, two of these things now. I have one question about this deal. What or where is zulily . Zulily, a great retailer. I obviously heard of them. I never seen one. A lot of kids stuff, clothing. I have kids, ive never bought anything. Well, you are missing out. Go online. There the a retailer, a pedia company a retailer . Liberty will be rolled into qvc. If you think of what the does qvc have stores . Its an online retailer. Only online. Its an online. So its all no brick and mortar. It came off a good quarter. They were off pressured with stock. They just released a report and that stock went up. Well. Thats the thing. Is ed seenow in place . Is that owe pinterrest. You are talking amazon and netflix. Not even. The totally different. But in the meantime whats your fate purchase you made off zulily . You are hammering for not buying. The stocks that people watched. It went public if fall 2013. Its been very volatile. I havent bought stuff. I definitely checked it out. Its especially for kids. Lets talk about china. Chinas currency moves, question about the u. S. Economy putting a september rate hike in question. We have two opposing views on this ready to duke it out this morning t. Deputy chief u. S. Economist at ubs, greg kumar is here president of kumar strategies. Good morning to you. Good morning. Start the debate. What is going to happen here . Well. Hold on one second. I got a guy at the table. Im giving him deference because he made it all the way here. Sris in l. A. Its not fair. Its 5 00 in the morning. He probably got up 3 00 in the morning to do there hit. Now you are saying you dont care. Life is unfair. Ill take the advantage i got. Ill say this, i thisty fed moved since september. I think very much if you look at the tone of the language, she shifted from talking about Janell Yellen the need to wait to move earlier in order to make sure they go slower. I think that was a key clang in her tone. I think the fed is going to following elo up with that, assuming we get through the cpi report today and the cpi report right before their meeting. And that payrolls gone e dont slow. When they set the bar for marking, it wasnt as high as the forecast. The forecasts largely have been met. Sri, apologies, i know you are up early. You are on the other coast. I was unfair, you will definitely get the last word. Thats quite all right. It is good to listen to drew. I feel very differently, which i was in china earlier there year. I am heading back next month to see one more time, andrew. The problem is that last week, 4. 5 devaluation was not to destabilize the world market. But the chinese economy is slowing down largely. And i would expect the currency will depreciate significantly more than that. Few look at asian currencies on friday and today, monday, you have had massive devaluations of major currencies that the levels not seen until from the early, late 1990s, when janet yellen convenes the feds next month and discuss it, the Global Situation will be in turmoil. The imf has decided not to join the situation the pickup and correction in greece. Have you big demonstrations in brazil yesterday. That is going to remain hard in very serious crisis. The turkish leader is reaching record lows. How does the Central Bank Head here in the United States raise Interest Rates and find that the result is the dollar depreciates massively. Probably goes through parody for the euro and the exports, which have been a major supporter of u. S. Economic growth is going to fail and you have the world bank and imf to be warned about not raising Interest Rates this year. I think the chair woman yellen will be taking a big risk if you were to go against this sky. Are you wearing blinders . Are you not focusing . So lets see the fed raises rates the dollar goes up. Whats going up now . The dollar is going up . Whats the difference . The difference is the technology. What do you think will happen . Lets clarify whats going on here . I think it will happen. I think the fed is kind of finally had enough in terms of keeping rates at zero. I think everything we are seeing now is the result that the fed is offside. Its too low. I think the world recognizes that, i think thats why we are seeing this activity. I think were in part creating the instability in the world that sri is worried about. Andrew, i think i said this to brian on a cnbc a few weeks ago, if the fed goes ahead and increases rates, you are nevertheless looking at a corrections in u. S. Equity markets pushing the u. S. Economy back into recession. Sure, you can increase Interest Rates. If thats what the fed is looking to. You have to correct the distortions in the u. S. Economy in markets and sometimes you do need significant rate hikes. But the feds should be aware what the implications are. Sri, the fed as you know has a dual mandate for u. S. Growth and inflation. If inflation is not at the target, its moving towards that, unemployment has certainly improved. Dont you think the fled face a credible problem if they hold off from september, hold off until next year perhaps . If they dont raise rates when they told us they want to and theyre going to and we seen such progress on jobs . Sarah, your questions are spot on. Does the fed lose credibility . It loses additional credibility. Either they lost it over the years the last time they raised Interest Rates was june of 2006. They maintained zero Interest Rates, which is supposed to be a socalled emergency politics since december of 2008, and they have repeatedly signalled that things were going to clang only to give up at the last moment. I dont see a reason why the fed is going to change right now. A, the employment is concerned, you are right. The Unemployment Rate has come down on a u3 level the narrow definition the broader u6 definition is over 10 a. Lot of people are working part time. Those are not reflengted in these numbers. Does the market take that as a positive or a negative . The mark takes it as a big positive. Andrew the market goes up whenever the fed gives them additional liquidity and zero Interest Rates. You dont worry about the longterm consequences. You just build the bubble up bigger and bigger. That has been the story of the u. S. Equities market. Okay. We got a little conversation now. I promised in the last report, i appreciate you coming in. Sri i appreciate you waking up early. One quick note on zulily, we were talking about what it is, whether it was a rich deal. They ipod at 22 a share. It zoomed up 70 and come down materially. Its worth noting. The pocket collapsed. And i dont know if its a reflection on the quality of Investment Bankers these days. Look at twitter going back, etcy had problems. Are they coming probably too soon . To me when you see sole cycles going public, call me. Thats like a sign of something. That may be the take. It feels a little thats not even dotcom stuff. A popular debut doesnt necessarily mean it will continue to perform well. When we come back we talk about the slide in crude and former fed governor larry lindz s lindsey is here. Plus a star wars makeover. More on that. We are back in a moment. Plus a. More on that. We are back in a moment. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Everyone is looking for ways while to cut expenses. S unique, and thats where pg es Online Business Energy Checkup tool can really help. You can use it to track your Actual Energy use. Find rebates that make equipment upgrades more affordable. Even develop a Customized Energy plan for your company. Think of it as a way to take more control over your operating costs. And yet another Energy Saving opportunity from pg e. Find new ways to save energy and money with pg es Business Energy checkup. Oil continuing to slide this morning, following further, below 42 a barrel. 41. 69. Wti down almost 2 t. Obama administration is allowing companies to trade oil with mexico, the first time in four decades, marking the erosion on u. S. Crude completely. But there are concerns this could further Lower Oil Prices by adding more supply to the market. Joining us to discuss these dynamics, kevin book, managing director at Clearview Energy partners. Kevin, the pressure this morning, with econtinue to see on oil, is it driven by the oversupply sore it now the demand factors like china and what we learned last night, which is japan, back in negative growth. Demand continues to collapse out from underneath us. Particularly in asia. Generally, there is also the ongoing supply story at the same time. If you are in the oil alphabet game, you heard the sort of the ushaped and vshaped an wshaped. This one is the omg shaped recovery in oil prices, because i think we got a little further to thawl. Where does u. S. Production slow down . Try to answer the first question, i dont think anyone can answer the second question t. First question is driven by two things the oil clock and ooil calendar. Right now we are going through the seasonality of oil and coming into a weak period as refineries turn around for maintenance. Thats where you will see more room to the downside, especially on the wti side, the wti brent spread, which you see is widening. Now to your sec question, look, in north dakota, everyone thought theyd be shutting down 25, 30 ago, the Mineral Resources says the core counties can produce a 24 to 28 per barrel. Im not so sure that thats that far. Because up in north dakota. Theyre already theresh in the 20s now. Kevin, listen, not to be walking in the oil fields, pulling down a drilling rig is one thing. Capping a well is a different thing. Once you are already pumping oil. You are not going to stop producing. Its expensive. Its hard, the environmental regulations are hard. Right. You got, its basically cutting a off the pipe. So the production is going to be very, very difficult to simply stop. There is only one producing group in the world that ever had the tendency to cut off production once it started. That was opec. They gave up that tendency last year. So now weve got brent crude prices, the International Benchmark went 5, 6 bucks ahead of wti. What if the Obama Administration does continue pushing forward with letting Energy Producers here export crude oil. What happens to that spread between the spread here and internationally. The convergence with brent coming down, wti going up, you can ship oil pretty much anywhere in the world for 6 bucks a barrel. What you are saying is captivity is hurting the producer right now. What you have to ask is what happened friday, going to change the world, the answer is. Mexican refineries can only take in another 150, 200 barrels of light crude from the u. S. So this isnt by itself enough to take the pressure off. Do you think its the first step in the Obama Administration lifting the ban on exports . It is a step. Its not the first step, there is a couple steps taken before. It doesnt look like the Obama Administration is going all the way either. Thank you for joining us. We continue to watch that price climb this morning. All right, coming up, a new look for kfcs Colonel Sanders, months after the restaurant chain brought back the chicken spoken character, foglorne, leghorn pedestrians, that story is next. Edestrians, that story is next. Redestrians, that story is next. Hedestrians, that story is next. Aedestrians, that story is next. Pedestrians, that story is next. Sdestrians, that story is next. Estrians, that story is next. Strians, that story is next. Trians, that story is next. Rians, that story is next. Ians, that story is next. Ans, that story is next. Ns, that story is next. S, that stor saturday night helped rebrand Colonel Sanders. Now that character is already getting another rebought. Take a look. Hey, young people. After a long day of spontaneous roadtrips and break dancing, well, you get hungry. Thats another former snl alum, norm mcdonald. Kfc announcing he is taking over the colonel and the colonels job. Young brand said the campaign has been polarizing, but at least it got people talking about kfc. Kfc is outperforming competitors growing sales in the most recent quarter. He had the job, its like a hot mini . I thought service satire when i first saw it. I dont know, maybe it was, it seemed odd. The form you can tell by his voice. He has such a distinctive voice. And a scowl. When we come back the countdown to the september fed meeting is on, with just one month to go, we get a closer look at the prospects for a fed rate hike. Larry lindsey, the former white house economic adviser very plugged in will be joining us next. Its more than a network and the cloud. Its reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced Technology Solutions, including an industry leading Broadband Network, and cloud and hosting services all with dedicated, responsive support. With centurylink as your trusted technology partner, youre free to focus on growing your business. Centurylink. Your link to whats next. Welcome back to squawk box on cnbc first in Business World wide, lets look at the stocks to watch this morning. Kkr samisnt resources will restructure under a chapter xi bankruptcy. Kkr and its parters bought the oil and gas producer in 2011 for . 2 billion. Estee lauders revenue fell below estimates. Tesla is getting a boost. Morgan stanley top pick and raising the price target for the stock by 66 to 465 bucks per share from 280 t. Firm says beyond out auto production, tesla may but nikkeily positioned in share mobility. We will be watching zulily. We learned it will be acquired by Liberty Interactive, the Company Behind qvc for 18. 75 in cash and stock. Zulittlely cocompounder mark batten was the former ceo of blue nile. We didnt mention alibaba became a big shareholder in sdsu zulily. If you bought it in the original ipo, the stock shot up all the way to 70 at one point. Depending on how you look at this. They came all the way down. It sort of depends on where you went in. Meantime the latest shot in the phone wars fired by sprint, its unveiling a new plan called iphone forever. If a new iphone comes out, a sprint customer doesnt have it. They are eligible to upgrade for 22 per month after at t and verizon announced new pricing plans. Exactly one month away from the fed september meetingch Steve Leishman is joining us now. If we get an Interest Rate increase in september. What did you do . I went away on vacation the fed is ready to hike. She messes up china with the dval. You messed up the oil price, i go away on vacation, the whole operation goes to exactly. She destroyed it. You did china. You did oil. Thats what were here to do is tear things down. Heres the thing that is the problem t. Fed conundrum placed it in the postqe period in efforts to get off zero ground. Growth cooperating. Inflation is not. Recall the fed, looking for a further improvement in the job market and confidence inflation moving back towards 2 in order to hike. Heres what we got t. Fed has the stronger dollar because of sarahs china evaluation. She personally did it. Brian attacking oil prices while im on vacation and making sure im looking at my Samsung Phone t. Other part the growth data, can you marked up substantially. Can you running a bit above fed and job growth north of 200,000. All that makes the fed minutes and inflation the most significant releases of the week. Its well to remember a lot of what we are talking ab happened since that fed meeting at the end of july. That includes the market in growth. I want to show you the growth markup here. What you can see. We originally report q2 and q3. Twoandahalf with the atlanta fed with its curious 07 bringing up the rear on that they have a huge hit from imports a lot of people are questioning, could come out. Put it altogether, heres what theyre saying on wall street about that fed hike in september. J. P. Morgan quote, baring any clear signal to the contrary, we are sticking with our stept call d. Other wall Street Company with the norgen name, Morgan Stanley, we ploov they will decide if september to take a pass on raising rates and over at barclays, more on line with my thinking with eretain our base case for a september rate increase, however, we believe there is some volatility. I went away on vacation. 75 probably of bringing it down to 60. In part because of what you see. If you look at the two year, guys, we went way down. Down back of that 68. Where is that. 66 level there. Now its back up to the 72 level. That seems to be along with september. Because you are accusing of destroying things. Destroying, laying waste to. The Empire State Manufacturing just cage out, we came out, weak, terrible, negative. We had the Strong Industrial production last week. You go on vacation, you are sharp and on it. Today. Yes, especially. I love. That i should definitely go on vacation more. Price indexes sew the input prices were slightly higher. Thats going the other way. Selling prices were flat. The new orders in shipments fell. The Empire State Manufacturing index of which i never have spoken prior, down 14. 9, lowest levels. I would point your attention, though, brian to the philly fed later this week. A more followed, closely watched. Did you say philadelphia is a more important city and statistically new york city . Statistically, yes. The empire state. Where are we taking this . Yankees. Thats where we are taking it. Phillies. Okay. Stay where you are. Thank you, i will. We are joining in on this conversation about the prospects for a rate hike in september, larry lindsey, the ceo of lindsey group, former National Director and Federal Reserve governor. Larry, what is miss yellen going to do about all this . Well, i think looking at the feds own behavior, i think they will take the pass in september. They lets, i think watching what the fed is saying is the most important. Last december, they projected 2. growth for this year. That would have been a great time to have set up a march rate hike. They didnt. In march, they cut their own forecast for 2015 to 2, 4. That would have been a reasonable time to set up a june rate hike. They didnt. If june, they cut the forecast again to 1. 9. That would have been the time the set up a september rate hiekt t. Fed is constantly drawing down its estimates for growth this year. If you, you know, if you dont signal you are going to hike when its 2. 8 i dont think it makes a lot of sense to signal when growth is 1 money 9 in your own mind. I think they missed an opportunity. Wall street is expecting a better second half. So isnt it possible we get a better second half and they get caught up and december is too late . Well, you know, i dont know if its ever too late. Theyve moved the goal post so many times. Im not sure it really matters in that regard. I mean, heres the feds real conundrum. If you came down from mars today and you looked at the level of the economy, you would say, gosh, you know, were way behind the curve. On the other hand if you look at the pace of growth, youd say, gee, im not sure we should cut. I tend to look at the data in a way that suggests we are not going to have an acceleration in the second half. I think if anything we will have a deceleration. I think that 1. 9 is probably right for the year, maybe a little too high. I dont think this is a most clever time for the fed to lift off zero. I think they sould could have done it painlessly, i dont think there is a cause and effect here. But i think they are running a risk of raising and ten being embarrassed by a slow down. Larry, you sort of make the point for the thing that you criticize in the following way. If the fed raised in earlier when it had the opportunity in your own words and then the economy doesnt support that hike, then the fed actually made the right decision by not hiking because as we both know, the fed does not want to retract in the first case and in the second case, it seems to be time to judge whether the economy has enough strength to withstand not just a single hike, but what it calls a normalization of rates. Well, so, yes, i think they should hike, so is that would be my bias. Remember if you are seriously thinking growth will be 2. 8 and you dont hike the chances you will hike when you announce a growth at 1. 9 doesnt make sense to me. Io eng the hike would cause a recession. I think theyre more afraid of being blamed for the recession, if they cut their growth forecast by a full point, it doesnt seem like a more likely environment in which to lift off zero. I think the question is it seems less likely. We know this is a more internationally aware Federal Reserve. They told us that. The question is how much . And what would be the risk . Ill turn it to you, larry, for merging markets and for china and for some of these global spots if they do raise rates . Well, here is the global central banking ka fun drum. If you keep rates at articrtifi low levels, eventually the return on capital is driven down to the financial return, which is zero. So we keep hoping for more investment. What we had is we expanded investment so much, we expanded the supply side in the economy and thats basically deflationary force. That and there is a list of other reasons, the bank for International Settlements did a great job in the report on this. We are now in a policy that is not helping solve the problem. On the other hand, any time we think about an exit from that policy, we get nervous, it may make things worse. So we are in a difficult end game right now. I think the smart thing to do would have been to lift off, get off zero and then see how things go. I think right now, its a little bit riskier for them to take that chance than it was. Okay. Larry, we appreciate your time and your perspective. We hope to see you soon. You look so happy signature outdoors. Is that right outside of town . It may very well be. When we come back the ways to rebuild americas infrastructure, morgan brennan, what do you have coming up for us right now . Reporter well today, guys, it is all about rail. These contine i tainers are a big part of the futurele of great rails, companies are pouring hundreds of millions into their infrastructure. We got that story after the break. What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. All right. Welcome back, everybody. 8 43 in the east. For railroad, intermode trailers are accounting for nearly half of all rail traffic. Carriers like csx are fitting more containers. We are live in north baltimore, ohio, some of the big money thats being spent. Morgan. Good morning, brian. Thats right the intermodal containers like the ones you see behind me are a big part of the future of 48 rail. This is a section that increased more than a third in terms of volumes since 2009 and unfortunately, up until this point, much of the infrastructure has been stuck in the past. How do you quadruple capacity in a century old freight raith rail tunnel extending under the heart of d. C. . Thats exactly what csx plans to do, one part of the 850 Million National gateway initial i initiative between csx. We will move 280 trucks on a single train. Its a lot of highway congestion were going to alleviate. Its a part of an 11year multiphase undertaking to more more 48 from east coast ports to the u. S. Csx is increasing clearance on bridges and tunnels to double the kaergo, once complete in late 2018, csx says it will result in converging 14 billion truck miles to rail and help save 2 billion of gallons in the process. Intermodal has been traditionally a strong growth. It continues to be over the very long run when you three about the United States transportation infrastructure. The rails are well positioned to take market share off the trucks and onto the railles. And other 48 railroads see dollar signs as well. They completed a facility in mexico to move between the l. A. Area ports, texas and the midwest. Seeing other rarls make investments in this area as well and as railroads put more and more money into this part of their business, we are already starting to see the results, csx reported a 5 increase in q2. That was a bright spot in an otherwise lackluster quarter. Guys, back over to you. Thank you. We appreciate it. We should tell you we have breaking news from target from the New York Stock Exchange. Reporter yes, more changes on targets executive ranges. The current ceo will become targets coo, john nul begamull. These changes will happen in the beginning of september. Remember, target is still without a chief merchant after kathy taseia had been let go from that title earlier this summer. So more shakeup in the target executive ranks. John mulligan the current cfo will become the coo. He has been with target since 1996. We will have him for an exclusive interview on power lunch on wednesdayp make sure you tune in for that. Back to you, guys. Thats a great show, by the way, the second half of that show i think. You think is great. I dont think its great. It can always be better. Its a quality program. Good to know. Coming up, jim cramer from the New York Stock Exchange. He will tell us what investors should be watching this morning before the bell. Check out the futures right now. Were down. Down materially now. Down about 54 points on the dow. We are back in a moment. Thank you, guys. Playing some good music this morning. Folk family revival. Good song. Lets get down to the New York Stock Exchange with jim cramer. Theres a lot going on but tim tebow is going to start, is he not . No but hes going to be good on the conversions because of the change. You need a guy who can do a sneak. I saw him at training camp, and hes a remarkable guy. He hugged every kid who was handicapped. It was not done for the press. He is very well liked from what you can tell from the team, and its an oddity. Here he is. Hes back, and hes inspiring people with a standing ovation. Futures are taking a little bit of a turn for the worst in the stock market. Oil down. Oil and dow have been seemingly attached at the broken hip lately. China concerns and the Empire Manufacturing survey was awful that came out about a half hour ago. I think the market trade, when oil is down and oil is cracking all the levels and you read the stories about the saudis wanting to flood things. Ive been watching you on your show. You have talked about and assuming that you cant keep pumping this much if youre saudi arabia and the United States will eventually not be able to put out as much. But the futures market is reflecting the fact that theres no place to put oil. All the suez max is taken. You take a look but right now these stocks are leading the market down. Jim, two stocks. Zulily getting sold. I was wrong about them. I thought they could make this thing into a mini amazon. They obviously couldnt. I think your comments about how low they sold there versus the ipo is outrageous. The other thing is tesla. The Morgan Stanley price bump is so absurd that its got everybody kind of saying are you kidding me about this shared mobility . But people love tesla. The Retail Market loves tesla and itll be up if the futures werent down so much, the stock will be up substantially. Its already up 9 so far this year. Outperforming the s p. People love tesla. Thank you, jim. Well see you in a few minutes. Coming up. Star wars fans anticipating the next part of the franchise. Bob iger announcing star wars theme parks. When youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. At ts Innovative Solutions connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. You totalled your brand new car. Nobodys hurt,but there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. 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Your link to whats next. Stars is going to be getting its own themed land. When is this going to happen . Well, no exact date yet. Were waiting to here but bob iger is putting his 4 billion acquisition of lucas film to work making star wars the center of the stage. Our single largest expansion ever. Iegbob iger revealing the tw 14acre parks. Disney is also updating the Jedi Training academy. No date on when we can expect them to. Disneys big Park Investments have been overseen at shanghai disney. They say this state side investment provides optimism about the longterm Growth Potential about the u. S. Parks as well as the star wars brand. Also helping it stay ahead of universal which has invested billions of dollars on new rides, including harry potter. Im excited about that. In terms of timing of the announcement, do we think any of this has to do with having a bit of a last quarter in. No. This must have been in the works for quite a while. And it seems like this was part of the reason that he wanted to buy lucas film. Theyve talked about having a greater presence at the parks for star wars but this is another level. They talk about the Capital Requirements . Talk about a company, a u. S. Company investing in their own business. This is the kind you like to see. This is going to, i assume, cost billions of dollars. Ive seen two to three billion dollars but analysts are right now trying to figure out exactly how much to estimate. It seems like definitely a big capital expenditure. They expect to pay it off over the next few years. Right. Okay. Pretty good story. To your point, the stock is down 11 this month. Its still up nicely. 14 for the year. But its been a rough few weeks for some of the media stocks. Yes. If you look at zulily Liberty Interactive taking that. There is a Liberty Mutual. Taking that company out. This is a big transaction. The stocks up 49 . That would seemingly seem like a good thing but way, way off. And jim cramer calling this a bit of a loser. The founders, one of the cofounders being a winner because he got in early. I believe facebook will be an ultimate winner in social media. We gave in and got a facebook page. Better late than never. I have a fan page. No fans but i have a page for any fans who would like to be i just wrote a piece on why gas prices will not help the economy. During the commercial breaks. Thank you brian and sara for coming in. Well see you on wednesday. Are you coming back . Im not. Well miss you. Squawk on the street begins right back. Good monday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer at the New York Stock Exchange. David faber is off today. The month of august refuses to be quiet as we kick off a week of retail earnings, a massive upgrade for tesla and a lot more. Oil is hanging onto the low 40s after seven straight weeks losses. Our road map this morning, amazon ceopo