tv Squawk Box CNBC June 29, 2015 6:00am-9:01am EDT
ship that was bound for the international space station. it's monday june 29th 2015 and squawk box begins right now. >> live from new york where business never sleeps, this is squawk box. >> good morning and welcome to squawk box here on cnbc. becky has the day off. there's one big story today and that is greece. here's what we know at this hour. the country now imposed capitol controls. the banks and main stock exchange will remain closed all week. atms expected to reopen tomorrow but daily cash withdrawals will be limited to 60 euros. over the weekend greek prime minister alexis tsipras angered creditors when he announced a snap referendum on the terms for cash reforms deal. the vote is set for sunday july 5th. a yes vote would back pension cuts and other austerity
measures. a no vote could trigger greece's exit from the euro zone but don't call greece debt just yet. european commission president is appealing correctly to the country's voters. >> six days until the referendum so we're going to talk about every possible angle. >> yes. >> because tomorrow if they default on the 1.8 or whatever it is its an imf default. that isn't even a real default to everyone else. that doesn't mean anything necessarily. you wrote a book. we'll talk more about this. we want to look at the futures and get you up to date but then we'll talk about all the other things. we've had congress vote to save the country and then push it to the brink. you saw him telling people in the u.s.
>> you think we're still in theater territory? >> i do. there's nothing new. there's no new information. they can't pay back what they already owe. there's no new information. you need to put the bond out and lower the interest rate on it. i still don't believe that they exit. do you? >> i think they might. >> they talk -- >> he'll be here at 7:30 to talk about it. >> both sides talk about greece is part of europe. they all say that. he needed to do that. >> even though he is saying vote against it i think he's saying give me a way out because i promise i wouldn't make any concessions. >> you think it's a personal way out. >> let's look at the global
stocks selling off this morning on the greek crisis. the s&p indicated down about 20 points. it was a lot worse than that earlier. number one you have to figure out whether it really happens and number two whether it really matters. and we're going to talk about that as well today. you can see germany down three points. over three points. if you have any questions about germany or places like that i'm here. >> you just came back from the vacation. >> i have france under control if you need to know anything there. even though the euro has stayed weak you still pay 18 euros for a glass of chardonnay. so things are okay as far as the caves in francefe cafes in france. everyone is going to rush to safety except in the place where there's a problem. so you can see the greek ten
year at 14.5. but we i think, our rates are plummeting. there's the german bund. i didn't have a german bund. >> nice. >> let's look at asia quickly. down almost 3% points in japan. there's the hang seng down 3.6. crude not surprisingly everyone will be worried about the global contagion whether there's a slow down and developed economies based on all of this so not surprising to see that back below 60. let's look at our ten year which had gotten up to back over 2.5 last week. now back to 234. back to in. i want to talk about this later. thanks for not fixing greece
while i was gone. it kept the euro under control. >> thinking about the vacation. >> you took care of a lot of other stuff while i was gone. settled the whole exchange with obamacare. >> yeah. >> gay marriage. >> got the marriage recallequality. >> you couldn't do the greek thing while i was gone. >> we need to do that. >> you needed me to get it done. i appreciate it because we did keep the euro weaker while i was there but let's get it settled here. >> we'll go over there now. julia is in athens on the ground. she joins us with the latest this morning. >> greek people woke up this morning to the realization that the stock market was going to be closed and banks were going to be closed and they could only take up to 60 euros out per day
but they weren't waiting around for that. they were at atms up to 50 people. they're trying to protect the tourism industry here. those people can still take as much money out as they want to and the tourists that i threw over with yesterday they were totally unaware of the situation. they're going about their daily activities. people are being very stoic about the situation. what we don't know is what is going to come from this announcement in around half an hour's time. are they going to come up with fresh proposals or not? is there a prospect from the greek prime minister here. what we do know is the imf payment still has to be paid tomorrow. i spoke to christine over the weekend and said to her does she
still expect to be paid. hn in. >> i hope that payment is made on tuesday and if that was not the case i would call the board very very promptly. >> most people believe in the markets but it's less important now than the ecb that comes up at the back end of july but we keep coming back to the stat. >> obviously taking some bad hits there. central bank and finance leaders around the world are monitoring the situation in greece. he spoke to greece's prime minister yesterday arguing that a deal is in the best interest of all involved we'll get right to this. >> i'll tell you why i thought
about you. you were grateful deading a lot. >> i was. >> the most beautiful church i've seen to date is st. stevens so i thought about you. >> the boys are back together now. >> have you seen this gothic and beautiful thing. >> i must have been there. >> did they play? >> on saturday night they did. >> that's why obviously i was there looking around thinking of you. >> wow. >> which shows you how messed up. >> i was thinking of you joe. every day i would come in and look at what happened to the relative cost of your vacation bhen i look at the euro. >> thank you for not settling it. >> it's not cheap there anyway. >> here's the thing, you can look at the exchange rate but when you go on the street to get something the exchange rate is irrelevant
irrelevant. >> there were two goals here. to ease fears of financial global contagion no matter what happened. president braum balmobama called counselor merkel. both agreed keep greece in the euro zone. he gave the greek prime minister a call. lew urged europeans to consider debt relief and for greece to commit to reforms. g-7 deputy finance ministers held the call. the fed is on a call like that but we could not confirm that fed official was actually on the call. meanwhile lagarde issuing a statement urging the european central bank to use all available instrums. she said the euro zone is in a
strong position to respond to developments and also added the imf stands ready to provide assistance as needed. but here's the debate. whether they matter as much as in the past given the ecb program and better economic news in the u. s. and months and years to prepare for a greek default and grexit. if companies are not prepared for agrees to have a problem they should probably go on and default. >> that was the lehman story. >> i really disagree and i think you lose -- your own lessons from your own book right? >> because of how fresh that is in our mind that's why lagarde and other bureaucrats are absolutely soiling their wears right now. listen to me if with the taper
tantrum if the market goes down at 8% and our central bankers go nuts, do you know how worried they are? >> we didn't have a precedent of contagion. >> do you buy the argument about the imf? that tomorrow's payment is irrelevant? >> it is. >> the imf will act like it matters a lot and from a precedent standpoint it does matter but financially and globally it's almost irrelevant and we have two great guests coming up and i have to think they're going to argue, greece is a pimple. >> it is. >> so have we not had time now to prepare for this. >> but their actual insolvency has been known and not changed by what's happening right now. we knew we were going to paper it over. we're just arguing about how or when. and i bet you know who is going
to end up making money, we'll have him on, wlilbur. nothing ever really -- >> one name gathers -- >> we make it an infinite zero coupon bond that you never pay back. >> one man gathers what another man spends. >> you stay here. we'll come back to this conversation and talk about it's impact on the u. s. market the reaction to greece in just a minute but first to asia where stocks sold off overnight. we're in bear territory, sri joins us in singapore. good morning to you. >> good to see you. let me just add to that. all the major indices in china are in bear market territory now. >> staggering volatility once again for the mainland china market. remember when friday afternoon we saw a free fall there by more than 7% and i warned about an
intervention over the weekend. we got that didn't we? the pboc cut interest rates and the rrr as well. reaction was very very muted. we saw in the morning session the shanghai comp up by 2%. down by 7%. cut some of those losses still deeply negative. so the fact that the market failed to respond to the stimulus and the easing tells me that this is a market that is broken. one wonders what kind of complexion that data will be and whether it will validate the move by the pboc. that's the big risk event for these markets. otherwise a very negative day. wholesale risk aversion. down the greece and the fact
that the debt talks collapsed and this is going to be the narrative as we get closer to that referendum in greece on sunday. back to you now. >> thank you, sri. >> joining us chief investment strategists and i continue to say there's two things to discuss. number one is whether there really is a grexit or default and number two whether it really effects the economic situation in other countries and specifically the united states. i don't think we know either one. number one is this like the same stuff that they're doing -- the guy really couldn't make concessions. but if it does happen is it a problem? >> look i think dudly put it right. everything in the u.s. looks okay. looks like we're heading toward a rate hike but the wildcard is
greece and i think that's where we are today. >> is it a wildcard though? >> unless there's a financial event or panic or contagion. >> a lot of things are on auto pilot. lines were reamoved last year and a lot of the safety features are already in the cars. so, you know the additional policy responses, you know might be a little bit more -- might seem more restrained because everything is already there. >> is it the rhode island gdp? >> it's actually half the size of massachusetts. >> it's like western or eastern side. >> listen, i would broadly put
this in the apocalypse not category. it's a tragedy for the greek people. you have 26% unemployment but i don't think the ecb would have made this decision. doesn't mean they're right. i don't think they would have made this decision if they thought that the ramifications would be broader in europe itself. everyone is fed up with the way negotiations are going. >> it doesn't appear like the other countries seem to be blowing out the way greece is. >> no. >> does that tell you that in the market's mind there isn't contagion out there? >> that's right. we have been looking at european bank credit default swap spreads. in 2011-2012 those blew out when greek treasury yields blew out. this time around it hasn't been happening. there's a feeling that they have walled this off. i really don't think it's enough in terms of a global economy to overwhelm the good news happening in the united states. >> i'mo figure out whether this is happening.
he came out with a piece yesterday said he thought there was an 85% chance that they're officially out of the euro. is that right? >> i don't think there's any other way to address greece's problem. i'm interested in what he has to say later but the currency is the major means for them to address their issues. the market values that currency and wages and assets at a lower rate than the surrounding areas. >> so -- >> and the market has a chance to come back. >> the country would be thrown into chaos. it would help tourism. people would go there if there's anywhere to go. >> and help their competitiveness and they would have to pay for it as opposed to other europeans. >> and how much would what they owe already cost? >> you would have major foreign debt. >> what's the latest poll we saw of the greek people? >> they want to stay in.
>> 60 or 70%. >> it's higher than that. but that was a week ago or two weeks ago. >> they vote yes to stay. the guy says hey, i even told him -- >> there's a big question about how you ask the question. that may matter a lot about how you answer. >> the question is if you ask people, if greece stays then you ask the people in the other countries how do you like the euro if you look at the creditor countries like greece finland, and everybody is like no way. this isn't what we signed up for. margaret thatcher wrote about the free writer problems that will be indemic in a system like this. the euro has never been popular among the people. it's been elitist. >> they are able to value their own currency. >> you know if it's free i'll
take three of them. that's the way that they are in greece. it's a free option and obviously helped germany a lot. so of course. >> if we give anything then everybody else is going to ask for something. it would be better to get the greek people to say all right we're going to stay. thank you, sir, may i have another? and they stay. >> different question you know this emergency liquid assistance program? almost like a back to a lehman's style thing in terms of how you address the banks? they're limiting the amount they're going to be paying out. should they be all in? >> on that. just on to the ela. that's creating the lines around the banks. >> look i mean --
>> how would that change the vote. >> the ecb feels itself in a stronger position than before to force this issue. there's a domestic political aspect to this that you create these and secondly you don't send good money after bad. if there's no program, what is the result here? a constant train and you never get there. there's 110 billion euros or something like that. >> the greek people would be worse off possibly. they'll have pension issues and start taxing you know entities more but if the total chaos of an exit were to come about the greek people would even be in more dire straights. >> i would say for now, joe. the only thing is you could sew the seeds of real reform. the only benefit or virtue would be things would get so bad they might sew the seeds for
structural reform later on. the problem now is you're just putting band-aids on dpaping flesh wounds and it's no different than a week ago. >> i mean you're not hoping for too big to fail too? this is your opportunity for the sequel? >> got to sell more. >> i don't really have anything yet. >> i'm a little worried this greece thing is a pimple. it might be too tiny. >> there's always hope. >> could be a pamphlet. like a magazine article. >> everybody has a -- someone said that over the weekend. they were worried about a reporter being biased. everybody is biased in some way. so you want too big to fail too. >> unfortunately i don't think this is it. >> unfortunately.
okay. great. thanks. thank you to drew and jason. >> coming up we got much much more on the greek crisis and the global market reaction. plus the mediterranean nation isn't the only place in trouble this week. puerto rico is sounding the financial alarm too. we'll talk about that next. as we head to a break check out the futures. we're in the red. dow looks like it would open off 173 points. stay tuned, squawk box returns in just a moment.
the country moving closer to a possible default. athens imposing capital controls on its banks and those banks, afore aforea aformentioned closed. you can go to an atm tomorrow but only get 60 euro at this point. there's the european markets which are -- we're about half that right now indicated. >> you can see that. that's rough over there. especially italy and portugal. you can do the math on 4.5% over here would be a big sell off. so far we're down less than 183 points or so and puerto rico is
also sounding a financial alarm. in an interview with the new york times the governor of the territory says the islands $72 billion in public debt is unpayable. therefore puerto rico would seek to defer payments while negotiating with creditors. the governor recently said he considered allowing him to push bankruptcy. the move could have far reaching implications for the u.s. bond market. it wouldn't make her right but it would throw some shockwaves. >> you already scheduled your next -- >> i need to go down to puerto rico. >> this would be a much bigger story in greece wasn't -- >> in the headlines, yes. >> but it's a long time coming too and i don't know how you fix this one either. but i feel better about our
ability to handle what happens in one of our territories than the eu's ability to handle what happens in greece. don't you? >> a little. i don't know. >> that's definitely not going to be a systemic. >> no the other one is a pimple. this is like a -- >> like a blackhead. >> a small one. >> is a blackhead like before the pimple right? gets clogged an then the immune system. >> right. >> you're the scientist. i don't know these things. let's go to washington because president obama keeping a close watch on greece but also facing a key deadline for the iran talks. john harang getswood joins us this morning. let's talk greece first. to the extent there are implications here in the united states politically they're what? >> i don't think they're very much. the prospect of turmoil, financial turmoil and political turmoil in europe is something that isn't welcomed to any
administration but i think in the immediate term it's not a tremendous issue. i've just been on a week's vacation in greece and i was just wondering while i was gone did i miss anything here? >> not much. there were a couple of things that happened in the u.s. >> are you kidding me? you weren't here for the greatest week in a progressives lives since the beginning of time. you weren't here? >> i was on a greek island joe. >> i spent a week on the island and then i was back in atens for a few hours before catching a plane. >> i can't believe you went on a greek vacation. >> i made it out with these five euros. that's all i got. >> the tourists are left high and dry in parts of greece right now. that's only the island you went
to? i don't know that island. if you can't make money you have serious problems if you can't bring in tourists to that play. >> all i saw in athens by the way, guys at the end of the week's vacation was checked into the hotel and one of the tourists is asking the front desk where's an atm. the one i went to tint work. and the desk was saying i think that one is out of money and you better go get in line. it was a sense of growing drama there toward the end of the week. >> i would have loved to have heard your analysis on the whole obamacare exchanges issue because i was abroad too but following it was interesting and trying to figure out robert's motivations. basically sort of saying look you elected people that passed these laws. if you don't like the laws you need to reverse something big.
that's the discretion. i don't know if he was looking up how the constitution effected. whether it was the right constitutional decision or not. we're not ready to reverse something like this which makes me think that maybe it just -- it wasn't necessarily a set back for those that are against obamacare. because you didn't want it to happen that way because the fury and backlash would have been so great that i don't think they could have -- they were in a position where they couldn't even make that call. >> yeah i think it was a pretty big set back because i don't think politically there's a root to. >> well a republican president or congress is the root. >> yeah i think that's very unrealistic to expect. >> maybe it is. but maybe that's the only way it should happen at this point. >> could be. that's right. i'm not a lawyer. this is not a case of
constitutional principle. it was about what is the meaning of those words and therefore depending on how am biggous or not am biggous you think the words are, what is the legal implication of that. that they meant for that to happen is true. however if the law isn't drafted properly then what does that mean legally? >> jonathan should have kept his mouth shut then. >> yeah but whatever he said that's not what anyone involved democrat or government involved. >> it will be a different
presidential election if the supreme court had gone the other way. i don't think it would have been positive for the republicans chances. >> as a matter for the 2016 election it's better that it was resolved this way. on the other hand if your goal is to shrink government and not allow obamacare to become a semipermanent feature of american life it was a set back. >> but hilary at this point, anything to worry about, i see pictures of bernie sanders that it's a tight race now and biden might jump in. >> that's not true. >> i don't believe that. >> tighter than it was but bernie sanders is causing liberals to swoon right now and they like his message. they think he's not holding back. i haven't seen anything that makes me think he's on track to beat hillary clinton.
>> they wanltd a -- want a socialist. >> some of them do. >> she's ahead in almost all the polls but capturing a significant chunk of the people. >> we have to go but john has to come back later this week. we have to talk about iran. we have a big deadline tomorrow. >> they're not going to meet the deadline. >> bumped to july 8th; is that right? >> they're going to keep working on it and see. >> we got to go. >> it is a i can't disearn whether they'll get a deal. it's not going to be tomorrow. >> grey hair way tan. you look like george clooney on that motorcycle. >> i'll take that. >> you are magnificent. a live report his choice. >> they pay him to wear the stupid thing. he chose to accept the money? >> live from frankfurt.
>> you only endorse things you wear and love. >> where leaders are figuring out what to do with greece. check out the major markets in europe at this hour. stay tuned, squawk box will be right pack. ery auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
we got information yesterday afternoon from the ecb that the emergency liquidity assistance that's essentially the last lifeline. they're granting the bank of greece and the bank of greece to the banks and greece will be frozen at the level now. the level stands at roughly 90 billion euros. that money is gone. everybody was saying perhaps the ecb should recall it. it's not realistic at all. what we're seeing is a freeze in that operation but this emergency liquidity assistance is also depending on the country being on their program and as we all know the program for greek will end on tuesday. big question mark though is what happens wednesday? ecb governing counsel member who is the head of the austrian central bank was saying that they're going to discuss whether
they grant more or whether they keep it on wednesday at the governing council meeting but also the reality of things is if they don't keep a freeze but want to recall it that would mean actually the complete collapse of the banking system in greece. i think they'll wait until next week at the latest or at least to find a solution here. with that back to you. >> yes. when is the next -- i don't know if you're the right foreign ask necessarily. so they don't pay the imf. when is the next big payment where it would actually constitute an actual default? that's sometime after the referendum isn't it? >> yeah that's sometime after the referendum probably. if they were to default on the payment to the ecb officially from the credit agencies that wouldn't be a default because
again that's public debt and not private debt but-a deeper issue, the first half of july and if they actually default on that then this is it. that's the official default for the country. not talking about grexit. just default. >> they know this. anyway, thank you. we appreciate it. >> they know this. they know this. they know that we make -- >> tomorrow is not a good day. >> we have a series of tomorrows because we're always, something is going to happen in 24 hours but tomorrow is not the big enchilada. >> we can get through that. get to the rev ren tumferendum. you think they vote yes. >> i think the people vote yes. and tsipras leaves.
>> they'll need a new government. >> they'll accept the terms they need to accept. people that argue that oh there's definitely going to be a grexit that's much more exciting to say definitely going to. >> than to say this is all theater. >> people say that but don't you still think that. >> i do ultimately but i'm more nervous than i used to be. >> four years working with you, there's times you get nervous. i don't want you to get nervous. don't get nervous. be like harwood. we've been telling you european stocks selling off this morning. wilfred frost joins us from london. we got about half your sell off here wilfred. >> absolutely joe. i don't want you and andrew to feel nervous either but european investors feeling the nerves this morning after the
developments from greece over the weekend. red across the board. focused in continental europe germany up 3.2. france off 3.4. they prayeredaired a few of those losses. the banks pearing the brunt of the declines. france off 5.2%. they meant to be recapitalized of course. meant to be more protected from this issue today. that raised questions of whether we might see contagions spread more broadly across europe. that tells the story. we have seen bond buying pushing down the yields for the likes of germany and the u.s. and yes we have seen it move in the opposite direction but in perspective look where the yields are. 2.3% in spain. 2.3% in italy. that's a long way from 2012 when
any greek issue suggested the possibility of the eu falling out. summing up it's only up half a percent now. summing up the story down 0.4. >> we appreciate it. when we return, the euro dropping on greek fears. the call on currencies. we'll talk about it when we return and later a man with a lot on the line in greece. wilbur ross. a major investor. he's going to join us live. we're back in a moment.
greece could leave the euro zone. managing director at e.k. asset management. what are we supposed to make of all of this? >> i don't know yet. it looked really really bad last night when we're down 2% but the markets have come back at this point. they believe that eventually they're going to try to workout a deal. what's ironic is that the ecb itself said the deal is off the table but the assumption here is you're hearing all of this rhetoric saying as long as you vote yes we'll come out way way to finance you. >> you saw yields are surging on european sovereign debt. almost as high as united states ten year. >> all are in much better shape than in 2008. >> not if the ecb were to cave.
this is working the way it's supposed to work. greece knows -- this is what we say, the greek people probably realize the chaos of a grexit is worse. >> today is the first day. the greeks woke up and there is no money and that's the reality of the situation and that's what they wanted to do is scare the greek population. >> who do you think wants to do that? >> they want some kind of movement. they want to show them that if you do not do this all of your assets will be devaled. >> put the flip side is tsipras -- >> that's the theater part. >> that's interesting.
his ideas that if they do vote for referendum then he has to go negotiate. >> gives them cover. >> but the question i think that nobody is thinking about is its always the political cost if they don't resolve this and keep greek in shackles they can't go on forever. >> we have to run. what are you going to do this morning? >> i am going to short the euro into the highs. basically i think ultimately this is a bigger structural problem in the markets because the ramifications are not over. we'll be feeling it as we go forward. >> bear market territory despite a rate cut by the central bing there. the prospects for the asian markets there. are we going to ever talk about what happens here? it's really an interesting
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economy, itself. some are saying something here. what is it? the property bubble is finally coming home to roost or no? >> today you are seeing greece. >> the 20%. >> it's divorce from reality from the economy. so you got the government boosting it up. at the same time you got people with one foot in the door. one foot out of the door saying do we really want to be in here at its peak? i think the government is backing it. you still see a lot of external weakness and internal weakness that is making people nervous. >> i don't understand what you were saying. the stockmarket is too high in china for what the fundamental apples are indicating? >> it's divorce from it. you are actually seeing our second quarter data show there was a recovery. you are seeing a deceleration
overtime. that should not lead to a gain in the splarkt over a matter of months. you are seeing that people are getting on the easing train and looking at a bunch of other stuff. right now the chinese government is trying to encourage that load into the stockmarket, even though it's not pushed by data per se. >> so they're doing the same thing our fed did here? >> the whole world did that. >> so the chinese government opts, then it's not marking, it's down 20%. you are saying prior to that it has not worked? >> they still have a lot of leverage to pull here. you had an unfortunate set of circumstances in the last few days. you also had a situation where a lot of this binds on margins, they're trying to push a little out. they 24i think it will help the economy with a secondary effect. >> when is the last time they tried to cool off recently?
>> so they have been more consistent. >> the property was for a long time too long too hot. they started peeling back all these regulations issued for the last several years. so at this point their biggest concern is making sure the bottom doesn't fall out of the property market. >> you buy the shanghai market right here? >> if you are really risk tolerant i think you do. >> you can't fight the fed, this fed or that fed? >> what people don't realize what japan did they took their pension on money. carolina is on the cusp of doing the same thing. >> that's a short-term or medium play? >> it's a long-term play. they will send it down 20. >> so we'll shorten the euro base we're buying. coming up, when we return a greek crisis getting worse by the day. the capital controls a major
debt deadline and the global markets are concerned. u.s. futures right now are down sharply t. dow off and the s&p looks like it will open down. "squawk box" returns in two very big hours. we'll try to explain it. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
it's bound to be a wild ride for investors today the second hour of "squawk box" begins right now. >> announcer: live from the beating heart of new york city this is "squawk box." welcome back to "squawk box" here on cnbc. first in business world wide i'm joe kernen along with andrew ross sorkin. becky is off today. there is one major story, the entire globe is popping up that is greece. here's what we know. the country imposed capital controls the bank and main strex will remain closed likely all week. atms are starting to open the daily cash withdrawals, limited to 60 euros. over the weekend, greek prime minister alexis cyprus had a cash reforms deal set for
sunday, july 5th. a yes vote by vehicle citizens would back pension cuts and austerity measures and reforms and a no vote could trigger greece's exit from the eurozone. the european commissioner is speak income brussels right now, among the highlights so far from his speech he says he expects the eurozone to stay at 19 members, he warns this is not a game of liar's poker saying he is deeply saddened by weekend events and feels betrayed by the latest events. joining us on set, vice chairman. we act like we're not in a position to understand how sometime the rest of the world operates, but i remember something about this budget thing and weren't, we will be the united states was going to default on its potential and it went to the last moment and suddenly something was figured out. do i remember the tarp?
did that get voted down once? are we really that unfamiliar with this? >> there is one similar and one difference. we were threatening the default to release some members of the congress where we had the money to pay? >> but what has changed in the last two years as far as greece's ability to pay? nothing? they have never, so what has changed? >> we always have them kick the can on the radio road. >> what is different? >> that's true we allowed them to string along. >> which we will continue to do at some point? >> now there is an interesting difference. >> that is that this referendum may, instead of having the burden being cyprus to make the decision, is now on the greek people. they have to make the decision. if they vote no then the kind of chaos we have seen today -- >> isn't it 70% that. to stay in the euro?
>> that's what they are banking on. >> cyprus is saying vote no he's saying a wink and a nod? a wink and a nod? >> can i flip it around? isn't the ecb, as joe said there is no difference nothing's changed. why don't we -- why done they i wouldn't say we give it over? >> give more money? >> i understand that they will demand they tow the line with the previous agreement. >> that's the worry. they are trying to wing census. if they can coddle the greeks. >> they would be lending a little bit more money to some of these banks on an mortgages basis this week to give them more liquidity so you wouldn't see the lines around the banks. >> they want to force the voter
of greece to make the decision. they want the greeks to understand if they vote no they will not get any more money and be a part of on the you're. >> reporter: they don't like these bankruptcies they don't like not being able to get money out of the atm. >> you think the greek people put that on cyprus or they put it on the pcp? >> cyprus is going to try to get them to think that it's the ecb. the fact is. >> the euro group and imf and others are going on but we have no choice but to stop adding to the lending. do they want more of this chaos or take the cuts that the creditors are asking them? >> i would say coddling.
>> people don't see us as going back to something -- >> european central banks the ecb was, in fact trying to keep the thing going and give the banks enough liquidity. negotiators have said. >> we have to go to lady chatterly. did you however the cuddling stuff? you don't want to weigh in on that either? >> i think the european life would have given them more because the greeks are playing. >> you are now to the ground in athens. julia joins us with the latest. good day. >> reporter: good morning, guys. well the greeks are waking up there morning and realizing the 60 euros they can take out to the atm. the greek protect tourists.
they can still take cash out. >> that doesn't mean the cash is available 40% had a cash problem. yesterday when i arrived, they had no clue what was going on. there is a sense of normalcy surrounding what is a great deal of concern from the greek people that concerns what the referendum is about. i said look at this bailout that finishes on tuesday what is the referendum going to be on these proposals won't be on the table, will they. >> listen in. >> it is a fight that the european financial arrangement runs until june the 30th and any development unless there is a new arrangement are an extension will no longer legally exist.
>> the other question is can we reach a deal in the next two days he also called the greek government populous and accused them of wrangleing. it doesn't look like we say to them that's a point in the question. 17% of the greeks. if you have the further austerity, it will be 14% of people willing to sign and continue with the creditors. so that's the real issue here too. i also have one member of the government tell me if they agree to sign up for a deal, they will re resign. it feels like a real mess and lots of questions, very few answers, back to you. >> just to repeat the poll which we keep talking about 70%
number, she said 49% when you talk about austerity, when they recognize the austerity issue, the number drops down precipitously, that becomes much more the issue. >> i don't think the austerity that would come from the chaos and what would happen i don't think they're ready. >> she is saying they would, in fact sacrifice being members of the euro if they had to go for all this. >> austerity may be worse. the implication may be. >> i realize that. i think when they go to the voting polls, they have second thoughts of voting out of the euro. >> in the meantime markets are reacting to all this. we are joined with a reality check on how worried we should all be about greek. >> that's what matters, all the politics is interesting. people wake up they want to
know the drama of the officials around the world and in the u.s. stem greek contagion gives way to the real test. that's market reaction. stocks around the world down say 1% in the u.s. 3% overseas maybe 5% in some markets, yields are down in safe hampbs u.s. and germany the risk offtrade spreads around the world they have spiked in greece. it's a sign there is worry about spreading contagion not panic. you can see two charts i can barely read it. there it is up call it five basis points in greece. up say 20 or so. sorry five or so in italy now. here's what they're saying on the spreet about possibility of can they jun. pantheon says the eurozone has probably never been in better
shape. jim o'sullivan writes, we fear the crisis if greece could trigger an important bond yield correction. barclays say the systemic implications of capital controls being imposed in greece are limited, given the ring-fencing measures put in place by the ecb. finally, btig writes the ecb is going to have to convince markets that greece should it move even further towards an exit is the lone exception. it seems clear that in ice lakes, greece is not a big problem, as we learn, fundamentals are one thing. in the short one per sexs take over of how concerned the next guy is about the problem. >> that prompts officials to declare sometimes like kevin bacon in "animal house," all is well. >> i missed that. >> the greeks will they say, thank you, sir, may i have another? >> was that kevin bacon, too?
>> yes. >> the greenhouse quote made me think if they exit see, i think that's the whole thing about letting them not giving them any concessions. it's something sure that there isn't a next dodgeino. that's why they play tough with them. >> it's a better deal. >> so by staying tough and if they did exit by staying tough, that precludes other. >> on the other hand, if they're too tough, this is a member of the european union, no one wants their economy to collapse and the europeans will provide them some assistance. i think one of the reasons steve points out the bond markets haven't been worse, there will be fans fencing. there will be a lot of efforts
to help italy. >> i have a question about germany. at the end of the day, greece being in the eurozone provides by the way, all the money they lend they make money on their personal spread. all the histrionics and posturing, isn't germany going to want greece to stay in? doesn't greece know this talking about game theory germany wants greece in the eurozone? >> yes, the footballs minister made tough statements to get the greeks to move further along in his direction. in the end, they want greece to stay in the -- so you and the eurozone. >> bring it home bob, literally home. you wake up in the morning. i get all these things.
people don't want to have to care about greece. >> right. >> they say to me steve what do i need to know about greece? they want me to go one sentence two sentences, it's too long. so just tell me do you really think the u.s. investor the u.s. economy should be concerned about what's happening there? >> not directly, no. i think if there were ripple effects, i think they would be a lot more concerned. i think they have taken measures to avoid that from happening from spain to italy to portugal and other countries. i don't think in the long run it will be very consequential. >> i thought you meant bring it home. >> you are all over the place. >> just say so. >> come on. you meant give me a little. >> we will not have a big effect. >> i want to go to chicago to see the fare thee shows. i will be here a while. >> you know why we weren't listening to julia. >> this is the bigger news of
the morning. al will be in the office here. >> i have been a 40-year fan. he was in montreal. but he's going to be on. >> will you say the greatest guitar player that ever lived? >> for me that i've ever seen. as long as i can return a brother. >> we book him in the "squawk box" studio. >> it's a special day. >> greatest guitar player ever. >> i'm not willing to tell him. you know why i can do that? because i can. he's coming on. that's why at 8:40. >> we talked about greece. we can play a little background music. >> maybe some forebodeing. >> we don't know the answers either. we are doing a lot of guessing. i think it's less implications. >> now you bring it in. finally. >> bringing it home.
>> thank you. >> okay, coming up two more trading days in the half. futures point a sharply lower open. when we return, we will talk about the fear factors. stay tuned. "squawk box" returns, a lot more in just a moment. listen up... i'm reworking the menu. mayo, corn dogs... you are so out of here! ahh... the complete balanced nutrition of great tasting ensure. with nine grams of protein... and 26 vitamins and minerals. ensure. take life in.
don chu joins us with fear factors in the second half of the year. >> no surprise greece. first of all, wells fargo says greece is important. in the short term i think greece is a potential source for confusion and sell-off in the market at least very briefly. the reason is if something happens with greece it's all about whether it will affect the business sentiment. >> that will be a big deal it's also interest rates and the fed. we can't emphasize that enough. obviously the whole earnings season is going to be a big part of this as well. as we talk about this even if they do a minor or little increase there is a lot of anxiousth. i think all of these things guys, will be a huge deal for the markets. greece obviously, front and center. number two fed and number three
what will happen with this upcoming earnings season. b.c. over to you. >> thank you for that dom, joining us is oppenheimer's chief strategist. where are you this morning on greece? >> i think obviously a fluid situation. there are a couple key things that need to happen t.troika need to extend the thing and the greek people need to vote yes if those things happen the moderate government comes in. previously and things stabilize, obviously right now those are two big ifs. >> it's a gamble. >> we know the "options action." >> i think that's the most likely scenario is that a more moderate government comes in. merkel has made clear yes vote is a vote for the euro. i think most greeks want to stay in the euro.
a deal will get worked out over the next couple of weeks. >> steve said bring it home what greece really means here. >> i think if that scenario plays out, greece doesn't mean a lot here. >> the worst case scenario means what here at this point? nothing? >> i said we went through the best case jar i don't think. i said that doesn't mean anything t. worst case scenario is potential contagion into other markets, weakness and a fragile european recovery so the best case and worst case scenarios are different. this educated guesses is highly fluid. our best guess is the commerce scenario prevails. >> therefore you play there out. i think if you are waking up this morning, you are looking at this, you are thinking i'm going to call my broker i'm going to do something, i'm going to do what? >> you want to add the risks on
investment. >> you'd be buying what? >> we like u.s. equities, especially with a cyclical bent. there is a lot of combond proxys emerging market equities, international equities, high yield. you can see your loans. >> you would buy europe though? >> this week yes, the core view is it's more likely this gets resolved in a call way. of course, it's not a slam dunk. you are holding me to make an absolute call. i'm trying to do that for you, trying to help you with that. these are obviously high stakes bets. >> we will leave it there. thank you for coming in. >> coming up if greece didn't have us worried this morning, puerto rico probably would. sounding a financial alarm, "squawk box" will be right back.
and the other street? it's been burning energy all night. for frank. frank's a cat. now, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized. welcome back to "squawk box." puerto rico is sounding a financial alarm. the governor of the u.s. territories saying the island's $72 billion public debt is unpayable. therefore, puerto rico will seek to defer payment while negotiating with creditors. we heard some of this story before. the governor has recently said he has considered allowing the
government to declare bankruptcy. his administration is pushing to allow public agencies the right to file for bankruptcy under chapter 9 protection. the move that puerto rico could have far reaching municipal bond market. so what's going on in greece. it's happening in its own way in puerto rico. coming up, our news maker of the morning. distressed wilbur ross is a major player. what does he make of the country on the brink? he will join us. we will talk about it in just a moment as we head to break, check out the euro. you are looking at 111 right now. stay tuned. "squawk box" returns in a moment. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and
cabrera joins us on the line can you use your credit card but even you would have trouble at an atm until tomorrow i guess but maybe you can get 60 euros at that point that don't go that far. >> foreigners even though the banks are closed today, some atms are operating. if you are a local, you can only get 60 euros. we are told if you are a foreigner, you can take out your limit. get in line with 100 other people to get your money out. changing money at the airport for foreigners zero problem. no limits. they are clearly trying to cater to tourists in the middle of all this. if you are a greek citizen, your banks are closed. you are limited in your about to do any kind of transaction. if you run a greek business we've spoken with gas dealerships, example that don't have an ability to buy fuel eastern though they have the
money to do so because they don't have the money to conduct a transaction. so we're starting to see the economy grind to a hamtramck as a result. i can tell you on the ground right now it looks normal. i see kids playing in the school yards, et set remarks even though it's summertime t. tourists are out. the tourists are on the plane with me or oblivious to the fact that they're coming to a country in crisis. but later on today, we will see a protest. probably a large one that will urge citizens to vote against the big vote in a week. then tomorrow there is one that will be a protest that says no everybody should vote in favor of the program that the creditors want to impose on greece. this is after a weekend where everything that could have gone wrong will go wrong for greece. when the prime minister announced late friday night he wanted to hold referendum that was a spark all greek sids said wait i thought we were close to a deal. that's when the lines started in the middle of the night and ended up forcing the ecb hands
in some ways to impose or to cap how much assistance they were giving to greek banks the greek team themselves to the they had tuesday night. they thought they had a few more days here. >> all right. michelle, i know you are coming back. i still think overwhelming think they'd soet to statement we heard something. it depends on how the question is asked about austerity. don't you think they realize lives would be worse if they let it happen than if pay the stay? >> so the polls when asked directly do you want to stay in the euro? the polls show yes, more than half of the greek population wants to stay in the you're. >> reporter: when you break it down based on income level and parties, the poorer you are, the less likely are you to want to stay in the euro. and so that number and the overall support for the euro has fallen. so it's really going to depend on turnout here and remember what is very interesting about
the negotiating dynamics going on right now, it's not even clear that the european commission says they don't care about the outcome of the vote. they don't trust this government. they will do what they want even if they vote yes, that i will do all the reforms that thus far they have campaigned against. so it's a very couldn't fusing situation i situation. by the way, they're still negotiating. there is talk out of brussels hopefully they can have a deal done tomorrow night. hopes are faiz fading fast for. that. >> okay. good. all right, thanks we'll talk to you later. the euro is selling off its low this morning. sarah eisen joins us on the set to talk about. that we had a recommendation, a short euro on its highs today. >> i will start with vintage mario draghi think back to july 2012 the famous i'll do whatever it takes speech. in that speech he says we
think the euro is irreversible. after this weekend, the world is wondering if that's true. that's why there are two key questions, will greece leave? what happens to the euro if they do? for all intents or purposes it is a vote. increasingly, it looks like if greece leaves importantly, it will be because they choose to. not because they're getting kicked out of the euro obviously, it sure seems possible now. so the question is what happens to the euro if greece does leave? short-term pains, they told us it was irreversible. not to mention the precedented sense, europe has its fair share of weaker nebs the contagion factor is very key. that's really important because no matter how tiny greece is the euro is massf. it's actually 22% of all reserves in the world right now. obviously the second most important currency for trade and trading next to the u.s. dollar
but the long-term impact. the currency could come out more cohesive and stronger in the end, they point to the fact the european politician versus never been so united as they are right now in this fight against greece the ecb says if they have the tools, it's not afraid to use them that could restore faith after this rocky period with or without greece. the bottom line is rifts are rising. but there is good reason to believe the euro could not only survive but thrive in the end, as for how that trades there are two schools of thought. you said buy it on the disc yes, if it emerges here. >> sell it on the high. >> the key will be the ecb. if they are forced to take some sort of action that could weigh on the euro. >> yeah, if people want.
we talk about this too. if germany effectively has been able sue it to value the currency to get out of a tight situation. let's talk to the chairman of ceo ross. they make him the largest share holdner greece's third largest bank. anybody that knows wilbur knows that you are a young man, but you have been involved in a lot of negotiations where you got the better of the other side almost all the time otherwise you wouldn't be wilbur ross obviously. so you know negotiations and i think you have an idea right now this is no different than how many other negotiations have you seen like this and not totally unexpected, probably? >> well it's a little different in that greece brought us democracies centuries ago. now they'rant to bring us chaos. >> i thought about. that i also thought about how the crumbling ruins and the
parthasarathyenon is starting to fall over, a metaphor for their economy and their infrastructure in building it back un. >> will it be the one that brings down current civilvation? >> i don't think it will bring down current civilization except in greece itself. i don't see how the tsipras party. thank you they will fall. so there will have to be some concessions made. if the greek people understand how limited those concessions requested are and it's kind of like going into the abyss on the other side. they'll never pick the abyss. >> you three the greek people understand this version you are talking about? >> they don't right now the big megaphone has the party.
go a few days without more than 60 euros, go a few days with no pharmaceuticals in the hospitals. hospitals. >> you think this is a strategy in terms of liquidity, are they not providing liquidity to your bank right now? >> no they're not. the cap the 89 billion euros, there was a few billion euro flexibility as of the end of last week with the system as a whole. >> what is happening actually at your bank? >> they're line they're not totally out of control yet. that's the interesting and surprising thing. >> you made you're investments, all these people made investments. greece is no more broke than it was. it was insol vent and broke when you made the investments. so nothing is really changed. >> i think the what's changed is the at sued of the government. we came in betting. >> we talked about it in the
past. you didn't think this government may not be here after saturday. >> let's say the people vote down the austerity, banks will still be closed. there will be capital controls put in. there will still be no more money. there is no liquidity in the bank. >> the chaos that would come after the exit would be worse than the austerity. they don't understand that though, don't you think? >> greece has a prime ever a bug deficit right now as we speak. >> that means if they never paid another penney of interest or principal, they still put more out than they take in. how do you pay your pensions with that? >> how do you pay your government employees? how do you do anything? this voting no doesn't solve anything. it just creates a whole new layer of complexity and
problems. >> you'd be able to bring more tourists in, export more that won't offset the amount of chaos in the country. >> once there is social unrest there will be before too long if this thing continues, no tourist is going to want to go to the scene. >> how long will you go as a tourist there? >> right now people will still go in. they have a lot of prepaid trips. they don't want to forfeit them. they take a chance. >> people got stuck with the bluff oftsipras. they have to up ka it and sooner or later they have to blink. >> the other strange thing, cyprus negotiated a lot of concessions from the eu. if they had stopped and declared victory, he'd be in better shape. sho would the country. >> hold on you think
politically he would have been okay? >> no, i there i the problems are in his party. now we have game theory meets harsh reality. >> what's happened to your bank? >> it's still there, still functioning to the degree it can. closing the banks except tore these driple ets may postpone it somewhat. >> in terms of his valuation to you? >> we think eventually it comes around and settles down. >> is that five years out? >> you'd be surprised how quickly countries can come around. there is a contrast though between the greece situation and the siochi prospectus situation. eu imf, everyone dumps money in when the capital controls were put in and did their best to keep the country liquid. here there is no liquidity being put in. that's a sharp, schaar difference. so to the degree people think it will be like cyprus they're nuts. it will be totally the reverse.
>> the fundamental point wilbur when people realize consequences of voting no to the terms of the troika and see the chaos between now and the time. >> why do you think alexis tspipras will skew people the ecb are these horrible people trying to ruin us? that's the argument. >> that's been the story line. but that doesn'tee owe. >> why won't that when there is civil unrest and you can't get your money, why are people. >> it's a question of alternatives. 60 euros a day will be good compared to if they vote no. >> in the first place. >> wilbur why do do you this in the first place? you court danger danger is your middle name? why did you go to greece in the first place. >> occasionally we make a
mistake. >> why the time because it was cheap? you go where there is trouble 678 you have done it in the past. you are not a grave dancer but you are a vulture investor. the vultures are circling. >> where we got on our own, when sapmaras called the special election, we thought he had done his political can you lus correctly and his party would have prevailed. his policies were actually starting to take hold. the parliament made them come in slower and less effective than they would have t. country was starting to turn around. now it's going into some sort of a strong recession maybe a depression. >> wasn't corazon eventually right, all those bonds came back he bought? well, he was eventually right tell particularly. >> we will see what happens with you. are you in a different situation. you will be finding your way.
you physical you will make money. >> the sad thing is i can afford the loss the greek people cannot. >> you will use a bunch of big tax writeoffs and stuff anyway. >> i do pay taxes unlike a lot of the greeks. >> all right. wilbur, thank you. coming up, when we return negotiators in vienna pushing to complete the final deal with eastern. what is at stake? then at the top of the hour robert wolf 32 advisers ceo, discusses greece xm bank and much, much more. we are talking about the presence of politics "squawk box" returns in just a moment. .
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that's huge for my bottom line. what's in your wallet? >> welcome back to "squawk box" this morning. the futures ahead of the open here. dallas will open off 147 points down t. s&p down as well. the nasdaq would open off about 45 points all on questions about the future of greece and its whether who will be included in the euro or not.
it's another story this week. we've already hard from john harwood. he thinks the deadline will get missed. the senior associate at carnegie endowment for international peace. do you think the deadline is a fawn deadline at this point? >> i do. i there i the real deadline is going to be july 9th and it's really going to be an open question whether they'll meet that deadline or whether they'll have to extend further. >> okay. so play it out for us. what has to happen? walk through us the permutations if you will. >> iran needs the deal tachl arehey are hemorrhaging because of the drop and hemorrhaging billions trying to retain the regime. iran needs it more. america wants it more. i think secretary kerry, president obama want the major foreign policy victory. they're prepared to continue diplomacy t. problem is you have
a regime. he almost prided himself on resistance. he has been unwilling to excise. >> how do you valuate the recent compromise of the supreme leader? he was quiet allowing negotiators to make a deal. then he comes back a few days ago. he in effect red lines certain portions of what our negotiators had thought have already been agreed. what kind of game is going on initarian they tehran on the negotiations per se? is he negotiating to raise the level of their own support or is he actually imposing red lines that will undermine them? >> we will see in the next few days historically. he has been an ernest guy
meaning its the challenge we have with iran is iran's most accessible officials like foreign ministers aren't powerful and iran's most powerful officials supreme leaders aren't accessible and i sisoned to your discussion on greece a few minutes earlier, if there is a link it's enormous pride the greeks and persian and the supreme leader basically says we're not going to save in to the demands of outside powers. >> let me ask you, two european majors have acknowledged holding preliminary talks with tehran and bp not admitting it publicly. what do you think is happening in these discussions? >> andrew siren a country with enormous potential. i i has enormous natural
resources and human capital. major international companies, especially energy companies are eager to get back into iran but if this deal isn't reached, a nuclear deal isn't reached, these companies will basically continue to face a simple decision. >> that is you want to do business with america or do you want to do business with iran. the way the sanctions are set up by the u.s. congress it forces these countries and companies to make that simple choice. >> if you look ahead, one of the things the administration is banking on is the deal is reached with rohani and zarif. the company will open up and that will clang the internal dynamics. you said it's enormous talent. this country could blossom. this could be the economic region very quickly. is there a die nammic by which you can project that if a deal
is reached this country will gen to open up will begin to allow the juices to open it to move it ahead and start shifting domestic politics away from the mullahs towards a more open towards a more progressive participatory system over the medium term? >> well, it's always impossible to make predictions about the middle east. but i think that is a valid hope that if a deal happens over time it's not going to be in the next month, but you know perhaps five, ten years from now it helps to transform moderates who want to see it become a nation space. that's certainly the demands of the iranian people. frankly, those have been the demand for two decades now and the hard line revolutionarys. so i think it's going to be a very difficult battle ahead, but as you said there are a lot of reasons to be hopeful about iran moving forward.
>> okay. we will leave it there. thank you. >> any time thank you. >> the long torturous negotiations. remember, so we're over there in vienna. >> the greeks. we're walking by policeia everywhere in vienna at this beautiful hotel. it's nighttime. we're going what's going on? i said who is in there? john kerry. really. >> so the cast is off. so he's back. that's how long it takes. he falls off a bike. do you remember when it happens? he will be in the hospital six weeks. that time has already passed. i think it was like six already remember how quickly your kid's cast is off. kerry is back up on the bicycle the horse, negotiating. the iranians general was on his way to vienna as well a. beautiful home. kerry walks around like he is king. what itself word i'm looking for. >> did you see him? >> he was in there. police everywhere. >> a lot of works.
♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. >> here's greece on the brink
of default, the greek banks are closed. federal officials can't get on the same page. will that country ultimately leave the eurozone and what are the global economic implications. over the next hour, we will hear on the issues africaing your money. guest host robert hormats is here. robert wolf will join us but professor john taylor joins us. plus elon musk spacex has a setback. another one. atlantic city is betting on a comeback. the final hour of "squawk box" begins right now. >> live from the most powerful city in new york this is "squawk box"." >> welcome back son "squawk box." becky is out today. i'm andrew ross sorkin.
sharing his thoughts robert horsarath, under secretary for economic growth and we don't, not a former fat cat with goldman sachs. you don't put that on your resume? resume? >> that doesn't go away. that's a taint. >> a beautiful stain. >> we are 90 minutes away the futures are fought nearly as bad as what we have seen in the rest of the world. who knows? no. 1 does it happen no. 2, if it does happen those are the two questions. >> saying is it lehman means it's probably not going to be a lehman. don't you think? >> i was there. i think this is nothing like lehman. it will be a non-event.
>> what was your number at ten? >> 32. it was ivy league. >> fullback. >> what was your number? >> 32. >> 32 advisers. why is that a familiar number? >> oj. >> okay. we will continue the conversation. in the meantime, we want to get right to it. talking about greece. michelle cabrera russo joins us. the banks are closed in greece. if you are a greek citizen, are you limited to only 60 euros. if you get to an atm that has cash, they have been filling up the atms spore radically ever since the european central bank said they weren't providing liquidity in light of what happened over the weekend. the prime minister elected tsipras. they announced they will host a
referendum of terms that are offered by the country's creditors. >> that infuriated the creditors. it made the greeks extremely nervous. they began at 3:00 in the morning. all lines started to form. it was after that, mortgages meetings over the weekend have resulted in people there was mortgages meetings over the weekend that resulted in the european central banks saying they were going to support the banks here. we have entered a whole new level of crisis. people have always said if greece were going to leave the euro, this would be the starting point. capital controls. this is the point where if they don't come to a deal some time this week and there are hopes against hopes that this could happen before tomorrow night they will print up iows or scripts for banks, et cetera that's what eventually leads to you end up having alternate
currencies that ultimately trades, it gets to the point there is no going back at some point. so it's totally influx. everybody assumes there will be a referendum on sunday. some people tell me it may not happen, believe it or not. we don't know if the european commission will accept the outcome of the referendum. it's something that is worthy of even noticing at this point. they say they don't trust this government to actually implement any of the reforms they want to see done. it's a real mess. i can tell you the tourists appear to be oblivious. they are allowed to take out as you much cash as they want. >> let's get to the psychology oak. on this set, there is this prevailing view somehow a deal is going to be reached, rational people will realize in two or three days within they see all these lines around the banks, somehow it's only going get worse, therefore, they need to make a deal. this other view is tsipras and others are going to effectively
influence and persuade these people. the ecb is awful. they have been completely and utterly screwed. >> yes. i think it depends on what your income level is at this point. the el withier people i speak with are very much in the camp that we absolutely need to make a deal. when you speak to poor people here, you know they say we have no money. it doesn't matter. they feel they have nothing to lose. >> there are more poor people than rich people and who's voting? >> that's what we will find out. at the same time there has been this very much ascent along the greek people. even people i have spoken with in the past. though it has changed, they want to be a part of the european communities and using the euro is a part of. that that currency is always very, very psychological when it's not backed by gold or something else. the currency is very much a psychological thing and if that could be changing as we speak
depending on how to your point, andrew, how they see this move by the europeans. >> okay. michelle, there is a brief period of economic growth over there where it wasn't as bad. >> yes. >> tourists i mean i was going to ask you on the islands, do people know what's going on are or they out putting tanning lotion on in mikonos? i bet you will see we can have a minus 5 or my news 10% or worse, gdp tourists is absolutely abandoning degrees? >> oh for sure yeah it's a huge draw on the economy. 20% at one point. i can tell you whenever historically there have been big situations in the middle east for example, the beginning of the arab spring that, year greece saw an increase up 20% of tourism that year. people go to greece instead of
istanbul et cetera. that was happening this year yes, also, because of the situation there. that was beginning to happen here as well, this year but when you look at the television screen you wonder geeze am i going to be able to get cash do business? is the hotel going to insist that i have to pay in cash instead of a credit card? these are all things that are, that could easily lead to people can selling their time in greece. the government is working very hard telling foreigners you can take out as much cash as you want. >> michelle, thank you. we will be talking to you, a lot more. let's bring from another voice, robert wolf is the ceo of 32 advisers, he is here. you said before this is not lehman brothers. this is not it. why? >> well, this is not going to be a contagious effect at all. at all. it will not go into spain and
italy. they put enough t. euro put enough caps over the last few years to really centralize this around greece. i think a week is a lifetime. i think the chaos is just beginning. i think the lines will get longer and longer. when people realize they have no good money for goods and services, they will go back and realize the best outcome they have the to be a part of the euro. >> you are rational. you don't turn it around psychologically and say, oh these people are oppressing me in the worst possible way. i hate you. i need to get away from you immediately. >> well, you have two tough "options action." on your own is the worst one t. next week in more or less shutting do under the economy. when i was at ubs, i oversaw the russia and the argentina restructuring. when you start hitting the banks, you cut off the blood line. >> when do you get to the point. of civil unrest? who do they blame? >> i think over the next week you don't know what you are
voting on first. you really don't know what you are voting on. >> if you got 40%, you got people retiring at 50. they don't acknowledge that is the narrative of the ecb, they're mean they're holding back, translator not humanitarian and this is not democracy, does anyone really believe there was not in large part self inflicted? don't people know that austerity is what follows overspending and not producing and not working? do they really feel they're entitled to never pay back loans that are made? >> they should feel they need to pay back. they have been kicking the can two years. so this is nothing. >> it's not the ecb? >> all the ecb is what any lender would do, not throw good money after bad. >> i have been negotiating money for clients. they're tough. this is not just going to be a
pretending. >> they should do some reforms. >> they should do the reforms they are talking about, is the imf deadline irrelevant meaning if you default on that you are not defaulting? >> the deadline is irrelevant in the sense of the markets, nothing is happening anyway. so what does it mean? okay. the question is what are they going to enforce? okay. the next imf loan? it's going to be an incredible austerity time. >> what's the next step in the process? they defaulted. at some point they have a lone after the ecb. they don't pay that either. >> they will eventually have to have a long-term loan at a much lower rate. probably something like a p.o. of some sort where there is no interest -- >> is there a coupon? >> infinity -- >> fine eventually it will work its way out. by staying in the euro, you know the hope is that you know the ships, germany and france
lift them a bit. you have to keep traveling tourism, okay going there. >> that current government imposed the conditions that these creditors want. >> it won't be discoverment. >> it will be replacement? >> if you stay in the er euro. >> you talk a lot of ceos and boards of directors, european companies, does this even matter? is the conversation we're having is this a conversation that's happening in any board room? >> i think everyone is talking about it. they are talking what joe brought up this morning. no one is talking about china moving into beer market. possible defaults in puerto rico. you have them saying a september height rate. which by the way is not in the market september. i think they're talking about this whole geopolitical global economy. then you talk about the iran vote that you guys talked about. >> don't you think spain, italy, portugal, they were watching this saying improvement. austerity ends the world,
$deficits. >> the banks are in better shape. >> they, are they realize, this is not a position where you can say, i'm sick of austerity, i'm not going to play anymore. by playing tough with greece that sets a precedence to the other countries. >> they have to play tough. >> you have to. that's why the imf will play incredibly tough. >> ecb, same thing. >> the other thing that central bankers are ready. >> ready to respond to any type of problem. i mean they remember lehman. >> you have to put more liquidity in the system you can ever imagine. liquidity allows to you take your time. >> think about our markets, down 150? what's 150 on 18,000? >> what is that? >> the tarp we went down a thousand points didn't we? >> lehman brothers have prepared
us in a way. >> the central bank. >> the imf knows it wants a lehman, too. >> i want to talk politics with you. >> i'm glad we can't. i'm glad we're not talking politics. >> joe it was a great vacation week for you. you are back to celebrate. come on. >> i am celebrating. i think i am celebrating just about everything that happened. i don't think the obamacare would have been a positive for anybody. i mean your people will be rioting in the streets right now. >> hold hands. come on back. >> even before buying. >> i hear you. >> your guys didn't get on board until joe, honest joe. he opened us out. >> i love hillary with the rainbow stuff. >> you love hillary?
>> yes. >> see if people like it that i like. >> coming up we will head to the boardwalk of atlantic city. it's been a year since the bankruptcy patients there, morgan brennan will talk to the coo the borgata about the gaming market next a. shortened holiday week t. jobs data is thursday. markets are closed friday. when you dive into the labor market. a fed rate hike timing still ahead. that's where at&t can help. we monitor network traffic worldwide, so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
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we got a news alert. cisco is terminating its merger with u.s. foods. this morning cissiscsisco is announcing a buyback margin. >> they said they were going aattempt a block. >> here we are, a government that's in terms of anti-trust issues becoming much more aggressive and end likely to create real questions when it comes to health insurance mergers and other things it isn't how the justice department is setting itself up. >> thigh are.
now even u.s. foods sysco. the food company. >> i would have liked to have seen your reaction to that as well. >> oh, you don't think i can be honest? >> i was honest the entire time. >> you didn't say you wanted to block. >> no, i'm a customer of time warner cable. >> okay. i tell you about a setback for elon musk. jane wells has the details. >> hey, andrew nasa is calling this an important loss. every message of taking the cargo has failed. astronauts have supplies so nasa says they will have to keep supplies on the water. this failed spacex rocket launch, the problem may have
been in the upper space. they should find out rapidly what went wrong because there are no subcontractors with spacex. quote. we own it all. oh man, it was something to see. it has suspended its launch schedule to finally compete for its first air force military launch. bottom line, we will have to continue to rely on the russians. first the russians are the only way we can get to the space station right now. a carrier is being carried and in fact spacex is carrying a new docking mechanism. it is destroyed. so there is another on the ground. they make an engine used if non-spacex launches military mission, up until now, those launches with that engine have been handed. a joint ven closure. congress wants a u.s.
replacement by 20 scene, but ula warns it may fought have one in time leaving us with a gap. it's not clear if spacex will have a rocket. yesterday's mishap makes that less clear. yesterday it was elon musk's 44th birthday they are taking it to the space station friday. the russians back to you. >> jane well thank you. yeah. scary. >> coming up greece nearing economic collapse it says here we'll see you when new jersey casino town check on the casino business next. as we head to break, here's a look at futures. at book club they were asking me what you're doing now, janice. blogging. your blog is just pictures of you in the mirror. it's called a fashion blog todd. well, i've been helping people save
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it's been a rough year for atlantic city new jersey. since last year the number of casinos shrinking by a third. morgan brennan is there. she has a special guest. >> reporter: hey, we're in the marina district of atlantic city. joining me is the regatta coo, he is joining us to talk about atlantic city coming to the busiest week of the year for this struggling seaside resort.
so tom, as andrew just mentioned, we seen a third of the casino's supply leave sense 2014 are we at the right number? >> i think we are. eight casinos seem to be servicing well. you can see stress in the surviving casinos, employees get more hours. there is capital reinvestment. in a way that just didn't happen when the market was over saturated. >> i think we got three proposals for casinos, another in central jersey what does that mean for atlantic city borgata, the overall city? >> it probably means two different things in borgata, we probably proved the market is down 40%. we are down eight. we will be fine moreover for atlantic city i think it's bad
policy. what will happen as i see it is you will have a casino in the meadowlands, a 50% tax rate. they'll do a billion dollars in gaming revenue. half will come from atlantic city you will wipe out a half a billion in wages and benefits. so you literally will tax a small number of people and turn that money over to the state. >> what is your take on sports betting. that's been a big topic. here in new jersey they are getting ready to rule on new jersey and seeing if we can bring this here. are you preparing a sports book? sample we are not. it has started to thaw. there has been action at the federal level david stern said we should legalize it. maybe it will happen. >> when online gambling tame ka
imto to the area. a lot of folks thought it would save gaming in the states. what itself your bet on sports betting? online gambling didn't necessarily? >> online gambling. different people had different points of view. we viewed it as a new distribution channel. we attract a totally different customer and we make money at it. so it's been really good for us i don't know that sports betting will save any place either. it's not a high margin business. it gets customers in your building when they otherwise wouldn't be. in the super bowl slow times, things like that. it's a great addition. it's not something to rely on. >> thank you for joining us. the coo and president, andrew
back over to you. >> thank you for brick us that conversation. coming up, when we come back should global investors be afraid of the situation? greece will have investor john taylor when we return. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪
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>> mayhem continues in greece. now you can pay more than $300 million in breakup fees. the same they announced a shareback program, which made some people feel better about it. elliot's move is moving to speculation it will move to be bought by nokia. elliot founder paul singer will be a featured singer. for more information and tickets
you can go to delivering alpha.com. the global markets are sliding on greek fears, so what are they going on default? >> they have been trying not to pick sides, maybe the secretary went over the greek side urging debt relief. that seemed a little more towards the greek side. >> you can see down 3% in france almost 3% in germany. 3.8 from spain and the s&p 1% off the lows there. it seems little more contagion. you might see a flight to safety. when it comes do the ten year
note move over to the other side which is the flight from chaos i guess you could call it but on the left side you have your greek yields they're up call it 500 basis points 31%, if greece but only what you want to call your 30 basis points when it comes to italy. so a little bit of concern, not a whole lot of concern right now. contagion i think and andrew back me up on this or disagree. contagion, it's a knock down effect. contagion is a systemic risk issue. it rifles through the system. it's a sign of panic. you shouldn't rule out the contagion. i feel it's a strong country you
would could have a knock, but contagion is a different issue. >> it goes back to the lehman issue. maybe we will disagree. i remember going into the lehman event. a, telegraphed. b we thought it was a tiny nothing thing. >> lehman? we all thought that? >> a lot of people. >> not me. >> you talk to the banks. >> not me. >> on that monday when lehman went under the first half of that morning. >> i was scared the whole time. >> i was scared, too. i'm saying. >> i communicated my fear i believe on television. >> there were people that pretended they weren't. >> greece the a failed city. >> greece defaulted you know three years ago. >> it's not like lehman don't pay their bills and they're bankrupt. >> that was a liquidity crisis. we have known.
>> one big difference this could be a major problem. if the ecb does not continue do provide withdrawals the banking system is deteriorating. >> we are also in a post-qe vermont it crossed that line in the sand. they're wide opened with the ability to liquify the european bank. >> that is the big difference. there is a lot of refencing greece than refencing lehman they are giving money to portugal and spain. they weren't prepared. >> we will ends there. we should break in. >> a better friend? >> we will talk about it. >> should we tell people what
happened? >> winning the broadcast rights. >> olympics which is the way cnbc did it. >> that's a huge thing it exclude russia. we will talk to david after we talk to john taylor. news keeps happening joining us now with more on degrees the fed and there week's hoover institute. can we still call you mr. secretary? i don't know. maybe. >> >>. >> for systemic risks, where are we? is it anywhere near 12345.
>> i think the uncertainty, this is a surprise the greeks did on friday they pulled out of negotiations and called for a referendum him we don't know how it will play out. this is kind of an ongoing thing. i think you are seeing some reaction to the markets. it's not as great as i think some people are worried about. i think that's good. but that big uncertainty is there about this referendum. >> hough does it finally work itself out? we made the point that there is a difference between a liquidity crisis and the solvency crisis. nobody knows, this is not a news flash to anyone that greece is unable to pay back the money it's already been leant. so how does it all of a sudden become a crisis it's a big surprise to the world? >> >>. >> it's been going on a while. other experience defaulted.
the other problem is the uncertainty the pullout and the referendum if there is a yes, in other words, that the greeks would like to stay in the eurozone. >> do they stay in the eurozone? >> i think at this point, yeah. talk about uncertainty given that, by the way, this negotiation that they have nearly finished friday is a complicated page do this don't do that don't do this. it's hard to evaluate. i think if there is a clear indication that if the dpreek majority want to stay in they'll do it. >> are they prepared to do what the vedtors have asked there
emto do in order to say? it takes some pain? >> that's the big inconsistency here. i think to stay in will entail some difficulties. there is a difference of opinion within greece, of course. it will raise problems for the government. this current government that might have to require a change there. >> right. >>. if you can go over and whisper in the ears, do you think you could broker something palatable to everyone? is it doable? will that be the end result? >> no, it's doable. you know what i think about when i see a situation like this is being in public policy in the past. how do we get into it? i go back to this loan in 20 12k4r50ug9 i think there would be ways at the beginning than drag this out that is high.
they have make adjustments. >> who makes the call on the deal merg el? draghi? >> draghi is quite key because of the ability of the imf, sorry the ecb to intervene. as you mentioned earlier, quantitative easing with countries. he's a big player the fact he didn't increase the liquidity support, continued it didn't increase it, that actually is an important decision. they're making decisions as we speak and i think for the most part, they have to resolve this inconsistency. i don't worry as much about the contagion. a lot of people were talking about you see some of it. it's been anticipated so much. i'm looking forward to you know what happens tuesday that's the deadline for default. it looks like they will go through that. not pay the imf. we'll receive. they still have time. after that there is that big vote coming up in greece.
>> john taylor. we appreciate your analysis. next a $1.45 deal. euro sport channel on television and the internet the ceo of discovery. this is huge i think people thought it would be the way it was always done like the public national broadcasters over there. how did you get in here and do this? i know the ioc likes nbc. did you tell them you used to work at nbc? >> i am here in switzerland, it's a great day for discovery. as you say, we were able to get the exclusive tv and multiplatform rights on all screens for the olympics from
2018 to 2024. we expect the europe in general about 700 million people a. little more. we are in business here already. we are the largest pay tv player in europe. we have free to air channels across eastern and western europe. for us this is a natural. particularly because we took control of euro sport about a year ago euro sport is the leader in sports and europe. we have been saying for a long time, if we get a chance to get compelling i.p. live event programing, that that given where the world is going, how people are consuming content on different platforms, that that together with the market share that we have all around the world, the channels and scale could be a big, big opportunity for us. and this came up about a year ago when thomas bach the chairman of the ioc talked about wanting an olympic channel that
every day could talk about the olympics and olympic events. we reached out to the ioc. we took them through the fact that we already have two to three sports channels in every market in europe with the leader in sports and cable. we are also the leader in sports with euro sport.com, which like espn.com in the u.s. is the leader online for clips and scores and so we felt from the beginning that this could be a great partnership. >> it wasn't just money i guess? so you know with you i can't. what were the other bids from the people that normally do there? you know the national public channels over there? >> as you say, normal think they would sell often to governments. so this is the first time we have been able to take all of europe and get rights essentially for the next decade.
one of the reasons we were able to do it is we already have great assets here we can deploy. as part of the deal we get use of the olympic rings, which we'll be putting on euro sport and the olympic library. also, we have been in business here if europe for 20 years. we have pay tv channels broadcast channels. the great thing about this olympic deem for us is we ended up paying twoer the four olympics an increase of high single digits where when you look at big event programming, around the world, particularly in europe where the programing rights, fees are going through the roof two is we were able to lock this up through 2024. so if we're able to really develop and enhance the olympics, we get the benefit of that and we're convinced, we can be free cash flow positive. we already have euro sport, euro sport.com. we have free to air channels. we are putting this on top of a
strong leading infrastructure. >> i think this will transform euro sport. one question i noticed in the release you are going to sell some of the subrights to some of the national broadcasters like the bbc or france television or others, how, so when you look at the total price that you paid and you subtract out how much you will be able to license that to what do you think your overall costs come down to? will you use it to send view ersers to euro sport? >> we think we can we think the close to $1.5 billion we can offset if we want to. we have broadcast channels in the u.k. two in germany, five in italy with the leader and gives us the optionality to broadcast direct to consumer,
online on all devices, we will subdistribute a lot of it. there are requirements by government rule or ioc rules. so we will do some i think it will be a great deal. >> have you talked to lazarus, you saw fox it's not easy to cover. i just want to make sure this is a success for you guys are you good at this? >> well, luckily, i spent six years working side-by-side with on the olympics there. they're the best at covering it. hopefully it runned off on us.
>> don't be too proud to ask for help. we are here if you need it. >> i asked you for help the other day on the golf course. you didn't give it to me. >> no i didn't. my friend congrats. i didn't watch anything. i was just over there there is nothing over there, except euro sport. >> it was soccer. >> there was a goal. >> still to come. acclaimed jazz fusionist guitars, will it be okay with that fusion moniker at this point? al demiola will join us my 40 year love affair is fought right, my mufblg idol and a tragic state of mortgages says it will stop streaming companies. his thoughts on that. maybe we'll see a little more when we return. >>
jeopardy. al is here on the "squawk" stage fresh from his performance at bb king. you will be at bb's again at bb's again tonight. all this hitting the fan from greece. people might wonder, we're still going to do this because we are. it's been 40 years since i first saw you when i was 19 and i think you were 20 years with return to forever. >> 19. first show was at carnegie hall. >> you played in cincinnati? >> i did. at the stadium in the first tour. as part of the new port jazz festival. tell us you have all this other stuff happening. you've earned a very big living. you're probably bigger around the world than here but is it hard and streaming just makes it tougher? >> we've lost our record market almost completely. the stores are gone. it's just changed drastically. now music is like free for
most people. >> how do you solve that? what would be the answer to streaming? >> we lost a lot of our great lawyers that used to protect us because everything has changed so drastically, but, you know we need to get the streamers to first of all, pay more and then once it goes to the record companies, they need to distribute it to the artists and that's what's not happening. >> but you're seeing. >> record labels are so afraid of going out. you know? a lot of them are fall big the wayside. >> could taylor swift eventually be our ied snl. >> she could have been stronger. she was very light on them but i really think she would have went a step further like james taylor said it should be half and half. half should go to the hartistsartists. >> i don't know why it doesn't. do you ever see it reversing? >> no. >> he's going to be very
pessimistic. >> i'm pessimistic on that. >> what if artists ban together and decide you aren't going to get more music. >> he's going to make all his money live. but we spend, like months sometimes making a record. and then it becomes almost a free item. you know? the unfairness is huge. you know? radio paid a certain amount of money per play and now it's a tiny fraction of that with streaming. >> this is a disruptive technology. for once, i agree with you. it -- what if artists, if you can't make money, what if it starts hurting? >> i want these guys to make money. i'm not saying -- >> how do you stop progress? what would have to be done? >> the riaa has to step in and make a statement, in my opinion. they have to clamp down and we need big names to get together.
you know? and just stand up against it. you know? there's not enough of us right now doing that. mccartney is already too rich to do it but we need a bunch of mid level artists coming together with the right kind of legal representation plus the riaa and just stand up against it. you know? >> because people i don't think, have really connected the dots to where what they love to listen to is going to be lessened or -- >> no in. >> or i don't know something's got to give somewhere to get people motivated. >> it's going to get better is what i'm told but it's going to take a lot of time. that's what i was told. it's frustrating waiting for it. you know? >> right. all right. well, you know we have all this other stuff going on. >> everybody is out on the road as a result. >> right. and you're out. >> when did your new album come out which i have already? >> a few weeks ago and it's doing very well. this is all original. >> should i call it fusion?
it's almost classical, half of it? >> it's like a world music mix of the different influences of classical jazz. >> break a leg tonight and i'm going to be there and i'm going to be hung over tomorrow probably. anyway thanks. thank you. >> thank you, al. i'm looking for to sitting next to joe tomorrow hung over. that's going to be something. >> so nice. >> in the meantime, let's get down to the new york stock exchange. mr. cramer help us through greece? what are you making of how the markets will open this morning? >> i'm looking at the dollar. if the dollar is too strong j numbers have to be cut later in the week. numbers away from greece is not that bad. stock market down 2 3% seems reasonable here. looking at how a lot of hedge funds want to buy the first dip, it's a long day. it's not great, not bad. >> you think there's a bigger dip in the afternoon? >> there's too many hedge funds
that need the market lower at the end of the quarter for -- to be able to buy the first dip. if you want to buy the first dip, fine. i'm never going to fight that. i haven't liked the setup. i'm waiting for greece to leave. three months down the road there will be a strong euro and it will be fine? >> you think greece is leaving? >> i think they want to leave. that's what this has been about the whole time. >> the prevailing view this morning has been that greece is not leaving at all, actually that two or three days from now when the greek people realize how bad it really is they're going to actually vote yes. you think no? >> what's on the table is either that germans cut it by two-thirds or they get paid in drauk mas by two-thirds. that's all there is. there's a false dichotomy that they want to stay in europe. they want to stay in europe in the euro if the debt is cancelled by two-thirds. it's a false dichotomy.
don't buy into it. >> jim, we'll see you in a few minutes. stay tuned. squawk returns in just a moment. never settle for verizon's overpriced gimmicks. try the un-carrier risk-free for 14 days you'll love it, or we'll pay for you to go back. we live in a pick and choose world. choose choose choose. but at bedtime? ...why settle for this? enter sleep number... don't miss the lowest prices of the season, going on now. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. so your sleep goes from good to great to wow! only at a sleep number store. right now, find the lowest prices
the final word this morning? >> there are two wig risks that relate to greece. one is they'll get too good a deal from the europeans, and then the others will want the same deal and put pressures on their government not to come ply -- >> are you more soldly him or mr. cramer this morning. >> i think the probability is if the greeks understand the consequences. >> that's a lot of -- >> my worry is there won't be time to get them to understand. i think if the referendum goes ahead at this point, the greeks would vote to get out and not to comply at this point. i think there's still a chance if things get worse over the next three or four days the greeks will recover but it's touch and
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