Transcripts For CNBC Worldwide Exchange 20160622

The wednesday, june 22nd, 2016. Worldwide exchange from london begins right now. Baby please dont go if i make up tomorrow good morning, welcome to a very special presentation of Worldwide Exchange on cnbc, live from london, im sara eisen. Im wilfred frost. Welcome to london glp your turn. We are indeed, just across the river thames from the houses of parliament in less than 24 hours. An historic vote will begin to determine the uks membership in the European Union. Weve been seeing swings in sentiment and in the polls. Here is the latest the Financial Times poll of polls gives the leave camp 45 . 11 remain undecided. Weve got this thing covered for you from start to finish. Our guests for the hour include Financial Times Economic Times martin wolf. And mark astley. Jim mellone, and jacob reesmoog. Lets check in on the globe markets this morning. The u. S. Futures right now, they are flat. If we look at the tenyear note, the yield is 1. 687 . The euro gaining a little steam but about 1 . The dollar yen slightly higher by. 030 . And the pound down by 0. 1 . The chief indicator for markets for brexit has been higher. Its a fivemonth high against the u. S. Dollar, increasingly pricing out the odds of a brexit. Showing you european equities at this hour and the early trade. What weve been seeing is the dax in germany up. France is up. Ftse 100 up. Italy and spain under a little pressure acres Little Movement ahead of the big vote tomorrow. As for asian stocks, nikkei finished lower. The japanese yen is stronger. Thats been a barometer of ease and caution. Wti and brent crude both trading above 50 a barrel. A close there could be the first time in several weeks. Well keep an eye on it. And third, on gold, leading up to the vote and uncertainty has given a lot back in the past few sessions. 1270 your price for gold. And uk leader nigel farage and David Cameron making their lastditch pleas. Cameron hoping to appeal to a sense of logic, saying a vote to go would undoubtedly hurt the economy. Expert after expert, independent advisers, people whose job it is to warn them said it will shrink the economy. In the medium term in a decade of uncertainty, and in the long term living with fewer jobs, lower wages and higher prices. While nigel farage, the controversial face of probrexit part of the uk independent party denied the vote to go would impact sentiment. Well, up and down, frankly, its gone up and down all through history. Sterling entered a bear market in july 2014. Most of our politicians wouldnt understand. If were talking about a 15 or 20 collapse whats that going to do for confidence . Why would they lose confidence. Wed be back in charge of energy policy. Of steel policy, of Financial Services regulation. Wed be back in charge as opposed to having to rely on worlds coming to us from the eu. Lets try to sum up sentiment, sara, as we set across from house of parliament. Leading the times saying ftse chiefs hitting the jobs point of view, urging people to stay. The daily mail on the other hand urging people to leave. Saying if you believe in britain vote leave. Its going for argument of sentiment of the heart. Its quite a good way to look at things right now. Do you vote with your head and jobs, do you vote with your heart and sentiment and vote to leave . I got that, i arrived late in london. And the bbc is airing this big debate. Both sides have a number of influential voices on the stage. Arguing back and forth for the british people. Most notably, the current mayor of london was arguing in vote of remain. Boris johnson was arguing against it. And we did get a sense it was the emotional appeal of the exit camp versus the camp for stage. As we look at the markets, the markets and polls are signaling very different stories. The polls continuing to show this is a close race that could go either way. There are a number of polls favoring the leave campaign. And yet, the markets are going the other way largely because of the betting odds which continue to favor remain answer have moved even closer with a few hours to go. And the betting odds are going to be a factor for what the pound and other markets do. Weve got the chief betting expert from ladbrokes coming up. Martin wolf joins us from the Financial Times. Good morning, martin. Its a pleasure to be here. Lets talk about what the newspapers are suggesting. Is this a vote against peoples minds and peoples hearts . I dont know, i think there is emotion on both sides. I, for instance, are emotionally committed to remaining. I feel very strong about britains role and thats a value as well. Its probably true, i think, that the better informed people, people worried about economics, the people in business, economists themselves are overwhelmingly in favor of remain do have the knowledge and i think it is true that a lot of opposition is, i think, rather romantic desire to return to 19th century. Plus the real hoissue of immigration. Has it to remain based on facts . My theory they won the argument based on facts of course theres always exaggeration in the stories. Its simplified. But it seems to me its just an overwhelming consensus which does not mean its always right among professional economists, international organizations, the treasury the cost of leaving in the long run would be high. Theres no doubt in the short run the costs would be very high. But the brexiteers say thats the reason to leave. Economists are lumped right in there with politicians. And they will say they were wrong on the euro project on the common currency. And theyve been wrong on the financial crisis, so why should we listen to them. Well, i think theres always an argument that experts can get it wrong. Isnt my view, the sensible people think they trust an expert. All the people who argue with going to a doctor, why . Not because doctors infallible, but because they studied it. I think you should go with people who studied it. In defense of it. Lets touch on the immigration argument as well. Its absolutely crucial. You disagree with that. You think its been used wrongly by the leave campaign . No, actually, im one of the economists that thinks that the leave campaign is a genuine issue about it. It does create problems. Were still getting even in a beat year, outside of the eu, the eu immigrants are hard working, young, clearly making a physical contribution. So, to focus on that seems to me quite wrong. But it is clear it does create problems. You cant pretend its nothing. And as weve seen in the u. S. , too. Immigration is a genuine big issue for people. But in my view its not big enough to decide it. Theres much more than that. Hes got a great oped in the Financial Times. Martin wolf from the Financial Times. Back at home, what is on the agenda in the united states. Fed chair janet yellen continues her semiannual testimony on economy and Monetary Policy on capitol hill. This time, she goes before the house and Services Committee at 10 00 a. M. Eastern time. And existing home sales data for the month of may. And results from winnebago from the opening bell. And beth, bath beyond after the close. Todays big corporate story, tesla offers to buy solarcity in a stock tesla would pay 28. 50 a share. Customers would buy an electric car and battery and solarsystem all at once. Tesla down 10 . Solarcity down 17 all of the back of that news. Right. Lets get to our twitter and facebook question of the day, it is not on u. S. Corporate. It is, of course, on the issue of brexit. We asked, if the markets are underestimating the risk of a potential brexit, do weigh in online and well bring you the results later in the show. Well also talk to some heavyweight market guests on the topic as well. When we come back, brexit or remain . It is the question of the hour. Strategies for both outcomes. Investor mark astley, ceo of millennium global next. But first, before we head to break, what Ceo Jamie Dimon had to say to his employees about a potential brex theit a few week ago. So, for today, the leave companies here, with technology, research, banks, says and trading we can do it here. After a brexit we cannot do it all here. I dont know if it means 1,000 jobs, 2,000 jobs, it could be as many as 4,000, and it will be jobs both all around the uk. As you know, the most important thing for me is to take care of our people we want to take care of our people, take care of our clients i dont want you to worry about it but when you vote, you should be thinking about Something Like that. Nsigh. Insights that help investors predict market closes, well before markets close. You know, your analysis has helped us improve our predictive accuracy by over 500 . 550. 2, to be precise, but we can always do better. I like your attitude watson. 5this man creates software, wto protect this customer, who lives here and 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. Chubb insured. Welcome back to Worldwide Exchange, we are live today in london. Fed chair janet yellen weighing in on how a brexit vote would impact the world as she gives the semiannual policy testimony on capitol hill. Listen. It would be significant for United Kingdom and for europe as a whole. I think it would usher in a period of uncertainty, and it is very hard to predict. But there could be a period of Financial Market volatility that would negatively affect financial conditions. And the u. S. Economic outlook thats, by no means certain, but it is something that we will be carefully monitoring. Other top financial regulators including treasury secretary jack lew as conferred about the upcoming brexit vote, according to a statement they released late yesterday. And clearly, some of the biggest policymakers in finance are worried about it. Joining us now to discuss brexit risks and how it could impact economies in the global market, mark astley, thank you for joining us. We asked on twitter whether the markets are underestimating a brexit vote given the reports were hearing from the likes of janet yellen about how damaging it could be. Are markets underestimating that . The first is the volatility of the marketplace and brex tit. Theyre 80 20 in favor of remain. Thats not to say 80 of the votes but of the 50 that remain. And the third is the market itself, as you pointed out earlier, with sterling rallying, arguably, the market is saying around about the same message, Something Like 80 20. There was a second aspect of this which is what is the outcome of either one. The market is very much saying its asymmetric. But if theres a brexit vote, is it 10, 15, 20 . But if its to remain, theres more likely to be a small reaction. Asymmetric. Is george soros right when he says that sterling could fall to 150 . I think its highly probable well see a reaction, whether 1. 15 or 1. 20. The day after the brexit vote nothing will change. Everything will change in the unknown that people are concerned about. In sterling, it may not be one day, it may be a month by month number. What will it mean for the euro . The euro is likely to be better over time for reasons. Actually, the euro across with the value, given the sterling, you see the euro rise by 10 as well. U. S. Markets have reacted hugely to the story as well. What is the factor of a brexit that could affect the u. S. . Is it the threat of political collapse across the rest of europe . Or is it just the uk economy has that judge effemuch effect. I think the classic is a riskon event. If to remain, the rally to rise. And the exact asp is true in the counterfactual. Weve seen that in recent weeks where the bond market have behaved exactly the same way. Are you buying european banks until this vote . Clearly, the banking state would be much better. Mark, thank you very much for joining us. A pleasure to have you, mark astley of millennium global. Still to come, its the 64 million question. In politics, who do you trust more, the polls or your bookie . Should you stay or should you go . We check the odds next with ladbrokes chief political oddsmaker. Ok team, what if 30,000 people download the new app . Were good. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. The first incarnation of European Union rose from the ashes of world war ii. The goal to foster economic cooperation. It grew in size and scope over the years and formally became known as the European Union in 1993 which also introduced the idea of european citizenship. Today, there are 28 members. In 2002, the euro was first introduced, britain, however, did not adopt the single currency. And maintains its own currency are the pound and its own Monetary Policy. Now, a growing number of uk citizens want to leave the eu altogether, due to concerns over immigration, loss of sovereignty and the effects of eu bureaucracy on businesses. A vote on whether to leave or stay will take place on june the 23rd. Prime minister David Cameron is the most prominent member of the stay camp. I believe that britain will be stronger, safer and better off by remaining in a reformed European Union. While former mayor Boris Johnson leads the brexit camp. This is a once in generation chance to take back control from an institution that is out of control. Spending the taxpayers money. The question, of course, on everyones mind, will brits choose to stay or to go . And many believe the best way to make an educated decision is to follow the money. And who better to tell us than one of the biggest betting firms in the uk. Were joined by Matthew Shaddock who is head of political betting at ladbrokes. Thank you for joining us. Which way is the betting market going to go . Its been pretty stable lynn the last 48 hours. Theres a 60 chance that the uk will vote to stay in the European Union. When we say thats what the odds are suggesting, how do you reach your aulds . Is it purely based on the weight of many moving the markets based on the polls . What do you put into the results . Yeah, its pretty much supply and demand. The more money you put in the game, the more it comes down, vice versa. And right now, the money is placed on remain. That could easily change the last day before the votes. I think whats motivating investors is the general tendency in events like this, big votes around the world. Is it true that the weight of money is on remain, but in fact the volume of bets is on exit . Yeah, youre exactly right. So most of the bets were taking are on leave. As that happens, the average bets taking on remain under 450 pounds. And leave 75 pounds. That explains where it is. What is your track record when it comes to actually predicting the results . For instance, what do the betting odds say for the British Election and how close were you . Curious, the polls general election last year, the polls were saying this is going to be a dead heat for conservatives. The betting market saying theres an 80 chance that torres would be. And it was significantly wrong the polls and betting markets 10 to 1 on the torres. It end up costing 1 Million Pounds. Why do you think that you and the polls are telling such a different story right now . I mean, the polls are just trying to give a snapshot of Public Opinion. Thats proving difficult. With variation, its been difference in survey. The markets can forecast, they can do it in exit information not just the polls. Just talk us through it as well, particularly for the u. S. Viewers, how much harder it is both from the polling Companies Perspective and your perspective to predict this outcome . General elections, theres history to go on. Theres geographic votes. This is just one National Vote and no comparatives . Exactly right. We dont have a referendum in the uk. The biggest would be the Scottish Referendum a few years ago. Both the polls and betting markets got that right. I think the turnout is going to be a lighter than betting market in that instance. As it turns out brexit camp so much more motivated and they turn out in bigger numbers we could be in for a surprise. The final point, the weight of money remains with individual bets but there are many, many small bets backing brexit, is that right . Its the people doing it represents the British Population as a whole. So, i think if you want to know the Public Opinion as a pollster, looking for Public Opinion and results. How much money is riding on this . We estimate about 100 Million Pounds traded in the uk on this market which might make it the biggest political bet of all time. Matthew shaddick, the held of betting at ladbrokes. Coming up, jim mellon will be joining us. One of the most successful betters and highly and he wants the uk to leave the e. You. Hes going to tell you why and how hes positioned for it, when we come back. Youre watching cnbc, first in business worldwide. Support. 4 7 digestie try align, the 1 ge recommended probiotic. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. Good morning. Brexit or remain . Thats the final countdown for the uks historic vote. The debate. The polls, the odds and the passionate arguments all coming up. High stakes and big money on the line. The Global Markets are on alert. Our special guest of the morning one of britains most successful managers, hedge fund manager, jim mellon. Its wednesday, june 22nd, 2016, and youre watching Worldwide Exchange live on cnbc. Good morning, welcome back to a very special presentation of Worldwide Exchange on cnbc. Im sara eisen. And im wilfred frost. We are live in london, across the river thames from the houses of parliament. Good to be home . Very good to be home and great to have you here as well. Are you enjoying it as well . Im enjoying it. Its always cloudy. Does the sun ever come up in this country . It does but its hard to predict. It is predicted to be raining tomorrow. I wonder if thats going to impact turnout. It certainly could, and turnout is going to be crucial in this. Markets are dancing to the tune of brexit at the moment. Lets check in on the markets and what theyre doing right now. U. S. Futures are basically flat, if we move on have a quick look at europe. Weve seen slight gains. Dax just about flat. Italy down. And ftse treading water ahead of this crucial vote. Japan edging down while china slightly higher. As for the broader picture, got to be checking currencies. This is where the money is being made ahead of this brexit vote. Euro stronger by just a bit. Dollar yen weaker, something to watch. That stronger yen, always a cautionary sign. The pound, though, has been stronger. Charging toward 1. 47. A fiveyear high against the u. S. Dollar as the betting odds move in favor of britain remaining in the eu. Oil, wti and brent crude also trading higher. We do get the governments Industry Report after yesterday we learned in the ati report there was decline in stocks. As for the treasury note yield, 1. 64. Janet yellen with the semiannual report. And the leave and remain campus clashing over the british economy last night during a bbc debate. It was several hours. Former mayor Boris Johnson making a very impassioned plea to leave. He repeatedly targeted his successor, london mayor sadique kahn who accused him of resorting to fear tactics. Have a listen to last night. Boris, boris youve used taxpayer money to put out an election leaflet that says turkey set to join. Theres a map. Theres a map. This map shows in red turkey. But the only countries named in this map are syria and iraq. You should be ashamed. Johnson calls the European Union a, quote, jobdestroying machine. He said those backing a stay vote are willfully underestimating the uk. If we stand up for democracy, we will be speaking up for hundreds of millions of people around europe who agree with us that you currently have no voice. And if we vote leave and take back control, i believe that this thursday could be our countrys Independence Day. Right. Lets get into this debate a little more detailed. Weve got jim mellon joining us. Hes one of the leading investors in britain. Jim, good morning to you. We should also mention that you are one of the backers of the leave campaign. And indeed, one of the donors also. Lets talk about what this vote means for markets. George soros said this week that the pound could fall to the level of 1 15. Do you agree with it . I think the pound is overvalued anyway. It should fall to about 1. 30. It needs to fall in my opinion to help british exporters but falling to 1. 15, i very much doubt it. I think the bets have been placed. Whichever way the vote goes it will come down. The level. Pound this morning and over the last week, does that suggest that markets expect almost certainly that this vote is going to be to remain . Yeah, they do. And the betting markets are saying the same thing. They might be surprised, however. You mentioned the weather, the forecast for tomorrow is terrible. Thats going to help the leave campaign. More committed that remainors. And the young typically would be remainors who may not vote at all. My general view is still 50 50. If i had to vo, id say were going to stay in by a narrow sweep. Jim, im not sure i understand the economic case for leaving the eu. I understand the immigration argument. But the remain seems to have the economy when they have the dire predictions with what would happen with trade markets if voted out . Lets talk about the trade issue. Thats partly economic. Theres absolutely no doubt in my mind that the remainors who say the immigrants contribute more to the uk are dead wrong. In fact, it looks to me that the cost of immigrants somewhere between 30 billion and 40 billion net pounds a year. Because the euro is going to fracture over the next few years. I think france and italy are in classic debt traps. And those debt traps are going to result in bull market flight somewhere in the next three to five years resulting in the deflection of the euro done. And britainen is on the euro titanic as it sinks. Its not part of the euro . Its not part of the euro. But we have bailed out euros own countries. We bailed out greece. We bailed out ireland. Last year David Cameron over his dead body, and hes not dead yet. Basically paid 1. 9 euro pounds in despite saying he would never do it. We may be on the hook. Is this not part of a treaty, its part of a joint agreement between the budget to pay the other countries and that could be as much as twothirds of our national gdp. Thats from a rejected institution is. Despite that argument, and it is focused more on the negative effects of a european collapse on britain than the positive effects on the uk economy of leaving, despite your argument, would you admit, though, that the economic argument has been won bit remain side and those voting with their wallets are going to go that way . Probably, because the key points have not been made by the leave side. You know that the eurozone is say Customs Union with high protectionist barriers. One of the things that remainors say food prices and clothing prices will go up if we leave. Assuming it collapses. Were paying 11 tariffs on clothing, 10 in the eurozone. More importantly 58 and 60 on cost of food. The cost living for the average brit would go down and not up. If we look at sectors that might benefit if britain voted to leave, what would be top of your list . What would benefit most of all . Funny enough, most people say that the city would not benefit if we left there would be absence of passport rights and so forth. I actually think that the city could become a large singapore for the whole world. Its already got the infrastructure, and the people and the time zone. I think the city could prosper more under a brexit than it currentedly under the eu. A lot of strict rules. The flip side of your argument say, if you take the u. S. As an example, yes, no trading agreement with the u. S. As it stands. But if the eu continues on ttpp. That could put them at a highly competitive level. President obama already said that the uk would go back to the end of the queue. Theres no way the french farmers are going to agree with the u. S. Farmers. The Digital Economy is not compared to the united states. I dont think there will be a tpp. Lets face it, weve managed without a u. S. And uk agreement. The uk sales Different Things than what the europeans sell to america. Theres going to be no change. Cars and alcohol. Were pretty good at that. 24 hours until britain votes, youre a massive investor. How are you positioned ahead of this . Wheres the money to be made . I think what to do is to be very flexible. The pound could fall to 1. 32. As far as the ftse, 75 are international. I dont think its going to be more than 300 points down. Most of the volatility has occurred. If people made money or lost money, its already happened. With the euro and the yen despite negative rates, theyve been trading sort of safe havens during this factor. Is that wrong or right . As far as the yen is concerned, thats a completely separate issue. I cant see the effect of the yen on the brexit to be quite honest. Maybe the big downside is for the euro and not the bruitish pounds. The europeans are going to lose out more if we brexit than we lose. A a, its not reflected in the markets, b, theres a camp that says that europe would get even stronger. And make it difficult for the uk once they leave in terms of trade and business relationship. Europe needs the uk much more than vice versa economically . Im not sure thats true. The germans were their biggest export market for their cars, as you know. And theyre not going to allow retaliatory measures in my opinion. Also youve got pressures from other countries such as holland and denmark and sweden for a referendum or exit from the European Union. They need unanimity in the 27 remaining countries. I think a trade deal would be done very quickly with europe in my opinion. It wouldnt be canadian or norwegian or swiss model. It would be a british model. We are the largest by far. 1. 32 for sterling. In exit vote for euro would hit how much . I think the euro would go down 1. 10 against the u. S. Dollar as an example. Jim, thank you very much. Jim mellon. Got a lot of good views here on Worldwide Exchange. When we come back well have more views with todays must reads including why cameron made his brexit bed and what will happen if hes forced to lay in it. Well be right back. 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. Igoing to clean betteran electthan a manual. Was he said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Before a bunch of dreamers land said, why not . And Collaboration Tools from intel made Rocket Science simple for actual rocket scientists. And the launch crew met for a moment of reflection. Before any of this, cdw orchestrated a collaboration solution using pcs with intel 6th gen core vpro processors. Collaboration by intel. Orchestration by cdw. Welcome back to Worldwide Exchange. Live from london this morning. To our must read stories catching our attention. We actually have real paper its today because our shows at 10 00 a. M. In london. The daily telegraph, british warplanes and superb forces and other military personnel will continue to support the u. S. Coalition led effort to degrade and destroy isil and syria and iraq. Need lls to say the eu has been totally to the success of the coalition effort, which will continue irrespective of whether or not britain maintains its membership. I picked it not just for the british audience but the global audience with the less interest in security in nato in fighting isis and terrorists. I have to say William Hague made a great argument why its against the Global Security interest that the uk stays in. And so has obama. As on cnbc yesterday. My must read is from the new york times. I dont have a copy of it. Its titled brexit vote David Cameron faces problem for his own making. The writer saying besieged by the wing of his own party, mr. Cameron made made a promise intended to keep a short piece among the tories, before the general election. If reelected he would hold an in or out referendum on the continues british in the bloc. I think its important to note for the future of David Cameron, he delivered this referendum in part, not particularly, but in part, as this Position Agency held of the government. And he didnt think it would be this close and hes facing up to the problem. And when you weigh in the economic impact, you say why did you deliver this referendum in the first place. Hes under pressure the result that comes up. I wonder if britain votes to remain, how history is going to look at it. Will they look at it as a smart decision. Whats it going to mean . Even if britain votes to remain, hes still dealing with a divided country, right . Are there going to be policy responses . Yeah, i think for future, as a slight remain, youre going to see pressure. Still ahead, he made news last night for clashing with mark carney, the governor of england, accusing the governor as not being as it should be. Well be speaking with jacob re reesmogg. Well get his view after the break. Heres what black hawk ceo larry spenfink had to say. If brexit happens it would be harmful for the economy economy. It would raise questions as to the viability of the eu. Quite frankly, maybe it will force the germans to do fiscal policy. We were born 100 years ago into a new american century. Born with a hunger to fly and a passion to build something better. And what an amazing time its been, decade after decade of innovation, inspiration and wonder. So, we say thank you america for a century of trust, for the privilege of flying higher and higher, together. Welcome back to a special edition of Worldwide Exchange. Live from london this morning. Just across the river from parliament. Joining us now is jacob reesmogg, hes a prominent exit campaigner, hes also on the Treasury Select Committee which is the law making body responsible for holding the likes of mark carney at the bank of england accountably. Hes also the founder of an Investment Firm with 7 million. Good morning. Good morning. You have a problem that now the governor mark carney has responded to the brexit vote . Yes, i think, i think hes become partisan. Isnt it up to him to assess the Economic Risks facing this country . And clearly, that is one big one . Historic, the bank of england has only worked out what government policy would do. It has not speculated about what policy may become if things changed. And therefore in the period in the runup to the general election, it doesnt look at the opposition partys economic policies and say which one is better because that would be getting into the nittygritty of an Election Campaign and gelling a seal of approval of one party to another. In the Referendum Campaign its not exact and i think thats deeply improper. I think there are forecasts that the bank has to make over the last week. Two different speeches over the last ten days. Weve heard janet yellen explicitly mention that brex set a possibility influencing u. S. Economic forecasts and the Interest Rates there. So is she impartial as well or both just doing their job . Well, the chairman of the Federal Reserve is free to say what she likes. Shes not responsible in any way to the british electorate or accountable to them. The governor of the bank of england has a specific right for that. If we now think that hes the held of the political system, can you trust him to set Interest Rates differently . In my view, you no longer can. Dont you want him to be making contingency plans in case of a potential shock in the brexit vote goes out as many are forecasting . Well the bank of england has to make contingency plans. A major bank may go under. But that could limit the fallout. No, specifically, its the other way around. That the Financial Policy Committee does not speculate on banks that may be in trouble precisely, because if it did, it may cause that very trouble. So, i think the bank has been the governor, specifically, because it comes down to him, has been very irresponsible if what he said. You just remember, these are forecasts. And there are a variety of forecasts, and the bank of england hasnt got a very good record on its forecasting. So to make alarming statements based on forecasts that correspond erroneous is deeply partisan for the bank of england. Lets move on and talk about the impact that brexit may have. Youre chairman of Capital Management what has 7 billion, a significant sum. Although your firm is relatively small. Maybe one day it will be that size. Whats the view for smaller Financial Firms in london in terms what a brexit would mean, good or bad, for your company . For small firms, brexit is an absolute opportunity. I dont think i could now set up the business i set up in 2007 because of the weight of regulations that have come in. We had the imd come in which is thought to cost every company 200,000 to implement. When i set up, we didnt have 200,000 to waste on european regulation. And its instituting a whole slew of regulations and it would make the cost of setting up a new business, of developing a small business, much higher. And thats why the big boys love europe because the regulation protecting their interest. But for small firms is this just dead weight, dead weight cost. Assuming youre right on the regulation point. What about the fightback, dublin, frankfurt, paris, surely theyre dying to share it . 700,000 people work in the city of london every day. Youre assuming every man, woman and child in frankfurt would work in that sector. It could be spread across here. I think the idea that it will help frankfurt is wrong. Exactly what was said if it joined all the business would go for frankfurt. It didnt then. Because the advantage that london has is not being in the European Union. Youre in regulation, the rule of law, the english language and the time zone and all of those things remain because they have led a huge weight of expertise in london which will carry on being here. Which way is it going to go . Were going to win comfortably. Theres a huge surge of support for leaving. We, of course, is exit . We is exit. We is Independence Day. Its the same as the Independence Day firm is being launched. A great celebration and we will remember the 23rd of june and the way americans remember the fourth of july. Jacob reesmogg, conservative mp, talking about his reasons for an exit vote. That is if for Worldwide Exchange from outside the houses of parliament. Squawk box is next. Good morning. Consolidating elons empire. Tesla offering to buy solarcity in a deal that musk calls a nobrainer. Details straight ahead. Breaking overnight. Crude prices topping 50 a barrel, following new data on Oil Inventories in the u. S. And lets do this. The countdown is on. Politicians and Business Leaders making an 11th hour push for tomorrows brexit referendum. Well have the latest polling data from london. It is wednesday, june 22nd, 2016. And squawk box begins right now. Announcer live from new york where business never sleeps, this is squawk box. Oh, good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernin and andrew ross sorkin. Well start with food prices. Wti going up. Wti sitting at 5050. Yesterday, crude oil was down slightly it was down 52 cents to 48. 55. Even with food prices down, Energy Sector was one of the strongest sectors were we watching. Stocks up across the board. Everything you see has increased. The u. S. Food