Transcripts For CNBC Squawk Box 20160621

The hang sentence by 0. 75 . And hang seng slightly weaker. Right now, things are flat, relatively flat across the board. Youre looking at the dax, barely budged. The cac is slightly higher, wti was up for the second day in a row weve seen a gain of 7 over the last couple of sessions. Going back to 48. 96. These currency traders better know what theyre doing. That better indicate theyre going to stay. They better know what theyre doing. Right. But still, the polls are pretty even still. Betting markets they bet that it breaks first day. When People Get Ready to do it, they think, oh, my god, what am i they get too nervous. They say theyre going to be leaving and they dont. Obviously, the pound is hitting at 1. 47 this morning. George soros, the financier who has made a ton of money the last time it collapsed. His warning you could see the pound go to almost 30 if there is a brexit vote. Lets go to wilfred who is watching what is said on all of this, wilfred frost joins us right now from the uk where hes been standing by. Wilfred. Good morning, becky, yes, indeed. Let me update you first of all on the polls that weve got out over late last night and early this morning. The first one, the orb poll, it gave an eightpoint reversal from its own reading a week early we are. It now gives the remain 53 . And the yougov poll gave leave still 44 to 42 . The same shift in momentum towards the remain side, albeit in a less pronounced fashion. It was from only two days earlier the last version of the poll. The general theme in both of those two polls is undecideds are starting to decide. And theyre choosing remain as opposed to complete desertion of those who want to leave. As joe said its very close indeed. 44 to 44, the Financial Times polls. Lets just touch on that soros point because thats made a lot of news over here. As you rightly said, becky, george soros correctly called the collapse of the pound in 1992, a day that was called black wednesday. Hes saying this friday could be black friday if the uk votes to leave. He said the pound could fall precipitously by 15 and possibly more than than 20, from its present level of 1. 46 to below 11. 15. Even though the polls might be closer than they were last week, whatever people are pricing in, if it happens this saying it could be much, much severe, the fallout. Wilfred, what kind of thoughts have you heard from others . I read george soros column, he lays out a very forceful case for why he thinks this will happen and why it would be a terrible situation. What have you heard from others who either are in agreement with him, who think hes wrong this time around . But he thinks this time would be different. That the fallout would be much worse, you wouldnt see a rebound. What you saw in 1988, the bank of england stepped in and lowered rates and that is the result that helps britains economy. He thinks, this time there would be a different end result. Well, actually, the other way around, the last time the uk was in the Exchange Rate recognition, a fixed rate exchange, you have to keep fixed rates artificially high to match against the Deutsche Mark back then. When it crashed out, the uk was able to cut ratings and the uk got a significant boost to the economy. Hes arguing it wont happen this time because its already free floating and Interest Rates are very low. And he also pointed out about 7 of gdp and the uk is supported by foreign investments. Something that he said would fall because of the uncertainty of leaving. So thats why he said this fall would be very bad for the economy. I would add, though, on the flip side, is this very convincing to try to convince voters to vote one way or the other. He wants the uk to stay in. Perhaps hes exaggerating things, who knows. Michael gove joined me on worldwide exchange, and he said dont listen to him. Those are Michael Goves arguments. Hes got it right about the pound. Some interesting things to point out im not sure the average voters care about currency positions and forecasts of billionaire financial managers, what they might care about is what David Beckham has come out to say, he has backed remain loud and clear. I think thats something at the margin probably helps, of course, people are obsessed with David Beckham, myself included. Whether i make my own decisions or how i vote. I think that today is grabbing more headlines than george soros. Do you get to vote were youre there on thursday . I do, of course, im a british citizen. I have a british passport. And i havent left the uk for 15 years in a row which is the rule for this particular vote. I shall be voting but i will not be telling joe how if he wants to know. You vote in the house of lords, you have a lot of authority back there, dont you . That is the house of commons. Its actually not as nice the house of commons. The lords have a nicer setup inside. I dont care if they have more power, youre sticking with the house of lords, knowing you. It has nothing do with either, obviously. Hey, wilfred in my twitter stream this morning, somehow emma watson showed up with her hand out and a big x. Shes telling everybody dont forget to vote on thursday. No excuses. Does she have a view . All of the celebrities coming out now with different views on this . Some celebrities are. I dont know which way hes gone, if you do get in touch with her, please get her number for other residence. I dont know explicitly which way she is going. In general, id say the Arts Community predominantly are going towards remain. I know benedict cammerbach has. And the author of downton abbey. And interestingly, though, youre saying emma watson though i havent seen the tweet is encouraging people to vote. Very important will be the turnout among young voters. Young voters are the least likely to vote. Theyre usually apathetic. In all the polls they are favoring remain. If she does encourage them to turn out at all, then thats likely to help. Even though the polls have narrowed. The sentiment moving towards remain. Theres lots of different democratic breakdowns whether london and england versus sco scotla scotland. Scotland voting to remain. The turnouts within those individual groups could make a difference. Why else did you want her number . Because, i think, its very important that we discuss in detail the turnout from British Elections from this era to make sure were both on the same page. I will direct messenger for had you, wilfred. Did she follow you . I dont know. Youre right. You cant direct message. Wilfred, thank you. You didnt expect me to know that. Thats true, too. Pretending you can message her. Lets tell you what else is on todays agenda once we get through the emma watson news. High can dm who can you dm . You. You cant follow me. Really. You know what you can do, you can mute people now. As always. You can follow them. They think that youre following them. Yeah. So its very polite and cordial. You dont have to ever see what they do. Its mute. Its better than block. Because they dont know it. You look like youre a very gracious person, very nice person. But youre not . Youre not. If you have thousands of followers, you dont know every person that follows you, right . No, i dont. Do you know the famous ones . I dont know. Im getting confused. You got like half a million. House thousands, thens o ten, you could message them. But i dont know if they do. On todays agenda, janet yellen we think follows joe or hope does, she heads to capitol hill this morning. The fed chair is going to be delivering part one of the semiannual testimony. She appears before the Senate Banking community. It starts at 10 00 a. M. Eastern time. Well be following that. On the earnings front, fedex adobe system and kb home are coming out after the closing bell. Also, a little bit of Corporate News just crossing the wires, Chinese Media at holds supercell for approximately 8. 6 billion. Supercell is the maker of clash of clans mobile game. Ive never played it. Supercell at about 10. 2 billion. Also netflix, service issues, if you had this problem on monday apparently causing a major outage on monday, good news, its been resolved. Reports of the problems on the uggs east coast surged monday afternoon. A lot of buffering for people to get to thing orange is the new black videos. Yesterday . Yesterday. I did hear about that. And the latest campaign released yesterday, revealed donald trump is falling behind in the money race. The campaign raised 3. 1 million in may impaired to harrisburg clintons 27 million. But its more than doubled the previous monthly hauls. So his Campaign Start at june with 1. 29 million in cash, compared to 42 million in the clinton coffers. Yesterday, trump fired Campaign Manager Corey Lewandowski who has been tasked with overseeing the fundraising operation there. In terms of staff, theres reportedly 700 in the Clinton Campaign. 70 in the Trump Campaign. Doesnt surprise me. But its what is it, june . Were talking convention. I figure hed say, look, ive done everything with what ive got so far. Im going to ramp it up getting a new Campaign Manager. Supposedly, his children were pushing for the change. For the change. Not clear whether a new Campaign Manager comes in, whether paul manafort, he may get a lot of those. Because you love this, no money, no staff, no chance. No i didnt say anything. I didnt say anything. I have you dont think after all this time i know when youre gloating . I im nm not gloating. I love a good story. And there say human drama story. Talking about the other human drama called the market these days. Lets talk about a little bit more on reaction we havent had the reaction yet but watts going to happen on thursday. From oppenheimer funds, the chief investment officer. Is there anybody here that wants to take a position somehow that an exit is upon justice. No i think the markets are telling you that in spades. The probabilities the polls may show that they are even, ieg market betting how does the market know better than the polls . Not that the polls have been perfect on any of these situations but the polls are kind of all over the map and they show things that are relatively title. How does the market know . I think the market knows from experience than anything else. The scottish polls running close. We are basically relying on the fact that economically, if they leave, it will be an utter disaster. And after everything is said and done, people vote with their econom economics more than anything else. And you think thats the case . I think you have to be kind of a loft character for not to recognize that leaving the Economic Union is probably going to be a bad outcome. What do you do ahead of it . Thats the real question. If youre sitting here watching the show right now and figuring out ma to do with your portfolio, what are you thinking . First thing, we wouldnt make any changes. If you look at whats pricinged into the market today, european banks, european financials are trading below their 2008 valuations. 2008 was a pretty brutal recession. It was not a fun time. So we dont think people are going to be vote for a recession, going to the polls, voting for a higher unemployment. Whatever else. If you look london betting houses, the oddsmakers versus the polls, oddsmakers are telling you the odds are more likely they remain. I like the betmakers because, frankly, theyve got something on the line. If polls are wrong it doesnt matter, but if betting houses are wrong they lose money. Six to 12 months from now, people in the uk is going to look back at this like it was the y2k. Remember we were told that the airplanes wouldnt land, the economy was going to come to a halt. Were all in agreement if thats already baked in the cake, that everything is fine. There a discount here . No, there was a discount but over the last few days priced out. We are done. We are done. Whats the new story . The new story is the growth picture is okay. I heard it wasnt okay. No the growth picture is actually decent. Second quarter growth is going to be better than first quarter. We are running its not a disaster, its not free that we like but it is quite good. The emerging markets more importantly are stabilizing. I think theres good reason to be hopeful. Are you hopeful . We are, were bullish, were bullish on the u. S. And europe as well. Where do you think at the end of the year . S p 500 and russell 2000 are the number one indices. They could easily be at double digits. Double digits. Double digits. Its been bullish on europe. If brexit doesnt take place, they may have a bigger rebound, right . Stories is earnings. When people talk about u. S. , they talk about u. S. Markets. Number one, theres massive outflows and number two, theyre talking about dismal corporate professionals but theyre looking in the rear view mirror. Oil prices were falling 40 or 50 . The dollar was in the midst of a 20 or 30 rally, as long as we dont repeat what happened last year, earnings basically snaps back to zero. You look at employment, you look at wage growth, you realize the consumer is not doing bad. And theyre telling us the fed is going to be more dovish. We could easily be a year out from now, be looking at 20 year over year growth. Without a lot of gdp growth because a lot of those head winds have rolled off. I think at the end of the day, the fact that the dollar is not going up and stabilizing, has come down to some extent, is probably the biggest driver for earnings. And oil prices and growth and financial conditions in general. Let me make it more complicated, given everybodys bullish outlook if youre janet yellen going to try to have to defend herself in washington today, why dont you just raise them . Well, you dont raise, because if you do raise, you basically take the u. S. Away from what the rest of the world is doing. And youll dot same thing that you did last year which is get the dollar up and financial conditions tighter and the economy much worse than what it needs to be. At some point, she will, right . The fed wants higher rates and at some point theyre going to get it. My guess is theyre one employment rate away from the next hike. They will eventually drive rates higher. The question is is that bad for stocks . Not automatically because if youve got stronger growth to offset it, its not bad. Historically, equities rally, the reason is corporate profits are rising and profits offsetting higher Interest Rates. I think the fed has changed its mind, they want to tighten but they recognize that conditions are not conducive. Were going to leave the conversation there. Thank you, gentlemen. Lennar out with quarterly results. Earnings of 9 cent ace hair. And revenue, the companys were up and stock is flat. Coming up, much more on potential fallout from this weeks brexit referendum, veteran investor wilbur ross is going to weigh in. And then later, well talk to michael spence. Stick around, well be right back. Dinner may i be excused . Get the new xfinity tv app and for the First Time Ever stream live tv, watch on demand, and download your dvr shows anywhere. Legendary financier wilbur ross has said a vote for the uk to leave the eu would be a disaster. Joining from us london wilbur is chairman of w. L. Ross, a company, a wellknown turnaround guy. And someone who is involved in a lot of financials and some in london, too. Youre still with that uk investment you made a few years ago. I know youve pared it down a little. Tell us about that, and whether you think that would be hurt by a brexit, and why. Well, i think a british exit would be the worlds most expensive and most acrimonious divorce in history. And i think that it would be terrible both from point of view of employment and point of view for economy. Mainly at this point, to back Richard Bransons takeover of several years ago, and it worked very well. But we are mainly a Mortgage Lender in the uk. In fact, weve been doing about a third of all of the new lending. And i believe that home prices would plummet in the event of a british exit. Average house in the uk is about 250,000 pounds. And if it went down around 10 which i think could very well happen, that would wipe out half of the net worth of most of the older people who own their own homes. Or everybody over 70. 77 own their homes. Over 70 of those over 60 own their own home. And all of those are the goods that seem to be pushing for the exit. So, i think they would be committing financial suicide. And along the way it would hurt us as well. Maybe they dont understand why housing prices would collapse, wilbur. Why is that your prediction that housing prices would collapse . Well, in every year, the largest amount of fine direct investment into the uk, every year in the last five, has been from other countries in the European Union. That would be interrupted in the event of an exit. Second, 45 of uk exports going to other eu countries. Those would also be interfered with. But the worst thing is, brexit would not be an automatic and quick event. There will be at least two years worth of wrangling over the terms of the exit. Think how hard it would be to renegotiate the 80 treaties that uk has with the common market, by negotiating with the same bureaucrats in brussels that they just thumbed their noses at. This would be a nightmare. And those bureaucrats would be backed by the eu countries. Because its important for them to show that exiting is not an easy thing. There in fact is no mechanism in the eu constitution, for an exit. This is totally uncharted water. And i think to have to negotiate treaties that you hope will benefit you with people that you just told to go shove off, not going to be an easy exercise. It will be volatility and fright throughout the united kingdom. We were talking about the difference between polls and actual betting. We were talking about it yesterday and today. Right. I know you dont actually have a place to bet with any bookies on the 80 outcome that people are saying. But with your investments, you probably have more on the line than most of these people betting. So, im sure youre a little until its over, youre not really going to take rest completely easy. But do you think 80 is probably a good forecast, or the likelihood that uk remains . Well, it will either be 100 or zero at the end of the day. So, but those are the boundaries of it. We made the decision youre still up 11 of voters. So it matters to you. Oh, it matters. And we made the decision, we always hedge the plan back to dollar anyway. So if george happens to be right about his currency thing, that part wont be troublesome to us. And i do think the stock already reflects a fair potential for brexit. All of the financials, until the last few days, have been acting very badly. And i think its investors have the same view i do. But particularly, the challenge of banks would not be faring very well in the event of a brexit. Wilbur, to follow up on that point you a you always hedge the pound against the pound. You have done anything differently in the last weeks or months to make sure your portfolio is safe if this vote goes down the way youre not hoping it does . If they vote to leave, have you changed any of your portfolio as a result . Well, what weve done is, weve held off on some investments we were thinking about making here. Were not really a hedge fund. And so, the reaction of being short stuff is not really available to us. I do think, though, as ive maded my rounds here in london, there are a on the pound, tremendous amount of short on the euro. I think in a strange way that would help to moderate the fall in the event of the brexit coming through. So, i think, george may be exaggerating a little bit when he says 15 to 20 . That would be an astonishing move for any currency. Yeah, yeah. He may give it a little push himself to get it started, knowing george. So, wilbur, where did the notion of you boeing a treasury secretary in a donald trump administration, where did that come from . Is that just total conjecture . Has he talked to you about anything like that . Well, donald promised the transportation secretary to carl icahn, i believe thats already a settled matter. So, let me ask you about the latest news of the day. Supposedly, as far as money in the bank, hes got 1. 3 million versus 41 million for hillary. I dont know whether you saw or new Corey Lewandowski, but hes out. Yeah. Can knowing trump as you know him, can he right this ship . And is there still time, considering its june, and the election is in november, for fundraising and building a Campaign Staff and building it out . Well, i think theres plenty of time. 90 days or 120 days, 150 days, as i think is what to expect, thats an eternity in any kind of a political environment. So, i think there is the time. I also think that donald has proven before that he doesnt need as much money as the other candidate. Remember in the early days of the primaries, everybody was saying that bush was going to overwhelm anyone else. Because before the Campaign Even started, he had over 100 million in the kitty. Donald raised and spent a tiny fraction of that. And exceeded them. So i dont think he needs nearly as much money as the Clinton Campaign needs. I think what he does need is to be more president ial and to show what i regard as the real donald, the person who is thoughtful, who does come to meetings prepared. And who is very much in control of the situation. But i hope that the real donald starts to come through a little more clearly than it has before. Excellent. All right. And you got your checkbook on you, if he calls you, are you is it a check in the mail . So, i am part of the i am part of that trump victory, the joint venture between the campaign and the Republican National committee. And i intend to work very hard to raise what money i can for him. Wilbur ross, thank you. Appreciate it. Good to be here. You know, looking at thirst stock certificates of ownership, hes in london so he can be there watching. And we didnt have much of a delay. No, its good. When we go out to new jersey, theres like four seconds. Depends on the bounce. When we come back, words of wisdom from this weeks brexit vote from a worldwide economist. Michael spence will join us next. As we head to the break, take a look at yesterdays winners and losers. Tokyostyle ramen noodles. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients, stepbystep recipies, delivered to your door for less than nine dollars a meal. Get your first two meals free at blueapron. Com cook. This just got interesting. So why pause to take a pill . 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Insurance coverage has expanded nationally and you may now be covered. Contact your health plan for the latest information. Welcome back to squawk box, everybody. Right now its time for the executive edge. Were just two days away from the brexit vote. One of the worlds foremost economists 2001 nobel lawyer yet mike spence. Hes also a professor of economy at stanford university. Professor spence, thanks for joining us today. Pleasure, nice to be with you. Tell us what you think the biggest risks are. What happens if the brexit vote actually decides that the uk will leave . Well, theres kind of the short run and the long run. So, in the short run, i think its impossible to know. Ive seen expert opinion, george soros saying theres going to be a convulsion of some kind. You know, others think its sort of a semi nonevent for the in this markets. To be honest with you, i lean a little bit toward the latter. I dont see any immediate, you know, convulsion coming from this. Its been so highly anticipated. But the longer term risks are what . Well, i think its more, as i said in a recent piece i wrote, therisks are more political. I mean, you have a very wide nature of developed countries political skepticism about the sort of government growth patterns were experiencing. And so, the spillover effect in europe, where we have, in italy, where i live, fivestar movement thats getting more powerful. Just won two major cities. And so on. These are all basically parties that feel that their government the government structure theyre used to has lost control of the forces that are affecting their lives. And i think thats very prominent in the brexit discussion within the uk as well. The probrexit people are people who want to control their own destiny. And think that, you know, a combination of the forces that are affecting everybody and remoteness of the governments in the eu as its evolved is problematic for them. And similar strain that weve seen around the globe is echo here in the United States and other places, too, asia. Absolutely. Do you think theyre right . No, i mean, honestly, the best way you know, were dealing with complicated things. And the best outcome would be, you know, kind of major rethink of government structure within the eu. So, my kind of slightly Wishful Thinking hopes actually is regardless of how the british citizens decide this in the next couple of days, that the european leadership takes the occasion to try to sort of, you know, think through how to make the governance feel closer to the people, to kind of restore a sense of democracy, if you like. You know, that may not be the outcome, but that would be a good outcome and start us on a somewhat different path. You can say that this has put people on notice, governments on notice. Thats certainly what ive heard. But i think whichever side wins isnt going to taking this as a complete victory, either as a complete validation of what theyve seen at this point or a validation we want out and that this isnt working. Its hard to see how you get from this position to there . Well, theres lots of things to trip on on the way through. So i agree with you completely but it looks that the leaning in britain is toward staying. Im not sure, maybe with people waking up, and the tragic death of the labor member of parliament, jo cox. But it would be an enormous stake if they took in favor of staying as kind of a victory and thought the issue had gone away. And the same would be true in a number of other countries. I mean, i do think this is a bit of a wakeup call, you know in europe and britain and the United States, where we have lots of disenchanted people and so. You know, theres a long road, and i think the wakeup call regardless of the outcome of this particular vote is a good signal, message to take away. Professor spence, we want to thank you for your time. Good talking to you. We hope to see you in person soon. I hope so. Thank you so much. Coming up, peter thiels fate on the facebook boards. Plus, the ratings are in for the cleveland historic title. But first, a look at european markets. Looks like things are in the green ahead of the brexit vote on thursday. Back in a moment. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Looktry align probiotic. Our digestive system . For a nonstop, sweet treat goodness, hold on to your tiara kind of day. Live 24 7. With 24 7 digestive support. Try align, the 1 ge recommended probiotic. This is a game of yafairways and greens, drivers and irons. Its also a game of big data and servers. Just as pga tour pros need modern analytics to improve their scores, businesses need customized Data Center Solutions implemented by cdw, using hpe proliant gen9 servers with intel xeon processors to improve their bottom line. By switching to xfinity x1. Rio Olympic Games show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Welcome back to squawk box here on cnbc, first in business worldwide. Check out the u. S. Equity futures at this hour. Weve actually picked up some ground since we started about 45 minutes ago. Dow futures up about 76 points above fair value. S p up by 10, nasdaq up by 20. This come after a day of gains for the market. Dow was up by 130 points yesterday. Billionaire investor bill ackman is stepping up his campaign against herbalife. Releasing a video. Ackman said the video is the first in a series that hes going to be releasing this week. Herbalife hasnt just commented on that. Not going to let this go, huh . Theres a movie screened in the hamptons thats all about herbalife . Yeah, i believe that may be funded by it. And separately in news in Silicon Valley we mentioned briefly what might happen. Now it happened. Its official, Mark Zuckerberg hasnt unfriended peter thiel. Hes agreed to thiel on the board of directors. Despite the secret bank rolling of hulk hogan. Mark zuckerberg had talked about transparency and free press. Also, by the way, has a deal facebook has a deal with gawker. They actually have a business relationship which makes it all more economic indicacomplicated. The other big controversy is what have they been doing in terms of blocking conservative media. Right. And peter thiel was at that meeting. Peter thiel was at the conservative meeting. Im wondering if whats bothering zuck is more about gawker and less than peter thiel libertarian politics . Thats not going to fly with zuck. Hes still in the fold. Facebook at this point would be, you know, that would raise some eyebrows. Because i would immediately ascribe it to political correctness. Yeah. Because peter thiel is that conservative. And then theres another guy Mark Andreessen had made a comment on twitter. Hes on the board of facebook. Then had had to take it back because people thought it was offensive, a thing about indians. So there is a whole everybody is trying to andreessen, especially being connected to facebook and the pressure that creates. Andreessen is a trump guy, but a conservative. Hes supporting with the two candidates and figured out the four issues that matter to him, including immigration. In the past, he was a mitt romney guy. Coming up, Hillary Clinton is outfunding donald trump in the race to the white house. John horowitz joins us talk to talk about the poll and the battleground race out this morning. Well be right back. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Bbecause you cant beat the zero heartburn orrow i take prilosec otc each morning for my frequent heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. Quinnipiac university is out with a new poll of the swing states for candidates Hillary Clinton and donald trump. John harwood joins us now with the results. I think i might have seen these yesterday. Though there are so many different polls. Are these the ones that are pretty close . I mean, within a margin of error . Different than the general. These just came out this morning, joe. Oh. 6 00 a. M. Okay. Theyre florida, ohio and pennsylvania, three critical swing states. Starting with florida which had previously been very close. Hillary clinton has opened up an 8point lead over donald trump. When you look at ohio, theyre running even. Trump had been having a slight lead before. And in pennsylvania Hillary Clinton has the narrowest lead which tracks what she had done before. Youre right. In ohio and pennsylvania much closer than some of the National Polls indicate, although ive talked to strategists for both campaigns in the last 24 hours and both agree that, in general, if you look at the swing states, Hillary Clinton is six to eight points ahead in those states. So donald trump is in a hole. And if you look at the fundraising that has come out in the last 24 hours you can see its a very deep financial hole as well. He has only got the Trump Campaign only has a Million Dollars on hand compared to 42 million for Hillary Clinton. She is advertising in battleground states. He is not. She has staffed up in battleground states. He has not. However, people who are tied to the Trump Campaign are happy that yesterday Corey Lewandowski was fired by trump. They portray him as somebody who was wedded to the techniques they used in the primary, small staff, relying on trumps media appearances, saying he was blocking donald trump from expanding and professionalizing his Campaign Staff. So we will see over the next few weeks whether paul monan aforth who is the new chairman and now has freer rein to the extent donald trump will del gaegate t him. Well see if he it turn it around. It wasnt in play last time, was it. It was a fivepoint margin for obama. Pennsylvania is a state thats been a little bit of fools gold for republicans over the years because it is structurally very close but difficult for republicans to get from 47, 48 where theyre very close to the victory line, over that line. Yeah. Well see whether donald trump you know, the theory of the donald Trump Campaign, given his the nature of his appeal on the economy, on culture, the working class whites who powered his campaign, is that rustbelt states are a more natural fit for him than, say, Rocky Mountain states or other potential targets. John, for what its worth. Wilbur ross was on earlier. Se he is a trump guy. He pointed out that bush had over 100 million and that was just one of the 16 this fell by the wayside without spending any money. Thats true. There are five, six months how many . Just under five months. Yeah. Youre right. Plenty of time. So well see. There is time. The core question is can what worked for you in the republican primary work in the general election. And thats the question hanging over donald trump right now. Seems like he is already willing to change strategy. Right. When we come back this morning, blackrocks global chief investment strategist joins us to talk about the brexit vote, Janet Yellens testimony today and tomorrow and much, much more. Later, senator bob corker joins us. Stay tuned. Squawk box will be right back. Is very good. Thank you. speaking japanese exactly. I can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. speaking japanese . A brexit warning from george soros. Leave the eu and watch the pound collapse. Details of his predictions and how markets are reacting. Corey lewandowski is out as trump looks to reset his campaign ahead of the gop convention. Mark zuckerberg and peter thiel remain friends. The facebook ceo keeping the venture capitalist on the companys board despite thiels ugly public battle with gawker media. That story and more as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome to squawk box, right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with Rebecca Quick and joe kernen. Take a look at the futures at this hour. Things are looking up again. Dow looks to open up 77 points. Nasdaq up 21 points and the s p 500 looking to open up about 10 points higher. Oil right now as well youre looking at wti crude. 48. 77. All of this moving i think in large part because people think that the u. K. Is staying put in the eu. Other people may have a different view. Here is whats happening at this hour. Janet yellen delivers part one of her semi annual testimony on the economy and monetary policy. She appears before the Senate Banking committee at 10 00 a. M. Eastern time today. Billionaire investor george soros says a decision to leave the eu would probably trigger a selloff of the pound and a recession. He writes a vote to leave could see the weekend with a black friday and serious consequences for ordinary people. Soros predicts a brexit would cause a 15 to 20 decline in the pound. We spoke with wilbur ross a short time ago. He sees short bets everywhere and he thinks george may be exaggerating. He says it has been pretty widely anticipated and people have protected themselves as a result. The Senate Rejecting four measures proposed by democrats to restrict gun sales. Republicans rejected them as too restrictive. A group of senators is working on a compromise bill aimed at keeping firearms away from people on terror watch lists. The question has been is there judicial process for making sure you are vetting the people on the list. More in the next hour. Former senator tom coburn joins us to talk about the issue. In its daily show of restraint and good journalism, i in fact, i didnt know this, but i decided just now it was on the bottom it is always on the bottom of my stack. I said i saw that coming up in the teleprompter for you to read and i said let me check the daily news and see what they came up with. Called slaughterhouse and that the senate votes in favor they voted yes for continued mass killings. No hyperbole with blood running down the dome of the thats the daily news. A group of republican senators right now are working to try to see if there is judicial process to add it is tough with due process. The judicial process is the issue. Easier to deprive someone of flying than something where there is an actual Second Amendment for. So just in terms of due process i think thats right. Then i was thinking one other thought i had before you i know you have your read coming up here. So was that last week we had the twoday fed meeting and yellen, we had to listen to her . Now shes got i feel bad for her, because you know were going to stand pat. How many different ways can you say were not going to raise . How many times can you say, well, were not going to raise . Were going to stand pat. Weve decided at this point were not raising. I mean, its been i mean, every she has got to like, come on the big issue hanging over their head, the brexit. Still hasnt happened. She has to talk for two days somebody is writing speeches for her. We have bob corker on in a bit. He can give us a preview of what hed like to hear from the fed chair. Standing pat. You can say, im not moving. Not raising. No hike. She has run out its like, what what can she possibly say today, sorkin . Trust me. There are many ways to say no. We feel good about where we are. Really . Do you have any trying to move forward. Wow wow not always effective. Joseph. Oh i thought you were going to you spoke long enough that we couldnt talk about Donald Trumps lack of money. Thats what the story was going to be about. Man, youll get it in later. I just did now. You did. Youve heard a lot of ways to say no. Yeah. The latest brexit headlines out of the u. K. As that country heads for the historic vote this thursday. I dont know, 147, 80 . Wilfri wilfried, is there any question anymore in your heart of hearts . Theyre going to stay, right . Youre going to stay, i guess . I think there is still a big question, joe. A gre sense of uncertainty. Thats an issue i wanted to revisit given the way the markets have moved over recent days. Looking at the sterling chart year to date. Close to 148 this morning. Not only at highs of the year. We are at the highest point since the campaign begun. Of course, significantly far from the levels george soros was mentioning earlier today if britain voted to leave. The ugov poll out overnight still has leave ahead 44 to 42. The other poll from the telegraph gives a significant lead to remain. If you dive into the full document that came out, thats of those who are definitely going to vote. The same numbers of people all the people ask if they voted is much closer. 49 remain, 47 leave. Highlighting the point i made earlier of how important turnout will be. Over the last 24 hours i have spoken to lots of people from the remain side. They still say its too close to call. From the leave side, theyre saying theyre unperturbed by the changes over the weekend. If we broaden out, lots of people, whether friends or people on the street, a lot of people are saying theyre not watching the daily developments and the interviews that we are doing every single minute of the day at the moment. They have made their minds up months ago. Bringing it back to the markets. The markets have moved in a certain fashion. I still think the sense on the ground that ive got since touching back down on the ground here in the u. K. Is one of uncertainty. Its not all done and dusted yet. William hague is joining us, as you know, in half an hour. A former foreign secretary. He only left the government very recently, but he is not part of the government anymore. So he can speak much more freely in terms of what he actually thinks is happening and is likely to happen on thursday. Thats coming up in 25 minutes. Whilst youre there, have you hit our favorite spot . I havent i havent yet. And as you know its my favorite restaurant. I have not decided quite what well do on friday, but i am looking forward to entertaining all the cnbc people who will be here on the ground. Sara is flying over today. Kayla is flying over later this week and all our excellent producers. I have to line something up. That wont take place until friday. All im doing until then is working very hard. Be a good place to go. When you show up with watson on your arm everybody will be duly impressed. Listen, were looking forward to an exciting bit of coverage. Genuinely, this is the biggest vote in my political lifetime. Yes. Its incredibly close still. Its hard not to focus on anything but that. This is a huge, huge vote for the british people. And its going to be very, very close. Whatever the momentum in the last couple of days, undoubtedly back to the remain side. Still far closer than David Cameron ever thought it would be. He has unleashed all sorts of sentiments around the british people. It could go both ways still. Momentum back with remain, but it will be very close. Thank you. Well see you in 25 minutes now. Hell bring the guest he just talked about. Markets, brexit and the soros warning. Blackrock Global Investment chief strategist joins us. Richard, thank you for coming in. Weve heard all kinds of things. George soros warning the pound could be massively devalued. Wilbur ross says he doesnt think so. He thinks it would be less of a dramatic move than that. What do you think . We see a significant move down in the pound in the event of an exit vote. You can just see that in the way the markets are mossack fonsecaing moving in the last week. 115 . A double digit move is plausible. You saw a rally in the pound last week. A big rally this week. A move down last week. Just on the swings in the polls, the tone at the last couple of days is that the u. K. Will remain. I would agree with the comments we just heard. It looks incredibly tight. The polls are pretty close to 5050, neck and neck. Prediction markets have moved back. But are still implying somewhere in the region of 28 probability of exit. I think youll see a big move in the pound either way. If you get a remain vote, actually the large short positions you see on the pound, a lot of currency hedging going on for many clients. Theyre going to come off. You could plausibly see a doubledigit move on friday. The pound at 1. 55, 1. 60 . It moved this week purely on a tenpoint swing. You could easily see a larger move, yes. Wow. How does that play out in equity markets . In the event that you get a leave vote, then the equity markets most exposed to that, the ones that are most vulna vulnerable are the domestic, smaller midcaps in the u. K. Youve seen the correlations rise across europe first of all. Across european markets. Not just germany. Peripheral markets are vulnerable as investors start to think about what does this mean for the European Union and some of the peripheral markets. Who is next. I think you see valuation spreads wide. On top of that it has material consequences for the u. S. Market. I think you see a global risk off trade as people become uncertain. Richard, thats a little different than the conventional wisdom weve gotten over the last days and weeks where a lot of people think, after last weeks volatility, much of this is baked into the market in terms of, if they decide to stay, it wont be a huge spike in stock prices in europe or here in the United States. You think thats wrong . I think its wrong. Like i said, the Prediction Markets are saying 28 probability. If you get a decision to stay, i think there is still a material upside. We see at blackrock a lot of clients who are very, very cautious right now. Theyre cautious not just because of the u. K. Referendum on thursday. Theyre cautious because there is a lot of uncertainty about the economy and fed Interest Rates. Theyre sitting on a lot of cash. Theyve typically been hoarding cash, underexposed to risk assets. I think if you see how much cash versus the regular percentage would you say . You are seeing in many cases clients owning high singledigits levels of cash within their portfolios. Where typically you would see the numbers below 5 . They can sit on it for a long time because the opportunity cost of owning cash is very low right now. If you go et a remain vote, i think thats one of the potential catalysts for clients, investors, to start casually putting the cash back into the market. You have not seen that yet. You have had a nice two days in equity markets this week. You havent seen significant flows back into the market yet. In the event of a remain vote, that could be one of catalyst that starts to give investors a bit more confidence. Take money out of increasingly negative yielding instruments and putting them back into higher returning assets. Thank you for joining us. Thank you. The ceo of one of the worldest largest Utility Companies will talk to us about the european economy, a possible brexit and the impact it will have on the business there. Later former British Foreign secretary William Hague joins us. He recently said leaving the eu risks fragmentation of the western world. He will join us live from london when squawk returns. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Welcome back to squawk box. The futures this morning have been indicated higher after gains for the market yesterday. Things have been picking up. Dow futures up right now about 77 points. S p up by close to 10. Nasdaq up by 21. We are joined by a major player in the Global Energy scene, including the race to generate more renewable sources to power the Worlds Energy needs. The chief executive of nl group, one of the Worlds Largest utilities and renewable companies. Did i say it loud and proud . You did. Was that good for you . I wanted to make sure we got it. We want to talk energy. But real quick on the whole brexit situation. Okay. How you view that. I thing its a disgrace, and i think it would be a real disaster for europe. I think we just heard from richard before what the big market is looking at this. The way its looking at it, its a big question mark. I think if brexit happens, europe will look like a very messy place for some time. What would it do to your business . Nothing directly because we dont have exposure to the u. K. We are in the in the u. K. But indirectly yes. What would the knockon effects be . The investors would look at what companies are there in europe and how we relate to the European Business and maybe take a big break. So it would be terrible. I think it cannot be underestimated. When we teased you coming up, we talked about renewables. When youre thinking about making investments in renewables, at what price does it make sense . Given what oil prices are, how has that changed the dynamic. There is no more a relationship between oil prices and renewable investment. If you look at what oil is how many oil is impacting on energy production, on power production, basically almost nothing. Its gas and coal. The correlation between oil, gas and coal is weakening every, every day. So this is the third year in a row where, in light of declining oil prices, investment in renewable worldwide went up. The correlation is simply not there. How much is the eu subsidizing the renewable industry . It stopped. How does it work if it costs three or four times as much . How is it economically feasible . It does not anymore. In latin america there are competitive biddings. Versus natural gas. Since 2009 brazil started having competitive auctions. No matter what kind of source of energy. Just the cheap price wins. And 75 of cases wind won. Gas won only on 7 . Why . Its just more expensive. Wind is blowing hard, very strongly in brazil. So it depends very much on how much wind do you get, you know. Its a question of resource. And today this is a big and competitive industry. And thats the reason why its growing. There is no other reason. In the u. S. Its not having the same kind of renaissance if. In the u. S. You have a lot of investment in renewables in the u. S. Its one of the Fastest Growing you have fiscal incentivation here. People look at solar in the United States and say, if the subs dididnidy didnt exist it e more challenged. You look at a lot of solar in the u. S. With little subsidies coming up. If you take mexico. Mexico is an unsubsidized area. We just won a thousand mega watts of Solar Investment with prices that were unbeatable from gas turbine cycle. There is no more the incentive versus nonincentive. Its another normal source of energy. When you look at the technologies out there, what has the greatest potential at this point . From a policy perspective . You should not bet on one technology. Thats a mistake. You should go at least two, three different sources. And today, solar and wind are those that have the curve of abating costs more steep in front of themselves. Hydro, Geothermal Energy are old but they did a good job in the past. Theyre just getting there. Are you in rome . I am based in rome. Thats rough. Its you suffer. I dont think i would go. In brazil there is not a valueadded tax that subsidizes . No. Wind power . No. I am reading something from the world bank. This is no incentivation in brazil, chile, mexico. There is no incentivation in peru. The issue is just its cheaper and its getting cheaper and cheaper. And of course, there is also another point. Its not volatile. Once you have done the plant, the cost of Generating Energy is fixed. You dont have this intrinsic volatility of commodities coming at you. So its like many countries like that. Thank you for coming in. Its a story we have not heard. The lack of subsidization. When we come back, hedge funds scrambling for positions ahead of thursdays brexit vote. A special report on what managers are anticipating. Then, cnbcs larry kudlow drops in to talk your vote. Thank you. That was great. I asked my dentist if an electric toothbrush was going to clean better than a manual. He said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. 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Probably not. Biggest opening ever for an animated finding dory. Yeah. Nemo is in there. And nemo is still i am still still my endorsement stands a day later. I think youre still emotional about it. I am still emotional about the end. Must be a good ending, not a sad ending. I cry at car commercials. You have to understand where the bar is on all of this. Youre not even pregnant. Right. Youre not pregnant. I am not. A the moment. The first part of finding nemo, the mother gets killed in the first two i know. I remember. I remember. Are you still affected by that too . I am pregnant. Mark zuckerbergs decision to keep peter thiel on the facebook board. Larry kudlow on the white house and William Hague. Look at the u. S. Equity futures. Still positive. Nasdaq up 18. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Welcome back to squawk box. Among the stories front and center at this hour, the fed chair will be delivering part one of her semi annual testimony on the economy and monetary monetary policy. She appears before the Senate Banking Committee Later this morning at 10 00 a. M. Eastern. News crossing the tape. Stepping down. The soft bank ceo. This is important because roy was expected to be the successor to massasan. He came from google. He was also seen at the leader at that company. Given a huge compensation package at soft bank. 73 million just last year. Made a number about 4 million of bets for softbank over the past couple of years in that role. Still waiting to see whether those will pay off. Well try to find out the back story. Home builder lennar out with quarterly results, the company earning 95 cents per share. 9 cents above estimates. Revenue beating expectations. The companys Home Deliveries up 12 in the quarter. We are just two days away from britains referendum on eu membership. Wilfred frost joins us from london with a special guest. Good morning again. Good morning again, becky. Thank you very much. I am joined by William Hague, the former British Foreign secretary and, of course, only stepped down from that position last year. William, welcome and thank you very much for joining us. My pleasure. Now, in the past you have been incredibly critical of aspects of the European Union and most notably the single currency, but youve come out in favor of britain staying in. Can you square that off for us. For me the important point is that we won the battle to stay out of the euro. You are quite right, i led the opposition to joining the euro way back in the late 1990s as leader of the conservative party. And actually pointed out many of the things that would happen that have now happened in the you euro zone. We have won similar battles to stay out of others, not to be part of the quota for asylum seekers. We have a uniquely advantageous position. Can the euro zone survive . Youre critical of aspects. If it doesnt, does britain get dragged down with it. I think the euro zones future is doubtful unless it achieves closer fiscal and political integration. There will be some effort at that. In the history of the world there is not a successful record of Monetary Union without political union. Can britain stay out of that integrati integration . If the euro zone collapses or shrinks or whatever happens, britain is involved. All of us around the world have that problem. Can we stay out of euro zone integration . We very much can. There would have to be under a law i took through parliament five years ago, we would have to have another referendum in the u. K. To approve any transfer of power from this country to the European Union. So we have a lock on that already. Lets talk about power. You were former foreign secretary. Britains place at the world stage, its place in negotiations about international relations, would that be hampered if britain pulled out. I think so. Thats one of the reasons i am on the remain side. Britain is in everything. In the eu, the commonwealth. Nato. G20, g7 and so on. That gives us a tremendous position in world affairs. Very important from an American Point of view is that we are an important link across the atlantic. When europe adopts sanctions on iran or on russia that are in line with those of the United States, its partly because britain was at that table in brussels arguing in the same direction. But does britains past stem from being alongside the 28 european states who might not have particularly strong militaries or the fact that the u. K. Is one of five members of the u. N. Security council. A nuclear power. Being part of the club of 28, does it make a difference . It does. We often got our way. On those sorts of things i was talking about. Sanctions on iran that helped to bring the iranians to the negotiating table, and a nuclear deal has been done on the back of that, as a result of those negotiations. It was britain and france and germany that together really drove the european agreement. That meant 28 companies were applying sergeananctions togeth. In that sense its magnified and maximized by being in the European Union. I want to talk about the trade deals that britain may strike if it did leave the European Union and afterwards. A lot is made of how other nations would treat the u. K. In that instance. You remember a leading member of the government as a referendum on scotlands membership. Had scotland voted to leave would you have treated them harshly and posed tariffs on whiskey imports and the like . We wouldnt have gone out of our way to treat them harshly, but it would have been difficult for them. It would have been difficult for us. Not because somebody would have it in for us. But because in the world of today, negotiating a whole new trade arrangement is difficult. Look at the transpacific partnership. Now the United States has negotiated with pacific nations, but it stalled. The ratification is stalled. How many years would it take, even with good will on all sides, for britain to replace the free trade agreements around the world that the eu has. The forecasts, including the treasury. Very severe. George osborne saying it would cost every house hold 3,400 pounds. Has cam reron taken a huge risky delivering the referendum in the first place . We are a profoundly democratic company. There has been building for years for people to have their say and hes recognized that by giving them a referendum. One way or another there was going to be a reverend ul. Hes done it in a planned way. Now its up to the people this week to decide. Are you feeling confident . Its going to be very close. I think opinion polls are finding it hard to read. Financial markets are overexcited one way or the other. Its very close. Mr. Hague, thank you for joining us this morning. Its been a pleasure. William hague, farmer British Foreign secretary. Two days until britain votes. Wilfred, thank you for that interview. Appreciate it very much. The uncertainty of the brexit vote has Hedge Fund Managers scrambling to be in the right position following the results. Kate kelly joins us with more on how theyre bracing for a possible brexit. Are they still bracing . They are trying to cover for every eventuality. First of all, the markets today, worth taking a peek at. In the green a little bit after being down in europe earlier this morning. So the question was is the remain rally of yesterday over, but it appears it still has legs to it. Interestingly Hedge Fund Managers surveyed by a hedge fund researcher, results issued last week suggesting that 79 of u. K. Based Hedge Fund Managers believe remain will prevail. This poll was taken in early june. Of course, the polls have suggested that there is more of a dead heat in recent days. So they are proving right relative to what the picture looked like then. At the same time theyve been positioning, at least in the currency market, also for a remain. Looking at c. O. T. Positions, it tells you bets that the pound will fall, which is something that george soros and others are warning about if there is a leave victory, have actually gone down in recent months. The bearish pound bets were at a threeyear high earlier this year. Starting in may it tapered off and we see relatively long short bets on serling versus the dollar. George soros is warning that the idea that the brexit would not have a big effect on personal finances for britons is Wishful Thinking. He says this is something to be very concerned about. A vote to leave could see the weekend with a black friday and serious consequences for ordinary people. He kind of walks folks through as to why in a guardian piece that weve been talking about overnight and this morning. A lot of political differences in the Hedge Fund Community over this. Some in favor. Including michael farmer, a member of the house of lords and a metals trader. Versus george soros who famously traded in 1992 and broke the british found, as it were, and made a fortune for himself. We should say, by the way what was the comment made earlier today about soros . He did it. He forced the issue. He wasnt just playing something. Right. He created absolutely. The Market Impact of his trade forced some consequences. Right. It should be said here, he is positioned as if to say that remain will prevail. His book at Soros Fund Management will benefit if this is the case. Hes arguing that in the opinion pages. Its an interesting read. He makes a number of points as to why britain is better off, as our guest was just saying, as a member of the table. Kate kelly. Thank you. Coming up, the Great American himself is here. Larry kudlow joins us after the break. Well talk about the shakeup in the trump camp and Hillary Clintons war chest. Futures indicating a positive open. Cramer wasnt enthralled at the beginning of the rally yesterday. It did peter out into the close. Be back up a little today. Get back some of what we lost at the end of the session. Its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Squawk box this morning, details of Donald Trumps fec filing released yesterday revealing that his campaign, falling behind in the money race. The Trump Campaign raising 3. 1 million in may comparing to Hillary Clintons 27 million. Still, the 3. 1 million is more than double the previous months haul. Trump spending outpaced fundraising, so his Campaign Started june with 1. 29 million in cash compared to clintons 42 million. Yesterday trump fired its Campaign Manager Corey Lewandowski. Lewandowski. Who had been tasked with overseeing the fundraising operation. More than just the fundraising operation. You have said his names a million times. Just seeing all the letters. Cory ran the Field Operation during the primaries. Larry kudlow is here. Proper introduction. Okay. Lookit, they changed it. They had an intro. Lets say joining us now is larry kudlow. Great american. Cnbc contributor and Great American. Thank you. Congrats on 25 years. Thank you. Unofficial advisor to mr. Trump. Informal. Really still from the company to unleash prosperity. We have helped all the candidates. Every one. He is just the last guy standing. Well talk about a lot of this stuff, larry. One thing that i think were a little bit simpatico on, you know, all the things swirling around. I saw a great cartoon. It was it was ten Mainstream Media people, and there was this little mound here that said trump stuff. Then behind them theres all these mountains. Theres benghazi, the server, the clinton global initiative. There were like peaks. All the media was gathered around looking at that. And sometimes i you know, i sort of feel that maybe the media is operating that way. You think . Really . What i was getting to every sunday what i was getting to is just for someone who is a freemarket private sector guy, just the tax plan. Take Everything Else away and you could just decide based on who is going to shrink the size of government and do things that are for private sector growth versus someone who has moved almost over to sanders position. That is my view. I think he has a freemarket supply side, growthoriented plan. Whats with all the republicans wringing their hands . I think the single best thing he came up, which is being tweaked a bit now. The basic point is slashing business taxes on large and small companies. I think that is the single best Economic Growth stimulant. He went to 15 early in the game. And to me that showed me he was on the right path. He is also going to be a major deregulator. As a businessman, he is going to be a costcutter. I always felt the rudiments were there. A lot of people in the republican primaries who i liked, supported and basically agreed with, but i think donald trump ran with the ball. I am a great fan Andrew Ross Sorkins biggest fan for many years, but the New York Times runs a sunday hit piece on trump every sunday morning. I guess, larry, its the wall which, you know, a lot of countries have secure borders. I guess you can its somehow like there is a way you can cast the whole wall issue as some type of terrible, why are we building walls not bridges, when all you are really talking about is trying to secure the southern border. Then you have the muslim immigration. Those two things together cause people to ignore Everything Else. The tone of that conversation and some of the rhetoric thats been associated with it, even more so than the ideas that go with. Thats true. You have to watch tone. I agree with that. You are talking to an immigration reformer. I am a freetrader. We are in a very serious war that threatens this country. On gun control . No. I know. For our lives, democracy and way of living. The need to secure the southern borders, the need to have very great care on new visas. I am all for the visa moratorium. I like the fact that trump has moved off a religious criteria and into a geographic criteria from overseas. Damage may already be done. I wrote a column months ago saying it should be to anyplace terrorism pops up. The fbi director says, they have information on people, fine, we look at it. Right now the systems are not in place. The main thing for donald trump, in my view, is he has a progrowth plan. We have been suffering for quite by the way, under republican and democratic president s and congresses, we havent moved real wages since 2000. We havent moved business investment. We have not basically moved productivity. We need different policies to encourage this, particularly on the business side and Small Business side which helps middleincome wage earners. I think thats his case. He has to stay on message. Lord knows. If he does, this is a close race. I know there is a lot of discussion in the papers. Take a look at the real core politics averages. Theyre basically even. I think she is plus five or six on the national, which is almost error margin. Key states, florida, pennsylvania, ohio, which i think are mustwins for trump, theyre basically even. I think she has a onepoint lead. This will be a close race. A piece in the journal today walks through good piece. I couldnt agree more. I think still thinks its a longshot though. Agree. Thats fair. The jerry cy piece. You said 5050. I think right now its 5050. Thats not a longshot. I loved your interview last week with wilbur ross. I loved it. I wrote a column about it, okay, because wilbur is basically saying he is a dear friend of mine but we didnt rehearse before coming on your show. He is basically saying trump will overturn a lot of the establishment in washington. The lousy economic decisions in both political parties, the cronyism, the corporate welfare. That is precisely what trump intends to do as long as he stays on message. I want to over to save the economy, i want to overturn the economic establishment. And by the way, you are seeing the same feelings across the pond. This is what brexit is all about in large measure. I call it magna carta 2. 0. I was not there for that. I want to make that clear. Are you probrexit . I am probrexit. This is magna carta 2. 0. Aboutselfgovernance. Common law. My view the eu has greatly expanded its authority, its become a socialist bureaucracy. It has councils and this and that. Its making legal and regulatory decisions, Climate Change decisions. These individual country parliaments are losing their power. Particularly britain. Are you okay if free trade suffers as a result . Free trade is not going to suffer. I dont buy that. Thats the imf with this hate stuff, jiggering numbers and all the bank economists, weenies coming on. England is first of all the most powerful financial presence in europe. And the fifth largest economy. Thank you. England, actually britain, has actually been lowering the tax rates in this recession. What about a free trade issue here and the position donald trump has taken . Trump likes britain. He wants im separating this. I am taking the free trade piece and i am separating it and making it curious. You have to look at it relative to sanders and clinton. Here no, no. Clinton is an antitpp. She is, by the way. Let me make this point. She is worse than trump. You cant, andrew, have china and others, japan is in this boat, breaking the rules on a constant basis. So the trick is to tear down their barriers. We just passed a law, we, the Congress Just passed a law signed by the president , very important, called the Customs Enforcement act. First change in customs law in 40 or 50 years. And they say, if bilateral negotiations. If countries repeatedly break the rules according to the wto and so forth, then the United States has the power and Legal Authority now to step in and impose temporary, targeted tariffs. It could be for the company, it could be for the industry, and it could be for the whole country. Reagan used this. Right . Bush and obama used this. Steel and i dont want protectionism but i think trump is on to something. There is a lot of new evidence, by the way, from your side of the aisle, that in fact, in certain cases, these freetrade deals which were not enforced legally have hurt working people. And guys like me have to take that into consideration. So i cant be pure. I have to live with it. I think trump is looking at that and hes touched a nerve on that. Great american larry kudlow. Trying to be helpful. I am afraid to say if brexit is good. Congratulations on 25 years. Thank you. That makes me think i have to go another. We go back a long ways. You have been fabulous. Thank you. Love you too. Dennis gartman talks brexit concerns, the markets move higher and sources worrying what a brexit could mean for the pound. Former oklahoma senator tom coburn joins us to talk Second Amendment and his recent oped. We can enable a banker to travel to the most remote locations with nothing but a phone and a tablet. Everywhere where theres a phone, you have a bank. Now a person is able to start a business, and employ somebody for the first time. The microsoft cloud helped us to bring banking to ten Million People in just two years. Its transforming our world. Looktry align probiotic. Our digestive system . For a nonstop, sweet treat goodness, hold on to your tiara kind of day. Live 24 7. With 24 7 digestive support. Try align, the 1 ge recommended probiotic. When we return, janet yellen set to take the hill in just a few hours. Everything from brexit to the economy on the table. Well ask senator bob corker what he wants to hear from the fed chair. Squawk box will be right back. Over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. The brexit and beyond. We are just hours away from Janet Yellens grilling on the hill. The economy, the rate debate, and of course the big thursday vote in the u. K. Senate Banking Committee member bob corker set to tell us what he wants to hear from the fed chair. Politics and the race for money. Donald trump and Hillary Clintons stark fundraising gap. The gops nominees campaign reset and the latest polling numbers. Broadcasting legend larry king is here to weigh in. Big money and big ratings. The warriorscavaliers showdown living up to the hype with the biggest audience in 18 years. We bring you the numbers as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, here on cnbc, first in business worldwide. I am joe kernen along with Rebecca Quick and Andrew Ross Sorkin. Were less than 90 minutes away from the opening bell on wall street. Up 70 now indicated on the dow jones. S p indicated up almost 9 and the nasdaq up just under 20 after a pretty solid session yesterday. Didnt close on their highs. The markets in europe at this hour, which had big gains yesterday. Again positive today. But not to the extent that we saw yesterday at least. Among the top stories, janet yellen set to give part one of her semi annual testimony on the economy and monetary policy. Shell be appearing before the Senate Banking Committee Later this morning. Well talk to senator bob corker about what he wants to hear from the fed chair. That interview is coming up in under 40 minutes time. Billionaire investor george soros says a decision to leave the European Union would liketolikely trigger a selloff in the pound and a recession. Germanys top court clearing the way for an ecb emergency bondbuying program. The crisisfighting tool has never been used. It was launched as part of Mario Draghis pledge to do whatever it takes to preserve the euro. The Program Gives the central bank broad powers to buy the debt of financially strained members. A large german group wanted it struck down arguing that it constituted illegal monetary financing, violating german law, but the court rejected that claim. News just crossing in the last nour. Softbank president nikesh arora stepping down. Hell remain an advisor. He was hand picked as the successor to ceo Masayoshi Son. Softbank owns sprint, a big stake in alibaba. Yahoo japan and many others. They do about 80 billion in revenue. He was seen as being the successor to Masayoshi Son and creating or taking it into a techfocused version of berkshire hathaway. Now that he is not that man, questions over who would take over the company. Nikesh came from google. When he left there were a lot of people who were both surprised by the move but also sad to see him go because he had been seen as one of the operational guys who actually turned google from a startup, if you will, to a more operationally focused company. Big questions about his future and now softbanks. As we mentioned, two days to go until the u. K. Votes on its future in the European Union. A new poll out from u gov shows 42 want to stay. 44 would vote to go. The polls are close. Another neck and neck at 44 . Others showing the remain camp picking up speed. Joining us is dennis gartman, the editor and publisher of the gartman letter. This is pretty close. Thats very close. It depends upon which hour of the day you get a poll whether its plus or minus for the leaves or for the remains. We wont know until thursday night in the middle of the night what has actually happened. It can go either direction. Like most elections, it depends on who gets the vote out. If you asked me a week ago, i would have said the folks voting to leave would have had a greater propensity to go to the polls. I would say now, after the tragic assassination of miss cox, maybe the remains do. It will be very close and nobody really knows. Thats something the market hates more than anything. The confusion. How do you figure out how to place your bets ahead of a situation like this . I am normally watching trading, the british poundsterling but somebody else can do that this week. Thats a bet i prefer not to make. Have you changed anything aside from not getting involved in the currency trades when it comes to the pound . Anything youve done to fortify the portfolio for stand on the sidelines. The only thing i trade is my own retirement account, and i have a very, very small net long position. I would rather be long. But because of whats going on over there, i the size of ones long position should be as minimal as possible at this point. The sidelines are a wonderful place to be. Will we have clarity come friday . Im not sure. I think it could down to literally hundreds of votes. Once you get a vote, though, you are probably talking about a situation where half the country is ticked off. At the other half. And where politicians have to do something to acknowledge the other half of the electorate. Which leads to uncertainty in itself. The big thing is since the u. K. Has had a referendum, the propensity of other marginal countries to do the same thing will grow. If you had had a leave vote of a majority, you probably would have gone to scotland once again and there would have been a move to have another referendum to leave completely and divorce itself from the u. K. Countries such as bulgaria, who is marginally involved with the eu, just barely made it in, some in that country would say, what are the benefits . All sorts of confusion. A federal election next week in spain where its an extreme rightwing vushersus an extreme leftwing. A lot of confusion is embarked in europe at this point. This only makes it worse. Does that make u. S. Equities and u. S. Properties more attractive, or are we all interconnected. There is no other alternative. Despite the fact that you will a you can do in the United States given the low level of Interest Rates, you go to the equities market. Its made the dollar quite strong and it will probably continue. That eventually leads to weaker equities. I am not of this school of thought. I remember times when a strong dollar and a weak stock market and the opposite. The propensity or correlation between a currency and the equity market is really maybe over a sixmonth period of time theyre close. Over oneyear period of times i think there is none. Chaos in the eu regardless of how the vote goes down. Janet yellen saying that the fed will stand pat and not raise rates. That adds up, to, yes, be in u. S. Equities . Thats the only place to go. If you want to see where the thermometer is, watch whats happening to the relationship between the euro and the swiss franc. The franc has been getting strong as foreign money leaves the euro and finds its way to the swiss franc. Even over the past 48 hours its been getting strong, despite the fact that the remains have gone to a slight Percentage Plus over the leave vote. Keep an eye on that currency cross. Whats the story with crude oil . Its up 7 in the last two trading sessions but it seems like the market is tied to every fluctuation in oil prices, following it very closely. Whats whats at the head of this and whats following who . I will say that once you get wti up over 50, given the fact that the carrying charts from one year forward gives you 50 fraccers will be imminent sellers. It will be hard to Push Crude Oil above 50. What about the link between oil prices and equities . How solid of a link is that . I have clearly not been in that camp. I put a chart in about once a month because i hear every day, as goes crude, so goes the equity market. Its not true. Looking over the course of the past two years, equities have been going up. Crude oil has been going down except for the past six months. The correlation over any broad period of time is for Weak Crude Oil prices. Strong crude oil prices, weak stocks. Strong stocks, Weak Crude Oil. For the last six months everybody has said its a one to one correlation. I over broad periods i say thats not quite true. Dennis, thank you for joining us. Always good to be here. Scraping the bottom of the barrel, you find me down here. So thank you. Thank you for joining us. We love seeing you. Thank you for being here in person. My pleasure. The highspeed hyperloop getting a foothold in russia. Phil lebeau joins us with details. This is one of those stories people will listen to and say, what . A hyperloop between china and the Mediterranean Sea . Hyper loop announcing this morning that it has struck a deal to develop or at least explore developing hyperloop routes with the city of moscow. The routes would be in and around moscow, tied into the transportation grid there. Its just at the exploration stage at this point. Theyll be in development with the summa group, a transportation Infrastructure Firm in russia. They will be working with them. Listen to what the cofounder and executive chairman of hyperloop says about their longterm vision. He says its to work with russia to implement a transformative new silk road to whisk containers from china to europe in a day. We showed you the animation earlier. It was last month that we were out in the nevada desert looking at the first test run for the hyperloop sled. There you go. You see. It was not very long, but that was where we had a chance to see the early development. The fullscale test, by the way, for the hyperloop that they are building, they expect to have it in fourth quarter. They are also exploring several other sites in europe for development of a hyperloop eventually. They do expect to transport cargo by 2020. Think about the amount of money this would require if they were to build even a small hyperloop somewhere. Try to imagine going from china to the Mediterranean Sea. Its the kind of wording that will get people excited but at this point its very pie in the sky. I have a hard time imagining that. Phil, gives us something to think about this morning. Thank you. Absolutely. A new voice weighing in on the brexit debate. David beckham. Well tell you what the soccer star is saying ahead of thursdays big vote and how it might impact voters there. Larry king will join us to weigh in on the state of politics. Stick around. Squawk box will be right back. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Mr. President were on mars. Switch to a video call. Sure, we can do that. Congrat. Picture from mars looks great. Its about Time Business Communications caught up. Go from an audio call to a Video Conference with the push of a button. Vonage. Business grade. People friendly. Lepes foods is a locally owned here in santa rosa. As a Small Business, were always looking to save money, and pg e was able to help us. I help the Small Businesses save money and energy. It feels great. We looked at their lighting, their refrigeration system, and with just those two small measures, they were able to save a good amount of money. I was shocked. I couldnt believe that i could save 1,500 a month. With the savings that we get from pg e, were able to pass it on to our customers. Its pretty awesome. Learn how your business can save at pge. Com businessenergycheckup. Together, were building a better california. Welcome back to squawk box this morning. Looking at the futures right now. We are looking in the green there. Dow to open 64 points higher. Nasdaq up 18 points and the s p 500 up about 8 points. Also, David Beckham has a new goal, helping britain stay in the European Union. The soccer star is throwing his support behind the remain campaign, writing in a Facebook Post that players from across europe helped him while he was at manchester united. Beckham also saying britain should, quote, be facing the problems of the world together and not alone. Real quick, just wanted to mention, a film that we referenced earlier called betting on zero around herbalife. I had sucked bill ackman was behind the film. He says he did not fund the film. However, there is an mda. Nobody knows who funded it. All about herbalife and raises question about it. Its in the bill ackman camp, meaning it has the viewpoint of bill ackman. Right. Apparently he is not the funder of the film. Definitely not . He is saying his team is saying that he is not he has not funded the film at all. Maybe its peter thiel. I dont know. Getting my stories mixed up there. Just want to make it clear. You are you certainly are. Did you get yelled at . I was told over email that they were not behind it, so i wanted to make it clear. No exclamation points or capital letters. They were polite and cordial. But i thought it was worth a lot happening behind the scenes this morning. Yeah. Exactly. I want to take the new windpowered jet over to im still trying to figure out what the enel ceo was telling us when he said it doesnt subsidize wind power. I dont remember when renewables were cheaper than kilowatt . I dont know when it became much cheaper than natural gas. Its not. Look, brazil has heavily subsidized some of this. It looks like it is still continuing. You cant just come on i have a joke about that. You cant just say, no, thats not true. In the movie where they never mind. How to succeed the guy gets the wife gets home. He is there with and they just keep saying, what do you mean . She gets dressed and leaves and the wife finally gives up and says, forget it. If you just keep saying it, does it finally become i dont know. I am trying to figure out how. All right. Just say it loud enough. Enough times. Now to sports. The champs were welcomed home to cleveland. Been a while for a championship team. 52 years. Greeted by thousands of fans at the airport. The tv ratings, nielsen says, nearly 31 Million People watched that game seven on sunday. Thats the most for any basketball game, pro or college, since 1998 when Michael Jordans Chicago Bulls beat the utah jazz. This was in game six of the nba finals. Its also the highest number for a game seven since 1994 when the Houston Rockets beat the new york knicks. How to sleep like a king. Larry king here to talk about his new luxury home brand. Plus, his take on the race for the white house and the state of politics. As we head to break, take a look at u. S. Equity futures. Plus, his take on the race for welcome back to squawk box this morning. The latest quinnipiac poll of swing states this morning showing that Hillary Clinton has an 8point lead over donald trump in florida versus a onepoint lead last month. Joining us to talk all sorts of things. Well talk politics, trump versus hillary as well as a guy who has got a new business. He doesnt have a new business in broadcasting. We have a broadcasting legend here. Larry king is here. We want to talk to you about everything. You have a new venture. Yeah. I want to take care of this first. Can mind if we talk politics . Its your show. Do what you like. I am a prop. No i understand. Youre a host. You can ask us questions. I will in due turn. You have been friends with donald for a very long time. As i recollect, has to be 45, 50 years. You have had him on many times. Dined with him. Socialized with him. I hear or at least i read that you think youre going to vote for Hillary Clinton. Well, its a very tough pick because i know hillary a long time too. I am friends with both, have socialized with both and like them both. And i talked to donald last week. He is supposed to come on my new show. He was supposed to come on last week, then this week, and he rescheduled. But some of his stands i just cant go with. So when i am down to the two, i would tell donald, donald, i love you, you are a great friend, but i cant buy some of the things have you voted republican in the past, larry . I have lets see. What republicans have i voted for . Going back to like jake javis. How about in a president ial race . President ial race, i voted for nixon in 68. Okay. Against my better wishes. It was a strategic vote. I thought that George Wallace but not since . Thats what i am getting at. I think you vote democratic usually. I vote democratic but i am a very independent i grew up democratic. I grew up in brooklyn, new york. I handed out leaflets for truman in 1948. I was 15 years old. One of the most exciting nights of my life when he won. My family was all democratic. When i moved to florida, i got involved in doing shows and the like, so i i would say, for him to be so close in this election between two candidates, with one being a republican, thats actually more republican than hes been in the past. Right, because i know him so well. Exactly. The areas that he did with the right. The mexican judge you voted for barack obama. I did vote for that speaks volumes. Would you would you having known both of these candidates, do you think you could be swayed if his i could always be swayed. In fact, if you cant be swayed, you are locked in, you should i am always open to change. I am always open to hear something new. Theyve made these changes in the Trump Campaign yesterday. See, the donald i know i donald i know was pro choice. Im strongly pro choice. Anti guns. I am strongly anti guns. What the senate did yesterday was just wrong. Just wrong. To keep these guns going. There is no excuse. Theres due process. Thats what theyll no excuse to have a gun like this. So those issues if you did. Im issue like larry king in the o. J. Movie. You look like larry king interviewing the people you interviewed when it was actually happening. It was great. It was me. I know. You said it looked like me. 20, 30 years ago he means you havent changed. They made a wig for me because i had more hair. They got the glasses i wore then were a little larger. They got with the correct prescription. That was classic. They even found some shirts i wore at the time. Very similar in look. You were in the credits at the end. I was the only person in the show playing himself. Right. It was a lot of fun. Great directors. Have you watched the espn version of the o. J. Great. So far everything ive seen is great. The way espn has put it together, in a historical perspective, taking no opinion at all. I think theyre doing it brilliantly. The o. J. Saga i knew o. J. Very well is a sad, sad thing to me. Yeah . Yeah, because there are two o. J. S. Right. And its an enigma. One side. One side. O. J. Was captain of every team he ever played on. High school, usc, bills. He never got into an argument with an official. Never raised his voice on a field. Players went to him for advice. He was enormously generous. His linemen got gold watches every year. He was an extremely easy person to work with. I talked to the people who did the hertz commercials. They would rent out an airport late at night. You could do scenes over and over. He never complained. Here is that o. J. Sensitive, fun. There is the other o. J. Which had to be cocaine affected and a lot of things. So i think this is my opinion. I think i think my flipphone is going off. You have a flip phone . You still have a flip phone. You bet your life. I tell you why. You see this thing. It says phone. Who is on the line . Its not donald. Its a phone. It could be the interview coming through right now. Wayne lapierre. Could be my wife. We got to get down to business, why youre here too. Entrepreneur larry king is here. My wife and i were approached by a Wonderful Company in vegas and they make sheets and pillowcases and bedding for the best hotels. Top hotels in france and in america. And they wanted to put a line of that quality, that could go direct to the public. They came to my wife and i and said, what about a line of bedding called sleep like a king. They introduced it. We brought you some gifts. I brought you some soap. We have soap. Smells awesome. Are you a sheet guy . Are you into defoal yanliant. I wasnt into it until i got into it. Now i really like it. Can i feel them . Were actually in the market for sheets right now. This is for you. Its one of our robes. Here we go. This is a king robe. Hey. What does this stuff retail for . Its not a lot. I dont you dont know . Andrew, you would look like hef with this. You need a pipe with that. Here we go. Im going to model this. So do you sleep with these sheets on your bed . I do. You do . You got two robes . We have two. Pass it over to him. Feeling very here you go. Put it on, joe. Im just going to take it home. Larry, here is the question. You go to sleeplikeaking. Com. You will find a whole array of what we have. My wife did the designs on most of this. All of it in fact. Its a wonderful product. Makes your bedroom better. The sheets are so nice. I dont know the technical, the web count. I just know how good it feels. Youre 82 years old. What keeps this all going . What are you after . I am always curious about youve done so much. Have you talked to zucker . The guy who took over for you he never called me back. Seriously. I do a show larry king now. My wife can see. Thats distributed by hulu. I do politicking, speeches. Emceed the dinner for tony bennett last night. The feud i hear he said something the other day about you. I am kidding. It got silly. All i did was say, in one interview, that i found pierce morgan to be too much of an i person, that the interviews were about him rather than the guest. And i thats not my kind of broadcast. I want to learn from the guest all hell broke loose. He went crazy. All it was was a comment. Thats all. It was a fair comment. Anyone i i dont like to knock people in the business world. Were all in the business to try to make a living. There is a big niche. 500 channels. Anyone can make a niche. No one in talk has 4 i know jeff. Im going to send him an email right now saying bring larry king back. Bring him back you look the same. See, now you got clout. Im going to do it right now. It may happen. If cnn brings me back. I do the election. Then you could take the credit. There you go. Like that. I love taking credit. Then everywhere i go, there would be tons of interviews. Thats right. How did this happen . Right. How did this happen. The one and only larry king, everybody. You look great in the robe. Coming up, gun control effort. Focusing on private citizens but Government Agencies have been stockpiling weapons. A recent oped by tom coburn who joins us next. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Illuminates skin with pearl optics science. Your concert style might show your age, your skin never will. With olay you age less, so youre ageless. Olay. Ageless. Welcome back to squawk box, everybody. Here is whats in the headlines this morning. Chinese Media Company Ten Cent Holdings buying a major stake in supercell for 8. 6 billion. Super cell made the clash of the clans mobile game. Lennar reporting Second Quarter earnings of 90 cents a share. Revenue also beating expectations. The companys Home Deliveries were up 12 in the quarter and the stock is up 2. 9 . Reuters reporting that mckesson held talks to merge the i. T. Unit with change health care. The deal would create a Company Worth more than 10 billion. Zuckers email. Got it. On capitol hill, the u. S. Senate on monday rejected four measures proposed by democrats that would have restricted gun sales. The bills would have strengthened background checks and attempted to prevent suspected terrorists from obtaining weapons. Republicans said the bills were too restrictive. They are pursuing all neternati measures. Democrats accused republicans of being in the pocket of the nra. In a new report, though, that was very odd to read the other day raising questions about a growing federal arms race. The number of nondefense federal officers authorized to carry firearms now exceeds the number of u. S. Marines. Joining us former senator top coburn, chairman of the open the books, an Organization Behind the research. And he penned this oped that i read in the wall street journal. Why does the irs need guns . Senator, its good to see you. Just to summarize. What, eight or nine years ago there were 70,000 total, and now theres 200,000 . And i when i first started to read it, i just didnt understand why is the department why is the irs, why is hhs, why stockpiling ar15s and ammo . I dont understand. Why . Well, its hard to understand. First of all, i dont think its constitutional for them to be doing that, number one. If in fact they need protection, they ought to be using local police forces, who are there, trained and ready. V. A. In 1995 had zero. And they have 6,000, 7,000 now. So what we have is a mentality that says, we need to protect our agencies, and what we really need is a ban on assault weapons for the irs and federal agencies. Billions of rounds of hollowpoint ammunition owned by several nonmilitaryrelated, nondefenserelated, nonsecurity related agencies throughout the federal government. And its billions of dollars every year. Its this isnt a small thing. Both in terms of the principle of unarmed federal government in terms of their agencies, and the cost. So there are two big problems with that i see. I mean, if you were a like a conspiracy theorist and number one, its not just the last seven years. This started during the Bush Administration too. Thats right. Okay. Thats right. But when i first read it i was thinking, well, lets see. If your stated intention is to, you know, do all you can maybe to take guns out of the general population and suddenly youre arming all of these nondefense federal agencies, that would raise an eyebrow, but i dont think thats the story here for you, senator, is it . No. There is not Something Weird going on where suddenly you have the irs with all these guys carrying ar15s. Joe, its another example of a totally out of control federal government with nobody managing them. Now an impact on the rights of americans and certainly an impact on the future finances of young americans. And so thats why we need Something Like a convention of states who will actually limit the scope and jurisdiction of the federal government. This is wasted money. And if they need that kind of protection i have a great example for you. My hometown. I ran into a Homeland Security black van loaded to the hilt. And i asked the guy this is while i was a sitting u. S. Senator what are you doing . Whats your job . To protect you. I said thats what my local police are for. Whats your job. He could not tell me what his job was but he had a 300,000 outfitted suv and a couple of guns on his hips, driving around my hometown. And for what purpose . Senator, when you think about guns, one of the the big issues in the past 24 hours has been the Senate Decision on guns and this terrorist watch list. Where would have you come out . Well, i probably would have put anybody thats on a terrorist watch list with a notification so that the fbi is notified that theyre trying to buy a gun. They would have had to have gone through additional screening, without a doubt. We offered a plan while i was in the senate for gun shows that would have protected individual rights and allowed us to have a good clearance for everybody in those without limiting Second Amendment rights. Seems like a sensible step. Why is it that were not there . Whats the problem . I cant tell you. Our problem is we dont have great leadership anywhere in our country right now. Thats our problem. We dont have people who will talk about what the real problems are. These are symptoms. Until you start to diagnose the problem. And the problem is you are going to know my answer is we have a federal government thats ten to 100 times bigger than it was ever intended. It impacts every area of everybodys lives and its taking over areas best controlled by local governments and state governments. And we have to leadership to change that. Thats why a convention of the states we have eight states now. Well have 22, 23 next year, to actually reform the responsibilities of the federal government when it comes to our individual rights. All right, senator. Thank you. Youre welcome. We appreciate you coming on today. See you later. Thanks. See you later. When we come back, janet yellen set to testify on capitol hill today. Senator bob corker will join us next on what he expects to hear from the fed chair later this morning. Right now, a look at the u. S. Equity futures. Theyve given back a lot of the gains we had seen earlier. We had been up 75 points or so. Now the dow up 33. Nasdaq up 8. 5. Building on the gains we saw yesterday. Stick around. Squawk box will be right back. Nd flies to hong kong, to visit this company that makes smart phones, used by this Vice President , this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. 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Whether where a single jobs report doesnt wildly swing the outlook for racites. The street wants to know about her talking optimistly about the economy on the 6th to adopting the secular stagnation idea on june 15th. How does she explain a fed that once expected the 2018 funds rate of 3. 4 now down to 2. 4. Or whether a rules based system is not better than the way the railroad is run now. Ubs says cutting rates seems add odds with the hawkish tones that preceded the ism reports. Not until february 2017 that the rate hike probability heads above 50 . Its close in december at 46. Finally, could be interesting if senators engage the chair on the issue of whether the economy could benefit from fiscal stimulus or Regulatory Reform and the brewing controversy over trade and protectionism. Guys, you can always hope. Becky, my skepticism does not necessarily extend to the senator from tennessee you have coming up who we know is one of the more financially minded members of the senate. That was going to be my point, steve. I think senator corker will have great questions. Can you see yellen going to her speech writing, we just did this last week. I need another speech about how im not going to raise rates. How im going to stand pat. How many speeches can you write on not raising rates . I was trying to think of a few. As a crossword puzzle guy, there is always a different way to say it. Im going to stand pat. You aint going nowhere. Nope. Got to try to make it interesting again. As you said, it wont be. Its up to the senators to make it interesting. There are ways to have a discussion about policy. Because its im sorry. Am i being too impassioned . There are things to talk about that the street wants to know, that Congress Wants to know. My faith is in the good senate from tennessee. Why dont you try that sometime, steve, with this stuff. I will. Joining us right now is senator bob corker, a ammember the Senate Banking committee. Senator, you know your way around the financial industry. You understand this stuff. Particularly about sometimes some of the question seem a little offbase. What do you have planned today for yellen . I thought liesman did a great job with his oneminute excerpt. The goal of the chairperson is to keep the poll steady. They dont want market moves during the time theyre testifying. Look, if you look at where we are today, look at the bloomberg chart, if you were to incorporate the taylor rule, fed funds rate would be at 3. 7 today. And instead theyre at 25 to 50 basis points. So thats the biggest dichotomy we have had in a long, long time. So, when you look at that and then you know that janet yellen has not taken negative rates off yet, she hasnt said she would not do it, i think it could be a very interesting day, and i would like for her to explain some of the things that steve just alluded to. I guess part of the difference when you look at the taylor rule and you look at the world today, is that, when you have Central Banks in europe and in japan that are at negative Interest Rates right. It does complicate the situation. It seems to me that they have to deal with a lot more issues outside of the u. S. Than they ever had in the past. You know, we are involved in globalizati globalization. No question what people do in other places affects us in a big way. There really hasnt been much good thats come out of whats happened in japan and the eu. But it does complicate the feds role, no question. But you know, i would like to hear if she is still considering negative rates. I all alluded to the speeches that have been made. We saw that some of the more hawkish fed members have really changed their tone. Is this a sign of something developing in our economy thats not what we want to see. I hope it will be a good hearing. Well try to make it that way. We spoke with Richard Fisher recently, the former Dallas Federal Reserve president. He said some things that were fairly concerning, just the idea of the Balance Sheet for the fed. Huge Balance Sheet right now. And the expectation always had been that the fed would allow that Balance Sheet just to roll off over time, that that would be an easy way to get out of it without causing too much pain. He has pointed out that janet yellen twice now, in her two most recent speeches, has said that theyre looking at whether to double down and take those those funds as they roll over and reinvest them either in shortterm or longterm vehicles. And thats a little concerning. Thats a major policy change, and certainly would not, you know, give good thoughts about where the economy is going today. Which gets us to this president ial race. And the fact is, you know, this is a very, very important race to our nation. And look, the country is looking for change, and hopefully were going to see the candidates begin to lay out what their economic agenda is in detail and begin to give a vision of the future, because i do think look, there are a lot of people who have been left is really no we wish for it to be. Im talking the people around the country about softness. And this could well turn out to be a major referendum. I hope it will be, actually, not just on Foreign Policy issues but on the Economic Issues our nation is facing. You know, senator corker, youve been mentioned fairly frequently as a potential running mate for donald trump. A lot of people had thought youd be a great Vice President ial candidate. You made some comments after orlando that sounded like you were not necessarily backing some of the things donald trump had said afterwards. Are you still open to the idea of running for Vice President if you were asked . Well, you know, people like me responding to conjecture is not good for our health. And certainly i dont want to respond to that part. Obviously i havent condoned some of the slurs and innuendo that have been laid out by the campai campaign. At the same time, i understand the tremendous potential that a candidate like trump has. My gosh, its something any of us would relish to have the opportunity to change the trajectory of our nation. I know you had senator coburn on a minute ago, but right now, becky, the way things are both parties enable each other to continue bad habits. And our nation senator, do you know last time you said you had no reason to believe that you were being vetted as a potential veep. Has that changed . Do you know if youre being vetted as a potential veep . Can you just tell us, would you say yes, would you, sir . Yeah, i have no idea exactly where that process is at present. And i dont want to have any conversations about that. You might be. So thats different than last time. You said you had no reason i do not know where the process is. But do you know if youre being vetted at this point . Let me go back to what happened yesterday. What i hope is happening, look, its really tough to make a decision about changing someone whos been so loyal to you in publicly, i mean, everybodys writing and talking about it today, it takes a lot of courage to do that. And that was done. What i hope this is going to mean is that now were going to really focus on the fiscal issues facing our country, the Economic Issues that weve been talking about and how americas going to relate to the world. And what we have here is a candidate whos the only candidate who has the possibility of changing dramatically the trajectory. Im hopeful thats what were going to see. When you talk about a man as you just described as saying slurs and innuendo, what is sort of your dividing line for whats acceptable or whats not in terms of what youd be willing to support . Im looking for a president ial campaign that is going to focus on the issues that our nation needs to have addressed. Thats what i hope is getting ready to happen. Sounds like youre being i think you are being vetted. Did you just admit youre being vetted . I did not. I said guys like me responding to conjecture is bad for our health. Thank you, guys. See you later. Senator, thank you very much. Coming up, jim cramer, see whether hes being vetted from the new york stock exchange. Its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. With usaa is awesome. Homeowners insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Head down to the new york stock exchange. Jim cramer joins us now. Did kind of peter out yesterday, jim. Getting it back a little bit today. Still suspect the whole underlying strength of the rally . Well, yeah, look we dont really know brexit. We do have oil looking down today. I look at oil i just keep thinking we bounced from 45 to 50 when we go down a dollar or 80 cents you know we cant have any staying power. You didnt see any of the high growth staying power. It was more of the same, smuckers, general mills, walmart, dollar tree. These are the companies you cannot have a rally on that has any staying power, joe. It just doesnt work that way. Already. We were harassing senator corker so we have to keep it short, jim. All right. Thank you. Were going to turn it over to you on time right at 9 00. All right. Well be watching. Thanks. Thank you. See you, jim. We should say thats it for squawk box right now. Squawk on the street starts right after this quick break. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. As long as you love me, its alright bend me shape me, any way you want me. Shape the best sleep of your life. Sleep number beds with Sleepiq Technology adjust any way you want it. The bed that moves you. Only at a sleep number store. Hey, honey . Yes, dear . Youre washing that bakedon alfredo by hand, right . loudly yes, dear. Dish issues . Cascade platinum powers through. Your toughest stuckon food. So let your dishwasher be the dishwasher. This turned out great. Cascade. Thats like my grandma the kcooked, my mom cooked. I make a lot of banana bread because the baby likes bananas. laughs whatever home means to you, well help you find it. Zillow. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at the new york stock exchange. The market rally extending into a second day this week as some new polls show additional momentum for britain to remain in the eu. Got yellen on capitol hill beginning in about an hour, likely to be asked about that and a lot more. Europes green, the pound near the highs for the year. All of this in the face of a down day for oil. Our road map begins with janet yellen on the hot seat today. What investors should be watching for when the fed chair gives her testimony before the Senate Banking committee. Soft banks president steps down. Before today he was seen as the companys next