20 Episode results for "Andrew Ross sorkin"

Bidens $1.9T Plan; Big Techs Next Steps; IPO Fever

Squawk Pod

35:35 min | 5 months ago

Bidens $1.9T Plan; Big Techs Next Steps; IPO Fever

"Worldwide exchange is now a podcast. Join me brian sullivan. Is we get your day started with the big money stories. You care about all the smart takes on the news from the us and around the world subscribe to the worldwide exchange podcast today. This is squawk pod. I'm cnbc producer kramer. Today on our podcast. I'm convinced we're ready to get this done. The very health of our nation is that the president elect push for an economic relief package worth trillions. Will hear from one of joe biden's top adviser jared bernstein. This country has yet to put these two joel shocks us both. Of course the pandemic and its technomic fallout and this rescue plan solidly does social media struggling to strike a balance between protecting users and protecting free speech socials dilemma with the new york times ben smith. It's not totally clear. The break them up solve this particular problem. I think the challenge are breaking them up. Is that the way. Companies all sorts of companies work in a crisis. Is they look what they'll do that. And what's next for big tap with ozzy medians carlos watson whether or not there's a break-up of these i don't see that coming but i do see something that feels a lot more like the fcc those stories plus ipo fever in two thousand twenty one too much too soon when you go back to think about all of the. Ipo's the took place during the late nineties in two thousand created scandal on wall street. And i imagine that we will be having a conversation about a scandal on wall street over the next year or two. It's friday finally january fifteenth twenty twenty. One squawk pot begins right now. Good morning everybody. Welcome to squawk box here on cnbc. I'm becky quick along with joe. Kernan and andrew ross sorkin president elect joe biden unveiling details of a one point nine trillion dollar covert relief plan aiming java's joins us with the details and there are lots of details to dig through ama- good to see you again. Becky that's right. There's a lot in this plan but biden making the case in delaware yesterday that the cost of inaction is greater than the cost of actually doing this despite the massive one point nine trillion dollar price. Tag here's what he said. We cannot afford inaction. It's not just as smart. Fiscal investments including deficit. Spending are more urgent than ever. Is that the return on these investments in jobs. Racial equity will prevent long-term economic damage and the benefits will spar out out surpass far surpassed. The cost so biden's calling this the american rescue plan. He says this is just going to be the first installment of two packages the other one will be a recovery plan later on in the hundred days but for now the leading edge of this four hundred billion dollars for covid relief that biden advisors briefing reporters yesterday said they were surprised by just how bad the planning situation is inside. The trump administration in terms of rolling out the vaccine. So they want more money to do exactly that. Here's what's in the plan. They want twenty billion dollars toward the vaccine program. Fifty billion dollars for testing expansion. Thirty billion dollars for supplies and protective gear which they say still nearly eur in. There's not enough of all that one hundred and seventy billion dollars for k. To twelve schools and colleges of biden says he wants to get schools open in the first one hundred days of his administration in terms of direct aid to individuals. They're gonna plus up those stimulus checks. That were six hundred dollars last time around this time. It'll be fourteen hundred dollars in direct checks to americans that gives you the total of two thousand dollars. Democrats had wanted four hundred dollars a week in federal unemployment insurance thirty billion in rental assistance. A fifteen dollar an hour. Minimum wage biden says essential workers have earned that increase and should get it in terms of aid to states and businesses. Another big chunk in here for the states and localities three hundred and fifty billion dollars. They're fifty billion dollars for small business. Grants and loans and billion dollars for public transit. So a lot in here in the question now becky is going to be can this past on capitol hill and that is a big question. Mark as of right now. I look at this and just right off the bat that things that jump out. It's probably being the most controversial would be the twenty billion for public transit. The three hundred and fifty billion for the states and localities and then the fifteen dollars minimum wage. What do you think are the ones that'll be the biggest issues. I think those will definitely be the big issues. The aids to states and localities is something that republicans were against last year. They said look a lot of this is going to go to states that have messed up their own finances over the years through nothing to do with covert and we don't want to support that they called it. A blue state. Bailout biden is arguing here that governors and mayors are really in desperate need because they've got enormous shortfalls in their budgets and the federal government needs to step in and help them. I think that's going to be a key and there's just a lot of other stuff in here I think we'll get some attention as this rolls along Including biden wants to hire a hundred thousand healthcare workers and get those people trained up to go out and do contact tracing and vaccine awareness throughout the country. There's a lot of jobs emphasis in all of this. And i think you hear biden talking about made in america and american jobs You're gonna hear him leaning on that in order to try to generate support in congress for what is an enormous price tag and there's going to be an even bigger price tag. We expect to come in the recovery package. Which will be that big infrastructure piece that a lot of people have been talking to in some people on wall street have been really looking forward to in in the real world. I i worry about a lot of businesses ability to pay fifteen dollars just right off the bat it especially given the very difficult times or having right now so on the one hand you're trying to help businesses and you're trying to help small businesses and then on the other hand you're increasing their costs for some businesses exponentially and we've made the point that you know right workers early workers in a big city versus hourly workers at crossword such a such a difference in what you know different. Small businesses are able to afford depending on geography. I i don't that seems like a non start. It doesn't seem like a great idea to me either even though well intentioned like so many thing yeah i mean it definitely is going to add to the cost base for those companies and and i think if you ask the biden team about that i mean they were making the case yesterday So many of these essential workers on the front lines were asked to to take enormous risks over the past year and bore the brunt of this. They weren't in the sort of sherie. White-collar category of being able to work from home. They were in the category of. You've gotta go out there getting your truck and take the risk and and they are arguing that those workers deserve that from society. Broadly now the businesses aren't gonna like that and so it's going to be a fight in congress. It's real money okay. All right i'll i'll thank. You ayman aiming jabar's you never liked that. I thought i thought you'd like that. I'm not saying you. Jabber just. We've we've adopted instead of shot now so we jab fair. I think that shot whenever. I can get it. Continue this conversation right now on this relief plan and talk. Jared bernstein a member of president-elect biden's incoming council of economic advisers. Good morning to jared. We've been talking about this plan all morning and trying to really just gauge. Whether we think it's going to get past and what the most controversial points of it very well may be question is whether you think you're going to get pushed back on things like the minimum wage piece of it. Suspect we will. But let me say the following andrew. And i think you and your listeners. May well agree with this. I don't care if you have a d. or an our after your name. Your radio finally get this virus under control whether you're a d. or are you want to hugely ramp up accede distribution to finally try to put cogan nineteen in the rear view mirror whether you're a deer and are you want to open schools and you wanna open universities. You want parents to be able to access the child care they need you want to reach small businesses. That have gotten nearly enough help and whether you are a dnr. You don't wanna lay off first responders educators and other essential workers. In fact you'd like to rehire them. So there's a ton of common ground here. I'm not i'm not disagreeing with the drp. The question and the reason why. I'm digging in focusing on the minimum wage. Peace is simply that given the pandemic that is ongoing given the small businesses that are struggling and hurt weather. Despite the other stimulus measures that are going to be rolled in on top of this weather. The minimum wage. Peace may complicate that. Yeah it's a fair question. I mean obviously Present like biden ran on a fifteen dollars an hour minimum wage which is not an uncommon level in places throughout this country. Already and the research on this has shown that it's a very positive Program that has its intended effect. By the way there's also a phase in involved Typically a a phase in such that. It doesn't go to fifteen right away. So businesses have a chance to adjust but sure. I'm not saying that there's every piece of this is going to be a handshake across the aisle. I think the important point is that there is more than enough here especially given a joe. Biden's historical prowess at At artisanship ship that we ought to be able to cut this deal and you heard aiming talk about some of the endorsements from all sides of the aisle that's critically important keno recognize that this country has yet to put these two joel shocks behind us both. Of course the pandemic and its economic fallout and this rescue plan solidly does so jared. I'm sure you're not gonna wanna show your hand or biden hand in this case but given that these things are often as you said. Negotiations people try to anchor to either side which of the chess pieces here. Which of the component parts do you think. There's any flexibility that the biden administration may have. We'll the way you talked about component parts. I think what's so critical about this. Plan is the section between finally getting Are as as ayman set our arms around the dual shock of the pandemic and its economic. Fallout you. you'll just never get to the kind of rescue and recovery. That joe biden envisions without finally taking control of the virus and at this point managing the production and the distribution of the vaccine. So i think. I'm not gonna say that you can rearrange one piece with the whole thing falling apart but that's kind of negotiation. That's going to happen in coming days and weeks What i think is most important for listeners. To recognize is the extent to which the plan together in terms of virus control and getting the economy back on track especially for those on the bottom line of that you know. I know a financial markets station useful. You focus a lot on the markets. And i get that but we also know that so. Many people have fallen behind essential workers folks in the bottom half people trying to make ends meet. You know at the same time we work it. Results you've reported we've had spike in homelessness and hunger as in the way this works together. It can address that. Jared ask you separate question and you may think this is crazy. Are you spending enough on. Not just the vaccine piece of it but on the testing piece of it. Because there's going to be. Hopefully as many people in the country are going to get the vaccine but there's going to be It sounds like unfortunately a large part of the country that may not get that vaccine and the testing piece of it is still so critical as you know around the country. It's still taking two and three and four days to take a test which makes the test unto itself a relevant and it very well may be that a year from now. Testing is actually going to be a big part of getting people back in to the job. I agree with all of that. And it's a critically important that you just shared with us. I think a lot of people are kind of thinking you know. Hey this is behind us now that these vaccines are getting out As you heard the pres- alexei yesterday. The rollout has not been optimal by a long shot and he sat down and he did something. We haven't seen enough of it. This level of government sat down with scientists epidemiologists logistics experts and figuring out what it would take and it's a fair question are we devoting the magnitudes that we need well. These experts believed that we are and i. I think what's interesting here. You know he started out. Worrying about whether ds and rs would agree. On this as i as i scored. I think everyone can agree. That it's time to vote these types of magnitudes. Doing precisely what you've just said in this thoughtful way in which the federal government's finally takes the lead a making sure that we distribute the accede in a way that's going to put this crisis behind us yet us on the road towards recovery and on that point let me ask you about the additional fourteen hundred dollars which of course bring makes a check ultimately two thousand dollars which is what was the initial effort. Do you think that that payments should be more targeted meaning for those families who have not lost their jobs during this period who've continued to work and work from home. Do you believe that they should get the fourteen hundred dollars is that. Is that an efficient use of money. I think so. I mean i think it's also important to recognize that there's a four hundred dollars enhanced you i benefit unemployment insurance benefits for people who lost their job. There's a very significant increase in the child. Tax credit goes almost exclusively to the lowest earning families and to our estimates is going to reduce child poverty. I have taken from about thirteen to six. And a half percent i think. That's a jaguar. Jared y y should the us government give money to people who have not been affected financially. I'm just one piece so so no. It's a fair question. But you you have to recognize that the checks actually begin to phase out for single filers under seventy five thousand now under seventy five thousand. There's a lot of people who can use the help. So and by the way if you look at the percentage changes in after taxing come. This is a highly progressive piece of the plan. These direct payments. in fact. they may they. They raise the income after-tax income of families in the bottom fifth of the income scale by double digit percentages. Something like fifteen percents and they do nothing for the top one percent so i can see where people might want an even more progressive distribution there. But i think this this the war to the fire in a useful way. Hey here we always have this discussing the two of us. And i miss you and i. We're going to be seeing so much of each other. Now that i got a thrill up my leg but this we always talk about this minimum wage stuff and you always got your end all be all studies. Show that it doesn't impact business when you raise it and i love when you said that you just give the business a little bit of a heads up and they can prepare for the fifteen dollars all right. That's all it would take in your studies. did you get any level. Where would be a problem. I mean because if you didn't. I mean i'd like to go to maybe fifty or one hundred dollars an hour and really bring in the good times jared. Why can't we do that l. Suggest your idea. I think i think the way to think about this. It's a fair question. I think the way to think about this is how many people in the economy does the proposal effect if i proposed a minimum wage of five dollars an hour. It would make any difference because it wouldn't affect anybody. Can post fifty dollars an hour that would cover ninety percent of wage. Earners or something like that so you know. Obviously that's do so. You want to look at the effective range actually the way these academic studies were. And if you look at fifteen dollars an hour phased-in as i mentioned the range of the affected range the percent of workers that hits you can call it. The bite is actually very much in keeping with the other increases at all. These other studies are looking at. And that's why i can confidently say that it will have. Its intended effect of raising the living standards of low wage workers without causing the kinds of disappointment. And i know you worry about jared bernstein looking forward to spending a lot more time talking in the future. Next on squawk pob social media under scrutiny again big tech platforms have cut off president trump. What happens to their policies. Now carlos watson housi- media. I don't know whether it's a commission that does it. I don't know whether you support other kinds of changes. I think you've got to do something to limit misinformation spread on the social media platforms. I don't think you can hide behind. Speech exchange is now a podcast. I'm brian sullivan. Join me as we hit the biggest money stories from around the world breaking down the risks and rewards of global. Trade the news. You need to know what real world actionable advice and even a little fun and unique content. You won't get anywhere else like the most random but interesting thing you'll hear all day subscribe to the worldwide exchange podcast today. This is squawk pond from cnbc. Here's andrew ross sorkin attack on the capital last week still rippling through the tech world raising a lot of questions about rules on social media boundaries and power to president trump was banned from some of the platforms goes right now. Is carlos watson ozzy media. Co and ben smith new york times media columnists. It's good to see you both I'm going to start with you. Ben and i think the real question ultimately in all of this and we've seen jack. Dorsey tried to explain himself on twitter and whatnot. Is this a free speech issue or should we be talking about this as a tech power monopoly issue. I mean you know it's both it's neither right. I mean it's it's a free speech. The tech tech platforms exerted enormous amount of control over the public square particularly act together now race to the same place. The way they did here on the other hand the people protected by the first amendment. Here are the platforms. That's the reason they can do this. The sort of the free speech law applies to them in twitter's free speech rights allowed to do whatever it wants including bell trump off carlos. If you could be king for the day what would you do. What's the what's the solution. Yeah i think you do end up with regulation of some sort. I think there's no doubt that we've had problems not just in one election but in multiple elections whether it's been with neo nazis whether it's been with miss truths around covid whether it's been with mysteries around election fraud so i think you certainly have to have some you see. Critics like roger mcnamee ba- former facebook investors saying we should be looking at the code and stopping kind of viral problems that we should do other sorts of things. And take you gotta do you gotta do something. I don't know it's a commission that does it I don't know whether you support other kinds of changes. But i think you've got to do something to limit Misinformation spread on the social media platforms. Not behind how do you do it. And how do you do it in real time. I mean honestly. I think that we all talk about what we wish could could happen. But the reality of these situations is you have to create algorithms effectively. And sometimes what you see what i see i can read a sentence and you can read a sentence and we can read them differently at all for for the terrible things that i've seen online but i think that that's part of the issue in this country right now. Yeah so. I think the three things if you going to think about immediate things and think ben is written about this a little bit and you've seen it in the report number one. You'd some kind of commission that looked at the various social media algorithms and look at their ability to limit misinformation. And you'd have some regulation of that that'd be number one that you do number two. You'd cause them to do even more tagging. They currently do when you see something. That's often number three. You force him to be more aggressive about kicking off repeated violators. I think those would be the first three things that you'd think about doing if you were trying to meaningfully limit misinformation fraud abuse amplification of untruth on the social media platforms. And you break these. Companies part of this issue is about power that there's there's only a handful of these companies and they seem to have an enormous amount of power. The question is do they have too much power and if you broke them up how would you. I mean it's not it's not totally clear. The breaking them up solve this particular problem. I think some of the things. Carlos was talking about this kind of transparency. Could help but even the regulation people are talking about. Nobody's saying the government would regulate the say the strong proposals in europe or saying they'd force the companies to set up clear procedures. And i mean. I think the challenge are breaking them. Up is that the way companies all sorts of companies work in a crisis as they look with the other guy. Didn't they all do that. You saw all these companies race to exactly the same place. I mean one of the things that is happening now is you're seeing. The ecosystem splinter a little their far-right in just right wing voices moving to other to other platforms. There's the possibility of more distributed of more open source technologies where you could just have a less just less centralized landscape. I mean you know. All sorts of other problems will come from that as well. That was that was an extra ask. You hear twitter saying they want to create decentralized platform the more decentralized you get frankly more encrypted you get the less controllable you're ultimately going to happen or have rather right. I mean you know it was sort of interesting to hear jack the twitter still just kinda like wishfully. Think about this stuff. I mean the issue right now is that he. He and mark soccer wearing a couple of others are actually running. These companies have to make a bunch of decisions could be a lot more transparent about it and andrew. I think it's also navigable. That biden justice department in the same way that that the clinton justice department looked at microsoft and big tech almost a generation ago. It's almost inevitable that they're gonna follow what you're seeing in australia and germany and other parts of europe and insist that there be some meaningful regulation so. I don't think that's a question. You heard tim cook even a couple of years ago. say that there's going to be meaningful regulation and to your point about whether or not there's a break-up of these i don't see that coming but i do see something that feels a lot more. Like the fcc and their management of broadcasters applied to social media giants. And i don't think that that's that. That is that far outside of the mainstream or the american experience carlos do you think that users should own their follower list that they should own the follow and the reason i ask is. President trump by being booted off. Twitter doesn't just lose his voice. He loses his connection to tens of millions of people that he built up over. Many many years you're in business. You have a follower base. Carlos right on twitter now on youtube and all sorts of other social media platforms. If they said you know what carlos. Good luck to you. You're done you overnight could lose access to that entire audience that you arguably built you know. The dirty little secret is editor. They've already been doing that for the last four five years. Ben is smiling because we also saw happened. Facebook brilliantly brought a lot of people onto the platform in the early two thousand and ten people built up follower ships and then they changed the algorithm. So that you only got regular access to most of your worship continued to pay. I think to some extent some of that's already happening. I think people are realizing that. It really is within the purview of these social media companies. How much you truly control. I mean you see it even with email list currently right now we feel like we've built up an email contact our followers. We've got full access to them but you do as long as g mail doesn't change the rules on that or doesn't limit how many people you can send to. So i think there's a little bit of illusion in terms of people believing that they could maintain that and i think it will lead to some splintering in some creation of new kinds of platforms new media companies. Originally around the right but ultimately it'll impact the rest of we got here. Unfortunately it is no longer conversation. Ben collins thank you. I'd love to have you guys back to continue it too soon. Good to see coming up on squawk pod twenty twenty one has only just begun and the ipo markets already on fire. Petco is like a hot fly. A high flyer. I mean they sell dog food. I mean i want to get in on that at cat food. We'll be right back. You're listening to squawk pot. Good morning and welcome back to squawk box right here on cnbc. Android along becky. Quick and joe kernan. Joe appears andrew. Your most giving you a lot of ads at a again yesterday for the poor companies. That didn't get what they you know. What what they deserve. Because they're all doubling right. So i only time now for a check up on this week's big. Ip shares of petco jumped sixty three percent on the first trading day. The ipo priced at eighteen. Open at twenty six twenty nine forty shares of online clothing reseller posh mark ended the day up more than one hundred and forty one percent after yesterday's ipo the stock price at forty two dollars a share open it ninety seven fifty enclosed one. Oh one fifty. And here's a look a firm holdings one we've We were talking about stock. Rose nearly one hundred percent in wednesday's ipo closing at ninety seven twenty four surged again yesterday up eighteen percent and it's up again in the pre market. So there's there's a lot of excitement about ipo's you you can't control you can't you can't well. I don't know if you can't control that. I actually think part of it is that you can control it in. Being a decision made was to some degree what we talked about yesterday. Which is that. They are controlling and this is how they're controlling it. You know when you go back to think about all of the. Ipo's that took place during the late nineties. And in two thousand it also created beyond what what happened to the companies themselves. It created scandal created a scandal on wall street. And i will imagine that we will be having a conversation. A scandal on wall street over the next year or two when this is all said and done because the other thing that's happening is that there are hedge funds obviously and other investors who are making a lot of money and they're making a lot of money and getting access to these. Ipo's at these prices Knowing that they're going to jump one hundred percent in the day and to not believe that what you're gonna find out later is that there were quid. Pro quos and all sorts of trading among the banks. Because there's the client of the bank on one side of the investor. There's declined the bank on the other side. Which is the company. I think there's there is a much bigger conversation to be had about. What's happening here thursday yesterday. Same thing that happened thirty years ago. When i was i i never got an ipo. Our entire brokerage office would get one hundred shares of an ipo and they'd get in. I remember the biggest producer in the office. He would get his hundred shares and he would give it to his favorite client and it would double and it would be like. It's not that different than a discount that you give on someone who gives You know who did a lot of trading back. Then you'd give them a commission discount. This was a way of defraying. Some of the costs that they had paid over the past. You bet it's always been you know. There's been a wink and a nod. Get sings and and i don't know whether it's a dirty little caesar. Remember when you were saying that you spoke with max levchin and and he was saying that they want certain investors. I mean that gets back to that. Same idea of placing these things giving it to preferred investors preferred clients however that goes out. I mean that's the frustrating thing to people on on main street. I is if third the retail investor trying to get in on these things always this feeling of a club that everybody else is in on it. And you're just kind of the guy left holding it and chasing after it. Oh there's no question. I think that there's there's two issues here. There's who the companies want to be their shareholders. Which is okay so is that you don't necessarily want retail or what's called the hot money in terms of hedge fund world. You want so. That's an interesting point. But the second point i was gonna make relating to joe was mentioning about the discounting or offering some kind of advantage to the client. It's offering the advance at one client over the spence. Potentially the company and the other piece of is there were a number of banks as you remember now close to twenty years ago. Who were both investigated and prosecuted over these type of issues so the idea that this is sort of ice scratch my back you scratch yours and it's all fine. I don't. I'm only suggesting that as we're watching this play out that there probably some important questions to be asked about this whole program because there's something there's something that people are going to look back at at some point and say maybe this is a little miss. What was the whole quattro on. Do you remember becky. I remember well. I remember very well. He's still the case against. Aren't you andrew. i was there. I lived at both both cases because there was a mistrial. So there's two trials. The case against frank was was religion obstruction of justice but the the underlying issue that they were trying to investigate and actually at the time they weren't really investigating frank so the whole thing was sort of an oddity and if you remember the case was overturned in the end on frank courtrooms behalf to take him out of it but credit suisse at the time which was then credit. Suisse first boston effectively was accused of trading of not trading but basically taking trying to get big clients and big ceos to get. Ipo's meeting you take. i'll give you see. Oh you'll be my client. I'll give you money. i'll give you access to other. Ipo's if you give us your ipo. There was all sorts of favor. Trading going on at least that was the allegation and there were fines and more paid along the way. None of that goes on anymore. The way andrew. You said you bet. We're investigating scandal on wall street and the next year or two and all i can think is. I can't think of the last time we went a year or two and didn't have a scandal. But i think you're right about the questions that are going to be asked around this particular situation. I think those questions will becoming just tell. Petco is like hot. fly a high flier food. I mean i want to get in on that at cat food. Yeah how'd they think of that. It's awesome. I remember gabelli though thirty. Also twenty years ago said two things coffee and this was at the beginning of starbucks coffee and pet. That's right and he said and little. Did we know that that andrew finally might have gotten did you get a dog gander. Who is this here. What did you get a dog. I don't know no not yet syria. I say yet is still the operative word children may be watching. I think we should the bothering. I'll bring cooper on on tv. The boys and sydney like that. What does that a fish no. We've got we've got the greatest bunny in the world's we'll do animals animal. Show your your answer for a pet four. Can a buddy back becky. We need to see these are cute. They work it's good for ratings. We'll bring the binding on later. We have the cat on now inside. Said that if you if you get home and there's a big pot on the stove boiling do not go over there at least not this funny. This is the best you'll ever meet. Bunnies are not this. Bunny all right if you see guys in the neighborhood run in the space company founded by jeff bezos now nearly ready to take passengers on a ride to the edge of space people familiar with the plans telling. Cnbc blue origin is aiming to fly. I crewed flight into space by early april yesterday. The company completed the fourteenth test flight of its new shepherd rocket booster and capsule the eventual goal of the sub orbital system is to take passengers in research. Payloads pass. what's called the karman line. That line is where space begins. The flight takes eleven minutes and the capsule will spend several minutes in zero gravity before returning to earth. It's all a fully autonomous with no pilots on board so Good if you guys are signing up for the. I ride there and not no. I've got the you got apple. tv. I'm sure Andrew and I do when it's in sleep mode the you are going around. The the some of the shots are going around the the shots you yes and that that works that's great for it's a seventy plus inch tv. And i basically. I'm doing the same thing that does it for you okay. It doesn't take quite the exactly. Give me something that i haven't done right. Not impressed your would andrew. Still dealing with the commercial airliners. You're not going up in this thing. You're not not until they beta test this thing until you're ninety right. would you know. let's get past. Let's get past cove it. I don't want to go on to the second half to wear a mask exactly. I actually just the hard rock is back here on my shot. And they're big advertisement is hard rock. I mean what world where it's just who would have thought this a year ago. It's just wow. I gotta get me one of them. Hard rock mass. And that's squawk pod for this friday. Thanks for listening today all week whenever you do. Squawk box is hosted by joe. Kernan becky quick. Andrew ross sorkin dune weekday mornings on cnbc at six eastern. Subscribe to squawk pod. Wherever you get your podcasts and tell us what you think on twitter at squawk cnbc or leave us a rating or write a review on apple. Podcasts take arrest this long weekend. The markets are closed on monday in observance of the martin luther king junior holiday when we get back here on tuesday. What exchange is now a podcast. I'm brian sullivan. Join me as we hit the biggest money stories from around the world breaking down the risks and rewards of global. Trade the news. You need to know what real world actionable advice and even a little fun and unique content. You won't get anywhere else like the most random but think thing you'll hear all day subscribe to the worldwide exchange podcast today.

biden Jared bernstein carlos watson joe biden becky brian sullivan andrew ross sorkin jared ben smith
Content Is King with Movie Producer Brian Grazer; Back-to-School Uncertainties

Squawk Pod

32:10 min | 11 months ago

Content Is King with Movie Producer Brian Grazer; Back-to-School Uncertainties

"CNBC'S WORKFORCE Executive Council is the Premier, Group C. Suite human resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences. The networking resources HR leaders need now apply to the Workforce Executive Council at CNBC COUNCILS DOT com slash w. e. c.. This squad Claude I'm CNBC producer Katie Kramer today on our podcast. RIDESHARE lift reports a huge decline in revenue and maybe forced to suspend operations in California people that depend on it. What is the alternative I mean? You may not have any contingency plan hitchhiking danger back to school or back to the living room. The president of one of the largest teacher's unions leaks out what's at stake to restart safely start remotely but then they in a start winning know that you have the materials. And the resources and remembering media legends Sumner Redstone with colleague friend and movie producer. Brian Grazer. You'll be remembered as a builder as we all know he was absolutely fearless class grazer. The man behind a beautiful mind and apollo thirteen on his content could be king in a landscape crowded with giants. Bet On the one that's philosophy had the most commitment to content and quality. It's Thursday August thirteenth twenty twenty squad begins Ham. Good Morning. Welcome spot box right here on CNBC I'm Andrew Ross sorkin along with Joe Kernan and Melissa Lee who's with us today Becky's off worst Lee. In the House whatever information I have is about twelve seconds old so It's the beauty of working at home at that when Andrew Andrew said Melissa lease how she's in a house we're all in in house somewhere but. It's not together, but it's good to It's good to see. You can't see. Now I'm looking at the board from fifteen seconds ago but we'll, we'll power through this. It's it's. You're going to have an update on why we're all doing this. It's called a pandemic and it's still here. In update now on that pandemic for the first time in months, new case members of Kobe nineteen have been declining across the country steadily over the last two weeks. But testing shortages and key states are calling those numbers into question whether we've turned a corner or whether cases are simply going undiagnosed on the average number of new covid cases is down nineteen percent from July twenty eighth but testing has declined by twelve percent over the same. Time leary in Florida where the seven day average of daily new cases dropped more than thirty percent have seen testing drop by a similar number and what's Florida and update on the reopening of Disney world in Florida actors who had concerns about the park safety measures have reached an agreement return to work. After Disney, said, it would provide them with Cova tests disneyworld reopened to the public, July eleventh with social distancing and other safety measures in place. We will be watching shares of lift today. The ride hailing company reported a sixty one percent drop in revenue in the second quarter versus the prior year. But the company said monthly rides the increased seventy eight percent in July compared to April and year year lift CO founder John. Zimmer said the company may need to suspend operations in California starting next week if a court doesn't overturn a ruling requiring it to classified drivers as employs instead of contractors. Uber See made similar comments yesterday saying the company would have to shutdown temporarily for several months in California I if that ruling is overturned. I don't know Andrew endless. People. That depend on it. What is the alternative at this point? If you've been doing this for a couple of years I mean you may not have any. Contingency plan I don't know what you do at this point what would happen. Hitchhiking Danger I. I think it's GonNa put a lot of people out and I think the the debate between mobility and labour employee es and and what the right balances in what the right mix is I think is gonNA come into question I know there's a lot of critique obviously of of those companies and the Labor issue. But at the same time, they've done an enormous amount in terms of credibility from people who oftentimes didn't even have it places that were were were were terribly underserved. So how do you create the right balance and make a profitable enterprise given? That's the other piece of it. Right? That's the process we will. We'll see where that leads but I think it's going to get worse before. I don't know who you think it's subsidized by subsidize I. Guess by the Drivers for having no benefits I don't know whether that's okay with them or not. But what is the real? We should be able to figure out a price per mile where there's actually break even profitability because it's not probably where it is right now if you offer all those things, California wants you to offer. So what are we willing to pay to be able to call and have someone here in five minutes and take you wherever you want to go? It's a pretty good. I mean that is worth something probably worth a lot more than what it costs right now. So I don't know you. You tell me what what we want what is it? We realize agree but I wonder what happens to the? But then it might be a smaller business which is to say you raise rates maybe you can. You can provide those benefits to employees, but then you can provide the mobility to areas that historically were under served in part because it costs too much to actually serve and so. That's what I'm trying to figure out thus far. It's been subsidized in large part by silicon. Valley, public investors, and as you said, Joe to some degree, the employees but then there's the other question of would that employ you've had job otherwise then. There's the question is are they? How much of doing this? Right. To be okay with pulse pricing to and everybody hates that it's like wait a minute gouging me. It's like Rita Economics book you know the it's supply goes through the I'm sorry the demand goes through the roof just what's going to happen so I don't know it. I wouldn't like to try and run that place and then you'll air on self driving cars and you know delivering tacos on top of it all it's it's CEO Probably deserves. that CEO pay because it's tough to try to navigate through. So to speak. We're still on record, watch the the S. and P. Five hundred just a few points from an all time high hard to imagine Think it's August. So Pretty Quick Turnaround Melissa in anyone's book pretty crazy. Yeah I mean February nineteen was the day of the all time high that seems like ages ago though right I mean think about how much the world has changed since then and just a few months. Meantime, big story that we're following for your lifetime we go. Yeah. One point we're all sitting at the Nasdaq market site. Right. Very close to each other no matter lifetime ago. We just we had just gotten back from Davos where. All these people. Which is hard. Imagine member Sorkin they were altogether like in the same rooms like eating open food. Reading. On each other. Inside So then getting on a plane and flying around I mean it was a I don't know what surreal where we are now where we were then the you know Sorkin. As as Events you planning. What are you planning for? I don't know what's coming up. They're planning to do some kind of they're planning to do some kind of smaller in person slash virtual thing. We'll see what happens I don't be very interesting to see I. Don't know. What about the? Time. Virtual. Caviar just isn't the same. Pounds here permanently planning to go public through direct listing of shares in late September that means the company would begin trading publicly without raising any new capital. It also means a current investors wouldn't have to wait for a lock-up period to expire to sell their shares also cuts down on bank fees paid as part of a traditional IPO at Davos. We spoke with talents here, co Alex Carp about the plans to go public. We've told the company we are going to IPO and we are preparing internally IPO. I think we will. We will do very well in that context and when you look at some of the other offerings, well saying, you can basically look at this last ten years as A. Way of looking at tech is that it was a bull market the way we look at pound and looked at it for the last ten years is it's a bull market for monopolistic companies in a bear market for everyone else, and if you look at it that way, you don't finance growth with the this week vapors of of a foreign venture funds focus on growth with high quality revenue. That's what we've done for the last ten years. We've told people internally that I will happen and you'll see the results. We were practising our outdoor social distancing even back then Joe but Powell here was co founded by billionaire Peter Thiel and sells a data analysis software used by governments and large companies. Feel good about our ability to do the show the way we did it over there Andrew we were nothing but fresh air we doors we can do in the cold and we can set up shop in the middle of Times Square separate put our coats on and go for it. Coming up the head of the one point seven million strong American Federation of Teachers. Randi Weingarten is concerned about the White House's guidance to reopen schools for the academic year. That trump and the boss finally said that there needs to be these safeguards. But really if they had done eight block more sports would be open. squawk todd will be right back. CNBC's workforce executive. Council is the Premier Group. We'll see sweet human resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences. The networking resources HR leaders need now apply to the Workforce Executive Council at CNBC councils, dot com, slash, wnyc. This Kwok Pot. And September draws near parents, educators, and politicians continue to debate reopening schools during a pandemic, and it's not just about education. It's also about economics a CNBC and change research poll across six election battleground states found that parents and employers. We're going to have to make some tough offs this fall I know many of you not need a lot of convincing when it comes to how hard it is to balance child's remote learning and an adult job here, the findings more than a third of parents said that if their schools go online, it will be harder for them to do their job. No surprise. There seventeen percent said that they'd have to hire additional childcare seventeen percent also said that they'd have to reduce their own work hours and eight percents said, they'd have to quit their jobs and leave the workforce entirely. The burden of these choices is falling disproportionately on women more than sixty percents said that they're the ones planning to make job sacrifices in their households. Overall, the survey found that local schools still have support from parents even though majority don't believe it's safe for their kids to return to the classrooms amid the rising insurnace president trump met with educators and parents at the White House yesterday. Education Secretary Betsy. Devos. was there and reiterated the president's message about reopening schools. We know that for students and their families, they can't be held captive to other people's fears or agendas. We have got to ensure that families and parents have options that are going to work for their child and for their children's Education Joe Kernan Andrew Ross Sorkin, and Melissa Lease to American Federation of Teachers President Randi Weingarten the AFC represents one point seven million members including preschool through grade twelve teachers Oh and you might also hear Penny Special Guest Star today. That's Randy's dog Joe Kicks it off, Pro Garnett's. It's great. To have you this morning you're on record as saying if you want to blame someone over the schools not reopening. Look. No further than Donald Trump and and Mitch McConnell. So we understand where you think we need to look if we do if that's what we're interested in trying to figure out why it's not working. You think that the house did their job and we need about twenty three hundred dollars per student. It will that do it, and what would that what do we need to get this done specifically where your teachers feel safe So guess the question I'm sorry know as we're. All. Doing remote way my dog started barking. So my apologies for having her. But. But you know this is but you know what is really going on here is that let me let me be really clear. We started working on we opening schools not whether but how do we open schools? In in the in the in April because we knew that even if you tackle the virus and we'll hopeful that the virus would be tackled and community spread would be very little. would be wearing is a New Yorker New Jersey. that it would be logistical challenge to actually be able to narrow the public health safeguards that even the CDC still acquire and that less yesterday begrudgingly, trump and boss talked about with all of the other instructional leagues and wellbeing needs of kids, and the problem is that the administration did nothing and so now you get you August and September and in New York City for example, you don't even have p. p. e., which is why the Principals And the Teachers Union said yesterday. Opening because of you don't have the mass, how you gonna be able to do this in other places that started, which is once really freaking a lot of people out you had nine hundred, nine hundred cases in Georgia. Districts that didn't do the. Where you saw huge warranty Lou the issue here is this virus is a disease it affects children it affects adults and we have to take it seriously, and that's why everyone is believing over this. But those of us who have been on the ground have really tried to make this work. The problem is without the resources and would still huge resurgence in community spread. That's why you see more and more and more districts going to remote because they can't make it say for children or their staff. The. Most important thing in your view is. That is testing I. Know that's one thing testing tracing and `isolation. In the mask, but you also want the five percent The five percent threshold at no school should be open if the positivity rate is five percent. Which of those. What's the most important of those three? Are there? So, this is the. Virus. All of these things are important meaning if the community spread is over five percent that means a virus is walking into school. So viruses invisible and there are eysenck dramatic carrier. So that's why even the CDC and Dr Burks have said that if you don't. If you don't if you have greater than five percent got to say you should be on remote learning but the other issues are are not about nudity spread. It's about how you make sure the virus doesn't. Isn't spread to other people, and that's why testing tracing in isolation is so important and that's why the SIP safeguards that are in the CDC guidance are so important if one of its all six of them, it's the ventilation and the cleaning it's the mass and of physical distance same and it's Reasonable accommodations, accommodations and and and making sure that we're washing our hands I'll give you an example we held our. Convention the held its convention in Virginia. Virtually at a studio a few weeks ago. And the studio had the temperature taking all of this stuff but we. Specifically asked more safeguards and we spent more time doing things like making sure there was visible distancing baking charter was the Ben collection good cleaning and having mass wearing and it so happened that there was in parts of the studio. There was an outbreak of Cohen people tested positively but my staff, of course, we had done all of these things thank God none of my staff tested possible. Thank God. We tested negativity over the last couple of weeks after we found at the studio tested positive. and. So those things say to you in school in a workplace you gotTa do off six of those things most you know we've been on this. Fight for resources for schools for a long time. Now, it's clear why a window has to open in a school why you have to have good air circulation because this disease is airborne and you need to circulate the air. So what's happening in school systems throughout America is that is the windows doors open or. Shut it all have good ventilation. It don't have creepy yet. They can't see they don't they they. They don't have cleaning supplies Yak. Testing in place all of this stuff needs to be in place to open. So what we've been recommending to people because people you know this now because people have been trying and but what we've been recommending is so Create. The trusting confidence with parents and teachers starts slowly. Teachers in I create some professional development make sure that the school doesn't feel like a place where you're gonna get sick and then ultimately start remotely. But then stays in a start. When you know that you have the materials and resources, we know parents need childcare the reason that we have what so hard. But the resources in the in the in the New Heroes Zach that's that that the president and mccollum does seem to WanNa negotiate. We know they need the money. So Great. It was great back trump into moss finally said that there needs to be these safeguards but really saying in August, we said it in April if you had done an eight grow if they had done Nagel more schools would be open right now Randi let me ask you this and you know I I sympathize with. So many of the teachers out there but there are so many parents frankly. Who want their kids back in school? Some are angry about this situation. You look at a city like New York City where where the rate of positivist is at a at a at a very low rate today probably the lowest rate that we may very well have this fall given. So many of the masking it other steps that people have taken in, yet still teachers in New York. City or at least many of them are very concerned about going to school. In certain cases, I, think they do have the PCP, what do you? What do you tell them? What do you tell parents because it's one thing to be an area where there's over five percents I'm not gonna I'm not gonNA debate that with you all it's another case where you get into a different situation and by the way there are some parents in America saying look. We're going to work at Walmart we're going to work. On the frontline every single day some of them are doctors they're putting their lives at risk say if if kids are not the most important thing of school is not the most important thing we do in this country what are we doing? Well let me let me actually say this first off i. just read last night Dr Sanjay Gupta's. Very lengthy essay about why he is not sending his kids back to school and you know I think that what you're seeing now with the pediatricians and others in my sister's one of those traditions they lean into children's wellbeing but they have said over and over again if it's not safe safety comes first, teachers will often say Maslo Beats Lou any day week I just want to be very. I. I empathize with those parents in part of the reason that we are trying to stand up child-care and having REC centers and try to make impersonal learning were is because we know it is absolutely imperative for so herons because they have no choice but you know think about what's going on year. Schooling is not supposed to be child here. We know that schooling has lots of functions including that and including Netflix economy but but first, and foremost, we make sure the kids are saying and there's a huge difference between working at Walmart and working in a school, and there's actually a pretty big difference between working in a school and working in in a hostile we hang out walking. Without everyone came to say, say initiatives any teacher and any parent who has worked with their youngest children were like two, three, four years old this be hard to figure out five years old six years old how reliably help kids have a routine about mass a friend of mine is making. These face shields for little kids to try to figure out how to do those kinds of things. So you're talking about a very different kind of job and yes, it is really important. That's why the same are should've been there. We shouldn't be still fighting for the money for the safeguards and for these kind of things in terms of New York. City, that's why the two unions the. And the you. had been working with the board of Education for two months. Now Michael Moment for the U. has been out there as long as I've been out here trying to get these things done. It takes a village to make sure this happens and unmatched. Sure. The bill de Blasio has actually saw stood the extent to which this is a logistical challenge look at Ross Baraka in in. Would he started said we're GONNA stand up some places because know that kids need to be there. He, he wants people to stay home if they. Present present Randi, Weingarten of the American. Federation of Teachers, thanks for for joining us this morning. Appreciate it. Thanks so much. Next on swamp pod attack me award winning producer. Brian Grazer the man behind iconic films like Apollo Thirteen splash and the grinch who stole Christmas on how commitment to content can set one media giant apart from the rest apple I have all the capability of doing that it depends on whether that's their business model. Welcome back to slot. We got the sad news yesterday that former Viacom Chairman and CEO Sumner Redstone had died at the age of ninety seven. The man who claimed to have coined the phrase content is king shapes. The media business we know today building his family's drive in movie theater chain into the multi billion dollar empire. CBS Viacom, one of the many creatives redstone met along historic career Brian Grazer Grazer is the Emmy Oscar Grammy and Golden. Globe. Winning TV and movie producer behind a Beautiful Mind Apollo Thirteen eight mile. Friday. Night Lights Arrested Development Empire parenthood. The list really does go on. You've seen him at the Oscars with Ron Howard is also an author because he hadn't created enough content for us. All grazer is currently working on TV productions for Apple TV Fox, Hulu National Geographic and NBC. Here's Andrew Ross Sorkin Brian, it's great to have you on the program. This morning wanted to get your reflections on sumner and how you remember him and how you imagine the industry will ultimately remember him when history is written They'll remember him as a builder he along with Rupert, Murdoch proudly the single icons and builders of modern media centers to me. They had television movies video. They were there any fully integrated? You know media sources. So he'll be remembered as builder of by having to have to go through tremendous amounts of Adversity. To Create Viacom and united together with CBS and now it's Back together again, He. He someone who was supportive of of you over the years You you talk to him even I think over in the last years of his life. How did he reflect on what had happened to the industry? He wasn't a person reflected upon what happens. Or what was going on? He was a person that would talk about things that he did or accomplished or things that he might have missed possibly another that I can personally remember he was he was very committed absolute sort of a person. Binary certain way. Tremendous amount of focus and concentration. Sure. You've read his book where he was a code breaker. And he graduated number one, this classic Harvard he's very, extremely intelligent. Well, read and people often didn't find him to be the most approachable and I was one of those people that didn't find him approachable in in the beginning and Andrew. As you know for thirty five years I will every two weeks go out and meet somebody. Unite call them curiosity conversations in anything other than what I did for a living. So when few of his employees said Sumner wants to do this with you and he wants to do this this television series, which is documentary called a Iconic Class I was very, very resistant. I said now no, I don't WanNa. Do that but there were so persuasive that ended meeting with Sumner and I ended up medium he said meet me on venture boulevard at an aquarium there's a famous aquarium. Of A tropical fish store. That he wanted me to meet him at. And so I said sure and I had this window into his humanity because he had such intimacy with these fish in he knew of he knew at least a thousand different types of variety sufficient, which was really kind of present and again sort of a window into a different perspective in December redstone. And that became the beginning of our relationship but we did do a lost. We shot it together but he was a person that he learned by reading things is simulated what he learned and he could immediately apply in as we all know he was absolutely fearless prime has one of the great consolidators of the business. He was somebody who merged a lot of businesses together got involved in lawsuits oftentimes in the process. Do you as a creator and when you look at the landscape in the media universe today, do you think that consolidation has been a good as benefited? The industry has made it more competitive, less competitive obviously, they're big questions now, about big tech and whether they're going to be. There are some of them already getting into the media business, but whether ultimately that's going to be a good thing for the industry. What we've gone through so many different distribution systems and everybody will always worries about that best in a ruined content and it doesn't to ever really do that because between the bigger systems like whether it's apple or Amazon or Netflix, and then of course, the analog systems they even when they're competing with each other, they do find a sender somehow because artists struggle for that center and so there's always there's there's some wrestling match between between. These consolidated distribution systems, but basically, I think right now. I think there was a topic of time where I thought it was gonNA wrote away the quality or create homogenization within content and I feel like it's going to find a better much better place with a list of big media companies. There was Netflix there was apple. There was Disney at and T. comcast. If you could bet on one of them that we'll be talking about in a very big way ten years from now that you want to be in business with WHO's that. will say I would only say I would bet on the one that. That's philosophy had the most commitment to content and quality of content. That's how I would do it. I can't you can't bet on it because I mean apple I think is the biggest company in the world and they have all the capability of doing that it depends on whether that's their business model and or whether that's their commitment to it with its lives inside their heart. So I would bet on the company most committed to it of all of those okay it's a longer conversation Brian we hope you have your back. That squawk. pod, for today, thanks for listening. squawk box is hosted by Joe Kernan Becky quick and Andrew Ross Sorkin to weekday mornings on CNBC and six am eastern subscribe to Squawk Pod. Every podcasts have a question or comment tweet us at Squawk CNBC we'll meet you back here tomorrow. CNBC'S WORKFORCE Executive Council is the premier group sweet human resources executives from leading companies across the country. It offers a members only portal and jot plus exclusive industry contact with access to breaking news calls and digital networking experiences the networking resources HR. Leaders need now apply to the Workforce Executive Council at CNBC councils, dot com slash W. E. C..

CNBC Randi Weingarten Sumner Redstone WORKFORCE Executive Council Andrew Ross sorkin president Brian Grazer Grazer Andrew Andrew producer New York City California apple Andrew Ross Sorkin Brian Davos American Federation of Teacher Netflix Donald Trump Joe Kernan Becky Florida
J&Js Vaccine Trial Enters Phase 3; Tesla & Nikola: Whats Next for Electric Vehicles

Squawk Pod

35:29 min | 9 months ago

J&Js Vaccine Trial Enters Phase 3; Tesla & Nikola: Whats Next for Electric Vehicles

"It takes conviction to see beyond the turmoil in today's markets. That's PG the investment management business of Prudential with a legacy of risk management discipline and investment experience through thirty market cycles PG is prepared for today's challenges. Pgn Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with he ju- find out more at PGE DOT com. That's PG I M dot. com. This squawk pod. I'm CNBC producer Cameron Costa Today on our podcast. Johnson and Johnson has taken a big step forward in the race, for Corona Virus Vaccine J. and J. Chief Scientific Officer. The single dose of the vaccine could give protection very quickly within fifteen days and with that. Could be very useful in the emergency used and start your engines. Your electric engine status were recapping Tesla's anticipated battery day works ludicrous mode right now this makes ludicrous look ludicrous and unpacking Mykola, the other electric vehicle company sweeping headlines this week former Ford CEO mark fields I wouldn't invest until they have an investor day that clarifies a lot of their capabilities and their plans going forward those stories plus. A jet a yacht and a selloff that has Wall Street buzzing billionaire Ron Perlman's mystery plans for his cash with CNBC's wealth reporter, Robert Frank. He is the ultimate financial streetfighter. You Never WanNA count out Perlman he's so creative when it comes to capital it's Wednesday September twenty third twenty twenty happy fall we're on Wednesday right what's Wednesday morning Wednesday morning or Thursday morning he's Louise Splash pad begins right now. Good morning everybody. Welcome to Squawk box here on CNBC. I'm becky quick along with Joe Kernan and Andrew Ross Sorkin tests the holding its first ever battery day with you musk taking center stage and a lot of people talking about it. Now, Philibeaux joins us with some of the highlights Phil. Andrew Mixed reaction from analyst regarding Battery Day on one hand you've got people like RBC capital saying overall we believe Tesla's long-awaited Battery Day, disappointed elevated expectations, and then you've got paper sampler saying the event did a good job of summarizing the reasons why Tesla's advantage is insurmountable elon musk over the course of an hour last night was focused primarily on driving down battery costs and that's the goal for Tesla over the next. Three years in particular. But longer term they believe that Tesla will have a battery cost advantage. Now, CAIRN energy research estimates that currently Tesla has the lowest battery. So cost at one, hundred, ten dollars there. You see GM and B. Y. D. The curve is going down and Tesla. Believe they can cut this by fifty six percent over the next three years here Zealand Muss talking about the goal of becoming the best manufacturer. Eventually, every every company will have long range electric cars Eventually everybody will have autonomy I think but not every company will be a great at manufacturing. Teza will be absolutely head and shoulders above anywhere else in manufacturing data's or go. Big Focus will be on the Tesla gigafactory being built just outside of Austin Texas. Longer cells are the key to the cyber talk. Also to the semi, they're developing Tesla's target increased the range by fifty four percent. The orders are gigantic. So we have like I don't know well over half a million orders. I think maybe six or six hundred it's a lot. Basically, we start counting So I think there's probably room for I. Don't know at least like a unit volume of like two hundred, fifty to three, hundred, thousand a year maybe more. Must talking about the cyber truck again, at least six, hundred, thousand orders is what he says currently for the cyber truck, they also plan on developing and building a car that they can sell for twenty five thousand dollars eventually Andrew and the statement that I heard the most from people about last night more than a few analysts sent me text messages saying Elon Musk expects to sell twenty million cars a year at some point in the future just. For a point of Reference Andrew, the most vehicles ever sold annually was Toyota I think two years ago at eleven million and they WanNa do twenty million dollars twenty million vehicles a year at some point in the future Phil. Let me ask you because I got my phone was lighting up with TEX. As well from from various investors in the like one of the points that was made about the the twenty five, thousand dollar car headline is that he? Had made a similar statement back in two thousand eighteen. So how how do you square it up? I mean you've probably closer to being able to produce something today that he was then. Right. How do you? Look. They have long set Elon Musk has long said that the is to make a twenty, five, thousand dollar car. So that is not a new target that is out there originally when they said twenty, five thousand and say look, I, want to get it down. So it's an affordable mass market car and you can make the contention that the the model three is that that you are looking at a vehicle that's somewhere in that range of thirty five to forty, five, thousand dollars. Now, some people at home will listen to that and say wait a second that's not mass market you can. You can go lower than thirty, five, thousand This is not a new target that has been set out there Andrew and also keep in mind Elon Musk does have a track record and he even admits it of saying we're going to do this. Actually happened on the time frame that they said that it's going to happen Volkswagen specifically but other other car companies are bringing. So many of these online's next year. How much do you think that really represents a competitive threat right now to Tesla. Not. In the next six months or a year but Volkswagen, which is showing an electric SUV that they will be building here in the United States. They're showing that today it's called the ID four you've got that you've got GM coming out with I think twenty e the models over the next couple of years. So in the next year, we'll test lose its crown as the king of sales. No could it be threatened three years down the road after you start to see these models get out there and people say, Hey, I've got a different choice other than Tesla. K. Philibeaux always great to see. You'll get your insights an all thanks you bet I'll tell you what the one thing that caught my attention to after doing all the. All the background Tesla and. I mean, it's a little bit too arcane to really go into too much about the battery development. It really is we can talk about what the end result is but the the kind of stuff that that that. Ilan. Talks about in terms of materials and Gigawatts and how much things cost, and where are they going to get I mean we'll. We'll analyze it based on what it means for a twenty five thousand dollars Tesla or or further range or cheaper batteries which you know there's all that suffering but did you see the Tesla Plaid? This is what got me and I gotTa tell you it's expensive. You see the Tesla Plaid. Zero to sixty. Did you see the? Yes. Yes I, mean for me you really got Joe. I think I'd hurt myself and other people. That's if you ever if you ever did not doing that, I'd wrap it around some poll or something that is that is. Think about what that is I. Don't know if you've ever if I've ever felt that type. Of Acceleration G force because one thousand one to boom you're going sixty I mean that is that even if you do I, don't know. What's ludicrous mode now because I remember? Driving. Yeah. This gave Chris Look Ludicrous. Right. So it was very ludicrous at the time. We'll tell you one thing. When when you go on a long trip, that's I never realized that you don't see a lot of the model s. out there on like the. Hetty on the interstate, you still don't put five hundred and twenty miles because of five, hundred, twenty miles. Although if you're going eight hundred, you definitely going to have to stop and. Longer. Yeah me too. Yeah. But but I when I heard that it's like that is faster than any you know gas powered cars. That's tough. You don't get that kind of acceleration unless. You're right Joe that you wouldn't be able to do this in most places the. Safe to do that is where you have an open. Really nobody around. One million. Last week about a guy who was he got pulled over in Canada going I two hundred miles an hour or something sleeping in the front seat will push back all the way because again know that. Tesla will tell you you're not supposed to be using the auto drive. Feature I think it would be. Yeah people stupid options and. would be surreal because the the maximum speed. Okay. Zero to sixteen two seconds. Maximum speed. Two hundred miles an hour and no sound I mean, it would just be surreal but I was thinking if I could scrape together one, hundred, thirty, five I've probably cost more than that to wouldn't into I think probably and then they're probably waiting for this thing. I would imagine the plan I don't know how long it would take to get, and then you got there still are it's tough to get these these batteries I don't know that. Disconcerting. What's your tempted off? And then I was wondering, will it be I like the body style, the Model S. but I'm getting a little bit I. I'd like a little bit of an upgrade Will it be the same body sound the way now? I don't know it's pretty good body stop got a lot of orders for those trucks to which when we start seeing those things on the road every time you see when you're going to point at it I think. In other electric Vehicle News Nikola Motor Company has come speeding onto the electric vehicle seen since it began in Utah six years ago founder Trevor Milton was taking on Tesla. Appropriately named his company after the same nineteenth and twentieth century inventor this week Nikola announced Milton's abrupt departure from the company a curious development. When you consider the last two weeks, they've had thirteen days ago we were talking about equal because the upstart announced a partnership with General Motors and the to company heads Trevor Milton from Nikolai and Mary Barra CEO of GM actually came on squawk box to share the good news. Agreed with the GM we're GONNA see somewhere between four and five billion dollar sees just battery costs. Well, this is a wonderful validation of our technology and bringing our engineering and manufacturing expertise to the table. And yet thirteen days later, Milton is out his resignation follows a report by short seller Hindenburg research accusing Milton of making false statements about the company's technology to attract investors and deals with automakers. The news hit Nicholas shares heart but many analysts believe Milton's departure is positive for the company suggesting it'll boost focus on the company's goals. So what happens to that GM deal Mykola, was supposed to hand General Motors two. Billion Dollars in stock giving them an eleven percent stake in the company. The transaction was supposed to close at the end of this month and a GM it's still on track Nikola as of two weeks ago was valued at fifteen billion dollars, which is hefty for a company whose electric truck still hasn't begun commercial production. Here's Andrew kicking off a conversation with mark fields, t capital senior adviser, and former CEO afford. It's great to see you this morning. Help US unpack this, unravel it and what it all means. You sort of look out at what's going to happen to nickel. Also what you think the implications are for GM right now. Well, let's talk about GM I i. mean the reason they went into this This partnership with them was fold one is first off his they absolutely need to drive down Austin altium batteries and improve the profitability of their electric distance. So for them when they get out of this arrangement is I get more scale these batteries of drive down costs off ability. It will allow them to use some of their capacity than they have some of these dedicated lance they're gonNA jetting fades alert by vehicles and they get to share in the upside in the Nikola. but obviously, you know with the issues that's with with Nikola. Mary probably ask yourself number different questions and earn rewards A. Number two questions such as you know, did my team conduct a full due diligence Nicholas ability and talent? Given, the statement of work with date have Jim has to bring out twenty. Vehicles over the next week. He wanted dedicate engineering and manufacturing resources some of them to Nikola project. An X one is the Nikola brand now damage. Because you know they're they're going to be selling their vehicles and. That Nicholas. Now Warri Design and Marketing Company is the brand. And then question for her is listen you know in a contract manufacturing the the communist contracting. Myspace necker usually does the testing the design and if there's any problems with that quality albums ultimately in that illegal is that to be bad for GM's brander girl. So. Weighing the benefits the. Well. So that's a question. Do you try to get out of this deal at this point? How much of a black guy is it for GM? You know one of the questions that I tried to ask Mary the morning that they announced this transaction was how they had come up with and how comfortable they felt with evaluation of Nikola given that that so much of. The transaction revolved around them actually taking a stake in the business so they had to do some valuation work. And therefore do some real diligence on the company. It's not just you know getting an outsource company to pay you to to do stuff for you. They were actually taking a piece of the pie here. Well, yeah. She you know she absolutely getting with her business development folks or head of product development in our hair manufacturing and saying, listen I want to double check this due diligence at the same time. Remember Steve Girsky is going to become the executive chairman there and. Steve worked GM for a number of years. He's worked side by side with Barry. So Mary's probably getting on the phone with C. in saying, Hey, is this a real company is this is this company had the capabilities beyond just a prototype at a business plan on to help fulfill the obligations of this this arrangement. So right now I think there's little downside for gm but I think she has to check on all those things to make sure she wants to continue. Becky's got question you mark. Mark What haymarket market? What are Mary's options? If she decides that it's not I mean, they've they've put this investment and could she unravel the deal or? You lose what you've already done with this. I guess that would be my question is, is it possible? Even unravel this? Understanding. It wasn't finalized and just. To clarify, they've put no investment year. What they have done is they said they would provide their altium batteries technology as well as your fuel cell technology and Xue Ju some of the engineering and manufacturing. Of the of the Nikola products. So I think she has the options right now leader saying listen, we're going to finalise this agreement and I'm going to dedicate the engineering and manufacturing resources to work with Nikola to bring this out or if it's very clear to have a lot of off ramps for this Raymond I think it'd be no skin off her back. If she decides, you know the due diligence earns. something. That's lighter than what they actually expected. She can get out of it and GM can go on its way. If. It's easy to do I. Guess that raises more questions for the Nicholas shareholders because what happens to Nikola GM walks away from this well I. Think. There's a lot of ways around a love, but the bottom line is if you read their sec disclosures particularly around the time that went public and Ju-. They essentially said that. Mill, who was the executive chairman just laughed was the source of many if not most of the ideas around the execution. A driving the company, and so you have to ask yourself two questions one survey misrepresenting on that and at the answer is no. Then investors have to ask themselves. Well, you know what have they actually invested it and I think there's a lesson here for any investor investing UNICEF back they have to ask themselves the question is the technology or product or service real and also The governance mature because you know when you go public and you're under that white hot light of public shareholders, you have have very mature these control governance and disclosures August market. Here's here's the I don't know. Maybe it's the several billion dollar question depending on how much the company's valued at this particular moment now that you're also not just an operator, but you're in the investment business with. At what price? Would you buy into Nikola given the fact that it still doesn't have a product and revenue associated with it? Well, you know I I. Question at right now, I wouldn't buy the reason I wouldn't buy is I think one of the first things the new executive chairman there needs to do is I he has to resolve these DOJ and these SEC investigations in focus on the business plan and deliver products. But secondly, why I would suggest and I wouldn't invest until they have an investor day that clarifies their capabilities and their plans going forward in the milestones that. Laying out mark fields. It's always a pleasure to spend time with you. You know the INS and outs of this industry better than anybody and. It's a great conversation. So thank you. We hope to talk to you again very soon. Coming up on squash pod. Johnson and Johnson's moving ahead in the race for Corona Virus Vaccine John Jay's chief scientific officer. Dr Still Holes with a single those injection will learn in the next two months in a very large population while save inefficacy we'll be. Back after this. It takes conviction to see beyond the turmoil in today's markets. That's pgn the investment management business of Prudential with the legacy of risk management discipline and investment experienced through thirty market cycles. PG is prepared for today's challenges PJ. Jim Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with PG find out more at peace Jim. Dot Com that's PG IM DOT COM. You're listening to squawk from CNBC. Johnson and Johnson announcing that the first participants had been dosed A. New Phase Three Covid nineteen vaccine trial president trump is tweeting about saying a big news numerous great companies are seeing fantastic results the FDA must move quickly get to make to roll with a very special guest voting again, Make Good Morning Joe that guest is Dr Paul's Change as chief scientific officer docker stifles thanks for being with us. This morning I want to start on the fact that you guys are taking the first vaccine that only requires potentially one dose into this major phase three trial for covid. Nineteen tell us about how you reach that decision that it could be strong enough with just one dose based on what you've seen so far. Thank you for having me the program. Yes. So we studying one those and it's not just the overnight that we did that we have been working for a long time on this vaccine platform and studied in many diseases, single-dose I multiple doses, and we learned that the single dose of the vaccine could give protection very quickly within fifteen days and with that. Could be very useful in the emergency us. We did a phase one study where we studied this since mid-july, and we confirmed that we have a very good safety but also a very good immune response and that made us decide to do the FDA for permission and a allowed us to start the face three study with a single does in a very large population sixty thousand people we are going to vaccinate You're also running a separate trial in the UK which Andrew noted earlier, we'll test two doses y also be testing to when you're going forward with a sixty thousand participant trial with windows. Will. A single dose will be very useful in a very quick rollout into walt for preventing immediate mission we also studying boosted does so we could. We could learn about what is the long term lifelong protection, and almost every vaccine will will need to boost and we will evaluate boost at two months, but also booze six and twelve months to see what's the best longtime program for long long term protection, and that's why we study multiple. But we kick off with the large scale single-dose to go into emergency us as quick as possible when question, that vaccine experts have about your approach of course that you're using a harmless virus and Adna virus to deliver the genetic material of the coronavirus to our immune cells but that our immune systems could actually develop. Antibodies against the veteran it self thereby making it more difficult to get efficacy with future boosts. If you have to. You know again each year, how do you look at that potential will be able to give this as a potential annual If we need to. Make me studied out in several different situations both with an HIV vaccine, we give four times an twenty six factor over one year time in other areas also did that and we learned that the victory itself is generating that much antibodies and not about much immunity. It's the. While the victim of uses into body spike protein, which is the car for generating the protection for covid nineteen, which is generating the the the the reaction, and so we are comfortable that we can use it for prime boost to we have done that many times in different areas more than hundred thousand people have been vaccinated in studies and deployment of this factor and we know all too and we're comfortable that that will not be case. Doctor. I know that the the testing that you're doing takes place on lots of people age eighteen and up, and I also realize it's not something where you backs are. You test this stuff out on children really any more than you would on pregnant women. But when can we see the vaccinations for children? How will we know if it's safe? If it has any sort Cova reacts differently in children than it doesn't older people I just wonder without testing it. How will we know what the safety ramifications for children? We'll we'll have to test. That'd be that'd be I wanted to establish the efficacy and safety into in the in. The eighteen to fifty, five population and Dan Start dozing down we have done that with a ball out we have two very young ages starting one year. So we know that the victim in that in that population is very well tolerated, but we now need to I learned about the covert. The victim of oxygen containing the covid part. Before we go to children the same with pregnancy, we have studied extensively in breakfast woman in our ball trials with at twenty six and also bear we we have seen good safety but we I have to know about the corporate the different the different. Brought to to the to safety and the efficacy. So if we are looking at early next year, potentially for the vaccines being available for adults, how long before children can get vaccinated in the best case scenario? thinking the first second quarter, we should have data on children. Once, we have enough data on although studios down in children so that this is going ause because with a single does injection, we'll learn in the next few months in a very large population, what safety and efficacy will be. At least from a biomarker perspective, don't from a clinical perspective. So when that's known will move into children and early next year next year, we'll between early next year one out. Dr Sophos it's Meghan. I. We'll ask you also about you know increasing problem. We're seeing some concerns about the speed with which these trials are moving in an increasing potential hesitancy from the public to get the vaccine. We have new research out this morning from a poll from NBC and Change Research showing that increasingly Americans are wary about getting a vaccine once it becomes available and you heard Joe's enter introduction citing a from the president telling the FDA to move quickly on these. And there's been so much tying of the election to resolve on the front runner vaccines. There is concern about political pressure. How convinced are you that the US regulators in the US government? Will ensure safety and efficacy of these vaccines before pushing them through to emergency authorization. I'm very constant into regulators worldwide that they will That will that I won't to good day before they will approve but we also have our own principles. We are developing medicines and vaccines for more than sixty seventy years, and we always stay her own principles of making sure that the benefit risk s to be very well established before we bring a if OCCC. Nora. O. Or a medicine to patients. So we were that's why we study a large population. We study all parts of the population elderly young, but also people with Co. Morbidity. So learn how vaccine behaves and we will be thirty transparent with everything we do to the larger population. We will publish a protocol will probably show diversity publish. The data are face one study which was done, which was us to start. This study will be published imminently in the next forty eight hours. So be hope that by that by being very transparent but also very adhering to our own principles of safety and efficacy that we will not release a vaccine before we and the authorities are confident that it's safe to use for people widely. Over overall into will. Dr softballs thanks for being with us this morning we look forward hearing more of your updates including seeing your face one data hopefully later today. Thanks again. Coming up on SQUAWK POD, billionaire banker and businessman Ron Perlman is liquidating billions of dollars in assets is he under pressure or does he have a new project in his sights? CNBC's wealth reporter. Robert Frank has the story. You never think that somebody with twelve billion or one, thousand, nine, billion dollars could ever be forced or even driven to sell anything under pressure we'll be right back. Welcome back to squad. Welcome back to Squawk box right here on CNBC, I'm Andrew Ross Sorkin along with becky quick and Joe. Kernan Billionaire Ron. Perlman is in selloff mode unloading hundreds of millions. An art is private jet and several other investments in where preferring joins us with a closer look at problems dwindling fortune and what's going on behind the scenes. Robert Good Morning Andrew. His net worth has fallen by about half from twelve billion to about six billion just three years he was famed as a corporate. Takeover artist. But now Ronald Perlman is selling now his holding company mcandrew's and Forbes is selling many of its stakes in portfolio companies including AM general. That's the maker upon these his stake in scientific games, Players Holdings Company and retail me not. That's an online coupon company. Now on the personal side, he's quietly shopping around his private jet, his two hundred and fifty seven foot yacht and parts of his massive art collection net value that well over a billion dollars so that means auctioning. Off a Miro for more than twenty, eight, million dollars this Gerhard Richter is about to come up for sale for eighteen million. Now, bankers say Perlman has a large network of loans from Citigroup, JP, Morgan Bank, of America and several others, shares of Revlon that is by far his biggest holding they have fallen by over seventy percent. Just this year the company has about three billion dollars in debt. Now, Perlman's saying these sales are not a sign of distress part of a plan downsizing. And capital raised driven by what he calls the unprecedented economic environment. He says, I've been very public about my attention to reduce leverage streamline operations, sell some assets and convert those assets to cash in order to seek investment opportunities. So Andrew, he's suggesting here that he's raising cash in part to buy something else. We'll see in the coming months whether he isn't fact the buyer that we all know him to be or whether this is some kind of debt driven asset sale back to you. Robert what what are you hearing though because obviously you know I can't go a day or two without having some conversation with somebody who wants to mention Ron Perlman and and raise the question. Why is he really selling? Is He really downsizing? Is You're going to use that money as you said to buy something is he going to use that money because he he owes money to the banks and therefore selling things like like an airplane like a boat Yeah I agree Andrew I hear bankers speculate and talk all the time. He is such a source of fascination and intrigue on Wall Street because he's such a huge part of the whole ecosystem now. I know he is the ultimate Financial Street fighter you never WANNA count out Perlman he's so creative when it comes to capital when it comes to using debt on the other hand, I have never seen or rarely seen a billionaire sell on the business side assets and the personal side. So quickly without there being some kind of debt pressure and you talk to folks on Wall Street and they say there are a lot of. Interlocking leverage loans we're, let's say you've got this shares in Revlon pledged against mcandrew's Forbes debt and who knows how the artists leverage and where that money's being used so. You're right a lot of speculation and and we just don't know yet. where the money is who holds the debt and how serious it is. It's amazing though. We don't think that it can happen to two billion is right I guess. We sometimes, we see people that have I don't know whether it's actors or or athletes or something, and they make so much money. What do mean you have four hundred thousand dollars in assets and forty million, but it can my question no has to do with bill bouquet. Do you know that restaurant? Is he selling? See Selling Bill Bouquet. Or the one across what's there's one across the street can't remember the name you know whether whether those are. Are. A and you can imagine those are having a hard time to right now without. I mean I actually get emails from Bill. Please take out. Please take. Live in Jaffa actually actually. Actually. Has has done a great job and they're doing okay with the outdoor stuff. They built an amazing setup there. So so I think I think that is the least of his problems right now and I think he probably enjoys a meal there, but you're right Joe I mean, okay he's down six billion. We shouldn't feel sorry for Ronald Pearl Tan. Exactly exactly and I don't think it's I. Don't think it's that bad but. You never you never think that somebody with twelve billion or one, thousand, nine, billion dollars in wealth whatever he added the peak could ever be could ever be enforced or even driven to sell anything under pressure. So Andrew Province about that party every year. Andrew what does that thing out in the Hamptons or some big party is that? You want to disclose that or maybe not maybe they don't I I have not been that party, but they stopped but but in truth and. for. That party which was for the Apollo it was. They were. The Apollo over many years and I had never been to it but he stopped doing that party about a year ago and some people I remember I hate to speculate about but we're even even even going to issues then so I don't know. I don't either I don't remember the name of that other one can never been pickens ran through these issues a few times you know you bet big on things and when you have conviction in in in the the places you're putting your money you bet big on these things there's A. Problems. Can can catch anybody. There's a certain real estate guy is now doing something else with this time that that had some problems in the nineties to. Not to mention any names but Kind of high profile he went on to TV, and now you know moved into politics after that your buddy. Andrew. Trump had some liquidity problems early in the Oh, I. Forgot I believe he didn't. I was just I was thinking of my buddies thinking all my friends and I didn't. Think about shock. All right. Good. All right. That's the show for today. Thank you for listening and if you've been listening to squawk box from the very beginning thank you so much. This week marks one year on this audio adventure. We're so happy to behind this policy with you squawk box broadcast is hosted by Joe Kernan Becky quick and Andrew Ross Sorkin on weekday mornings on CNBC at six am eastern to get. The smartest takes an analysis from our TV show right interiors subscribe to Squawk pod wherever you get your podcasts and then tell your friends or tweet at Squawk CNBC or but we'll be back here tomorrow. It takes conviction to see beyond the turmoil in today's markets. That's pgn the investment management business of Prudential with a legacy of risk management discipline and investment experienced through thirty market cycles. PG is prepared for today's challenges. Pgn Brings long-term perspective and deep expertise across public and private markets globally outlast uncertainty with PG. FIND OUT MORE AT PEACE JIM DOT com. That's PG IM DOT COM.

GM Tesla Andrew Ronald Perlman PG CNBC Joe Nikola Joe Kernan Becky Andrew Ross Sorkin Johnson JIM DOT Nikola Mary Barra K. Philibeaux Nicholas Elon Musk altium
Delta Air Lines CEO; Bidens Donors; Operation Hope CEO

Squawk Pod

40:28 min | 1 year ago

Delta Air Lines CEO; Bidens Donors; Operation Hope CEO

"No one likes to feel stuck boxed in or held back especially by your cloud. It's a problem but the IBM cloud is different. It's the most open insecure public cloud for business. It can manage all your apps and data anywhere across all your clouds so it can help take on anything from re booking flights on the fly to restocking shelves on demand. Without getting in your way. Smart loves problems. Ibm Let's put smart to work. Visit IBKR DOT com slash flexible to learn more bringing. Show musically. This squad the daily podcast brought to you by the team behind. Squawk box. Cbc CONTROL TO CNBC's essential morning show every day. Get the best stories. Debate and analysis from the biggest names in business and politics are were coming to enact today on Squawk pot flight or fight or both at least in the airplane seat recline video that went viral. I'm not advocating violence. But someone needed to tell that guy. Stop. Love was not in the air for those American Airlines passengers. Blooded is for Delta Valentines days the best day to fly delta. Because everybody's in a great mood a big green announcement from CEO and Bastion Delta Airlines will become the first airline to go fully carbon-neutral businessman and philanthropist John Hope Bryant on the Fed the future of capitalism and serving the under banked. The color is not read or or or blue as political parties. Green and venture capitalist. Alan Patrick off is betting on Joe Biden. Even though his friend Mayor Bloomberg is running quite the campaign is a great strategy for Mike is of streetfighter those stories and so many more including some compliments in the spirit of the holiday rugged today CNBC producer Katie. Kramer it's Friday February fourteenth. Hey Happy Valentine's Day squawk pot begins right now. Good morning everybody. Welcome to Squawk box here on. Cnbc we're live from the Nasdaq market site in Times Square. I'm becky quick along with Joe. Kernan Andrew Ross sorkin happy. Valentine's Day first up on today's podcast. A Love Triangle Gone Wrong Amazon Microsoft the Pentagon and one TEN BILLION DOLLAR CONTRACT. A federal judge has ordered a temporary block on the government's Djeddai cloud contract. It's funny that I it. Just funny that the initials because it just sounds like they signed joins you're looking for. It was awarded to Microsoft competing bidder Amazon filed a lawsuit claiming that the evaluation process include clear deficiencies errors and unmistakable bias can read that as president trump. And Jeff Bezos. The court granted the injunction that Amazon requested but told the company to earmark forty two million dollars for any costs and damages the be incurred if the court later rules that the block was issued. Wrongfully earlier this week. Amazon said it's seeking to depose president trump as well as current and former secretary of defense. A Microsoft spokesman said the company's disappointed with the additional delay but believes that ultimately the get the job and we'll move forward with the work so I mean this is a big decision though it is because it is and it really is. This is trump versus basis basis versus trump. And if that's true then it should be blocked. I don't I don't think you can just say no but I'm saying you mean you can view it that way. Now he's saying the whole loss. Hallway suit is trump. I thought you were saying that. It's a given that. Trump said give it to Microsoft the entire lawsuit by is the pretenses that try no gave this over like and there have been other know. Oracle wanted to to to Oracle sued block. And you know it's got nothing to do with Oracle so there are other companies that definitely want a piece of this business. The question is whether the issue was they were supposed to get it meeting because all they got all their employees working at the Dod. Now they you know trying to you. Know there could be a case made that they have gained the system to their advantage. And don't look now but you know. Jeff bezos might control every aspect of your life. Someday so I. I don't have a problem with him. Not doing everything for me. Packages Problem Weather Service problem if the president if you can connect all those. He doesn't leave a lot of fingerprints even get him on the Ukraine question. You guys if Amazon loses has to pay the forty two million dollars. Was it worth it? If you're if you're Cheryl Amazon in this whole thing would you say that was? Is it fair down in numbers that don't matter on a market cap of weight? This is the equivalent of finding on the football field. Should you call the challenge right? Should you about the same losing time out? About what forty two exactly. But but I would say yeah. That's worth the challenge. It's worth the challenge will see what happens but I. I was surprised that the judge look straight up. I like his hair like that. It's tussled did you notice on the side. It's it's not the way it normally is so you look. I don't know I just perfect. It's not perfect and you look more rugged rugged today more rugged to me on the sideline a lot of play. It was. It was before. Now you're back to Andrew. You like my hair like that to win a little less perfect viral video. Everybody thinks this is stirring up. A heated debate on social media. Video depicts eight tall man seated in the last airplane and the woman in front of Him who decided to recline her seat so in response the man begins methodically. I don't know if emphatically is the word I'd use repetitive. Beat people are divided some arguing. The plane legroom has decreased over the last few years. So reclining is inconsiderate and others saying if she bought the has the right to recline. I am in the camp that he shouldn't be punching the back of the basically. That's the pro. I don't even think there's much of a look I get it. Get it when you're in that lasts with Tara feet and you can't lead back. That's a terrible. I kind of blame the airlines for you got. Something's got to be seriously wrong with you if you sit there and there's some lady in front and you see like there's something seriously wrong with that. Guy Seriously. I'm not advocating violence. But someone needed to tell that guy. Stop what to do if you're if you're if he doesn't do it. Then you know you need to enforce having said that let's let's take the punching out of it for a second though because this is what. I think people are debating. What do you think it should have put her back in or could have he said the button on it he he could have said to her. Can you sit up a little bit? I don't have a right mind as she should have. Lifted them. And then taking up somewhere else but again this is like the airlines for cramming you into the seats where they have been shrinking inches and inches every year off of this to try and cram more people and then people say oh they want to look the way I remember. You're sitting there and when the person loose back it doesn't it doesn't come closer my legs. It may be a little bit closer but he has. He had his tray table down and it looked like it was right up against what happened with back as you see. Look it's like right up against Galle road warriors out there who do a lot of work either on a laptop or an IPAD. It makes it a lot. What he's doing is unacceptable. Okay now what would you do to him? She got carried off the plane. I don't know it. Can we resolve things a little more civilly? Can't we just say hey? I'm sorry between Mike and President trump result things more civilly. And don't don't get in the muck with each other. I don't know if that's going to happen in today's society now that you don't want to you can get arrested for anything. Can't you the slightest touch? I don't know what it would. I mean it would have been. I wouldn't have. I don't I don't WanNa think about it gets me sort of nervous. Yeah I'm getting anxious anxious on a Friday on Valentine's Day way tonight when I get a little bit and let us know. What did I do everything right that I have all flowers you and you were sitting in that back seat and if you were sitting in the seat that she was sitting in what have you reclined back by the way. Sometimes you say something to the person in front of you say hey. Don't they know what goes on and coach and have the slightest idea I know I do? I like it you on my act. I know all the kids. They're yours class. That's a debate worth having. It is Valentine's Day and love is Oh and the other thing that is Andrus red. Todd that is good and he thought about it. You try to do it. That's as good as you could do. More like bright color. I don't have a lot of bright colors but I wore red tide last Friday. Oh my God you can't do it till next year. Then no because it was. It was hard healthy around and it's really my only genuine bright red tie that I I don't know what the hell that is around. Color like. Mike Boorda my dogs leave from actually company that I started to like suit supply. supply L. towns. Cheap doesn't sound like you. You look like a warehouse. It's not like it sound like that. You know what it is L. and supply. What do you guys think? Suit supply sort of like inbetween. Or Oh no but it's but it's also not never lose it coming up on the podcast entrepreneur and advocate for the under banked. John Hope Bryant is onset with Joe Becky an Andrew. How're you doing value here for Valentine's you're actually concerned about my heart? My feelings that they feel plus love really is in the air at least if you work for Delta it's the equivalent of about two full months pay for each of the ninety thousand frontline employees or Delta Airlines Pot. We'll be right back. No one likes to feel stuck boxed in or held back especially by your cloud. It's a problem but the IBM cloud is different. It's the most open insecure public cloud for business. It can manage all your apps and data anywhere across all your clouds so it can help take on anything from re booking flights on the fly to restocking shelves on demand without getting in your way. Smart LOVES PROBLEMS IBM. Let's put smart to work visit. Ibm DOT com slash flexible to learn more. Visit Squad. Good Morning. Welcome to the squawk box right here on. Cnbc Happy Valentine's Day love is in the air and I'm Andrew Ross Sorkin along with becky quick and Joe Kernan in studio this morning bringing us some love is John Hope. Bryant businessman Philanthropist Chairman and CEO of Operation. Hope also bringing us hope beyond the Land Steve Smith also with US wearing some purple a little bit of Love Thai colors twins Mr Kernan. Here's what's making love. Hope and we just need charity a today. I guess how you doing good value here for Valentine's you're actually concerned about my heart and my feelings that they I think about it for you. You're fine no matter what I try my best to. I love you anyway. Questions are emerging over president. Trump's fed nominee judy shelton after contentious confirmation hearing yesterday Steve. Lisa joins US WITH MORE ON Steve. You told us there'd be fireworks. It was a good call. Actually I wish all my calls were that good. Love was not in the air. Yesterday's Senate confirmation hearing of Judy Shelton to the Federal Reserve and the trump administration late yesterday. insisted that is not pulling the nomination of Shelton after that contentious hearing which both Democrats and Republicans expressed concerns about the nominee and the potential politicization of the Federal Reserve. Here some of the comments afterwards. A shelby came out and told reporters. He was concerned to me. Said I remain concerned. And then you know John Kennedy. What a great orator that he is. Nobody wants anybody on the Fed that has a fatal attraction to nutty ideas. Said John Kennedy is about shutting necessarily but that was his comment the Concern Cinderella Shelton's prior comments and writings about whether the Fed should be independent if the Fed should actually weaken the dollar and especially here advocacy of the gold. Standard of committee. Vote has not been scheduled with the decision is fraught with as much politics economics question. Being whether Republican senators will defy the president on the nomination. I think it takes. Just one and the nomination would go down. Yeah because the the Banking Committee is I think a Republican majority of just one so I think if they split. It doesn't come out and Steve could it be. This is not about a love of red or blue red green that no one sets their own wallet on fire that they don't want. It is interesting John that the one place where Republicans seem to have drawn a line on some of the president's nominees is the Federal Reserve. Let's be clear he's got a bunch of successful ones and like I think there's four The chairman he appointed Nominated Clarita the vice chairman quarrels the vice chairman for Supervision and Bowman Michelle Bowman. Who is in charge of bank community banking? But then there's been a fairly long list of those who haven't made it in a variety of ways. Mostly they never got to hear us. It hasn't been voting. But they were sort of in one stage or another of name to the and that's a pretty long list and I don't know that Shelton's going to be on that wall there of the unsuccessful nominees but there certainly was a question about it after yesterday's hearing and John. What do you what do you think about Central Bank independence? At this point I mean it's been so talked about. It's been so focused on the president has made very clear what he would like to see happen using his twitter account to tell the world I think that is critically important that it stays independent. There has to be someplace facts matter more than politics or persons or people or even the moment and I think this is one of those places and one of those spaces in and access the colors not red or or blue as in political parties is green and I keep saying people vote their vote. The pocket books. This is the best way to keep that a party going is to keep politics out of it and I think some of these nominees were never intended to win. Cain was entertainment That really wasn't serious. Maybe that was an attempt to signal There are others like the vice chairman who I think of various. I know him very well. Very serious. People I think this is the right call. I think what's interesting is is. There's been a change in the process here within the IT White House and I know this because I was able to report early on those that four successful one came out of this group inside the White House. That was doing things the way things used to be done before other administrations betting you find somebody you vet them. First or name doesn't come out publicly that kind of thing. I mean Powell's always out there but you also consult with the Fed. It feels like the four that haven't made it. We're sort of off the top of the head of the president. I think he read her. Saw something about more and decided. Oh I want that guy on. And then Cain and then say it hasn't been the same deliberative process that was going on inside the White House. It's it's changed somewhat. He's he's more out there. The president is more out there. In terms of the pixies thrown to the Senate. Hey John Let's talk about the work you've been doing the community in terms of trying to make sure that you are getting financial literacy and financial access to communities that haven't had it in the past operation hope is now what one hundred and fifty inside locations and banks one hundred and fifty locations thirty states were physical forty states we have a presence plus put the equal and the District of Columbia four million clients. We directed three point. Five billion dollars of capitalist money out of boy underserve into underserved neighborhoods. That are paying. We're paying their bills. And we've rehabilitated. A bunch of people who now the tin himself part of the Free Enterprise System Homeowners Auburn. The Guy who made the suit I'm wearing can't make this up. It's sexy when you come on. You have that come on my suits johnny. Schema been since you've mentioned him a riot dro- clothing hearing today. The idea of people having to drive thirty forty miles to the nearest bank. What is that like? And how does it change your ability to participate in capitalism? If you can't get to bank time as money no I tell people all the time choice between more time and more money as giving more time I make more money but when you're in these neighborhoods constantly degrade it. You dignities constantly rob because nothing is efficient. Nothing's available knowledge. Not Help to change that to some degree what you can do on a phone but you know phone right well. This is closing down the community banks. We went down to the Delta Mississippi. And they're closing down the banks because more bang going virtual. Yeah but you need with communities that have trust issues need high touch before you can have high tech and we're going back to the Fed. The Fed is one place where I have not actually been able to. I've actually had to have a little decor mothers. Told actually. Don't don't hug the Fed chairman when I took a intercity breaking and hugged him anyway but The Queen make sure you just turn your back step backwards. Don't hug but the point was really saying was John. This is not. He's not a politician he's again. He's not a politician. This is not you know. Let's have some again decor respect for the independence of the office. I didn't hook him on camera but I John. Get to this point because we across the idea to then the computers tend to make algorithms and they're very good at finding out the credit risk but some of the loans that you make are because you essentially you go you find ways to make loans that are different from what the Algorithms and the credit which is going back to wait. America was built characters called Character Linden. Actually character person. Bipartisan bills copies of phone. You're paying insurance payment. That's a form of credit. Doesn't show your credit report. We weren't we at ninety five percent. People have an error on the credit report. But WHO's helping them to understand that to write a letter to dispute that dispute that the law states the credit bureaus to prove it a pulled off your credit report as a forty point. Pop your credit score knows. What do you make? Italians go quick question there. People like Max Login at a firm massacre who's trying to rewrite what the FICO score even is how it's defined you have by the way the folks in China you look at. What an ant financial doing the way. They're scoring people. I mean you might have some real problems with. They'll get up off the subway and give somebody your seat and their cameras watching literally. All of these things are going into metrics. Into whether you're a good person bad person Gonna. Pay Not GonNA pay. Is You know. Technology is technology ultimately. Help US or hurt us. The answer as usual is it depends. Technology alone actually will hurt us. I'll say it was so max is a great guy I break. I'll talk to him tomorrow. And but but they're not careful. The company could actually help accidentally bankrupt a lot of people. Because you can literally micro-finance anything a plane ticket a car rental and it's five bucks a month. You say I can afford that because you think. What's the payment not? What's the interest rate? Or what's my debt and you may not roll all this up to realize you're actually technically bankrupt so I think it Max bad financial literacy coach in his model. Now you can do high tech and high touch doing well and doing good in. My goal is to be ten percent of all banking with financial coaching temper of corporates with Angel Coaching. I think that Jon Reebok rate three percent. That's amazing we're you arenas my daughter on on first-generation investors why why didn't you jump on your daughter's much smarter than they have have chapters at all bits and they get five hundred dollars. These kids to learn how to Mitch. Why didn't you jump not yours your own thing what I set you up just? Because you're Caucasian. Enriched doesn't mean you get to go to the front of the line and it just takes time Joseph. That's that's not what you saw her. We'll start with a point minutes. He can number. It is Valentine's Day. Love is in the air which is an extra special day for Delta employees for six straight years. The company distributes more than a billion dollars from its profits to employees. Join US right now I on. Cnbc interview was Delta CEO Eh Bastion. And before we get to your day we do want to ask you about the impact of the corona virus. And what's going on in the business and everything else but I just want to understand. I want to go straight to the employees piece. So I understand that How much money do employees get on this Valentine's Day but we are paying today one point six billion dollars in profit sharing to our people? Yes it's the equivalent about two full months pay for each each Each of the ninety thousand frontline employees Delta Airlines always tell our customers. Valentine's Day is the best day to fly delta. Because everybody's in a great mood and we look forward to celebrating our employees insuring. Those rewards with him today. You also have a big announcement another big announcement that you're making this morning. One point six billion as I just mentioned. It's not only a large amount. It's an historic amount. We've never found the company anywhere in or forget our industry in our world that has paid a profit sharing of that. But we also know that we've got more responsibility than just to share our success with our people and we are announcing that starting March first Delta Airlines will become the first airline to go fully carbon neutral on a global basis. Now will be focused on. Obviously the reduction of carbon that we are investing in our technologies clean technologies. We're using four engines but also carbon removal and the investment will be making new technologies going forward to remove the carbon that we can't reduce from are a lot of people are GonNa do a double take an airline. Becoming carbon neutral is a bit of a reversal of how we think about things given that airlines. At least as far as I know it are going to be based on fossil using fossil fuels for as long as we can possibly imagine. How much is this? GonNa cost on an annual basis. You're right Andrew. It's it's a big challenge and it's a big commitment and you're right. We will continue to use jet fuel for as far as as the eye can say. We'll be investing in technologies to reduce the impact of jet fuel. But we'll never. I don't ever see a future that we're eliminating jet fuel from our from our footprint but what is going to cost for us we estimate about a billion dollars over this decade close to one hundred million dollars a year. And there's there's no greater challenge that I know of that. We need to be investing in innovating in is environmental sustainability. When you think about carbon offsets you think about some of the programs that are out there. Some of which we all participate in you know they are. They are doing a bit to help the planet but we've got to be investing in the new technologies of tomorrow whether it be reforestation of we've got a project going on in Africa with global citizen to build a great green wall across the entire continent of Africa To Invest in sustainable aviation fuels to put some serious capital behind. It is this even. I mean the thing that I'm thinking about. You can buy the offsets by offsets. First of all the great can Andrea about offsets is. There's not enough offsets to go around effectively. So every company in the world decided they were GonNa try to become carbon neutral literally by paying others. There's there's not enough to. There's no way to do. This is what do you think happens to your competitors. You know the Great News For deltas. Doing Great Ed and relatively flush other airlines are not necessarily in your situation. Well you're right. Carbon Carbon offsets are not the solution. they are not enough to go around We need to be investing in projects that make a difference. Carbon Offsets Have a lot of ethics efficacy issues and quite honestly some places. They do more harm than they actually do. Good or pay people not to do harm. That's not really helping our planet Your second question. Is You know we hope this is something that everyone can join in? You'll continue to see. I think as you go forward. More companies putting forth more investment dollars to find a cleaner future I hope our competitors join us in the battle. This is not a race to be number one in this space. This is a race for planet. Help us with this. Everybody's trying to make sense of corona virus and its impact. Take US inside the room with you. In terms of modeling it how do you how does Delta model out the different potential impacts and what you're going to do about it because I think that's what everybody is trying to do right now? What is comparable to Andrew? We made a really make it really simple for you. When we started to consider and think about the harm that our our employees were potentially getting into and going into to fly to China. It was a really simple decision that we needed to exit the country and we exited about two weeks ago. was not easy in terms of impact. It's it's about two percent of our revenues but we cannot ask our employees to operate in China. If they don't feel safe. But how will I I? The larger questions are people trying to model how long this goes on for. I'm sure you have experts and others inside your firm that are thinking about that what the impact is even beyond the flights that are going in that China terms of other traffic just around the world where we are certainly seeing impact in the Pacific Knock on effect not like we were seeing clearly in China but there are some some impacts throughout Pacific. Travel trans-pacific travel. We're not seeing the impacts in the US or any of the other regions in the world. Those are all staying really healthy Were Monitoring Europe certainly across transatlantic. And I saw the announcements in Barcelona about the The show that was just recently canceled. Fundamentally the businesses. Doing very very. Well we're expecting to grow our revenues at a decent rate this quarter Don't forget fuel. Prices have come down in concert with the challenges around the corona virus so as a financial matter within the quarter. I'm not sure we're going to see really a big impact. Hey can I just ask you? How confident you feel in terms of making sure that people are safe when these planes are coming back from places in Asia. I was on a plane on Monday. That had just come from Taipei to New Zealand to San Francisco and then brought us back across. How do you make sure that you wind up? You don't wind up in a situation like some of these cruise ships have oh we. We have the strictest standards with respect to safety and cleanliness We we've I mean there was not enough time for that. That plane sat for an hour in San Francisco. There's no way you can thoroughly clean everything well I. I can't come to that because I'm sure that was not a delta plane off but we but we we absolutely have the especially on international trips we go through a deep cleaning return every time you know. It takes a couple of hours two to three hours to turn an international flight on average and we spend the time. We've got a a company that we've announced a partnership with called vital vio early this year. Which actually using light sensor technology and some of it's been previewed in dealing with planes coming back from China. Were using light technology. I thinking about in the lads to keep the labs cling to as clean as possible but also that we can. We can roll through the plains. Transitioning real quickly tell us about recline gate of the American Airlines flight with a person recline. The seat had somebody banging the seat. How how would you handle this situation? Well we we haven't reduced our our pitch and our aircraft in years In fact we're going the other way we've been adding a lot more pitch and a lot more seats with more space on our aircraft more premium seats more room in coach etc You know we ask all of our customers to do the very best to show respect to their customers. We want all our customers to have a great time but what we have and we generally generally generally do not see that issue. What's the advocate though? I WanNa know what the etiquette is. If you're tall guy you you are a tall guy. You are coach and somebody's in front of you may want to go all the way back. Is it appropriate to even say to them? Hey I'm really taller. Whatever it is favorite and don't go back to. They have every right to go as far back as they want. They paid for the ticket. I think customers have the right to recline We've been testing reduce recline and and seeing response on that. We actually have a fair amount of our fleet on a reduced recline as a result of that. But I think that the proper thing to do is if you're GONNA you're gonNA recline into somebody that you ask if it's okay first and then you do it when that's interesting. You never say anything myself though. It's called matters. You don't take anything. Do you think the etiquette is to ask the person behind if you can recline. I think if there if someone knows a tall person behind them and they they want to recline their seat. I think the the polite thing would be to to make certain it was okay. I never recline because I don't I don't think it's it's something that since I'm the CEO of the airline should be reclining. My seat and I never say anything if someone reclines at them. Okay thank you ED. Happy Valentine's next swap Todd Joe Biden has been fundraising in New York City. One of his donors venture capitalist. Alan Patrick off weighs in on Biden on his competitors watching the Bloomberg heads if you his aunts last couple of days it's all Obama and Mike and Joe is not done that. Which is it's ironic. We'll be right back. Welcome back this clock Pied. Here's Andrew Russell if you want to get a glimpse into the political minds of America's Co take a look at their political. Donations are but frank is. What does he do? He follows the money as the money. The big money the league money this season the nation's top CEOS gave over two million dollars to political campaigns. That's in the fourth quarter most of that to Republicans a CNBC analysis of political spending by the CEOS of the S. and P. Five hundred shows that twelve of the top fifteen spenders gave to Republicans but the two biggest donors were both to Democrats Reed Hastings at the top of the list. He's the NETFLIX supports. He was the biggest donor in the fourth quarter writing. A five hundred thousand dollar check to the Senate majority pack. That is a super PAC aimed at helping Democrats in Senate races now the second biggest spender Warren Buffett. He gave two hundred forty five thousand dollars to the Democratic Congressional Campaign Committee that Helps Democrats protect their majority in the house. Now ranking third. Someone I hadn't heard of before J. Dare he's the CEO Auto Salvage Company Co Part. He gave just under two hundred thousand dollars to Republican Causes With Ninety Five K to the Republican National Committee. Now Jeff Stryker of the Intercontinental Exchange gave one hundred thousand dollars to the RNC Fred Smith of Fedex Greg Brown of Motorola solutions and Lance Ryan conical Phillips also among the biggest Republican donors. This is just one quarter obviously. These aren't huge numbers. We're GONNA follow this all the way through November where these numbers in political donations. Go Okay Robert. Let's continue this conversation. Stay with us. We're going to bring in our guests Allen Patrick off who is co founder and managing director of venture capital firm gray coughed and our guest host. John Hope Brian Allen. Let's get you to weigh in on this part of the conversation. You've been very vocal about. You are supporting Joe Biden to this point. I know you said after Iowa that it was a little bit disappointing. But you were going to wait and see what happened. What do you think after New Hampshire go? Last night was a big fuss. Two big fundraisers for Joe and New York and we're over the top. Frankly it's been reported the paper. I have no specific knowledge but Report was their base close to a million dollars. And if you divide that by twenty eight hundred dollars a piece which is what they raised for those fundraisers. It's a lot of people and I can tell you that. The rooms in both cases there were two two two two of them and they were both packed and It hasn't translated into votes yet. What happens if what does he need to do in South Carolina in order for his campaign to keep going? Oh I think he's got to produce in Nevada come out pretty close in South Carolina. He's really gotta show stuff if he doesn't win I it's it's critical. I think he said it I think the donors feel Everybody's sticking Joe until they see what happens there and then of course you've got Super Tuesday but I think the money is A. I'm sure a difficult issue. And you gotta you gotTa get raise the money and you need momentum to do that That's why I say. Last night was a very good indication. That people who've been supporting him stayed with them which is using people. Do you think this is now about personality or do you think this is about where the party is? I think that Mike coming into the racists confused a lot of people because the kind of people who would be supportive to Mike are the same people would be supportive to Biden. I believe and a lot of people certainly New York people are all as I am a friend to bike and my just came in a lot later and I think people are sticking with the candidate that they started with and to let runs it. Scores and Joe Is very strong last night. But in the end the voters are what counts. And we've got to see how things go in these next couple states might be your second choice. Bloomberg I think it's fair to say that I'm certainly always been a friend of mine. And and he's a very viable. Formidable candidate is he certainly has. Ads are overwhelming at this point. It's we're showing the predicted sites and it's very strange. I was looking out of earlier today. Know what strange's that Bloomberg on WHO's going to be president in twenty twenty s number two any closer to to trump than anyone else and everybody else is far below but who's going to be the nominee it's still sanders well ahead of where well ahead of where Sandra as well ahead of where Bloomberg is so. It's weird for the nomination. It's still sanders. But for who has a better chance of actually being elected president? It's bloomber a you know that's the interesting but the weird Joe's in single digits it take take that as an example. I agree you. I don't think there's a chance that Bernie is going to be. The candidate. Put the votes at the moment. Say He is at the moment they say joe is behind and that exchange also I think one interesting thing is which is watching the Bloomberg adds. You'll notice that he is sue. Assumed the Obama role if you see as as the last couple of days. It's all Obama and Mike and Joe has not done that which is ironic because Joe obviously was his vice president and one hundred east got accepted. Mike is trying to take that. What is Bloomberg's efforts online to to punch back at trump? You know there's been a lot of people in the Democratic Party that have said we don't want to get down in the mud mud meaning slinging mud slinging mud twitter. We'll call it. We'll call the muck name calling holy their staff and one of the things that Bloomberg has actually done is said. You know what I'm GonNa do it. They take advantage of every time. Trump goes after. I'm going to go right back attention in in this world. It's almost like any news is good news for you. In terms of the attention you can get. Is that a good or bad given that he is oftentimes trying to differentiate himself from trump is a great strategy for my coming. He is a streetfighter fighter. Really I mean he's you know he's a self-made guy and he's not gonNa take any Baloney from anybody and in particularly trump and you just kind of it was yesterday which is a measure someone size up Which is a good comment but go low. We go go. That was never true over. That was never true. People that said that never stayed high. They were always just but it's not against each other on the Democratic Party. I mean JOE is consistently Anti Trump. From this day he started till some sniping supporters. Who are doing when it goes on really. Yeah it is I did. I mean the supporters are the voters John. Let me ask you this idea of self-funding Bloomberg is self funding and the idea. There's some people say well that's money buying politics. Some people say well that's just his money so he's not corrupted by all the the corporate. How do you read that and this is argument? Trump made the first time around as well. If I'M GONNA sell which you didn't end up you do it's my money so therefore I'm not under the influence of anyone else for for underserved communities that I serve as a brilliant strategy because your comments was about the billionaires money coming out of their wallets. He's actually talking about money. Going into poor people's wallets the Tulsa speech I talked about black economic empowerment. People know how can I become a billionaire talk about how can I become a millionaire? How God become wealthy and I think this neutralizes the The interest question. Do you believe ideas or do you. Not Joe Your comment about Sanders. Popularity versus Bloomberg. You got the emotional side of the brain that Sanders and then the question is. When is the logics? Hot Part of the break. Click in which is the more the The Bloomberg Converse Bernie has different gives different emotional responses to different. Believe me my emotional response is not just won't burn and now I want to thank you both for being here. That's the show for today. Monday is President's Day market holiday but we will be here with an all new podcast on your feet. The man the myth tracking down the man. It's legendary trying to track him down. He just won't be pinned down by any sort of convention. Becky quick reflects on interviewing actor bill. Murray squawk box hosted by Joe Kernan that quick and Andrew Ross Sorkin tune-in Weekday Mornings on CNBC at six am eastern to get the smartest takes and analysis from our TV. Show right into your ears. Subscribe to Squawk available for free wherever you listen. Have a great weekend. We'll meet you back here on Monday. Happy Valentine's Day by no one likes to feel stuck boxed in or held back especially by your cloud. It's a problem but the IBM cloud is different. It's the most open and secure public cloud for business. It can manage all your apps and data anywhere across all your clouds so it can help take anything from re booking flights on the fly to restocking shelves on demand without getting in your way. Smart LOVES PROBLEMS IBM. Let's put smart to work visit. Ibm DOT com slash flexible to learn more.

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A Farm, a SPAC, & Martha Stewart; Airline Bailouts; $2.2 Trillion

Squawk Pod

43:40 min | 9 months ago

A Farm, a SPAC, & Martha Stewart; Airline Bailouts; $2.2 Trillion

"It takes conviction to see beyond the turmoil in today's markets. That's PG the investment management business of Prudential with a legacy of risk management discipline and investment experience through thirty market cycles PG is prepared for today's challenges. Pgn Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with do find out more at PGE DOT com. That's PG I im DOT com. This is squawk pod I'm CNBC producer, Katie Kramer today on our podcast. Too Big numbers two point, two, trillion. That's the dollars proposed by House Democrats for another round of stimulus aid and one million dead from covid nineteen around the world while the US, government warns continued infection hitting the holiday season. The CDC said avoid the Turkey pro racers and parades anyway. Airlines facing hard choices as key federal aid expires the head of the Trade Group Airlines for America we have once in a lifetime and that is nobody's fault and the government needs to respond differently to this. Then they did to the financial crisis. And the latest company going public via a SPEC agriculture, startup APP harvest on a warpath here to change agriculture for the good. Maybe we should call it Martha back because guess who sits on the board none other than Martha Stewart, I WanNa see what can happen with this technology i. think it's just a brilliant step in the right direction for the future of our injury. This is a very fun for me project also, very serious project. Those stories and more today plus Wally France the latest on the international luxury market. It's Tuesday September twenty nine, twenty, twenty pandemic. I cannot wait those. squawk pot begins. Good. Morning everybody. Welcome to Squawk box here on. CNBC I'm becky quick along with Joe and Andrew Ross Sorkin Andrew Welcome back. Thank you. Thanks becky. Answer Pelosi Democrats have proposed a new two point two, trillion dollar corona virus relief bill. She said it's a compromise measure that reduces the cost of economic aid and includes new funding for schools, small businesses, restaurants, performance spaces, airline workers, and other Speaker Pelosi spoke to Treasury, Secretary Steve Mnuchin yesterday, and they plan to speak again today now, White House Chief of Staff Mark Meadows saying that president trump would be willing to sign a one point three, trillion dollar relief package but. We'll see guys where this all heads you inching along inching along as it. You know. I don't know where we went from two, three, two, two, two that's not coming down I. Don't know what I don't know where the White House really is. We'll see anyway vice president Mike. Pence. Said yesterday that Americans should expect a rise in Cova cases in the days ahead as testing increases in some mid western states show some worrying trends. I'm crazy infection numbers and some of the sparsely populated states like twenty, five percent infection rates which UNHEARD. Of. Warning comes as the global death toll from the virus hit one million people president trump said that the government plans to distribute one hundred and fifty million rapid cova tests made by Abbott labs in the coming weeks as we move into fall season and the CDC now warning that shopping and crowded stores around Thanksgiving is a higher risk activity that could contribute to the spread of covid nineteen also cautioned against participating in Turkey Trot road races. Dang. got cross that off Yeah I that's up I didn't. Where we missing something. Is My life It feels empty day Turkeytrot road race. Where do we get that? We're who who wrote. It did someone who write that? Did you go to a lot of these and is it Did it really say that somewhere anyway? Who did the CDC CDC said avoid the Turkey road races and parades anyway and gathering for large indoor events with extended family of friends thanksgiving I have something to do with giving maybe they have something to do with Thanksgiving? It's well. Any of the events that are associated with this what's coming? You know that people are going to be out and gathering that people wanna see fan jumping sounds like kind of tired of. I don't WanNa go to some crowded indoor. Not that I shop anyway but but I I don't want to I don't want to go anywhere where people rubbing shoulders. Really I I, wonder I mean it. I would never. USE PTSD lightly because it's such a serious thing that that that all our guys in deal with coming back but. We are a little bit I mean, I, do feel affected. In the future I don't know when we get away from I feel people near me if they're closer than ten feet and it it's it's a different to live than we have. Whole life isn't it and does it ever go away? I don't know. And I still wondering you know I I like giving people when I see them after I haven't seen them for a while and you can. Be Back. Elbow not. Hands not even not even a fist Andrew that that could transmit it couldn't it I guess you know what somebody tried to give me a fit someone gave me a fist this weekend I went with they put their fist out on I. put out my album Yoga fists might work. That's that might work I. Don't want to touch. Skin. No skin to skin for now. Just you know well, you must be a lot of fun I. Think we're. I do this I gotta say. Anyway in the meantime, The New York Times out with a report overnight that said top White House officials pressured the this summer to play down the risk of sending children back to school report says that the White House officials tried to circumvent the in a search for alternative alternate data that show the pandemic was weakening posed little danger to children. This is where. Dr Redfield has gotten in some hot water. Lately, he was overheard making a phone call private phone call where he was questioning some of the advice coming from another legal counsel versus what the CDC was putting out. and. Unfortunately it's got people in this position where they're not always sure what to believe in terms of what the CDC is saying in terms of what other agencies are saying. Unfortunately leads to this this fear that exist in our society right now. It's a it's a mess because it creates a real credibility problem we talked about the vaccine issue and and the number people already who were out there publicly saying, they may not want to take a vaccine and part of that is the credibility of the government and whether the whether the program will be. Administered properly. CBC has now confirmed that two women have come forward with sexual assault allegations against Nikola founder Trevor. Milton. Now, the first allegation came from Milton's cousin who filed an assault report with the police in holiday Utah claiming that the former CEO, groped her at a family wedding in one, thousand, nine, hundred, eighty, nine. It was first reported by the Wall Street Journal after she tweeted about it. Now, the second alleged assault which has not been previously reported comes from an event involving. A minor back in two thousand four that complaint was filed on Friday and Saint George Utah. The spokesman Milton strongly denied what he said were false allegations and declined to address the specific details of the women's Complaints Milton resigned as you know, we reporting on it for the past two weeks Nicholas CEO about a week ago Following that report from Short Seller Hindenburg research claiming that he had made false statements about the electric companies technology in order to attract investors and win deals with other automakers that reportedly led to an inquiry by the SEC j you can read the full story on CBC Dot Com the F. T. F. T. at a story. I. Think over the weekend about how the actual. Truck Design might have not even been his either that it might have been stolen from another company that he had met with many years ago. So lots of questions coming out about this and it's not just a story is you know about Nicholas also story General Motors given the diligence that that company hopefully supposedly had done on on on Nikola and the state that they've taken. In the company. Right. I mean, it seems like separate stories doesn't it? The I mean the the reason the trucks were. But but then again at all. May Be you know but he's already gone as. To me this is a story about diligence this story to me the war. GM is. Here, there's one about specs and how actually how little diligence goes on specs broadly because of the disclosure program and how it all works to begin with, and then there's the secondary issue which is General Motors, which is taking a stake in this company clearly without doing its own diligence, right you wouldn't expect GM to know whether he's groping cousins at family events. I mean, maybe would I dunno, the you gotta look at it but you well, you would WanNa, you would wanna be doing I assume you re hire people to do real background research on who you're about to get into business with. Both of those I'm a big fan of bars. Air. What's that? The. Both of those women came forward after GM took the steak I mean I've seen tweets from the other woman to and both of them came forward after GM. Took that stake I think once you're profile, it gets high enough anything from your past is going to kind of come out and and catch up with you and that that may be a case of this who knows exactly what happened in these situations but I have read at least one of the women's accounts and it was pretty graphic and. gestion is that when you do diligence on company, oftentimes, you actually due diligence on the executives especially, a effectively a startup that doesn't make money that doesn't have a history. You actually might go back and people's history their histories to figure out who they are and what their stories and whether you want to be in business with them, and as I said, I'm a huge fan of Mary bars, but she came on our air with with him to talk about the wonders of this transaction. Jim was very unique to us because they brought a lot more than just deleting the Badger. The whole world is waiting prostitute home who you're working with bill. Most amazing electric pickup truck in. Hydra. Till pickup truck in the world in Jim was definitely the top of our list, and after I got to know Mary more and our entire team, which is absolutely the right decision for the. For the company to do. I mean, it's just it's it's a perfect relationship and it appears at least even putting that can even putting maybe the alleged history aside that. That would work should have been done wasn't done in its completeness if you. Wonder. WHAT GM does now I I think that's the question to speaking with mark fields about that last week was pretty interesting just about what they can or can't do the the former G. Executive who's now they're trying to run things and see what really exists beneath the surface. A battle in the world of luxury brands is heating up. Failing countersuit against. In its bid to try and walk away from that sixteen point two, billion dollar takeover. Says that the conditions necessary to close the acquisition haven't been met and it will not be able to complete the deal as it stands it cited the pandemic, the threat of US tariffs on French goods and Tiffany's request to extend the deal deadline to the end of the year. Guys this. This is a very interesting one and Andrew. I don't know if thoughts on where this comes down. This does not look had anything to do with in terms of why this isn't happening. It's really the French government was pressuring lvmh saying that they shouldn't go ahead with this deal or are they should at least put it off a until something has cleared up around the threat of global trade in the United States making these charges that they may raise tariffs on some of these French luxury goods that the French government basically told lvmh forget it. You can't do this right now. I mean my my only thought is that this indicative of what's happening across the world? Frankly France of course has always had their national champions. lvmh. Is One of them but clearly the the decoupling going on is not just with China but to some degree. With the with even countries that have long appeared to be allies. Wonder if there's if there's a breakup fee or who gets blamed and how in this I mean this is a different sort of scenario to watch. You're right. It's the decoupling this taking place everywhere. But to watch a deal that had been put in motion, get broken apart. We'll gets. blamed. Well I don I gotta look through the the filings I don't I don't actually that's a good question I don't know who who ultimately pay the. Remember last week the Journal was talking about. How unprecedented is what we're doing with? TIKTOK and saying basically asking this question who are we France in terms of state `ISMs this isn't they do. They do this. I mean remember when Yo play was supposedly it's all suck wherever. I mean, if you try to buy I mean you better. You better be ready. There's some serious you know fighting if you're going to try to the by. Is a great andrew or Becky did you ever watch for cy? Do you ever see because I'm in the middle of watching and now it's it's three seasons it it is Louie the fourteenth. It's amazing. It is I mean like x rated at times but it it's I, have a new appreciation and love. of. It is they at that point it was the center of the universe Versailles was it really was? and. The French. They've got the most beautiful city and some of the greatest culture and and I I actually understand sort of the you know how they feel about their their brands and it's you know it's thousands of years of of of of being friends I think it's Great I. I love the entire place in everything about it and all the culture nobody else rich creamy sauces. Next unsquashed pod airlines press for eight as the deadline to avert job losses nears airlines for America CEO nitwits Kelly what hangs in the balance are literally tens of thousands of jobs, people's lives and the amount of service that communities both small medium and large are going to get going into the future. We'll be right that. It takes conviction to see beyond the turmoil in today's market. That's pgn the investment management business of Prudential with the legacy of risk management discipline and investment experience through thirty market cycles PJ is prepared for today's challenges p Jim Brings, long-term perspective, and deep expertise across public and private markets globally outlast today's uncertainty with PJ, find out more at Pge dot com that's P. G. N. dot com. This is squawk pot. Andrew. I think we must have lost Andrews defeated I don't think he here's what's going on here. Good morning everybody. Welcome back to Squawk box here on CNBC I'm becky quick along with Joe Kernan, Andrew Ross Sorkin we are watching the US equity futures at this hour Andrew. Stubbornness. Don't know what it yeah and then I couldn't hear him I. Don't think he hears us or we we hear. Be, dropped out yeah. No phone and Mike, wasn't on I. Don't know he's a mess becky. I can hear you now I feel like I'm in a variety of commercial. Can you hear me now? Can you now have you lost your IFP? It happens it happens anyway we're all here. I is fast approaching the day when the cares act aid expires for airlines companies CEOS have said the industry could face tens of thousands of furloughs. If no extension is approved WANNA get over to fill Abo- right now who joins us with more Phil Andrew you're looking at least thirty thousand airline employees are scheduled to lose their jobs starting on Thursday. Now, that depends on whether or not. There is an extension of a cares act yesterday United Airlines announced that it had reached a deal with its pilots union, and that deal means that they're going to be laying off or furloughing fewer than twelve thousand employees. Originally, it was supposed to be closer to sixteen thousand. That's because they were able to with this deal. Prevent about two, thousand, eight, hundred, fifty pilots from being furloughed on Thursday. What is the agreement between united and it's pilots basically comes down to this. The pilots agree to fly fewer hours essentially a pay cut, but their jobs are going to be guaranteed until next June fifty, eight percent of the pilots at United. Approve this change. Meanwhile, you've got American Airlines it as announced the largest number of scheduled furloughs. Nineteen thousand scheduled to start on Thursday American is also. Scheduled to borrow five point five, billion dollars from the Treasury Department. That's the other deadline that's coming up. That is tomorrow when airlines have to commit to whether or not they take a loan from the Treasury Department or if they say, no, we're not going to do that as you look at the passenger levels keep in mind that what we're seeing here is passenger levels they've leveled between sixty five and seventy percent, and at that level, the airlines are definitely. Going to have to become smaller. So the question becomes does the government step in with some type of payroll aid southwest and Delta both of these airlines along with Spirit therefore going treasury loans, they have said, no, we are not going to be borrowing this money from the Treasury Department. We're still waiting to hear from several of the airlines so far American and united have both committed to taking treasury loan. So the next couple of days will be really interesting guys. Phil question for you and I hope it's not a curveball here. Could you ever imagine an environment? That's that's so challenged in the airline industry that there would be more consolidation meaning the government would allow more consolidation given the circumstances of the industry possibly possibly but not much more I think that most people within the industry when you talk with them, believe that the feeling is that you're at the right size in terms of the number of carriers right now but there could be some on the edge there. Do you see a deal? Perhaps somebody consolidates with jet? Blue or consolidates with an Alaska that's a possibility, but remember right now. American Delta United Southwest. They control more than eighty percent of the market. So you're not gonNA see one of them snap in Alaska, airlines because I think that the regulators would say wait a second now that's really becoming too large and real quick. The reason that similar airlines that you mentioned earlier are not taking the loans rise because they think that the warrants are too onerous. What what's the rationale combination combination of the warrants being perhaps something that they don't want because it would be dilutive to shareholders but also they believe that they can get to where they need to be strictly by doing this in the private market and it. Gives them a little more optionality in terms of as the repaying it, restructuring those debts down the road. That's the key right now for a number of these carriers and also keep in mind with both South West. Delta they have a number of employees, a sizable number of employees who have decided to take unpaid leave of absence, and so at this point they believe, let's do it in the private market. Look if things continue to be terrible six months from now and the government has to you know step in again they've got a little bit of wiggle room there that they haven't already taken as much debt out as their competitors. Health. Thank you good to see more than one hundred thousand employees expected to be laid off. Congress doesn't reach a deal extending payroll protection joining us right now for this is Nicholas Kallio, he's airlines for America President and CEO. Nick it's great to see you Let's start with just understanding fully what you think hangs in the balance right now thanks Andrew what hangs in the balance our literally tens of thousands of jobs. People's lives and the amount of service that communities both. Small medium and large are going to get going into the future. So quite a bit. Congress has forty eight hours to act A to give a lifeline to the airline industry and its employees. They provided such a lifeline of back in March. It was a good one treasury calculated that about seventy percent of the grants they provided. Would be paid back by giving the grass keeping people out of the unemployment line paying taxes, medicare social security, spending money, and keeping their healthcare thirty percents you know provided in loans and and warrants. Paid back. So Nick, I think the big question right now was that was that was a loan though provided in March with an expectation if we're being honest about it that the world was going with a different time line, the timeline that we have today now that we have a better sense of time on it, and maybe we do we don't because it could go even longer I. think than some people perhaps anticipate. Do you think the structure of a transaction and help should change which is to say, do you think they should look much more like a dip loan right that would occur in a bankruptcy proceeding but will allow allow airlines to continue to operate and taxpayers receive a lot more warrants so that when things get better, it's not just the employees in the economy continue to improve but the shareholders get a meaningful benefit for putting that money at risk. No we don't actually, and there's a lot of reasons why first of all. This pandemic was no fault of our own virus have been cooperative. We were seeing an uptick in demand in the early summer I and we thought that would be helpful. than the search starting that went down This is a jobs bill job bill plain and simple all of the money that we received the last time and more. From the company's till went directly to our employees to keep them on the payroll. As you know, the airline industry is very different than other industries in that everyone from our pilots, flight attendants, machinist gates. Constantly retrained recertified because of the safety regulations involved with the FAA dot so you can't just. Take them off the job, throwing the keys and start up a between a vaccine public education about how safe you actually on. I'm not I'm not suggesting we fires me up suggesting that the money come in to you. What I'm suggests he is the tax payers are paid for it and that we're not gonNA treat the shareholders of the airlines differently than we treat the shareholders of of a hotel or lodging company. For example, I, think the taxpayers are being paid back by what we're keeping in place There's studies have done that Treasury made their own calculations about that based on a compass lexicon study. So this is not a zero sum game. You know you're keeping people on the payroll, you're not putting him in the unemployment line. But why are you but Y but why are you so intent on helping the shareholders of the airlines I have no problem with Gerald Lines. I'm just trying to understand why they should be an advantage class. I. Have No debate with you about providing money so that the employees and the airlines can stay up and running I think strictly about the structure of. It and whether shareholders should get the benefit that would otherwise come with it. Can you explain that that piece of it? Why should the shareholders of the airlines benefit you could structure it? So that employees the exact number of employees keep their jobs. The plane stay in the air everything stays as is the only distinction is the shareholder to the airline is not advantaged. I don't think the shareholders her advantage right now there are no different. That's I've acce going through twenty, twenty, two and again what happening here is. The are to keep airlines doing what basically is an on economic activity and we took undertaken substantial self-help measures here in terms of cutting management cutting management pay of voluntarily. But reflect. But you do recognize that the shareholder you do recognize the shareholder by default becomes advantage because otherwise the company would either otherwise go out of business or have to spend its own money or have to go to the private markets at terms that are much worse. So my question to you is why are you pushing on behalf of the shareholder? I know you say you're pushing on behalf the air, the employees, but it's very strange. It's very, very strange that you don't have airlines think we're very happy to accept money because we want to help our employees want to help our economy, but we recognize that the shareholders should not be advantaged inter, I know this is the thing with you. I don't believe the shareholders are managed. This is for our employees. This is a different kind of industry. It's an industry that drives the economy all the time, and it's an it's it's an industry that can help empower recovery people want to get out people wanNA travel unless be frank you can't. If you WANNA go see your family a California from Washington DC NEW YORK, you're not gonNA drive or take a bus or take attorney you need to fly there and that's what you want to keep you and the ability to do so. The recovery COP. A hundred percent, and by the way, Nick, those arguments were made during the financial crisis of two, thousand eight, which was you have to keep the economy going because and you have to keep the banks and business otherwise if they fall the economy falters my question to you is, do you think the terms of the loans that will provide to the banks were too onerous? Because they had wore meaningful warrants and frankly the taxpayers got paid back not just in terms of how the economy did the way you're suggesting in terms of jobs for the airline workers and what that will do for the economy, but actual mop but cash as well. There's a real distinction here between the banks and the airlines two, thousand and eight. You learn about that extensively including the book. That was banks acting poorly mismanaging themselves. Hurting their customers and taking the economy doubt here we have a once in a lifetime at least we hope a once in a lifetime can DEMOC. That is nobody's fault. It's a very different situation and the government needs to respond differently to this than they to the financial crisis, which again was something that the banks brought on themselves and on the economy I, a hundred percent of what about what about lodging restaurants all of these other industries do you think they should get the same terms that you're you're being provided they got better terms and how would you vote for? How would you pay for that? I well, I think it's going to be paid over a long time but they got better terms than we did in curious one they got direct grants and we're pushing advocating for a deal that just doesn't apply to US puts larger because we think the economy can pick up and recover, but it needs help right now. This is again, it's a once. Once an honor here at least. Situation. They didn't act act here to try to ameliorate the impact on a day-to-day basis. We can't let it all go to Helena handbasket and say you know, okay, we're GonNa let it all sorted out. Nick we appreciate you coming on this morning. It's a very important topic. I. Truly do hope that we find a solution that does help the employees and keep those planes in the skies because it's so very important to our economy on that. We very much Greek. Thanks so much. And we've got a glimmer of hope today. Thank you. Coming up on Squawk Todd at harvest. The Agricultural Tech Startup taking on a big problem. The world needs fifty to seventy percent more food but twenty fifty, some are saying we would need to planet. Earth's to grow that food with with the way we're currently growing it today we'll hear from the CEO and a board member who knows a thing or to making the most of your home whether it's your house or your planet. Martha Stewart I think it's really very important for all of us to get back to more normal lives but lives changed. You're listening to squawk from CNBC. Now after six and a half months of staying at home we all feel like experts in the home cooking baking home decor departments, regular Martha, Stewart's you might say, you know who probably wouldn't say that the Real Martha Stewart she's one of the most successful at home experts and entrepreneurs of our time, and since March she's also been stuck at home just like us although she seems to have more space than most of us whole farm to be exact other. Piracy, certainly made all. About what's important to us having really good vegetable gardening. Talk. But. She's been kind enough to share her quarantine living with the public instagram. She's at a Stewart Forty eight serving pictures at home tips and recipes. This is my anti head P. Our recipe. Recalling, Margaritas find beautiful goblets. I found these catskill the iconic Martha Stewart, even posted about US CNBC this morning you can follow us on instead at CNBC or you can follow Andrew at Sorkin says, he's the only squawk anchor with a handle andrews quarantine recordings may not include Martha Rita's at least not yet, but they do sometimes included cameo of his family's pet bunny birth but back to Martha, as you heard, her plans are very important to her, which is why over the last year she's gotten involved with Agriculture Company at harvest starting with at sixty acre indoor farming facility and Kentucky APP HARVEST HAS A. Big. PLAN TO REVOLUTIONIZE US farming. Here's Andrew Ross. Sorkin Agricultural Tech Startup at harvest is going public through what else back the company merging with Novus Capital Corporation it's a special purpose acquisition company. The deal will provide APP harvest with nearly a half a billion dollars in proceeds and joining us right now is APP harvest founder and CEO Jonathon Webb and we're also joined by Martha Stewart found of course, if Martha Stewart living on media in an APP harvest board member good morning to you both congratulations on the deal a Jonathan I'm going to start with you I remember we had you on on the show. Probably, about a year and a half ago. So congratulations to you on this new development. But explain why you wanted to be a public company especially given the SPEC structure and right now the questions about those structures why Andrew? Thanks for having me why? Why go public now because as you can see, the facility here is built. We'll be we'll be selling tomatoes here in the coming months and we want the consumers of our fruits and vegetables to be the owner and our company be the advocate and and and marketing with us. That's going to help drive agriculture forward here in America. So we felt it was the right time to take this company public and allow the. Average everyday American across our country to buy into this company with us. Martha get involved in this well, an Jonathan just this year in. In Utah at chefs dance that which follows the the wonderful on Sundance, Film Festival and there we talked about sustainable agriculture. I have noticed and part of the secular shift to vegetable base diets here in the United States and ATP harvest fits the bill the way that they are going to be able to grow vegetables and fruits sustainably not causing any of the water scarcity and the land degradation and deforestation that's occurring with regular of agriculture here in the states really really interests me and I think that they are riding a wave into the future of an and so excited about it. Jonathan can you can you explain how we should think about evaluation? No the enterprise values now, but a billion dollars at at least that's the expectation. The company doesn't have any revenue right now sort of walk us through the math for the public investor that now it'd be getting in and frankly getting an early this would almost be like a venture capital deal in in a more. Traditional World Know Andrew it's not a venture capital deal. We've had some of the best early investors in the world in our company Steve Case rise the rest a whole list of incredible investors that have gotten us to this point. How do we look at the valuation Andrew well. I've tried to say my background was building some of the largest solar projects in the US. and. In my lifetime, the way most power will come from renewables most cars will be run on electricity most fruits and vegetables in this world at scale are going to be grown indoors in a controlled environment. We simply do not have a choice Andrew we hosted the UN Security Council here in Kentucky a couple of months ago they came to to listen what was going. On here why? Because they have outlined that the world needs fifty to seventy percent more food but twenty fifty, some are saying we would need to planet Earth's to grow that food with with the way we're currently growing today. So Andrew, how you value this company, you tell me what what, what does it mean to grow fruits and vegetables globally indoors that's what we're working to tackle. This half billion dollar transaction is gasoline to put in this this this motor to let us drive forward and keep building here in a region that we love of central. APPALACHIA. Why are we building in this region because we have we have ray, we're getting wetter if you look at where we're growing our fruits and vegetables right now, California is on fire drying up south west of the US Drought-stricken. We've pushed most of our produce production down to Mexico trucking two thousand miles to get to major markets. What we're GONNA do Andrew we're GONNA rip the produce industry from the southwest and Mexico. We're GONNA bring it over here to central APPALACHIA WE'RE GONNA put it indoors where we're used ninety percent less. Water than open field agriculture getting thirty times yield per acre and the three quarters of the US and a day drive. So how do we value that Andrew? Well there's there's people lot smarter than me. Fidelity's the help blitz led this half billion dollar transaction and a lot of smart people. The table help come to come to that valuation. My job is to make sure we're building an. Andrew. Keep in mind when I'm with you a year ago this facility hadn't started construction yet we built one of the largest structures in the world is two times larger than Amazon's largest facility. We did it in the middle of global pandemic six hundred semi trucks materials coming to a Rural County in eastern Kentucky. So. How do you value this this company Andrew you tell me we got some of the hardest working men and women in the country to build this facility. It's project one. This project one, you tell us what projects, two, three, four, five, six, look like we're on Orna Warpath here to change agriculture for the good get chemical path. Out Get labor practices, we can all be proud of Jonathan Look I think everyone's everyone's rooting for you and for others in this space to have great success the question that I'm asking specifically because of. The specs structure disclosures around specs and frankly the questions in part because there have been other spags recently again, companies that also haven't had revenues before that have raised questions about how the public of should be thinking about these things specifically public investors. Who have not been part of a quarterback road show that would've typically happened in a more traditional IPO your Andrew no great question. Keep in mind this back was only one hundred, million we raised three hundred, seventy, five, million dollars from some of the most sophisticated investors in the world again, fidelity with a significant check in that we went on that. Roadshow Andrew. was just a vehicle. You know my my background is not finance my background, some building some of the biggest stuff in the world. This back was just a vehicle to allow us to hit the public markets but keep in mind Andrew of vast majority of this capital came from institutional investors where we went on that road show and we gave him. An opportunity to look at this company. So so I again, I can't speak for every transaction. I can't speak for every company that's donuts back, but I can speak for us the back we used Novus capital was just one hundred, million dollars nearly this hat billion dollar transaction. So how would the public markets look at this feel free to call up fidelity? Martha you're now involved with this company. You're obviously involved with some CBD products with canopy. Growth. I'm curious actually in this environment given what's happening with spats? Would you ever think about respecting yourself? spackle I'm speckled already so I'm now part of the private company and who knows what the future brings marquee brands which is a private company with an Neuberger Berman. Very. Very Good Group of people or were really on a on a growth patterns but this this tastic companies at harvest that I have. been come involved with is so fascinating to me because I had visited the Netherlands which is now the second largest. Agricultural exporter in the world after the United States the Netherlands is a tiny little country. But because of the efficiency of of sustainably grown product under glass, they have become a powerhouse. I WanNa see what can happen of with this kind of technology I think it's just a brilliant step in the right direction for the future of our country. And I I can't stand to see what's happening in California with the players the drought in the in the South I cannot bear it. I can't bear the drought here in Bedford. New. York. It's very difficult to cope with, but this is going to. Very big way. If we grow a lot more stuff under glass in such an efficient and and water saving methods, I don't like to see You know the degradation of our land with all the chemicals necessary Jim wrote stuff. So this is this is a very. Fun For me project but also a very serious project and I love Jonathan's Martha. Before. We let you both go Martha I do want to get your quick thoughts about what the post pandemic world looks like. Jonathan's obviously been able to plow through this period with a lot of success right? Of course now he's. Wrestling year old looks after all of this and specifically you had such so much success with social media. How do you think it all changes? Well, I'm very lucky because our business is focused on the home where everyone has been warring for now almost seven months. So home redecoration. Oh, entertaining home cooking. Baking a new book out hate perfection. It's GonNa be a best seller because everybody wants to know how to make the best case. It's hard. It's hard to live like this. But if you're focused on the right parts of living as we are and offering your products on a very, very wide spectrum of retailers, you can do all right I mean macy's and and Amazon with the with the online sale. It's been it's been okay and I'm not and I get up every day and I go to work just as I have. ADS thirty years of every day on creating wonderful new product for the homemaker. So I think post pandemic I cannot wait Ho that it's really a very important for all of us to get back to more normal lives but lives have changed and we are going to be living in A. Way So we'll see we'll. We'll come back and talk to you on a couple of months. Okay I, hope we get to do that in person Martha Look. Your Person Jonathan look forward to seeing you actually want to go out there and see what you what you've created. John Andrews hopefully bring the coast paid. October. Twenty one. Over twenty one our governor will beer. Martha will be down here bring the world from. New. York down, we got a big farm three hundred and sixty acres come come look at what the future of agriculture looks like and this is what a post pandemic world looks like. Andrew we're GONNA rebuild this world coming out of this pandemic to have more resilient systems we have to do it for your kids for everybody else watching this show we don't have a choice Andrew we gotta move fast. We appreciate you having us on. Thank you. Appreciate. Thank you both. That's clock pod for today on our rundown. Tomorrow trump and Biden debate will have the post game analysis and find out what messages resonate with voters. Nine is too late I. Don't understand you're talking about the debate tonight and. Late yes I agree. Of course at six PM on the West Coast and and that's a little early. If you go to five PM couple of Septuagenarians up there in the both might yawning. You know what? I mean I mean when's the last time? They were up about past nine o'clock. Less cranking about this than you. Practice. Yeah three-set. The of the squawk box is hosted by Joe. Kernan becky quick and Andrew Ross Sorkin tune in weekday mornings on CNBC six am eastern and subscribe to Squawk. pod We are available free on apple podcasts, spotify Google play stitcher wherever you listen tweet US anytime at. squawk. CNBC. We'll meet you back here tomorrow. It takes conviction to see beyond the turmoil in today's markets. That's pigeon, the investment management business of Prudential with a legacy of risk management discipline and investment experience through thirty market cycles. PG is prepared for today's challenges PG brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with PJ find out more at PGE DOT com. That's PG IM dot. com.

Phil Andrew United States Martha CNBC Andrew Ross Sorkin Martha Stewart America CNBC Kernan becky Jonathan PG CEO PGE DOT CDC Jim Brings Nick California
19 Years After September 11; Peloton CEO; Instagram Head

Squawk Pod

39:24 min | 10 months ago

19 Years After September 11; Peloton CEO; Instagram Head

"It takes conviction to see beyond the turmoil in today's markets. That's PG. The investment management business of Prudential with a legacy of risk management discipline and investment experience through thirty market cycles PG is prepared for today's challenges. Pgn Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with he do find out more at Pge Dot com that's pg im. Dot Com. This is squawk pot. I'm CNBC producer Eighty Kramer today on our podcast. Hello. John has been a hot stock for traders and Apollo purchase for those stuck at home sales are up two hundred percent CEO John Foley when you have a choice working out at home why would you travel? So we think that post Kobe this is still an incredible story. Instagram from a billion dollars to a billion users head of instant. Adam. Seri on the reals the Trans. And the challenges of Social Media in two, thousand twenty or very focused. January we can't prevent any your this upcoming election in the US for you know it's a big test for us. You know my responsibility. Those stories plus another stalemate in Washington and honoring and historic tragedy nineteen years ago, can define the world in many ways by that morning. It's just amazing how quickly time goes this last year we seen our share of tragedy as well. It's Friday it is September eleventh twenty, twenty squad hot begins. Good. Morning Welcome squawk box right here on CNBC I'm Andrew Ross Sorkin. Joe Kernan Becky's off today these guys in Washington then Washington News. We can talk about this Andrew. So you don't get everything you want. So you don't do anything. It's Kinda weird that you hold out this was. Going to happen no matter what they do a lot of stuff down there. That's a Kabuki. NANCE. Don't they Andrew I mean. They know is not going to happen and they both do both sides do. We did this. This. Yeah I know I know anyway Senate Republicans fad advance that corona virus stimulus yesterday, and this is what I meant. They fell short of the sixty votes needed to get around the Democratic Filibuster I. Mean they did it was unclear whether McConnell had fifty two. All, the Democrats present voted against it were Rand Paul was the one Republican who voted against it and for a while McConnell was kind of cagey. Wasn't really talking about whether it had to vote but then he got everybody except for Paul Rand, Paul and it was fifty to forty seven and that legislation included reinstating enhanced unemployment insurance at three hundred a week that's down from the previous six hundred also would authorize a new business loans, but Democrats called it inadequate. Saying it needed other measures including state and local government relate and it just begs the question. So. If, we end up with nothing because these guys WanNa go home to campaign. If we end up with nothing, should you have done this I don't know. I understand the point that's being made they want a lot more. A tent I mean I don't know, but the Democrats would do it. At. The House level knowing that they can't get it through the Senate the Senate it's. To without. Some. Something better than nothing. You can't always get what you want that trump's still place at rolling stones song all the time and. Drive me show unique about the Brinkley Rock. What's so unique about this moment and I don't know I don't know where you stand on it is. I think a couple of weeks ago and in some cases. Right now there's a, there's a lot of people who have the conventional wisdom seems to be that we do need this stimulus, and if we don't get it, it's going to be perilous the economy and yet. You look at where the markets are I. Know We've had a tough week but also. Stanton Druckenmiller and others who've come on recently and said, you know what? Actually the economy's a lot stronger and maybe we don't need these things that may not be most empathetic thing to say aloud at this moment given. The hurt that that still exists out there but it's a very interesting moment in terms of what that debate looks like right now. But the economy is not monolithic and there are places we could definitely target that are absolutely still in in need of this but then on the other hand, there are. It's a weird position for Republicans in for president trump to begin where they want to do more because they. You know even add more prime the pump. Prior to the election. But then again, they're making the case all the economy's already back. We already had of the shape so we don't need it. So they're like like it happens so often with. politicos where they say one thing and then the next second, they're saying something that completely counters the first thing that they said. So we get used to it I should've taken political science. You think they taught you all these things had interpret all this stuff and I don't think so I can't teach this in school can. I Say. T was was was closer to a real science I. Think you were real much real or science at least this is a political. Scientist. But. Right like sure it's an art. Senior Jersey at J. P. Morgan Chase are being told it's time to wrap up their work from home operations, according to reports, executives at the bank informed managers in it sales and trading units in London in New York this week to plan to return office starting September twenty first. The reports say that some exemptions will be made including employees deemed high risk or if they have issues coordinating childcare or home schooling. The President tweeting earlier this morning congratulations to j. p.. Morgan. Chase for ordering everyone back to office on. September. Twenty I will always be better than working from home. What are your plans so I can? Any idea you know I. I don't know what are our plans are going to be a back and forth I imagine between the city and here my my children happily are they're doing virtual school today but. We're supposed to be starting in person five days a week at the end of this month. So I will give you a report card on our progress about whether we get to that place. We're very hopeful we're crossing our fingers so. I'm ready to go back I WANNA get back to the Nasdaq Ace App the Delay Kills Me Andrew as now gonNa say that and I'm GonNa wait for you to respond. I'd I actually think the delay between both of us isn't that bad I? Sometimes, it's just. Maybe it's worth the higher speed maybe it's worse for me fiber to the home. To the home you know what we shouldn't complain it's amazing that we're able to do this and we did it quickly. And back in when we had to do it and all the guys that helped with this, it is amazing. Next, on Swapan Peleton sales surged one hundred and seventy, two percent in the last quarter as people stayed home during the coronavirus pandemic CEO John Fully. Content are strength training. Our Yoga are running are cycling on any screen and your and your home. We'll be right back. Takes conviction to see on the turmoil in today's markets. That's pigeon the investment management business of Prudential with the legacy of risk management discipline and investment experienced through thirty market cycles PG is prepared for today's challenges p Jim Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with PJ find out more at PGE DOT com. That's PG. I IM DOT com. This is. Here's Andrew Ross Sorkin. Let's talk about a couple of different stocks and this morning you were mentioning Your Peleton I. Know I think it's too. You're right where you are I said tell you. Family also contributed to this company's earnings this quarter because we just bought ourselves a Peleton's Fred treadmill. The company posting its first ever quarterly profit is revenue nearly tripled tripled I say the company benefiting from surging demand for at home fitness gear during the pandemic peleton's says subscriptions for remote classes reach one point one million in the quarter also increasing production to improve wait times for its equipment but doesn't expect to return to normal delivery times for several months. Shares are up more than two hundred percent alone this year Putin CEO is going to be joining us John. Foley and the company also announcing this week, a new bike Joe Anna New Pelivan treadmill. So a lot more word coming up from that company that's long long are they want to become the apple of, of electric fitness. One maybe on their Web, did you go with the Peleton? treadmill to is it the software. I mean. Do they have people saying come on? Andrew. Go what's a hill? Do. They have the like people motivating you or is it got soft? Way Way. It's like a weird way it first of all, I would say, I, would say the actual technicals treadmill are pretty great and the other element of it for us was my wife specifically though I try to keep up with her, I can't keep up half the time she was a big barry's bootcamp. A Goer. In New York City, which is on a treadmill, and then you jump off and do way to boot camp kind of style. So this was the closest thing to try to replicate that at home I should tell you and I would tell this to John Foley the machine is criminal expensive. and. They're coming out with a cheaper machine because it's It's it's. Charging so much for it I think it causes a lot of money and we're privilege to be able to to buy one but. It's Also, a big thing, Joe, it's it's it's it's large unlike the the bike you could maybe into a corner, this thing require required I think two or three people that it's a quarter it fits in a corner. It's over there hit it's fits in a corner that's exactly where it is. Don't tell the guy don't tell. Don't tell you didn't your wife to kick your your wife she's a kick. Your ass in that another thing too when you do that running through the mud and underneath the like electric. Back in the days when we did the tough mudder. Yeah, she's On just humiliating, I'm just along for the ride joining us right now for I on CNBC interview is John Foley. He's the CO founder and CEO of Peleton and John It's great to see you i. hope the next time we can do it in Person Joan I. Both Been Discussing Jobs Got Peleton actually right next to 'cause. We're we're working from home today as well and I just bought the new tread not tread. We can talk about that in just a minute but. Just, just speak to where we are because it. Clearly, the growth is been beyond any measure I think the big question in the markets among investors is really just how sustainable that is and what kind of multiple to put on that because what does that look like a year from now? If hopefully, we have vaccines and we and we have therapeutics and people may go back to gyms in the like. Yeah thank you. Thank Joe could just good to see you guys. You know we believe that the I will start off by saying we've grown a one hundred percent year on year revenue for six years. So this isn't kind of we just didn't do this because of covid. To your question whereas at as excited to get back to work, and hopefully we have A. A vaccine. Weeks we'd be excited about that. We believe what's happening. Ears is a secular move from working out at a different location into the home if you can have better workout experiences and both you know this from having a bike and a tread. When you have a choice working out at home with fantastic instructors with a very supportive community with the incredible incredible gamified and network software and the best hardware now in the world. Why would you travel? So we think that post Cova this is still an incredible growth story. In terms of just keeping up with the demand one of the things you talked about yesterday with these earnings was that it's been hard to keep up with demand. What does that look like in terms of just production off the bikes of the treads and the delivery of the ability to deliver this over the next couple of quarters? Yeah. That's a great question Andrew it's hard to put his finger on what team at Polygon is working hardest because if you like every team I talked to was redlining, but you're absolutely right the supply chain, the manufacturing teams though the field ops teams where they deliver the bites treads globally they're they're. All out for sure and I think they've done incredible job and we've gotten order to delivery for both the bikes the down over the last four months in the face of the exploding demand. So demand has gone up and we've we've been able to outpace it with our supply chain and field up deliberately growth. So I think we've done incredible job, but you're right to point out. It's hard for sure. CAN WE SPEAK ABOUT PRICING? You're you're going to be introducing a new tread that I think is close to half the price in a come twenty twenty one, you have a new bike out, which is also then going to allow for a lower price current bike as well. How much do you think you have to get the price down to expand the audience? Well, extent we are having a hard time making them fast enough at the current price you would say, we don't have to change the price at all. Of course, we are with our two, your point Andrew with our better best strategy and both the tread. Our opportunity an opportunity with the better best. We can have the premium product, the best product in the world which the new plus that we came out with this week is now the best in the world. It's just under twenty five, hundred dollars price point, and over time at allows us to do a lot of creative pricing right now attack the the original you know bike. The. Best. Cardio machine on the planet by millions is under one, thousand, nine, hundred dollars and which is. From a finance perspective under forty nine dollars month, which were which were very excited about. But we do think that as we grow the Salmon Tam globally price point for for our products is gonNA matter. So we're getting out in front of it. Jonah Ajao. Watching a lot of. The video and I see people working with dumbbells and obviously weight training is is important in addition to cardio might be might be even more important. Are you developing anything or? Innovating and like a universal for lack of a better term, a universal machine like with bench and. Maybe with about pulled down or Just, dumbbells watching someone do it is possible to combine the software that you have with a class or a trainer with a machine that SORTA has three or four different. Well, there'd be a Peleton machine like that. Well, you're right Joe, we need to win strength. If we'RE GONNA, win global digital streaming fitness stranglers an important part we're gonNA during quickly win cardio with their bike in our Trad. But we care deeply about wanting and strength as well. Andrew probably talk to this because I know you have a tread Andrew. My favorite workout and we talked about this in Person Studio Andrew. Is a boot camp off of the tread where I'm Joe, you might not know this but a lot of the content you get on the tread for five or six minutes, and then you get off the tread and then you're asked to point to grab your dumbbells or do strength training. So push ups or plank, and so when you do a Peleton bootcamp class, we all we now offer it on the bike with the bike plus behind my shoulder. Where you can get off the bike and then do your weight training with one of the best instructors a lot. Strength Coaches in the world. So we don't think we need to have a dedicated product. I'm kind of a free weights guy I like. I like working with free weights I like doing body weight training, and if you do and I know she do Andrew You do one of these forty five minute or sixty minute bootcamp classes on the trade off the bike your entire upper body is is feeling an and. Right now, you don't need to compliment that with another way training program. John I. Know You're not GonNa win and take your hand on this but in terms in terms of future products Is there. Is there a weight product out there? Or people talk about rowers that would put you back in the in the cardio space. You saw lululemon buying the mirror. What did you make of that? I thought it was a good exit for that found team I think brand was smart selling the business for all cash we are doing so much content on every screen in your hand, and in your every screen that's in your house today can be a portal to taking one of our ten or twelve verticals of content. So you think about we launched Roku TV APPLE TV? Amazon Fire TV? ANDROID TV along with our platform and our android platform. You can get our content, our strength training. Our Yoga emp are running are are cycling on any screen in your hand in your home. So I'm just still TVD on mirror whether there's a product market fit for that for that product. Pricing right now you there is a financing option. I think there was speculation for quite some time that there might ultimately be just a straight up subscription business where you know you buy you effectively rent the bike you rent the treadmill is that in the offing five or ten years from now I'd be if it wasn't Andrew I think there's there there are for sure it's not something you're going to see in the next year. We need to have it yet, but I love moving that direction. It's all in the in the name of affordability for our members are members and new members and making sure they feel incredible about the value. One thing. I will point out Andrew, which is a set on the earnings call last night was my favorite metric is last Q. Four, which is a effectively ended first of July last year our our subscriptions. Or US twelve times a month on average this year, the quarter, the just closed they were US close to twenty five times a month on average. So when you're you paying thirty nine dollars a month and getting twenty-five workouts from your household, the close to a dollar fifty per workout, it's just insane value, and so we're very excited about that. We're going to continue to push more content more more access to our content. And like don't you be terribly upset if if I traded if I don't WanNA use this bike if I, it's not my thing if if I if I would like to get the treadmill mainland, would that. I know the bike is your bread and butter and everything. I WANNA get a treadmill Anna bike room for that. But is that possible I don't WanNA upset you like you coming on the show and it's a great story that you have. You've been. that. Okay. You you've been so good to me. You could do no wrong personally but. One one thing I'll point out if you did the TREADMILL, you wouldn't pay an additional thirty nine dollars. So scales within your home, you pay thirty nine dollars membership and you could have all of our products and still pay one membership up. To your that wouldn't bother us at all because what you would probably do is either trade in your Peleton bike with a right now, if you wanted to get the belt on bike plus you could do you get a seven hundred dollar trade credit. War or you could sell your bike on craigslist or Ebay, and get a you know a pretty hefty portion of your original purchase price. And then new person who buys it ends up being a subscriber. So your your hardware Joe is always going to be associated with the subscriber if you get it out of your house and sell it to somebody else we get a new member. So we're we're fine with that either way of course. Jon We're GONNA have to run. But I have a question on behalf of all Palestine users who WanNa know will you ever allow people to watch things other than Peleton programming on the screens if I wanted to watch Netflix or some other program as I'm running or biking that seems to be big on twitter that I'm getting a number of requests about that like let's say you wanted to watch billions or something when you're when you're pedaling. Instance I. Don't hate that idea and to be honest we talk about it. Never, say never. Never say never, and and then finally for Joe on the on the track because if we're GONNA, get him a tread this new trick, I just got the old trump. I said it's criminal expensive because it is and I'm blessed to be able to buy it but the new one is it as good is it like Joe wants to get a treadmill it new have the slats or now the new one does not. Have the slats the the original that you have Andrew is kind of the Rolls Royce of treadmills for sure on the screen is massive does have the slat phonology it's it's incredible but to be honest since you're asking my wife likes the new tread better more petite she loves the running surface. It's an incredible product, the same great software, the same great content. So depending on what price point you want and what? Type what type of document to run on we have choices now, right John we always. Appreciate you joining us. We do look forward to following your progress. So thank you so very very much and We'll see you maybe we'll see on a runner. On a bike soon, I love that fun to be on your show. Thanks guys. Thanks. Coming up on squad ahead of the Instagram Adam Azeri on tiktok drama reels and facebook his parent company. Of Lot of really difficult scrutiny over the last four years and I as unpleasant as has been a times I think it's fundamentally healthy. This is really just about a category at the end of the day we'll be right back. Welcome back to squawk. It's been eight years since social media giant facebook acquired instagram for a billion dollars and aside from various facebook integrations. CEO Mark Zuckerberg has for the most part kept instagram separate different content, different features, different audiences in the last six months the billion instagram users around the world largely state home and relied on the platform for connection entertainment, fitness sanity, and even income, and in the last month. Institute on Tiktok with sharable short form video feature called reels, and just this week instagram announced it is testing new versions of home screen, making room for reels and shopping. Tout's Adam massery head of instagram. Join us on our TV broadcast this morning in his first ever CNBC interview. Here's Andrew Adam. It's great to see you. I'm thrilled that you're here I live with your product every day. My wife and kids say too much the my my kids are constantly trying to take it from me so they can. They can get on it as well, and we have so many questions for you both as users and also given that your company is right in the mix of so much of the news right now. So welcome and thank you for joining us and for what you. Think. You're on the West Coast right now so Why don't we? Why don't we talk a little bit about some of the things that are in the news right now So we can understand how you're thinking about them, and then I want to jump into some of the products stuff that I. Think. So many people are focused on right now, but the big issue has been the potential for political meddling. And the role social media plays in that and I was curious how you think about that issue on instagram. I haven't seen a lot of political advertising on instagram. It feels very different than what you wear. A lot of the other political advertising may live on facebook and other places. So how does that how does that work into your thinking? Actually, think about it don't worry about it a lie general instagram has less news than other march networks like facebook and twitter, but it doesn't mean that we don't have the risk of for actors interfere in elections are misinformation. We've seen all that kind of activity instagram as well. which is very focused on doing everything we can to prevent. Any. Particular upcoming election here in the US we know it's a big test for us. You know a lot of responsibility and charm bracelet responsibility. How concerned you? I know you put policy and at the company broadly. Know politicians cannot advertise new as a the week prior. Some critics out there? Say You know what? Though if you really wanted to get those ads out you'd put him into the feed effectively prior to that well, I think the announcements for recently particularly around and not allowing any new political ads the week. Ford. The election are just one step at a much longer path over the last four years new invested billions of dollars and had tens of thousands of people working on integrity broadly. With an ally to increase transparency to reduce this information to identify proactively what we call behavior. So Ford actors trying to meddle elections. And so I think a lot of progress but of course were concerned it's our job to be concerned I. It'd be responsible not to be concerned Adam. The big issue is your big competitor Tick Tock in the future of that company and what happens to that company you've introduced a new service called reels as part of instagram. I'm curious to see how much traffic you think has gotten. You know what? What the success of reels looks like to you right now and how much you think you benefited to the degree you have at all from the potential of a shutdown of tiktok or at least a transfer of power of it. It's an important question I mean unreal to start. You're seeing some early momentum and growing. Particularly fast countries like India. But it's early days in a long long way to go out. But broadly speaking tiktok has done an amazing job really just pushing his performance short form video ecosystem into existence I. Mean they've been added for almost a decade now and all the credit goes to that we've seen a short form performance video grow not only on Instagram, but on other platforms as well, and we have to adapt to those big ships because one of the biggest risks for us is that the world changes around us, we always have competition. But bigger risk when you're apart from my guts, you become less relevant. Now, you ask about the potential ban here in the US any short-form benefit would be in terms of stifling competitor right now I think is greatly outweighed by the risks of a more fragmented. I mean we'd benefit greatly from the ability to operate in countries all around the world if we moved to a place for countries start to silo unit within them and we can operate in that way can that it's much much that's much more problematic. Any short benefit is beneficial. I don't know if you're going to be willing to take us inside some of the meetings I imagine the conversations the must be happening inside your company right now. But if you were rooting for one of the buyers, Microsoft Walmart on one side or an oracle buyer on the other side. which way do you lean? I can't I mean I don't know honestly I'm following this like just as you are trying to figure out what's going on, it's been moving so fast. There's so little time and there's so much drama so I don't even I don't have a is there any? Is there any part of you that says you know what? This is probably actually good for our business. To the degree that a little bit of confusion and also I think there's real questions about the algorithm, the TIKTOK Algorithm and the tech behind it, and how much of that gets shared with whoever the buyer is and and their ability to be able to interest on that quickly relative to what bite dance likely due on its own I. Mean You bring up a really good point I. Think Taco's an asset is incredibly valuable because of how well they've done. With ranking Algorithms, they've done some really brilliant, really compelling work over the over the last couple of years, and so you any buyer buyers to decide how much of the asset value is the algorithms versus the user base I. Also, just think it'd be pretty wild I can't imagine running our business and not having control or even understanding how ranking works within the system. So I don't know we'll see what happens. We don't have a favorite horse in the race. I do think it benefits us in the short term of slowing down a competitor. The president sets as much much worse for us as a business in the long term. So I honestly. I'm not and not actually enjoying this at all even though some people assume it's good for us. Actually it's going GONNA be really bad for us over the next five to ten years. At Adam, has a product guy. One of the questions I would have is how many new features do you think you can build into the instagram service? The reason I ask is you've just introduced reels prior to that you would introduce stories which a lot of people viewed as a copy of snap, and then of course, the core which is the feed, and at some point, does it get too confused? It's a big concern saying our core values are being people and simplicity and craft, and as you try to adopt is the world changes around you. You end up introducing new features, new concepts, but we need to make sure instagram state simple, and so it's easy to use. That's one of the things that would greatly benefited over the last almost ten years. Now I think the question is, how are you consolidate concerts? How do you simplify while US thirty are ways are meeting near uselessness nothing about work to do their thing been some progress and our camera which has been able to support more and more used. To getting different suburban the last few years but there's a lot more to do something very. Adam want to talk about advertising because that's obviously the core engine of growth and the economics of instant and largely. facebook. One of the one of the great challenges that's now out, there is the shift in what apple is intending to do in terms of the development of its new operating system. I know it's now said that they're gonNA delay. This one aspect of that would make it much easier for users to effectively turn off. A lot of the ability for for APPs like yours to be able to track them, you filed a complaint. Now, facebook has filed a complaint against apple in the EU. Just in the past I think twenty, four, forty, eight hours. What is the impact of that going to be and how would you if you could persuade the public and users of iphones and other and other phones of the benefits of tracking if that's something that you would try to do Absolutely. I actually would. To to this that are. Very complicated question two things I want to stress. One is our advertising business obviously requires US time to stand Um data on some level we want to show you you're interested is that you're not just there. And obviously beneficial Ross is a business. It's also incredibly valuable for advertisers Nevada, majority of them are small medium sized businesses all over the world, and if the ecosystem changes in a way where advertisers can really measure never on invested, that's going to be yes someone for business but it's GonNa be for all the biggest forms roughly equally and center. I don't not that worried about over a long run, it's going to be much much more for all the small businesses are millions of they're not there the rely on US China's like customers to reach those customers particularly during a pandemic. When they're hurting wall Susan emissions are really hurting sorts ways flipside it's Duda important honesty's incredibly important. One Peter have control over their data to understand. They have on them innocence, but there's also value to you open up. Hundred Sport and we'll show any things that you're interested are interested in snowboarding and you're interested in news and so my experiences more around snowboarding surfing, etc news that's value but then for that to be personalized. Shelling, press to not shutting things that you're not interested in. Me needs to know at least a little bit about what you're interested in. That's the value of data that personalization, and so we believe there's a wage and be. Really responsible and give control data and transparency data but without cutting off our understanding that for operating Brom. So, Adam though in terms of this, what seems like a battle being set up with Apple. How much influence do you think you? You may or may not have over them and what do you think the outcome of that looks like. I don't think we have much influence over apple. I mean apple is the I mean they own the majority of the market here in the US smartphones who the with the Iphone, the control you could system. End To end. They've been very determined, very organized and the very focused on even immense power. I mean they can just decide that we can't launch new updates rats. At any given moment you've seen a series of articles and even some lawsuits around their influence and power over developers over the last couple of months. So I, think that we're GONNA just make our case as strongly as we can both tap but also to the public and to. Policymakers and insurance and academics. Serenity gender. Do you think that apple has an unfair monopoly because at the same time, as you know Washington is looking at facebook at and whether facebook has an unfair influence over over the world is social media advertisers. I'm going to take control the majority of the smartphone market here in the US. In a series of. Other countries on the most important countries from a business perspective in the world I think that they've received less scrutiny quite frankly over the last couple of years then that we have in Google and Amazon and others that seems to be changing generally things scrutiny is a good thing I. Mean we've been on the back end of a lot of really difficult scrutiny over the last four years and I as unpleasant as that has been at times. I think it's fundamentally healthy. This is really just about accountability the end of the day and I think obviously, there's more awareness about how large big tech companies are. But I'm not GonNa away on specifically which constitutes monopoly. For. That but I I do think it's good that we're all being scrutinized. Adam we're going to continue this conversation. I should tell everybody we're going to continue this conversation on instagram live. We'll see you on instagram. Thanks so much. Thank you. Still, when you say it, don't you say, Oh, my God September eleventh. For you it's about a half your life about about a third of my life, but it went really really. Quickly the nineteen years I remember it. So well, it is. I mean year after year, it seems like We. Constantly, it's September eleventh. It's just amazing how quickly time goes this last year. We've seen our share of of tragedy as well. Also, obviously been a tough year. Overall it is. I mean up until this pandemic and we'll see we'll see how history looks throughout all of us but I would argue that nine eleven was the most consequential thing that's happened. At least in the last fifty years in the United States if not, the last one hundred in terms of how we how we live. How we think about security geopolitical. Issues Wars It's you could define the world in many ways by that morning and I remember that morning unfortunately still all too well as you do. Mean Andrew. were. We're still seeing. Va a veteran veit veterans' suicides from wars respond from from what happened on that damn and it still affects. It's affecting people each and every day the the the after effects. As you say and all they. You know everything we do at airports and machine learning. So it it really was. That's when you wonder. And I guess we wouldn't be surprised if if twenty years or nineteen years from now that that there are remnants of of our response to the pandemic. I'm sure that that probably is going to happen as well. It's been nineteen years. The will be a moment of silence it's going to be observed. Right at eight, forty, six am eastern time, and if you call on that was when American Airlines flight eleven struck the north tower. Of the World Trade Center and it's something that is indelibly etched. In, all of our minds. AND GOING TO START Right now so WHAT'S ON DOT? Gordon and. June. Zero. Marie Rose Abbad. Andrew Anthony. Thank you for listening today September Eleventh Two Thousand Twenty from all of us at squawk box. Wish you strength and comfort squawk pot. We'll meet you back here on Monday. It takes conviction to see beyond the turmoil in today's markets. That's PGN. The investment management business of Prudential with a legacy of risk management discipline and investment experienced through thirty market cycles. PG is prepared for today's challenges. Pj Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with PG find out more at peace Jim Dot Com. That's PG IM DOT COM.

US Instagram Andrew Andrew Adam facebook PG Andrew Ross Sorkin Joe apple John Foley Peleton CEO John CNBC Senate John It Pge Dot President
The Winning Bid for WeWork; Under Armours Handover; Trade & Taxes

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31:39 min | 1 year ago

The Winning Bid for WeWork; Under Armours Handover; Trade & Taxes

"Things better that's why so many people work with IBM on everything from city traffic to ocean plastic new schools to new energy flight problems it's human nature to hate problems but why is that after all problems inspire us to mend things Ben things make the Kernan Andrew Ross sorkin first up on today's podcast we work it's been a wild nine year ride for this company a journey control to CNBC's essential morning show every day get the best stories debate and analysis from the biggest names in business and politics bringing show musically this squad the daily podcast brought to you by the team behind Squawk box thank the company that invested in Uber and slack is also one of we works largest backers and now it's trying to save its own investment here's Andrew with the story today rescuing we work and paying out the CEO that's unbelievable they'd offer more money paying twice economists art laffer forty seven billion dollars to less than ten all overseen by an eccentric and sometimes erratic leader Ataman also at the table for the last nine years soft good morning everybody welcome to squawks here on CNBC we are live from the Nasdaq market site in Times Square becky quick along with they will begin layoffs almost immediately if of two thousand people I don't know if you saw the other reports that came out yesterday which is that one of the reasons they delayed some of the earlier laughs as they couldn't afford in dollars shares that are held by other investors now as part of the South Bank would also put together five billion dollars in loans from a consortium of financial institutions that would also include itself and as part of all of that sources say that Softbank will pay founder Adam Newman around two hundred million dollars to leave the board whenever we've lowered the rates on the rich revenues gone way up these people can get around your taxes joe the man behind the laffer curve weighs in on the ideal tax rates take a controlling stake in the company already poured with ten billion dollars into that company and the decision could come as early as today let's walk through both of the packages because they're fast unto themselves the rescue package from Softbank includes accelerate a one point five billion dollar investment that it had planned to make next year and then buying up to an additional three alien you're effectively paying him twice you're GonNa pay for the shares you're GONNA pay him separately and meanwhile shirt at meanwhile not only that the severance for them so you have so they're going to wait and see if they were going to bankruptcy you're gonNA wait here for Adam Newman to take his two hundred million dollars to go home I'm to one percent and Senator Chuck Grassley on phase one when you consider that China's fifteen percent of the world's economy worked twenty two percent that's seven percent added together when they get together it's going to have an influence on the whole globe the Devil's in the details of the China trade deal we've got those stories and more how big news unless twenty four hours we works board now weighing two competing financial rescue offers we work expected to accept an offer from Softbank Room that was going to be what's called lead left for the IPO which of course is no longer happening they've put together a package that would add up to about five billion dollars and bring together give up his voting shares and support soft bank's takeover it's unbelievable it's unbelievable this guy already tapped out at the top outside investors this time including who was our guest host on Friday and and we've tried to push him on it but Barry Stern licks starwood capital as part of that group of the Oh by the way that that two hundred million dollars would keep him from filing for personal bankruptcy so it gets more interesting now J. P. Morgan has a second offer on the table this is the posed consists of several parts including new bonds some with some pretty high interest rates off banks offer with separately should tell you and this is the most astounding part of it all the whole company will be worth only eight billion dollars that's down from the forty seven billion dollar valuation before it attempted to go public and of course more than the entire total putting new leadership at under armour I'm CNBC producer Cameron Kosta it's Tuesday October twenty second two thousand nineteen squad begins right now in additional three and and then you're gonNA capture about five billion dollars from from other outside investors who will take on a debt pieces and then it's going to be worth it listening to that makes me think I'm never buying IPO I mean if if the people looking at we work in thinking about bringing public and talking about certain valuations they'd be down probably about five billion dollars just on a cash basis sure fourteen can go south I understand that but it it just Morgan Stanley at some points we're talking about sixty eighty I believe either Morgan Stanley Goldman Sachs at one point had a number that they'd presented to the board or to the company at least this is now probably twelve months ago amount of money that Softbank unto itself has put into the ten billion they're they're in for ten already ready you're going to put in an additional one point five then if you can raise two hundred million yes I'm for throughout I'm out of here if you want to talk about that how you'd like to eventually kickstarter campaign if the range was eight billion forty seven billion how would you ever get involved in somebody turned around a number like sixty at some point when they were trying to tell the way sacks a hundred million I was GonNa say like go fund me with your people on twitter or your should be easy I know I could raise human so not only did he take a lot of money out but he really was living high with everything he took off he has no money left at he what did he blew it all this will be good that's a good question in the journal over the weekend the the elitist rich people are now Democrats and all the working class normal people are are now and Maureen tell us a little bit about the details it looks like Softbank has won the bid from the board what what what does that deal entail sure so the deal entails as we reported you ve always represented yourself as a working class Stepford glassman yeah I tr- from Ohio you're from where scarsdale or something right no no no just won't be out of here if you can with your friends raise two hundred I will also a hundred hundred pop billion dollars and then it'll be worth less right so you have to gamble it will ultimately be right now it would be worth it'd be worth about the CO founder and CEO it looks like it's part of this he's GonNa get a package worth about one point seven billion dollars and that's the night in its three Credit Suisse and I believe UBS but I know it's getting more in Credit Suisse and those were collateralized against shares all leveraged he was completely leveraged with this yesterday that they're gonNa take over the company for about eight billion dollars probably the most stunning part of this deal the payout to Adam Newman eh clearly advantages him in a way that even with his controlling stake least the story broke throughout today's broadcast. Here's Becky joining us right now on the Squawk newsline with the latest is Maureen Farrell Ip on Capital Markets Reporter at the Wall Street Journal she broke this news cloy investors can sell at 'em based on his State it'll be up to roughly a billion dollars they're also gonNA pay up his alone he has a five hundred million dollars for the private jet happy with the two hundred million everything in a huge deal then by the way here's loans outstanding from Jay Dollar Maureen Watt Liar wire we work shareholders and employees not going to sue Adam Newman and sue Softbank for understanding is that consulting contract with one part of it the loan forgiveness but I think it's a good question it seems like you know demand it was over a hundred billion dollars on high end one hundred billion dollars to why the IPO closed with now the other thing I think is interesting so our buddy like into about three parts he'll be able to sell about a billion dollars stock into this tender offer that they're gonNA watch they're going to pay about three billion dollars employees who were hoping to participate in this IPO who who were led down a path a Pied Piper that that clearly steered them in a terrible direction that would be his own equity stake in the company but then when you had on top of that and advantage loan and then one hundred eight five million dollars in cash for all of those razer share do the elitist liberals actually have more money than the right wing greedy types that back media think which who has more money in order to me that that's what two hundred two hundred change package eight pocket lint I just got an email from a hedge fund manager with the subject line I can on that was coming do they're gonNA give him a new loan they're also going to give him a quote unquote consulting contract almost two hundred is is very questionable approach I think it's I mean it's are too early to say what happens I think that the issue is frankly frankly has done tremendous damage to him personally his own reputation and the Softbank Vision Fund and Softbank itself it raises lots of moral questions ethical questions and why frankly Softbank would actually even participate in something like this it's good it's money with my with my folks you could yeah we'll have to work in fact my folks probably won't it's tough getting this right I'm stuck here it's tough to say in two thousand people to be taking one hundred eighty five million dollar consulting arrangement I can understand potentially the billion dollar component of this given that that's being like during the negotiations with that he had the power he had this building control for they needed to find some way to get him to relinquish that raises is can you give founders these ten to one these you know elevated voting shares every has wanted them for the most part founders have been oh as you said employees investors could have sold shares and that was even far below where they last raised new money the forty seven billion dollars we've seen for every one hundred cash to indicate might take too by the way you might take it two yeah let's both work on its he got you know what you have a much better chance I think the people you know just from deal book and all that stuff and and their evaluation of their shares diminish rapidly and now the sun's GonNa look rewarding an individual who us rapidly shrinking valuation for this company and Yes employees are going to be let go in the coming months two thousand you know who knows where that end executive chairman and brand chief as under armor elevates Patrik Frisk the company's current president and chief operating officer to the role of I'd be surprised if they could they could stomach this kind of transaction on a morning like this because one of the reasons that he was willing to actually get out of this given the voting control and now you see what you have to do even when things go really wrong to get a founder out of voting control I mean this is this is such an founder and Frisk has been a key architect of this transformation plan he's reinvigorated the supply chain he's relooked at their sourcing capability extreme example but it's hard to imagine that this is not a tipping point where these kind of boating shares they found her the history now frisk did join under armor in July of two thousand seventeen from Aldo where he was the CEO working there also with a company trend for North American sales and we have a first on CNBC interview here coming up on Squawk box with both Kevin Plank CEO these changes are effective as of January first twenty twenty now plank of course has been the CEO of the company that he founded in his the bids begin as it turns out it was soft banks rescue bid that one we work if there's any winning to be had for calling in again marine for having me thank you making news under armor now just crossing the wires Courtney Reagan joins us with turn out of Newman was because other founders were disgusted by it but for him to now be paying him I I don't get it but we are at a time today but we want to thank you an Patrik Frisk to talk about this new leadership change the transition and much much more but of course again to reiterate those headlines under armor he's even re-targeted their customer so that's been a critical role for him to play here though of course there's still some work to be done North American the details what's up courtney good morning joe so here's some breaking news from under armour Kevin Plank who of course is the company's founder and CEO will be transitioning to the officer as of January first CNBC reporter Courtney Reagan caught up with under armour's Kevin Plank and Patrick Friskin Baltimore here are the L.'s still haven't quite stabilized and shares of under armour are down about twenty five percent since the last earnings call when investors really hoping to see a new good point and they're huge questions asked him in a month and a half ago we were talking about maybe two months ago twenty billion dollar evaluation in an idea grandmother's basement since one thousand nine hundred ninety six accompany he ultimately took public in two thousand five which makes Frisk just to the second CEO in underarms delays to food safety smart loves problems IBM let's put smart to work visit IBM DOT com slash smart to learn more or other founders. Can you think of look at this so there's GonNa look at him as free money well it's it's GonNa be interesting what other founders look at I think another huge question. CEO Kevin Plank will be transitioning to the role of executive chairman and brand chief as Patrik Frisk is elevated to the role of president and chief operating how we think about you know big strategic marketing ideas so I think it's a complimentary thing is about you know running the play that we've put in place but then also complementing each other highlights from their conversation through be changed I mean I'll be running the company day to day but it also allows Kevin to become more strategic in terms of how we think about elevating product at least found her friendly terms real questions founder there's so many founders that Softbank invested in frankly who are disgusted with Adam Newman people yelling saying go left go right and so ultimately like I'm going to be there and we'll make our inputs in our suggestions we'll drive on a strategic basis make sure we're aligned with that but Patrick on a day-to-day basis in candidate what he does really well and meet to allow me to run the company which I believe I can do pretty well so I said freedom that you know somebody who have their hands on the wheel you can't the over extended himself he bought at least five homes he had a may back in a driver running companies it has to be able to turn that wheel and that's where I think he's a ability to have a thirty plus year most of which was spent in this industry of veteran being able to come and join having the would've worked together side by side of the last two years and really get to be in boardrooms together you know sweat together and understand each other and just see the I think the discipline to food safety smart loves problems I._B._M. Let's put smart to work visit I._B._M. dot com slash smart to learn more the ocean plastic new schools to new energy flight delays to food safety smart loves problems. IBM let's don't use for anything productive let's say and just solving a lot of the problems that we have here is that a that that that goes against property game this is our wealth editor Robert Frank asking him a key question the top optimal rate for taxing the very rich is sixty percents problems inspire us to mend things ben things make things better that's why so many people work with IBM on everything from city traffic gently he covert trump analytics with Stephen Moore art laffer joined the Squawk Gang Joe Becky Andrew Robert Frank and guest host Surat Zeti here's Joe he writes in Western culture in terms of being confiscatory or do you really believe that people will be less productive and work less if they know they're going to the huge deficits we've got people that need we've we've got a lot of these guys don't need billions of dollars let's go we've done it before it's smart to work visit IBM DOT com slash smart to learn more attract stander by welcome back much is enough or too much depending on where you sit bracket what economists art laffer inventor of the laffer curve joins US next I wanted to help the poor by jobs so for response we called Economists Art Laffer Yep Dot laugher his work was central to the policies of the Reagan administration in the nineteen eighties and most end himself aren't laugher laugh Arar whatever of laffer associates art I'm GonNa you know what I'm going to start in a little bit different way and just just challenges analysis of something called the lavery that's the tax rate that would raise maximum revenue without creating widespread avoidance or discouraging the wealthy from working and earning on all the notions that we've had for three hundred years but I still want to challenge on what's the problem with moving some of the wealth that rich people have that after this together over the last two years it's going to remain we're GONNA continue down the path that we laid out at the investor day last year and we're excited about that we're excited about now doing this together and seventy five percent for the top one percent at least no sixty percent Zach men and his co author on a new book manual Sayas come to their sixty percent ideal not Bhai trying to confiscate from the rich problems it's human nature to hate problems but why is that after all being the play like Kevin said but we will be turning from festival office cheese will be next next on Squawk pod taxing the rich great for taxing wealthy Americans last week on the Pod we brought you a conversation with French economists Gabriel's Ben a tax advisor to both Elizabeth Warren and Bernie Sanders presidential camp first this hour Surat Seth Managing Partner Portfolio Manager Douglas Lane and associates are also of course a CNBC contributor we've got a lot going on what's the ideal went from about thirty percent of total tax revenues to sixty six percent huge increase in tax revenues from the top one percent the same thing happened at John F Kennedy is your taxes Joe and they really can't Warren Buffet as he reported in the New York Times which is a rarity reported his income taxes he paid seven million in taxes and taxed at a higher rate. What's the problem I don't know if they'll work less I don't know if they'll work less and I'm not worried about the justice idea you're the legal why don't we do we got when we cut the highest tax rate from ninety one percent to seventy percent revenues from the rich went way way up and the same thing happened with Reagan when we cut the highest rate from seventy complex error for simple truth whenever we've raised lowered the rates on the rich and raise tax rates on the rich revenues gone way up these people can get around broadbased flat tax everyone pays the same rate and then use the income distribution of the spending to help the poor in the minorities the disenfranchise who we all but he's just using the tax codes to take advantage of them as they all do and always will they aren't going to sit there and fade these exorbitant rates Duckman indeed and they think the tax codes are fair you know people don't like to be ripped off in these rich people have earned the money and you want to just tax them on the highest amounts art and they don't want you to decide it might Nova `grats recently I think this week said the idea that these people making fifty million or more billionaires that are subject to that this tax are afraid thousand ten and his income according to economists was about twelve billion now if you cut those right regulations restrictions and rates he'll pay his fair share it was a fifty million but raising marginal rates why is there a problem with going above where marginal rates would that would that'd be where you'd really gets them revenue because it would affect everyone talktime one you enter good morning welcome squawk box right here on C. we're live at the Nasdaq market? Citing time scrimmage Ross Sorkin along with becky quick and Joe Kernan and our guest host step up basis when it comes to end of life ten thirty one exchanges for the for the real estate folks carried interest for the government whatever they make for the next six months sort of a cruise to them yes no one but no one's talking about the one percent what her taxes remember I want to help that's not an issue about one question is how do you do it how about one percent or is that we talk about what is it five fifty six hundred thousand a year or so that's about five probably probably so they don't they don't take advantage of a lot of loop a lot of people as we LE- Kusuma worked six months of the year aid he said you're not victims you're the richest people in the world can't these people that are worth fifty million or more afford two cents of every dollar Beyond Act lately tax labor the same as capital and that would generate some say even more revenue but if you look at all this what people don't talk about is cost of living right fruit forget about a wealth tax for a second forget about necessarily higher marginal rates how would you feel about just the basic closing of loopholes around the million dollars given the amount that that would raise can't they afford it and isn't there clearstream what fear about it yeah but they know you're not gonna get it from him voluntarily unless you lower rates are we did it in the one thousand nine hundred twenty we lower the tax rates from seventy three percent in nineteen twenty to twenty five percent in one thousand nine hundred ninety nine and tax revenues from the rich I've always been forgetting all your deductions exemptions I Jerry Brown's flat tax where we lowered the rate to thirteen percent getting rid of all exemptions deductions etc including individual deductions for for the private equity. Folks I mean let's let's do the low hanging fruit you game for that because I think historically with Andrew I've always been for that twenty eight percent revenues from the rich went way way up as a result of that so you know when you just look at the very simple straightforward evidence in fact if you is China trade deal but he's not sure whether China will hold up its end of the bargain so this president has been as tough as any president has ever been on China about well it seems like starting down the road of some of the big issues like stealing our intellectual property trade secrets good morning to you some people are calling this a skinny deal are you in favor of of of a skinny deal if it doesn't get you some of the bigger issues that I know you've been all of that on the first dollar to the last hour and just let it go they'll all comply with the tax codes because they believe they're fair and they will try to get around it's now court good start so obviously I I'm happy that they're getting serious about that the trouble is we don't really know until and we ought to be thankful for the years welcome back to Squawk Good morning and welcome back to squawk box. CNBC live from the Nasdaq market site in Times Square. I'm Joe Kernan Low with Becky Quick Andrew Ross Sorkin US trade by Robert Lighthouse level that you could tax the wealthy before there's too much avoidance and too little productivity what does the highest rate the highest rate we could possibly do it right now I don't know what it would I'm will andrew but not all of them that's what you WanNa do with your taxes Warren Buffet as I said in that two thousand ten paid seven million in taxes and earned twelve billion over the next two years we'll be able to measure that for sure so I think you have to have some hesitancy and some disbelief about it doesn't hurt that changes in capital gains which is where a lot of the Democrats than price put capital gains were ordinary income let's mule four Esperance they assume you're just assuming no enforcement you don't think you enforce it they can hire better lawyers and Accountants and ex irs agency you can let me ask you this certainty of trade and getting some certainty is pretty important not only to China their economies hurt worse than ours but ours but when it's manipulating their currency and transfer technology but only partially going down that road but that's a pretty are they really abidin in good faith but on the agricultural stuff when they are committed to buying fifty billion dollars of agricultural products there says a phase one trade deal with China could happen as soon as next month join us right now to talk about trade and so much more Senator Chuck Grassley of Iowa Chairman of the Finance Committee but I'll tell you it'd be thirteen percent if you got rid of all the deductions exemptions exclusions just like Jerry Brown did that would be the perfect as you can aw whether China's really negotiate in good faith but at least it takes some of the anxiety out of the results from the onset live in New York or California versus you live in Florida so why doesn't anyone actually talk about you know like you said if you're the one percent and you're in the half a million a million's differ you consider that China's fifteen percent of the world's economy worked twenty two percent that's thirty seven percent added together when they get together it's going to have an influence Siam to slam Rod. Yeah of course they're gonNA find a way around it they'll do inversions they do all sorts of things why don't we just have a low rate you know you get signed an agreement and Chelsea let's say next month but we all know on those things maybe for a few years and he's frankly to some degree even worth negotiating with right now because he has a view that they are not going to abide by anything they even they signed their name to right away if they don't deliver we can measure that in the dollars they buy or don't

China Andrew Ross sorkin becky quick IBM president CNBC Wall Street Journal Kevin Plank Jerry Brown Softbank Ben Maureen Farrell CEO Reporter Patrik Frisk Senator Chuck Grassley
Former EY CEO Mark Weinberger, Republican Sen. Tom Cotton (R-AR), and Peloton CEO & Co-founder John Foley

Squawk Pod

33:55 min | 1 year ago

Former EY CEO Mark Weinberger, Republican Sen. Tom Cotton (R-AR), and Peloton CEO & Co-founder John Foley

"Don't forget to subscribe to our new podcast. What does that do exactly you. How does it audio bring in show musically the Squawk pod but daily podcast brought to you by the team behind squawk box control to CNBC's essential morning show every day. Get the best stories debate eight and analysis from the biggest names in business and politics are coming to our next today. The whistleblower report hits Washington Senator Tom Cotton on a tax break from tariffs. We we want to use the money. That's coming in from the tariffs to help those working families. Some relief and Peleton takes a spin with an initial public offering on the Nasdaq today and what a coincidence coincidence we were there to CEO. John Foley stopped by before Peleton's. I read I feel like we're six or seven different companies want. We've got those stories and much more. I'M CNBC NBC producer Katie Kramer. It's Thursday September twenty. Six Twenty Nineteen Swapan begins right now becky by three two one good morning everybody welcome to Squawk box here on CNBC. We are alive from the Nasdaq market site in Times Square. I'm becky quick along with Joe. Kernan Andrew Ross Sorkin okay a couple big stories that we're watching this this morning. Here's what's going on the big corporate story. Peleton stock set to begin trading on the Nasdaq today under the Ticker P. T. O. N. and all of our questions. They're going to be answered about this. IPO because on Co is going to join us live right here in dollars. It's an eight billion dollar Valuation Billion Dollar Revenue Two hundred forty five million dollars in losses we're GONNA talk about the math of that where they see profits eventually and what it all means and anyone on the treadmill the you know about the tread I do know about the treadmill red melt. I do know about the treadmill. It's very soft. It's like a way travel would would it's expensive. It's as a thousand dollar price tag. The bike is two thousand dollars plus. The plus plus the subscription fee plus. You now a little over two thousand a little over. I have won the the bike is quite a piece of equipment and it's heavy and it's really well made eight and you know you hook it up. You can have a seven screen with someone screaming at you. Go faster and stuff so so one of these so motivating one of the things inside right. The outside is there you go for a jog. You can ride a bike. It's all three age averages here. Grumpy this morning live a further south but one thing we talk to him about is the hardware actually has is a high margin product. It's actually a higher margin than iphone right now the margin they're collecting that it's the services in the investment that they're making in the services and the media component of this technology describing how much it's costing so much money. They're doing a lot of buildouts. We'll talk about that later. This one hurrying con Conroy eventually be built out there their argument in terms of the math and the model is that those are those are upfront capital expenditures that they need to do wonder they're building stuff in Europe because they're trying to build an international audience so it's not just you know they have trainers that have different accents different language different so there's a lot going. I like you pay a trainer. One time that's a lot of this is building the facilities. A lot of this building is but we'll talk more about this because there's some good questions to be answered disclosure we should mention this morning because CNBC's parent company COMCAST NBC Universal is an investor in Peleton separately Softbank reportedly planning to put an extra billion dollars dollars or more into we work this coming from a report from the Financial Times saying the Japanese firm intends to renegotiate a warrant agreement that was put together before we folks that works evaluation dropped and it's I appeal was delayed the paper a note. The talks are in their early stages so we were talking about before the show began that billion dollar investment if it were take place would come with actually also benefit some of their other shares and warrants that the in their previous investments clean up interest an extra billion dollars if this happens they're going to get a billion dollars but saw thanks can get a lot more of the company for that billion doubtlessly well that makes sense. Wall Street is watching the headlines coming out of Washington this week. Colluding Impeachment Talking Jazz joins us with the latest yesterday was a day that was dominated by this impeachment inquiry. That's moving forward on capitol. Hill among Democrats the president was here in New York for the UN General Assembly. President really frustrated yesterday. this impeachment talk really stepped on what he felt was a successful week at the United Nations and the president was at a press conference yesterday here in New York. I had the opportunity needed to ask him a question what I asked him was. Why Sir is it appropriate ultimately for an American president to ask a foreign leader for information about his political rival. He gave very long answer to that but here's part of the new president of Ukraine is looking to stop corruption. There's a lot of corruption going on and there was corruption. I just told you about senators that threatened him with votes and no money coming into Ukraine if they do things that's really what people are trying to say that I did but the only difference is I didn't do it. You take a look at that caller was perfect I didn't do there was no quid pro quo so the president they're saying. I didn't do it saying there was no quid quid pro quo but not really answering the question that I asked him which was why is it appropriate leaving aside the issue of money. Why is it appropriate for president simply ask a foreign leader for information about and his political rival. President Not really offering an answer to that one during the course of that answer today guys. We're going to see another day dominated by this story in Washington. amy did that entire thing without anything written in prompter for him off the top of his head teleprompter involved when he talks to the sound bites have have trouble reading. You didn't say take list of your biggest big at the end of the day. If you can get rid of seeing listen my business jargon one is on a going forward basis like right when they talk about the prospects for the company going forward. It's like we know what happened going right. You can't happen going back with you know who said it best Yogi. The predictions actions the hardest predictions about the future. Yes that is really true. Though that's so true he didn't know how I mean. Brian Z's insanity and brilliance really really close to each other so you're an outside exercisers that it I try to swim a little bit. I try to jog a little bit but I don't get nearly as much exercise as I should. You need mental mental toughness to be in in the gags down there. Don't you and physical you throw people out of the way they're elbowing people out of the way. If I I WANNA take you to one of those marine one departures and you can wrestle with the entire Washington can I I think there'll be you might you might be able to use some huge walk on marine. One always predicted is still thin volume. Okay the the impeachment. Odds are are up above sixty cents. Now the finishing the first term term are down in the mid seventy S to hide seventy the markets mypillow. I mean I don't think many people out there who think it's twenty. Republicans and you've got like a half a half at this point and you'd need twenty in upto you the what I'm hearing and I I mentioned Ari Fleischer happened but not to watch him and and he's not he's not a never-trumper but he's not a big trumper. He's not all in. He said this is his. These are his words. This is a five five yard penalty. This isn't a fifteen yard in football now. It's not a fifteen yard. It's not a halfway to the goal. It's not a where you get all the distance to where the pass interference and it's certainly not something that like a spearing where you'd be whatever it's called where you're deliberately hitting the the guy on the chin. It's not one of those where you get thrown out of the game that was his point and I think Republicans are GonNa probably stick with that are running in the Senate and they want to get it though they've been quiet. Elizabeth Warren is now ahead on a national poll and she's ahead in a lot lot of the early states right now and I don't know what happens to the stock market if Elizabeth I don't I'm not sure that the League Kuperman who said it doesn't open the day after that he was being it might have been hyperbole right but I don't if it becomes clear that she's the nominee I would think that the stock market if her chances just go up and winning the general election the stock market would start to act different and it's acting what's what's so fascinating to me about this election in twenty years that we don't have the sort of traditional chamber of Commerce. I free markets candidate in this race right. If you will and Elizabeth Warren Donald Trump trump is not a free market capitalist in the sense of Mitt Romney or or traditional Republicans. We've seen before trump is more of an activist executive. He does sort of like the IT sector. Not The you know he's a far cry drive from Elizabeth Warren. He feels as if the president should be able to tell individual but he's what to do. Does this help or hurt twenty twenty twenty twenty if they if they go along and does Pelosi take it to a vote where they can move. We just can't wargame out what a first term impeachment looks like because the last two that we've seen Nixon and Clinton were in the second can turn when all the bad stuff usually happens to president. All the bad stuff is happening to this president and the first term I think people's minds are pretty much made up on this president unless we have some dramatic bombshell so stay tuned a rash of CEO departures hitting corporate America this week building on what is turning out to be a big year for changes in the C. Suite. We worked worked jewel ebay seeing shuffling C. Suite for various reasons from boardroom battles to investor concerns and according to research firm Challenger Gray and Christmas there. There were a hundred and fifty nine. Co changes in August. That's up twenty eight percent from July and the most ever in a month so far in two thousand nineteen there have been in over one thousand. CEO Departures so changing of the guard at the top when Wall Street and Washington check in on the corporate corporate pulse of America whether it be for explanations of leadership turnover or broader sentiment they turned to the Business Roundtable the Bart is a group of about two hundred CEO's across every sector. It's it's all the big shots and business J. P. Morgan Chases Jamie. Diamond is the outgoing chair the new one will be Walmart CEO Doug Macmillan over the last two months the Bart released two pretty high profile statements pigments the first redefined corporate responsibility and the second downgraded the group's expectations for the economy are anchors asked Mark Weinberger former E. Y. CEO and a current current member of the Bart's board of directors all about markets great to see you. We've talked to a lot over the years and you've always had a pretty good idea about what's happening what CEO's are thinking about because you're talking talking to so many of them all the time I know that the Business Roundtable recently lowered its expectations for growth what what our CEO seeing what is this about and and what can you tell us sure so. I mean bottom line becky is the US is still strong. I think the general feeling would be that the numbers in the US are holding the rest of the world is what's dragging down the US right now and certainly there is a fundamental mind shift in my view of this China. US trade deal issue a lot of people people talk for the longest time we were in a terr- four eventually. There'd be a deal. We'll get through that you suck it up and you either take take the cost yourself or you pass it on now. The people are realizing. I think we're going to have a longer term. Trade issue. That's going to affect supply chains. It's going to be a much bigger issue and that is affecting the way they're investing across the world so these issues are topical and the way they're investing around the world meaning that they are not wanting to invest in China if American companies or they're not wanting to invest anywhere great questions actually. US investment I spend in China went up this court first quarter. First half of this year compared to last year but what's happening. It's investing in China for sales in China because that's where the market is where the supply chains are art. They are reevaluating whether they should have supply chains move to other Asian countries or somewhere else so they're looking at. Both ways are still serving China in China and that's still growing doing quite rapidly but how they serve the rest of the world is being reconsidered is almost a self fulfilling prophecy. CEO's are worried about what's going to happen with the trade talks so they're not investing. They're worried about the economy automated investing but by not investing that makes it more likely that some of this economic downturn kind of washes onto our show is actually last time I was on. We talked about this too. I I still think that's the case yeah I mean. There is no way that the business community sees two quarters of downturns in the economy which is what you'd have for recession. We definitely slower growth as we talked about but not to shootout downtown back to back next year. He's will be next next squad. pod Arkansas Republican senator. Tom Cotton is proposing a tax break for working families hit by higher prices due to tariffs on imported goods but he's also on the intelligence committee so he had an early look at the whistle blower report released this morning so trade tariffs and guess who said what about where in Ukraine and the political fallout. Let's just be clear here are Ukrainian. Oligarch didn't find Hunter Biden resume uh-huh Ziprecruiter DOT COM and start paying fifty thousand dollars a year because he's an expert Ukraine gas after this. I'm David favorite join me Croak into me and Jim Cramer for the opening bell our of CNBC squawk on the street the podcast subscribe for free wherever you listen and you can always catch us live weekdays days at nine. Am Eastern CNBC squad. Here's Joe Kernan Span by Joe Three Good morning and welcome back the squawk box here on CNBC. I'm Joe Kernan along with Becky. Quick Andrew Ross Sorkin the US and Japan have reached the seven seven billion dollar trade deal president trump announced the outline of the agreement yesterday at a signing ceremony with the Japanese Prime Minister Shinzo Ave for more on US trade. Let's welcome Senator Tom Cotton Republican of Arkansas senator. It's great to have you don't we don't I don't can you see to my left. No it's not you can't really see it but there's also a big elephant in the room that we may need. We may need to talk about senator but let's you're here to talk about trey. Let's talk trade at the start. How is that deal yesterday. Obviously a positive with Japan at this point but it just makes me wonder does that make us more or less likely ah Tocado China and get something done well i. I think the trade agreement with Japan was a big win for Americans and Arkansas in particular. We're very excited about Japan. Finally lowering barriers on beef pork and poultry also think the US Japan agreement could be a gold standard for digital judo goods. You know the transmission of videos books music. What have you between our two nations actually think that the agreement will have the happy effect of putting us nail all in lockstep with Japan to try to get better trade terms with China as we put more and more of these trade deals to bed couple years ago with South Korea now Japan hopefully later this year it'll be Mexico and Canada that brings us our focus more intensely on China. which really is the worst culprit in the International Trading System? Let's keep talking okay about trade it but just with it through the prism of what we've seen the last couple of days in your view the the the latest salvo in the get rid of trump. The latest salvo is based on Ukraine. Does that make more or less likely that he decided to do a trade deal but China I don't. I don't know if it makes it more or less likely going to do trade deal. China given what the House Democrats are doing. I I think what the president wants to do is a good deal for America's workers for factories as for farmers ranchers with China China obey the rules of civilized nation when it comes to respecting property property rise and trying to still technology and use it for military intelligence tells purposes the president's focus is as it should be on getting that good trade deal with China no matter what kind of hysterics you see in the House of Representatives but you've been in in Washington for wall and you know everything gets Political Democrats who need twenty senators. I think if they had all their own senators to go if it does proceed to that level Do you think that from what you know from what you heard yesterday in the transcript. I don't know what it's GonNa. Come out with a whistle blower necessarily. Do you think that this rises to the level of a high crime in warrants removal from office now you know it's a little mystifying to me and I think most Americans now that they've read the transcript of the president's call with the president of Ukraine exactly what the Democrats are talking about back. Nancy Pelosi said one of the grounds for impeachment inquiry would be withholding information from Congress and the people well. The transcript has been released publicly. I and members of the Intelligence Committee reviewed the whistle blower complaint and what's apparent is there's no quid pro quo that the president asked for anything in return for the US aid to Ukraine. It was a fairly straightforward diplomatic conversation. certainly it's not what Joe Biden has boasted about doing Joe Biden posted oh on television about withholding American aid to Ukraine if Ukraine didn't fire the prosecutor that was looking into his son's company and let's just be clear here. A Ukrainian oligarchy didn't find Hunter Biden resume on ZIPRECRUITER DOT COM and start paying him fifty thousand dollars a year because he's an expert in Ukraine and oil and gas he did that because Joe Biden was vice president of the United States Senator Let me ask you a separate question if you find the Joe Biden side of this troubling which by the way I think it's hard not to I do you find anything about what the president did troubling not necessarily rausing talking to a crime not necessarily rising to a level of of being impeached but in terms of character in terms of what it says in terms of being the president in the White House. Does anything about this trouble you whatsoever at all or do you think that this is completely fine so I I think the president has reasonable concerns about Ukraine. Ukraine Ukraine is riven by rival factions those factions pointing fingers at each other alive one thing that the president wanted no earlier this year whether presidents Alinsky a newcomer to your cranium rainy in politics was going to be better than some of the past leaders of Ukraine especially when it came to combating sunshine referred to that piece of the transcript. I'm referring specifically the piece of the call related to to Biden. No this is my point. Is that Joe Biden. A sitting vice president United States went to Ukraine and demanded the firing of a prosecutor computer that was investigating his son's company otherwise he was going to withhold a billion dollars in aid he boasted about that he bragged about that that was under a previous Ukrainian administration. Now with a new administration. The president wanted wanted to get to the bottom of whether or not it was more trustworthy. It was going to take a more serious tack on corruption and whether their past actions that needed it'd be reopened. I'm not saying that they're necessarily is anything they're saying. These are reasonable questions when you look at the facts sitting vice-president son getting fifty thousand dollars a month and it's a it's a common common topic of conversation between our president and president of other nations dealing with corruption and especially with AIDS those nations. They're going to get anywhere here under senator at this point. What would it cake to start flipping the twenty. You'd need twenty. Republicans and I'm sure they're we're going to be pretty solid in in their support. I just I don't know if as they split maybe SAS. I don't know maybe Romney but but what uh-huh what would you need to see where you'd actually the president would start losing report the supportive of his colleagues in the Senate or not colleagues but I don't WanNa get into any detail about the whistleblower complaint. Although I do think it will be made public and I don't think there's that much classified material in it and I think it's probably best now that the transcripts as public to make it public I will say I didn't see anything in the whistle blower complaint beyond much of what's in the transcript. That's been released publicly already what's been reported in the news and frankly a lot of it touched touched on what's public news classified sensitive figure that voters will have the American public will have a chance to litigate this in November of twenty twenty this and almost every other all the time so much about your t the act of of rebating some of the tariff money to tax payers How does that work shirts so we've added tariffs on various countries various products over the last two years. The Treasury Department is taken in tens of billions of dollars. There's Harris are primarily designed to get us better trade deals with those countries to protect our jobs and farmers and ranchers are forster's but there is that money and the Treasury Department now and I think a good side effect of it can be turning that money back to American families so my legislation rebate that additional tariff money every immediately those past two years of money and and then every year after taxes are filed to the bottom three tax brackets anyone making up to eighty four thousand dollars a year or one hundred sixty four thousand dollars for a family by saying thing that to the extent that this have an impact on America's families. Here's a remake of several hundred dollars so we can both try to use those tariffs to get better trade deals but also not hit Americans in their pocket books. It would only go to those in the the lowest three tax brackets anybody who's in that and it's not directly based on anything. They're buying your saying offering relief to families that inevitably would be paying higher bills if they get hit with some of these tariffs for the goods that they're paying in the stores worse yeah that's right so we want to concentrate the relief on working families who are in the bottom three tax brackets to the extent. They are going to face any kind of increasing inflation pressures. We haven't seen that much data yet but it's possible but we want to use the money that's coming in from the tariffs to help those working families some relief. What's treasury doing with the money right now. What's the administration right now. Tariff Revenue Income tax revenue or corporate tax revenue just goes into the General Treasury revenue funds but we do have the ability to create a separate terrified to identify how much money comes in on an annual basis and simply turn that money back to working families at several hundred bucks a year in the pockets working families. I think that'll make a big difference. As the administration signed off on this they in favor of it to it's just being introduced today but we've gotten some favorable indicators from the administration. National Ready and I think that we might have more senators joining us in the future and have administration sport behind it as well senator great to have you on today in hope to see you again not too long. I've been too long this time but would love to have you back thank you thanks good to be on next on. Swath pod. It's it's like riding a bike peleton public the company's. CEO John Foley takes US along for the ride a unique and modern company that is singularly focused on one experience a better fitness in the home but in order to get there. We had to do a lot of things that's next this is squawk pod taking behind the sounds of squawk box from CNBC cures Andrew Ross Sorkin IPO of the day Peleton going public today listing on the the Nasdaq under the Ticker P. T. O. N. The company PRICING ITS IPO at twenty nine dollars a share the top of the target range head of that debut on Wall Street. I got a The exclusive live tour of Peleton's control room to see how the fitness startup transforms an in studio working class to an at home experience squawk box. His team was the first to get inside. Peleton's tread control room were life fitness. Classes are broadcast directly to your treadmill. Hang with it amy funny. You guys got this. Keep it up. Here's Peleton. CEO John Foley from our exclusive behind the scenes tour we said can we be a software company and we looked at the hardware and the category and we said it's kind of the dog's breakfast of of uninspired hardware so we said we wanNA build the best hardware tablets and bikes treads and whatever else we come out with in the coming years to the extent that we see stream two thousand hours of live television programming around the world every month. It's hard not to say that we're media companies. Well Andrew also joined John for a spin in on those two thousand bikes over fifteen hundred people on this leaderboard right now for three Cape Gone. You're up. Did you rank and early days. I could win a class but those days are long gone. What do you think the biggest difference is going to be being a public company. Certainly the capital event have adding more than a billion dollars to a balance sheet and allowing having to invest in the new growth and continued growth and new categories and new markets is is really why we're doing it. We're very excited about it but you know we still feel like we're out one of VENNING Mon- of this massive opportunity to impact. A lot of people's lives around the globe. Here's John on the set of squawk box today. Thank you for coming on. Thank you Raffia. It's Important Day in in your journey. We surprised maybe you weren't that. You're actually able to price at the top end of this range given all the questions questions it seemed to be surrounding the IPO market right now. Yeah it was It was a thing you know we were. We were following it like everybody else. there was a ton of demand. I just obviously got off the road for the last. Just two weeks got in front of a bunch of investors fun process learning. It's my first. IPO But I think the demand was their high quality investors and so we were able to price at the top of the ranger we're excited has been the lesson though as you've you've traveled the country over the last two weeks also amid swirling questions about we work which of course has been in the headlines where Uber and lift and so many other surprised yeah I as a business person I'm fascinated. I read all and follow the stories like you do today obviously celebrating Peleton's IPO and so so we're we're excited about this moment for on the Pelivan journey. We think we built an incredible company the foundation in his great the economics are great the business models great teams great so we feel like we are special in this year. I feel I love that. I I really our. CFO Woodward who I've been on the road with for two weeks it's taken twenty six companies public. Whoa I'm kind of a new 'B as as my son would say the reason I imagine engine Dubar and lift and so many others is because one of the things that is interesting about this particular vintage of IPO's is a fast growing companies like Peleton. There's a company now that has revenue nearly a billion dollars but also losses. That's lost in your case. They've increased over time as the revenues have gone up at the at the same time hundred ninety five million dollars in losses and so there's a question about the path to profitability and how investors think about that sure so. Let's reframe US US awesome semantics here. I call them investments. Okay we we are investing and we're an investment mode and we are prioritising growth over profitability right now so we are investing testing in the new category of threat the Treadmill Jody your point we are investing in Europe so we are in the UK still in one year end and we're investing in Germany we go to Germany in the next sixty days with six stores in the six major metropolitan areas of Germany were hiring. The instructors were opening the stores. We're doing the logistics all of that. That is obviously expenses out in front of the revenue so we we call it investments stage and we think it's disciplined investing in terms of though how much of those are one time time capital costs meaning development of studios and new technology and other costs which I imagine are obviously ongoing stores new instructors employees yes so think about it's both aspects cap ex but here in Newark City. We're building a fifty million dollars television production in studio just down the street where we're GONNA have four studios under one roof the best yoga the best bootcamp the best cycling and a fourth studio to future proof it if we if we come come out with other products in other categories. We're also doing a fifty million dollar studio in London. A similar story or German instructors are going to coach out of that studio and and so do you think about the fixed costs leverage in our subscription business over time that would go north of seventy percent gross margin on that because of the fixed costs leverage over a thousand basis points of margin expansion because of the leverage at one time cost. It's one hundred million dollars. That's alone there. In what year do you expect expect to be profitable. I think we're showing twenty twenty three fiscal twenty twenty three in the in the five year plan and one of the other questions. It's come up a a lot of IPO specifically. We work most recently but across the board is this idea of a dual class structure. You have one. We do why for for better or worse. We've raised a billion dollars. Peleton so far as today north of two billion so we're well capitalized but that billion dollars through eight rounds of financing have really really crammed down the team including me so I have less than six percent of the company and I'm the founding. CEO and I think if you looked at a range generally founding CEO's have eight to twelve percent so we couldn't and do a ten to one voting class because then the leadership wouldn't have any control we just feel like we have the right experience leadership team in place. The board feels good about us are my partner the President William Lynch our CFO the founders are still altogether so we feel great about the team and we feel great about the opportunity do investors ask you about that though they do comes is up about a quarter of the meetings brought up class John how how much of this I mean people. Try to figure out what kind of company you are. Are you a bike company are. Are you a media company. Are you a technology company. what what what. What do you think you yeah. It's it's a great question. I feel like we're six or seven in different companies in one and our north has delighting our members and in order to do that. We had to be a retail company and a logistics company and hardware and software and media. We we have a fashion line of apparel fell close to six hundred thousand units branded apparel this year where music company. We bought a music platform last year integrated with our service so you can probably name five or six companies onto hands that have direct long term relationships with all the major labels and publishers which we do so how las spotify as the same style relationships that we had to go direct with so it it is a unique modern company that is focused on one exp singularly focused on one experience a better fitness in the home but in order to get there. We had to do a lot of things you're pretty reliant on the consumer and the consumers health for your business. This is an expensive expensive product. It's not cheap for the classes to sign up on a subscription model. We've looked at a great economy here in the United States. If that turned down could you change the spend. What could you quickly give it to deal with a downturn in the economy. Well appelt on bike at this point is fifty dollars a month with zero percent down zero down zero percent financing you divide that by two so it's twenty nine dollars per livan adults so it's an insane value. If you're riding the bike and we've looked at the last fifteen years of fitness suspend becky and even in two thousand and two thousand nine there was increased spend so it's effectively recession proof spend on what fitness dollars dollars as an industry people weren't cutting their gym memberships during two thousand eight when you look at the bike when you look at the treadmill struggles a four thousand dollar price point bikes two eight thousand dollar price point. They are high margin products for you right now when you look at the mix between the hardware and long-term the services. This is our software. How do you see this playing out whereas the hardware right now seems to be the engine you're absolutely right. Andrew because of the two thousand dollars price point on the bike and then the thirty nine dollars a month on the subscription the top line right now is eighty percent hardware if we continue growing at the same clip. Which is triple digits? We've doubled the company every year since inception. Obviously the law of large numbers would say you can't always do that but it's hyper growth company and to the extent we can continue this type of growth. Both hardware will always connected fit if we had this conversation five years from now. Do you think you will have more subscribers to Peleton's service. I broadly that own hardware or I know you can buy this. You can buy the service without the bike these days. That's right so yeah if you have if you're one of thirty four million the Americans with the treadmill in your basement today you could download our our digital APP and and be transported into a Peleton bootcamp class streaming live from New York City with one of the best instructors in the world on your sixty inch television screen in front of your dusty old treadmill and you so absolutely we better business view or not I would assume it is because it some ways you can reach more people but at the same time you probably don't have the same lock in that's right and and what's the hook on on the treadmill as soft on the knees or what what's what's better about your treadmill belt technology that has cushioned think about those high end colleges with those cushioned tracks the better on your body over time so our treadmill is the best piece of fitness equipment ever created you being with us right here. I it'd be thank you guys you can see more of this exclusive tour. Peleton's studio and my pasty Loyd arms and legs on CNBC DOT COM. Thank you before you allowed that. I didn't have the power. We have produced a lot more power than you. That's the show for Today on rundown tomorrow. One hundred eighteen companies have listed on the public market so far in two thousand nineteen about eighty eight of them that seventy five percent are are trading down. This week will break down the poor. IPO's squawk box hosted by Joe Kernan Becky quick and Andrew Ross Sorkin tune in weekday mornings on CNBC at six am eastern to get the smartest takes and analysis from our TV. Show right into your ears. Subscribe to Squawk pod wherever you get your podcasts. We'll meet you back here tomorrow. We are clear. Thanks guys.

president CNBC Peleton US Kernan Andrew Ross Sorkin Ukraine CEO John Foley senator China CEO CNBC Washington Peleton Joe Kernan Becky Senator Tom Cotton America Hunter Biden Elizabeth Warren
Jane Goodall: Conservationist, Scientist, Humanitarian

Squawk Pod

14:15 min | 1 year ago

Jane Goodall: Conservationist, Scientist, Humanitarian

"This CNBC podcast is brought to you by TD. AMERITRADE investing isn't one-size-fits-all every investor has a unique style. That's why TD Ameritrade our trade offers two different mobile APPs there's TD AMERITRADE mobile. Which lets you manage your portfolio with streamlined? Simplicity or thinker. Swim Mobile. which gives you tools as you need for more advanced trades an in-depth analysis visit td ameritrade dot com slash APPs to find the one? That's right for you once again. That's TD AMERITRADE AMERITRADE DOT com slash member SIPC bringing show musically this squawk pod the daily podcast brought to hugh by the team behind squawk box control to CNBC's essential morning show every day. Get the best stories. Debate and analysis from the biggest names in business and politics today on Squawk pod a timeless interview with conservationist and activist Jane Goodall from Twenty One thousand nine hundred World Economic Forum in Davos Switzerland. Let's go wrong they think. This is a disconnect between this clever into lay and love and compassion the human caused and Andrew Ross sorkin reflection election on that interview one year later just as this year's global conference gets underway. But it's very rare we're I'm sort of starstruck and I was genuinely starstruck by Jane Goodall that conversation exclusive to this podcast. I'm CNBC producer. Katie Kramer it's Monday January twentieth. Twenty twenty squad begins right after this this. CNBC podcast is brought to you by TD. AMERITRADE investing isn't one-size-fits-all every investor has a unique style. That's why TD AMERITRADE offers two different mobile APPs there's TD ameritrade mobile which lets you manage your portfolio with streamlined. Simplicity or thinker Swim Mobile Noble. which gives you tools? You need for more. Advanced Trades and in-depth analysis visit td Ameritrade dot com slash APPs to find the one. That's right for you once again. That's TD AMERITRADE DOT com slash APPs members ABC. This squad on today's episode. The World Economic Forum in Davos for forty plus years the world's leaders in business and politics had convened in the Swiss Alps for a whirlwind four days of meetings interviews panels and performances Andrew. Have you packed yet for Davos pact. That's actually this. After this project I caught up with Andrew just just before we both boarded a flight commercial to this year's World Economic Forum so Davos is the home of the World Economic Forum which has a long history. This is a group group that started in about nineteen seventy-one so almost fifty years of this global event for people who've never been there before. How would you describe it? What could you expect to see in terms of our our coverage this is the super bowl for business and policy leaders probably the greatest density of CEO's and government leaders in one place all traipsing through the snow together over the course of three or four days and a lot of the business leaders are engaging engaging conversations that are maybe a little bit different than what they're doing from a day to day basis we have a lot of discussions about about capitalism a lot of discussions about environmentalism mm-hmm about poverty around the world What kinds of conversations do you expect to hear? I think the single biggest topic you're going to hear about out this year is the idea of sustainability and. I know that is almost a cliche at this point. And it's a topic that's been addressed before Davos in really started To some degree at Davos however there is going to be a sea change in the way businesses operate and that real cost when when it comes to sustainability. You're looking at companies like Microsoft already that are charging their individual units for their carbon use. And I think you're gonNA see that in a very material way across the board so much of this is actually being led by Europe and some of the disclosure rules. And I think you're GonNa you start to see more and more disclosure around carbon emissions the cost of those emissions what companies are doing on. Es G. and it's just it's the the topic that is being talked about in the boardroom. Is it strange to talk about that. At a at a Swiss ski resort that people have to fly and in some cases take helicopters to get to. What's tell me about that? Disconnect people love to poke fun at Davos and think of it as you know speed dating and over Champagne. And everybody's flying there. I have never been fond of the argument that everybody should swim to Davos or otherwise. They're hypocrites if you really think about how. The dialogue and businesses changed around stakeholders and shareholders and purpose. And all of these things that have taken place place over the last twenty or thirty years they started Indaba. And so you know you can laugh if you want. But I I think that actually really the most meet some of the most meaningful decisions that are happening at the intersection of business and policy are happening there over the years. Joe Becky and Andrew have interviewed the likes of Bano J. P. Morgan Chase CEO Jamie Dimon His Royal Highness. Prince William the Secretary General Role of NATO and so many more but a consensus favorite for the squawk box behind the scenes team Andrews conversation with conservationist Jane Goodall at last year's event. Here's what Andrew told me about that interview a year later. Can we talk about what might have been my favorite interview that we did last year and that is with eighty five year old soon to be eighty six year old. Jane Goodall Maybe one of my most favorite interviews of my career. Oh that's awesome. I think definitely my most favorite image age. Somebody took a picture of me kissing. Jane's on head. Who took that picture Andrew? I think you did I did. Hey I think you did anyway. it's it's just it's an indelible image. I have long been a great admirer of Jane Goodall. Integrate I've had a great love affair with gorillas and monkeys and The environment and and being able to spend time with her and Talk to her about her own journey and how she sees the world today was really quite something. It was a very charming interaction. Action that you had with her I think that doesn't happen very often. When you're interviewing people especially the CEOS of the business leaders that we talked to in Davos you the other piece of it is? It's very rare and maybe I'm completely jaded but it's very rare. We're sort of starstruck and I was genuinely genuinely starstruck. Buy Jingle Jingle Bells raised about two hundred and fifty million dollars for her foundation for conservation work and environmental concerns and also also education about our planet and about The way we coexist with animals and I thought that message was actually really fascinating leading to bring to a meeting of the global elite. You know I think that what she does. She adds a sense sense of humanity empathy to a conversation among business leaders. That oftentimes missing that piece. Okay this is awesome. Thank you appreciate it. If you want to see that photo Andrew mentioned I wanNA kiss you. I'm telling you I've I'm GONNA catch you. We tweeted it out today with a link to this podcast follow us at squawk. CNBC anyway. The interview you're about to hear took place the same week as the launch of the Jane Goodall Legacy Foundation its purpose is to safeguard Goodell's lifetime work in conservation of animal habitats and the environment pretty fitting for what is sure to be a theme in Davos all those this year and the theme of few squawk pod episodes over the past week sustainability since launch. Jane Goodall Legacy Foundation has supported nearly five thousand projects and protected nearly two thousand acres of habitat around the world. Speaking of world travels. We learned a lot about Jane's life during that Twenty Nineteen Davos interview view including about Mr H. Her traveling companion. A toy stuffed primate brought a little something special to well. Mr H has been my travelling. MM companion for twenty eight years. He's been moved me to sixty four countries. Let includes North Korea he symbolizes the indomitable human spirit here on squawk. This conversation warms our hearts again and again. I hope you love it as much as we do. We have a very special guest. I I have to say selfishly. Actually I am thrilled to have this guest with us. Jane Goodall is here. Thank you for being here. You have now. Launched the Jane Goodall Legacy Foundation. Tell us what that's about. Well you you know. Ever since nineteen eighty six when I realized that the forests for going to numbers were dropping all the problems facing the chimp and soon after that began to understand the plight of so many of the African people living in and around forests who are cripplingly. Poor they don't have good health. Health education facilities and so raising money ended elephant program first of all around the bay area throughout chimp range in Tanzania now in six other African countries whether chimps and giving people better lives in the way they choose and they become partners in conservation. And if you don't have the local people with you this no point in doing it because it's their country and then having you know being still working on getting the funding for this. What's the point if younger generations on be better stewards than we'd be? You raised an enormous amount of money including including from the corporate sponsors. Yes that's that's it. There are thirty four Jane Goodall Institutes around the world. There's eighty countries with our youth program which is kindergarten university and everything in between an all of these groups are choosing projects they choose them to make the world a better place that people animals Envir- how much how much honey you're trying to raise two hundred fifty fifty million. Yes yes okay. I want to make sure we could try to raise more for you right now. Well the point is is that these young people all over the world and we were right across China right across the US and and other parts of the world moving into the Middle East It's not that they can make a difference. They are and why should we care because we have been stealing their future. Here's he is our intellect taking Tamaz. Here's clever businesses. Here's the new technology era and something's gone wrong and what's gone wrong. Pink is this a disconnect between this clever intellect and that's what separates us more than anything from chimpanzees and other animals and love and compassion. The human I have a couple of quick questions. One is a debate here in Davos about capitalism and giving back and I'm curious sort of where you stand on that given the work that you've done all these years well whether it's working people right I think the awesome individuals philanthropists some businesses and they definitely are giving back Sometimes you can hardly differentiate whether they're doing it Sorta greenwashing shing to look good. It's actually the the passion of the CEO but quite honestly as long as they give the money and it's it's not a corrupt business because we have to be careful. I want to take money from some company. That's completely destroying the environment. Two other quick questions kids these days. You like kids to spend time outdoors Unfortunately a lot of kids. I Dunno if it's unfortunate spent time on screens including my own kids. What do you think of that right now? Well do change change we. We do know that the good psychological development is being proved. Children need to be out in the green world And then final question You travel three hundred days a year. We have a lot of people who watched the show. Who who also are road warriors? What what the trick passion mission just doing what you have to do because you care fair enough Jane Goodall? Thank you really appreciate Squawk Pod. God will be right back. We're back. That's the chauffeur today this week. We're bringing you behind. The scenes content and from our rooftop sat in the Swiss Alps the biggest names in business politics and culture are in Davos. And so are we shoes of the most important thing at Davos. I think thinks socks are actually very important. But everybody's looking at each other's shoes all tourney figure out. Can you make boots. Look good with the suit on squawk doc box is hosted by Joe Kernan Becky Quick Andrew. Ross sorkin tune in weekday mornings on. CNBC at six am eastern to get the smartest takes and analysis from our TV. Show right into into your ears. 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Howard Schultz and the Ghost of Ross Perot

What Next | Daily News and Analysis

15:35 min | 2 years ago

Howard Schultz and the Ghost of Ross Perot

"Hey, Steve, it's Mary her said sleep. How are you? Mary. How're you doing? Steve Kornacki has been called the king of lickety-split political data analysis, you can usually find him swiping through a big flat screen on MSNBC. So when Starbucks CEO Howard Schultz, set off a social media firestorm by dipping his toes in the twenty twenty presidential race. I thought Stephen what to make of it. Did you watch the heckling video last night? I was on late last night. So we saw of it. Yeah. I said last night is that I am seriously considering running for president as a centrist independent if you haven't seen this tape it shows Howard Schultz on a stage with journalist Andrew Ross Sorkin trying to explain why he's considering running as a third party presidential candidate which view merely as a designation on the ballot. And that's when a man standing at the back of the crowd just starts ripping into him. If you're sort of Barnes and noble, New York City book event, you're sort of at the heart of. Call it resistance culture. Billionaire elite. We're going to get you that idea and that sentiment in just a minute. The twenty twenty presidential field is getting crowded. They're the big names Kamala. Harris Elizabeth Warren Huston gillibrand, then they're the wildcards like the spiritual guru Marianne Williamson. She announced he was running his democrat earlier this week. But part of what's making people so upset about Howard Schultz is that by running as an independent he can skip the whole weeding out process of the primary, and he's got the money to hang around. If all someone knows about Howard Scholtz is that he runs Starbucks. And that's where I get my coffee. Is there more to him that we need to understand? Or do we not know yet? Yeah. I mean, I think you do need a bigger story than that. He look at the the third party candidacies that have you know, that have gotten some traction. I think the the best one the most encouraging modern example for somebody like Howard Schultz who might be thinking about running third party would be Ross Perot in nineteen ninety two. The guy heckling Howard Schultz that in New York City bookstore and all the people ratio him on Twitter there haunted by the ghosts of that nineteen Ninety-two election like Howard Schultz Ross Perot ran is a billionaire and a Washington outsider. He actually got nearly twenty percent of the vote wasn't enough to win. But some say it was enough to change the outcome. So as Steve to put me in the back seat of his time machine. And see if we could get a better idea of how one third party candidate influenced and election, and what that might say about how Howard Schultz could change the outcome in twenty twenty stay with us. What happened back in nineteen Ninety-two? It's not the perfect analogy for today. But no story would be Ross Perot was a well known businessman when he decided to run for office in the early nineties. Same is Howard Schultz is now and like today the sitting president, George H W Bush was in trouble the economy was faltering. He was worried about being implicated in the Iran, contra affair, and what you saw in the start of nineteen Ninety-two was Bush's approval rating was plummeting a year earlier he'd lead the country victory in war. The first Gulf war to get Saddam Hussein out of rack in early ninety two February nineteen Ninety-two Bush's approval rating false of thirty nine percent. And it's in that climate that Ross Perot goes on Larry King show. Larry King Live on CNN is any scenario in which you would run for president. Can you give me a scenario which say, okay, I'm in? Number one had a want. King asked him a bunch of times. Hey, you know, people are looking for would you run for president? And finally on you know, third passer so Perot finally just says if you're that series the people are that series. You register me in fifty states. And if you're not willing to organize and do that, then this is all just. Are you saying to the ordinary folks if you're dead serious starting? Sweat Alyce some sweat. Why do I wanna see some sweat? I said it earlier I want you in the rain. It's amazing because you basically don't have an internet in the way, we know it today. You don't have social media in the way, we know it today. And yet, it's this this sort of viral moment that word of that moment, the clip of that moment, you know, spreads spread slower than it would now. But over the course of days weeks and months this massive, and I truly truly massive grassroots movement emerges that starts getting Perot on the ballot. But spring ninety two by May June ninety two Ross Perot's running in first place in the national polls. He's a head to George H W Bush Clinton is far far behind and people are contemplating the possibility that Ross Perot might actually win the presidential election. Become an independent president blow up the two parties. Of course, this worst case scenario is not what happened Bill Clinton one is. I was president some of blame Perot for Bush's failure to win reelection. But Steve disagrees says pro was just a symptom of Bush's ailing presidency. Not the cause even so pro did manage to get almost twenty million votes. I do think the thing when Democrats look at the Ross Perot candidacy and think about Howard Schultz with they're really seeing is someone who is able to peel off nineteen percent of the vote. And what that could mean. Yeah. I mean, so the democratic argument, and I think it's plausible. I I don't I don't know. But the democratic argument is basically take a poll right now Donald Trump's approval rating, and you'll find probably a majority say they disapprove of his of his handling of the job. And there was another poll. I just saw this morning. ABC news Washington Post poll, say fifty six percent of people say they definitely would not vote for Trump in twenty twenty right now. So I think Democrats just look at those numbers, and they say, okay, the numbers are there to beat Trump. The the only thing that could possibly screw it up is if those numbers get divvied up if you got, you know, two candidates three candidates, whatever it is who are sort of competing for that. You know, I definitely won't vote for Trump vote. So from. The democratic standpoint. That's why you can't have him in the race. He could just get only siphoned off votes that would otherwise go to Trump the other theory of it, then I'm open to and again, I think it's plausible. We just don't know is how many voters remember we call them in twenty sixteen the reluctant Trump voters and in like him, they didn't they wanna vote for him. But in the end they checked his name off anyway because they didn't wanna have Hillary Clinton as president. They were essentially they were voting against Hillary Clinton. They were voting against the Democratic Party might have even been voting against the system, but they ship. Trump's name off even though they didn't like him, even though it's not something they wanted to do. There's a scenario. I think it's it's not implausible that those same voters are kind of up for grabs in the homestretch twenty twenty. And if you've got a guy like Howard Schultz out there, maybe in a way, they weren't with Hillary Clinton, those reluctant Trump voters are willing to go and vote for they're not willing to go all the way over and vote for a democrat. But they're willing to abandon Trump and vote for Scholtz and in that case. Maybe instead of you know, being a drain on people who who who would otherwise vote democratic maybe it ends up becoming this this sort of halfway house for reluctant Trump voters, and it actually cuts into Trump's side, that's one of the things with these. I think the history of these third party candidacies. There are sumptious about how these these candidates are going to draw their votes that don't always fully match up with what ends up happening. I mean Schultz's said he wants to run as an independent. He's also a billionaire. So it means he can kind of avoid some of the checks and balances of the party system. But can we talk a little bit about? What may what running is an independent really means? And how difficult it is. Yeah. No. I mean, I it's something as simple as ballot access. You know, every state has different, you know, different rules on how to get your name on the ballot in the November election. Some of them are real easy. Some of them are very hard. It costs a lot of money. Takes a lot of time a lot of resources and even these establishment, you know, third party third. Party that we have in this country like the green party the libertarian party. Even we'll have trouble getting on all fifty state ballots. It's not a given. It's not on a Matic. So just first of all you have to do that. Now has got a ton of money. That's going to go along way, you know. And again, I one of the other if he does run I think one of the other pages he'll take from Perot's book, obviously is the attack that money for a very extensive advertising campaign pros effective with that in ninety two the ads. He ran were very different. They were different than anything. Anybody really seen before when it came to political advertising? He took he would buy thirty minute blocks of network television time, he would preempt, you know, sitcoms, you know, instead of watching major dad one night, you'd get the Ross Perot infomercial on CBS evening tonight. We're going to talk about how to solve the problems that we defined that country. I think we can come to the conclusion immediately. What it did was image at eight. Guy is different this guy. There's an executive he's sitting at the desk diagnosing the problem. He's serious. All these it created all these sort of positive associations with Perot. I imagine Schultz would would try to do something similar. There is one hurdle that Schulz like Perot can't just by away access to the presidential debates the biggest single hurdle that third party candidacy would face just logistically can you get in those debates 'cause it when you get to the fall of twenty twenty and you got, you know, two three presidential debates, whatever they end up having if you're not on stage, then there's just gonna be a vast number of voters who are just gonna write you off. And right off a vote for you as a waste because clearly you're not serious enough, you know to get into debates per Perot's, a good example Perot in ninety two he dropped out of the race in the summer. Got back in the race the start of October. He was running it like six percent of the polls when he got back in the race and people were saying Perot's a shadow of himself. It's not really gonna matter. They put him in. Debate. Anyway, the two campaigns agreed to it. He kinda stole the show at the first abate and the rest is history. He gets up to twenty percent on election day Beth for any third party candidates since teddy Roosevelt in nineteen twelve Perot runs. Again. In nineteen Ninety-six does not get into debates is vote was cut more than half. He got about. He got seven eight percent in in nineteen Ninety-six part of why we're still talking about Ross Perot more than twenty years later is that he had this charisma. He was known as the populist billionaire steep says that's another lesson for Howard Schultz. Because no matter how much money you have or how many debates you do you still need people to like, you not heckle you at Barnes and noble. So you could spend the money as Ross Perot in ninety two and you could get traction. I'm not sure generation later, if you don't have that populous touch that the money is going to make that big of a difference, especially as I said in the media climate change so much. I'm also not sure money quite matters. The way it used to the other part. There was just this polarization in tribalism. It's really taken root over the last generation where people just have these incredibly strong personal sociation with part of blue America part of red America. I'm not part of blue America. I'm not part of red America. And I think more and more they look at elections, you know, through that lens, which which would just another barrier. Really for for third party candidate. Steve had one last story for me about a third party presidential candidate one more reason, why Democrats maybe shouldn't be so worried about twenty twenty another lesson. I think that it might be worth keeping in mind about third party candidates to is I do think voters kinda kind of figure it out before Perot. If you went back to nineteen eighty there was a guy named John Anderson who ran as an independent that year. Jimmy Carter was the incumbent president. Ronald Reagan was his Republican challenger, John Anderson was a liberal Republican you had those back then he left the Republican party to run as an independent in the Carter. White House Carter. Political operation was panicked. Petrified because they just looked at it. And they said, well, hey, John Anderson liberal Republican he's gonna he's gonna take votes from us. He's a liberal where the liberal, you know, and they waged a whole campaign that has some some shades of what you're seeing now about Howard Schultz, you know, Democrats in the summer and fall of nineteen eighty don't waste your vote. Don't waste your vote. They had banners. They had chance Carter himself was saying Mondale. Vice president was saying it on the campaign trail, don't waste your vote. Don't waste your vote in the end people got the message largely you know Anderson had been running at around twenty percent in the polls at one point. You know, he comes all the way down to six percent on election day, when you when you take the exit poll and say, you know, who was your second choice. Anderson voters slightly more said Carter and Reagan, but it wasn't anything. Like, it wasn't anything like, you know, Democrats had been fearing all year in one of the takeaways was, you know, voters looked at the choice. Between Carter and Reagan. They heard the message from card or they heard the message from Democrats and a lot of the democratic voters. They took the message, and they base stayed. With Carter wasn't nearly enough for Carter to Winnie. It's so many bigger problems out in nineteen eighty but in lose because John Anderson and the Anderson effect in nineteen eighty ended up not being anything like like Democrats feared it would be. Steve. Thank you so much for taking the time. No, thanks for taking me. Appreciate it. Steve Kornacki is the author of the red and the blue and the national political correspondent for NBC news and MSNBC. And that's the show. What next is hosted by me, Mary Harris or supervising producer is Mary Wilson. Our senior producer is Jason deleo, and our assistant producer is Anna Martin shout out to all of the new listeners from Stitcher which picked what next featured show this week. We are so happy how you all. If you wanna find me during the day, you can reach me on Twitter. I'm at Mary's desk. You can also see pictures of the whole crew of us over on Instagram. That's what next pod talk to you tomorrow.

Howard Schultz Ross Perot Howard Schultz Ross Perot president Steve Kornacki Donald Trump Perot Jimmy Carter John Anderson Howard Scholtz George H W Bush Starbucks Democratic Party Andrew Ross Sorkin MSNBC New York City Twitter Barnes libertarian party
Jamie Dimon Projects Americas Future; Vaccine Cards & Verifications

Squawk Pod

31:19 min | 2 months ago

Jamie Dimon Projects Americas Future; Vaccine Cards & Verifications

"Cnbc's workforce executive council is the premier group see suite human resources executives from leading companies across the country. It offers a members. Only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences the networking resources. Hr leaders need now. Apply to the workforce executive council at cnbc councils dot com slash w. e. c. This is squawk pod. I'm cnbc producer. Katie kramer today on our podcast. Jamie diamond speaks. I was like wow. He's talking about business rates and the economy the j. p. morgan ceo's annual letter to shareholders. He writes a long letter every year. This is one of the media. I've ever seen and goes through a lot of issues diamonds messages about corporations china and the roaring twenties yet to come sixty six pages. But you're not gonna go over every page in your in. Your interpretation are andrew. there's a lot. More and vaccine requirement passport verification. It's all in the branding. Says pollster franklin's language in this case matters and look the right language is the difference between getting vaccinated and not getting vaccinated. Frankly it's difference between life and death plus coin basis. Ipo makeup tips and kim kardashian and the world's richest man is okay with a corporate tax hike amazon ceo. Jeff bezos said. He supports raising the corporate tax rate. Because it does nothing newest coming. It's wednesday april seventh. twenty twenty. one squad begins right now. good morning. Welcome squawk box right here on. Cnbc manage ross. Sorkin along with joe kernan and becky quick. I stopped today on the podcast. Jamie diamond has a few things to say j. P. morgan chases high profile. Ceo released his annual shareholder letter today and he's bullish for sixty six pages. The long-serving head of one of the biggest banks in the united states sees a booming american economy in the next few years for a close read very close read of jamie diamonds annual letter. Here's andrew you saying. This boom could easily run into twenty twenty three because of all of the spending that could extend well into twenty twenty three. He then goes on to talk about stocks he says. Well equity valuations are quite high by almost all measures except interest rates historically year booming economy could justify their current price. He also goes on to say that. Qe and deficit spending response to the covid. Nineteen pandemic is of a completely different magnitude in without some of the offsetting drags that trailed the great recession as he tried to make a differentiation. Between what's happened now during covid and what happened back in two thousand eight diamond said he sees some froth and speculation in parts of the market. But he didn't specify exactly where however he did say. Conversely boom scenario it's hard to justify the price of debt. Most people consider the ten year. Bond is the key reference point. This is because of two factors. I a huge supply of dead that needs to be absorbed and second the not unreasonable possibility that an increase in inflation will not be just temporary so two sides of a coin there a dominating extensive competition from silicon valley as well. This was actually the most stark thing. I actually read it. In the report in effectively says it's silicon valley's coming to eat the lunch of wall street and then talks about the regulatory impact of that is is banks are ready to compete against a large and powerful shadow banking system and they're facing extensive competition from silicon valley both in the form of fintechs and big tech companies amazon apple facebook google and now walmart he adds walmart in there for good measure of that is here to stay. He says as the importance of cloud and digital platforms grow. This competition will become even more formidable. As a result he says banks are playing increasingly smaller role in the financial system and then he goes on for several pages to talk about the regulatory impact of that and perhaps regulate regulators have hamstrung wall street in terms of their ability to compete whether effectively the fintechs in silicon valley should be regulated as well. Meantime diamond makes some brady pretty big proclamations about a policy both here in the united states and in foreign relations as well. Here's he's warning that he says quote china's leaders believe that america is in decline. I think this part of the letter may get a lot of attention. He says the chinese in america that is losing ground and technology infrastructure and education. A nation torn crippled by politics as well as racial and income equality income inequality in a country to coordinate government policies fiscal monetary industrial regulatory in any coherent way to accomplish national goals. Unfortunately recently there is a lot of truth to this. He then goes on to lay out. A plan might be described as the diamond plan which includes a marshall plan of sorts about how to try to effectively prevent that from happening. But it's a fascinating letter. Sixty six pages were going through all of it. There's a whole section by the way that religious assault taxes but so much in this is probably the easiest of. He writes a long letter every year. This is one of the media. I've ever seen and goes through a lot of lot issues. I mean just jumping back. The two things i think the jump out the most are the china forum relations that you just mentioned love to hear more about the salt but just what you said in terms of the regulatory oversight You could look at that and say okay. He he wants everybody else to have the same sort of equal regulation so that he's not at a disadvantage. But i think it's probably fair to say that the diamond pretty regularly looks at these things from abroad base. And if he thinks that there is a substantial portion of the financial system that is not being regulated. At this point he might see that. I would guess as as a concerning place where you could see some major problems. That could eventually do what all of this regulation was supposed to keep from happening. You know the too big to fail situation where you make sure we know where the risk is and you make sure that you monitor that risk. If there was a substantial amount of banking and a substantial amount of the financial industry that is now not part of that regulatory overview that that would be a warning about potential problems that could come up and kind of hard of his analysis. But it's it's so part of his analysis that there's going there is this existential risk outside of the banks and that's true but part of the analysis i think is that he thinks that the banking system is better position has better safeguards to be able to do a lot of what fintech is doing and do it better and do it with less risk. That's that's a huge part of the argument. He makes he also in some ways is calling for a little bit of a let up on some of the capital requirements and other things that are going on in the banking business with the argument that it's unproductive unproductive use of capital that he actually goes on. There's a piece of the letter where he says at some point. We're going to wake up and say you know there's four trillion dollars effectively. It's being locked up right now and that you're gonna want that money in the system more productive notice because things are so flush. There's a lot going on because there's one side go ahead to beginning where he was actually talking about business and dead in the economy. And i was like. Wow maybe this is not going to be a aca. Larry fink black lesson. Es g virtue signaling. It's not going to be sixty six pages of of preaching and i. This is pretty good. And i liked what he said about. When jamie diamond looks at the amount of debt that we're taking on and what the fed is doing and still predicts a boom for a couple of years. I think what it says. It's during the financial crisis when you add demand because of a recession or whatever it is you don't win it's really gonna come back and if we this is very unique because we know there is a pent-up amount that's going to suck all of this right out of the it's really going to bounce back and maybe we can handle it because of that and for him to be bullish all the way to two thousand and twenty three. I was like wow. He's talking about business and rates in the economy. And maybe we can forgo some of the preaching that we hear from all all the ceo's say but you got to advance it but but that was a good six pages but you're not going to go over every page in your interpretation andrew or are you can give you the freedom to say okay. He's very fearful of the possibility of what he describes. As a paul volcker moment where where would best decides they have they have to act and if and he and he says very clearly if there is a paul volcker moment that portend percents say. There's no way around. It did kinda sates different than the last financial crisis because This is unprecedented in terms of the snapback into me. We we already got sick at six percent unemployment already. That's amazing from where we were having no studied. These pages of two conflicting ideas going on one is that we're going to have a great economy through two thousand twenty three given the amount of money that's being poured into the market. The other side of it is that longer term. We have big big big problems. Almost intractable problems. And i will also say that jamie. It's always been very very positive about america and there is you know he's still is a lot of the policy. Prescriptions are about. How do you fix things. But i think when you really look at what he's talking about relative to what china's saying and everything else and the fact that he's accepting it. He actually says this time his different in the context that you know we have always overcome our problems over over over history in america and he actually says this time may be different meaning. Maybe we won't well politically but economically and all. I think there's a there's a lot in there. And so i think there's there's there's chew messages there's a market there's an immediate market message but there's a longer term sort of warning about what we really have to think about. Well what decides they want. The two sides agree on policy. And that's something that we need to do to move forward to handle these big issues. You gotta decide on which policies you're talking about and each side has totally different remedies for that. So just saying we need to come together and and do. The james always been a democrat. Just barely he said. I'm not sure he saying we just need to. The republicans need to get on board with everything biden administration wants to do right now. He's not saying that he's saying that either. That's what i mean. So i which policies whether it's small government less taxation more freedom whether we we're back to square one on deciding how to affect these things to compete with china. He goes through a a pretty robust plan. That as you might imagine talks about education. How do you get graduation. Rates up not just across the country but in inner cities goes through the healthcare issues in this country and the cost with healthcare. By the way there's a mention of what j. p. morgan is gonna do now that haven which was of course the package that was put together or the program put together between j. p. morgan amazon and berkshire hathaway and talks about the efforts that they're going to pursue their the. You should read the letter if you're interested viewers out there. It's worth every second because there's lots of wisdom in there and also just a great sense from one of the great business managers out there about what's going on in the world andrew. You mentioned he. He's worried about the paul vocal volker moment. If the fed has to act does. Is he worried about that or is he worried about what caused the paul volcker moment which was massive inflation at. He's worried worried about both and he does talk to some degree about the idea that that the metrics that we use we collectively as a country and we talk about on this. Show the indexes and what not to represent inflation may not really capture. What real inflation. About one hundred percent and so many stories about people who are willing to pay much more things than you would ever anticipate things like used cars different places. You know you just start. Hearing some of those things welling up because people have money. They're able to pay for these things they need. These things I i would share his concerns ten years still in bubble territory. Absolutely compared to where inflation and inflationary expectations are right now. But but then to get your volker moment i mean remember. The prime was twenty one and a half. We got a little a little breathing room. Where one well they got. Twenty points twenty points to go and one last note he says the government does needs to spend more the irs needs to spend more to actually try to be able to collect some some of these taxes next todd vaccine passport or vaccine verification. Same thing two very different. It's according to pollster. Frank luntz if you require it. Federal passport people here as a mandate they hear that washington is collecting your information. That's not what they want. They don't have a problem with a vaccine verification. We're back after this. You're listening to squawk todd from cnbc. Here's andrew ross sorkin. The white house is ruling out requiring federal vaccine passports in order to travel during an after the pandemic texas governor greg. Abbott just banned them. And the florida governor rhonda santa's a similar move last week joining us right now to talk about the rhetoric and language around. The vaccine is pollster and political. Strategist frank luntz. Frank has a new op-ed out on. Cbc dot com this morning. Got to go take a look at it. He argues leader. Should stop saying vaccine passport. Great to see you frank this morning. What do you mean by that. I mean that's when people hear the word passport and only half of americans have one so for the other half. It's it's a foreign concept to them. If you require a federal passport people hear it as a mandate they hear that washington this collecting your information. That's not what they want. They don't have a problem with a vaccine verification or certificate that a passport is a formal document. It collects information in a formal way. You've got a significant percentage of americans who don't want that. The concept is supported by almost three to one but not a washington mandate in this is so essential for the business community. Here this because the words that you say will determine how your employees view what you've done as you come back to work by using the language and as you can see right there. Sixty percent supported and twenty four percent of it look at the difference between the biden supporters and the trump supporters. This is a very big deal. The diploma in foundation has all of the survey research that we've been doing for the last four months on their website. I urge business leaders to go to it because we're providing a lexicon of how to communicate the of going back to work back to travel back to our lives getting our freedoms back and one more point. I give the biden administration credit. I for an incredible rollout where people are getting shots in arms at a historic level and to the trump administration for providing the vaccines in the first place for for speeding up the process that they cut they cut the bureaucracy but they didn't cut corners and this is the kind of language that the still has. Its people need to hear to give them the confidence to get the vaccine. The idea the virus is still dangerous. Still impactful still random and can make a difference. That's franken just but let's let's just talk about language for second. The phrase vaccine verification. You're suggesting the american public is in favor of the phrase vaccine passport there against even though i think we're on the same page and that really isn't a distinction if you're a business leader thinking about bringing people back to work whether you're going to go back to fifty percent seventy percent one hundred percent hybrid whatnot. You believe you can have the support of your staff and team using the phrase verification but not passport exactly at its difference andrew between a death tax and in the state tax. It's a difference between school choice and parental choice in education the difference between a scholarship voucher to difference between to use the the company that donald trump wants band difference between coke light and diet coke that of verification that says to people that they carry with them it's not mandated it's voluntary and the verification merely states. Something that they can show others. A passport says the government washy does collected the information. Verification is something that you have to demonstrate voluntarily that you've been vaccinated and it's what the american people want andrew language in this case matters and look the right language. Is the difference between getting back. Needed a not getting vaccinated. Frankly is the difference between life and death. It really does matter frank. In terms of businesses and business leaders mandating some kind of verification on the way back to work or potentially verification going into a stadium getting on a plane things like that. What kind of support do you think there really will be. A ultimately they will ultimately there's going to be about fifteen percent of the population that's going to be opposed to it because there's going to be about fifteen percent that refused the of the vaccine. We're gonna be. We're gonna come very close to hurt him entity. And and i think it's gonna happen within the next one hundred and twenty days. I don't think it's going to take until odds of september for this to happen but the idea and he just children with employees if you pull up the words because the words what matters most here the idea has significant support nationwide is all it is is showing people that you're safe that they're safe and provides a sense of comfort a sense of peace of mind and yes the words matter and blasting we will educate not indoctrinate. This is very important. Also the administration to hear that my if they make it voluntary the public will follow if they emphasize that ninety percent of doctors have been vaccinated. They will follow an all of these won't let me let me ask you this there. I don't know if you saw axios study that there are rather a survey poll. Really in your business about hesitation today saying that a majority of those who want to wait and see about the vaccine are more inclined to take the johnson and johnson one dose than they are the pfizer with the number. Three one coming in as why do you think that is. I is that it is about brand. I don't accept that information. Because i know that the hesitancy among people is more for the johnson and johnson hesitancy among the biden. People is more for the two vaccines rather than the one. It's different for different people. We have to personalize and individualize our language. We have to think not. From what our perspective but from the perspective the people that we want vaccinated and for business leaders. They have to put themselves in the minds and the concerns of their employees. Because that's what really matters. Not their perspective is the ceo the perspective that people come to work and and really bust their butts every single day in factories in offices because they're at the front line of this and decisions they are going to affect all of us for the long term. Franklin's always married to see you appreciate you bringing this news test. It's important stuff. Thank you coming up the rest of today's stories that got us. Talking and squawking from crypto to jeff basis on taxes to hollywood's newest billionaire another notch in the sculpting belt for the kardashians. God bless them. What what a family. But i'm still trying to figure it all out almost famous for being famous right. You gotta take a listen to this. It's swap pot that's right. Cnbc's flagship business. New show is a podcast squawk pot. This control to is not just the show folks to be even better. Because it's only audio join me. Katie kramer as i take you inside the squawk box control room and beyond the headlines of our tv broadcast with joe kernan becky. Quick andrew ross sorkin every weekday. Subscribe to squawk pot on apple podcasts. Spotify stitcher or wherever. You get your podcasts. This is squawk pod. Good morning and welcome back to squawk box. Welcome back doesn't well becky welcome back. Welcome you didn't go anywhere Hopefully here on nbc. On joe kernan along with becky. Quick andrew ross sorkin. Ipo is in the offing. It's going to be probably one of the biggest of the year coin base reporting a blowout quarter ahead of its public. Debut company reported one point eight billion dollars in revenue for the quarter. Beat the one point. Three billion dollars in generated in revenue for all of twenty twenty now is reporting fifty six million users on its platform generating three hundred and thirty five billion dollars in trading volume for the quartzite crypto currencies. As you would imagine. That's what they do. Particularly bitcoin to new highs in the first quarter basis led by founder and ceo. Brian armstrong. He plans to take the company public on april fourteenth. That's next week through. A direct listing on the nasdaq. It's poised to be as i just mentioned one of the largest listings in the year with the valuation. Some say could be as high as one hundred billion and interestingly a huge part of their businesses become institutional so there was lots of questions. How much of this is retail but if they become an institutional player at perhaps changes the game and also changes the dynamic in terms of how people think about the valuation of that company. So lots to keep your eyes on it. The expense side looks pretty good at climbing base. From what i can from what. I can determine in terms of people david answer the phones or answer questions or send out Tax information or anything. I think it might just be him as a matter of fact that guy. There's a there's a big system look march the joke the large question about coin base in the valuation of corn base over time is going to be whether just everybody else's gets into the same business whether it right now. They have almost a monopoly on trading bitcoin in these in different crypto currencies. But if you told me that fidelity was really going to do it and you could get on. Td ameritrade and you could do it here. And you can do there and goldman sachs and morgan stanley. Everybody's actually trading the actual currencies. That's that's the longer term sort of competitive question and hopefully we'll be able to ask some of those questions after this code is cool. The code is very cool. what's it called. Qr that thing with all the you know they can use it to look at a menu you can you know one of those so qr someone hit you. Have one of those for your wallet and someone else has one so if you ever want to do anything if you wanna give gifted kid or something like that you just click on that day and ready to go. You press one button and it goes on it happens. It's pretty neat. It's pretty neat the way that it did. Actually there's software is is pretty amazing. I'll give them that amazon. Ceo jeff bezos said. He supports raising the corporate tax rate. Because it does nothing newest comedy but he stopped short of backing. President biden's tax plan. He said amazon supports the administrations bold focus on investments in american infrastructure and said in his words we recognize this investment will require concessions from all sides. Both on the specifics of what's included as well as how gets paid for. We're supportive of a rise in the corporate tax rate and i won't add that the then instead as long as you don't change any of the the tax laws that we have but the tax rate doesn't really matter for amazon last week president biden. Propose the didn't you. It's like it's like because he so-called tax rates okay. President bind proposed a two trillion dollar infrastructure package in a corporate tax hike from twenty one percent to twenty eight to pay for it. The president's repeatedly singled out amazon for using loopholes in his words to a to not pay federal taxes. But loopholes. okay. I guess you can call it that. It is a loophole deafness loophole. But it's it's the way that the tax system is set up for companies like amazon. That that's in the tax code that that's how much they oh so i. I don't think the question that we have in dwayne on is if there's going to be a minimum minimum protects the minimum corporate tax. If if he's actually in favor of that which by the way he may very well be might be. That'd be a very different story and then and then we wouldn't have this conversation because he did that way. So if he if he does say tax amazon to give me an. Amg of ten percent. That would be big news. I don't think he's ready to say that. But i don't know you're right but i think the problem with this tax law to is that they're talking about raising rates but they're talking about creating more loopholes or whatever you wanna call it incentives to do all kinds of other things it just makes it more and more complicated makes it more and more likely that corporations will not be paying that rate again. We talked for a long time about trying to simplify the tax code for individuals and for corporations. What we've done is made it much more complicated and continue to do that. Because every lobbyist who wants some favor in there every congressman who wants some pet project in there that complicates things and makes it so that you have to raise rates even more so that you get more towards the revenue numbers that you're looking for him yesterday. When kevin brady was on andrew kept pushing him on hiring fifteen thousand more agents in. Brady's push back to you. Andrew was doesn't matter how many higher it's so complicated. You're never gonna get. Which is actually. I will say. It's unfair for me to say now. Because he's not here. But i said on air yesterday the math the math raw he has definitively wrong on that the end of the day. We're going to see slower hiring we're going to see less investment. Us and i predict we will see a second wave of us companies inverting or moving their headquarters overseas in the long run. That's why i this is such a major mistake to becky's point that is very complex right now for every dollar you spend you probably get some money back but it is there. There is something there is something there somewhere between fifty billion and six hundred billion dollars of revenue that you could be picking up and this is not money that a function of loopholes. Money that this is by that should be coming into the government and if we actually could go collect even you know a portion of that money it would change even the conversation. We're having right now but rates. I happen to agree with both arguments. I think you're right andrew. I think brady's point is correct to i. Think on both those counts. You could hire more and try and make sure you're getting after people who are getting around things but at the same time. Simplify it so that there's not so. Many grey areas kim kardashian west is joining the forbes list of billionaires forbes says that the forty year olds net worth is up in part. Thanks to her. Beauty line k. K. w. and also because of her shape wear lines skims her sister. Kylie jenner has dropped off the billionaire. List the twenty-three-year-old is known for her kylie cosmetics line. Her current net worth is estimated at around seven hundred million dollars. Joe also what a country. There's still some things can be what i'm still i. I was still in god. Bless them what. What a family. But i'm still trying to figure it all out almost famous for being famous for being famous right. Almost you get famous. Use the fame to do things and then you become more famous and it's kind of cool. It's kind of cool. It's probably too late for us to try that Cosmetics andrew a lot of money in cosmetic guate- men's cosmetics. What are you saying to be honest with you but twenty years ago. I wanted to do men's men's cream. I was convinced that i had a friend who is shape. Wear line missed out what missile. But i had a friend. I thought maybe i should get out of the journalism business and get twenty years ago by done it. It would have been you know. There was an opportunity saints shows the right path. I'm just no no. I'm glad you're here really. I can't imagine my life without it would not definitely would. Neither of our lives would be the same way. And that's the podcast for today. Thank you for listening. Squawk box is hosted by joe. Kernan thank you quick and andrew. Ross sorkin tune in weekday mornings on. Cnbc at six eastern subscribe to squawk pod share squawk pod lisa rating or. Write a review on apple podcasts. Louis back here tomorrow. What exchange is now a podcast. I'm brian sullivan. Join me as we hit the biggest money stories from around the world breaking down the risks and rewards global trade. The news you need to know. What real world actionable advice. Even a little fun and unique content. You won't get anywhere else like the most random but interesting thing you'll hear all day subscribe to the worldwide exchange podcast today.

workforce executive council Jamie diamond silicon valley joe kernan andrew Katie kramer paul volcker Us china biden administration amazon cnbc becky quick P. morgan jamie diamonds andrew ross sorkin walmart Larry fink jamie diamond
Market Roller Coaster; Robinhoods Outage; Senator Ted Cruz (R-TX)

Squawk Pod

35:55 min | 1 year ago

Market Roller Coaster; Robinhoods Outage; Senator Ted Cruz (R-TX)

"The CNBC podcast is brought to you by td Ameritrade with td Ameritrade. You get everything you need to become a smarter investor get help. From knowledgeable professionals get customizable tools. Get Investing Education designed just for you get no hidden fees and no trade minimums get smarter with Td Ameritrade where smart investors get smarter bringing show musically this squad the daily podcast brought to you by the team behind squawk box control to CNBC's essential morning show every day. Get the best stories. Debate and analysis from the biggest names in business and politics are. We're coming doing that today. On squawk pod another day another roller coaster ride for the markets. It's happening right now. He's a frightening time Joe Biden Dominate Super Tuesday with Bernie Sanders close behind and Democratic delegates analysis. From pollster Frank Luntz looking at the voter response. Biden is on his way up and Santa's Mike Well Hitters Peak Texas Republican Ted Cruz on the corona virus outbreak. And the industry's most vulnerable. The numbers are troubling. Were right to concern and Robin Hood is the high tech investing APP in trouble after a two day outage. Xia says Dan Premium. If you're somebody who feels you got screwed over you can go to another service and get the same benefits that you used to only be able to get robin those stories plus come on baby. Come on baby keep going way for at the market really talking about the ten year treasury yield the metric that has the business world buzzing. I'm CNBC producer. Kramer it's Wednesday march. Fourth Twenty twenty. Let's go let's go. Squawk pod begins right now becky by three one. Good Morning. Welcome to Squawk box here on. Cnbc we are live from as market site in Times Square. I'm becky quick along with Joe. Kernan Andrew Ross Sorkin our guest host. Cnbc contributor Surat's at the from Douglas Lane and Surat. It's great to see this morning kicking off. Today's podcast another wild day on Wall Street. As if two days of seesaw trading aren't enough one economic metric has done something unprecedented and it has captured investor's attention it's the yield on the ten year treasury. Bond on Tuesday fell below one percent. And like I said that's never happened before. Not even during the great recession now this metric while admittedly dry is important. It means that investors are willing to tie their money up for a decade in exchange for less than a one percent return the lowest on record. It's a sign that investors confidence in the markets at least in the immediate term is wavering. Of course this isn't happening in a vacuum as you heard on yesterday squawk pod. The Federal Reserve announced fifty basis point. Emergency cut to interest rates following the logic that lower borrowing costs boost economic growth even in the midst of a corona virus outbreak. What we're learning from the ten year drop. That rate cut might not be enough. People are looking for certainty. They want safe. Assets in the midst of what could become a global health crisis and international investors usually turn to US treasury bonds for just that. Here's Andrew Ross. Sorkin stocks. Were down early in the session yesterday morning and then at ten. Am Eastern time the Fed triggered. Its first unscheduled emergency rate move since the financial crisis that cut half a percent from the key fed funds rate at chairman. Jay Powell talking about the accident. Admitting the cut may not be a cure all so to speak we do recognize that a rate cut will not reduce the rate of infection. It won't fix broken supply chain. We get that. We don't think we have all the answers but we do believe that our action will provide a meaningful boost to the economy. Were specifically it will support accommodative financial conditions and avoid a tightening of financial conditions which can weigh on activity and it will help boost household and business confidence well then stocks whipsawed after the. Fed surprise without eventually ending down at nearly eight hundred points. The other big market headline yesterday the ten year yield dropping below one percent for the first time ever quite a bit lower. It was quite a day was down. We're down about three fifty four hundred when they did it then it was up. You want to get ahead of these things but can you really get ahead of these things up thirteen hundred on Monday? That was your day remember. I'm just wondering when he went into. I'M NOT GONNA have to know your predictions he's GonNa do this at some point would have preferred to do next week. I don't know I think no matter what they're going to get criticized heavily. I think this is just a situation where there is no situation because if they didn't cut you're expecting well why aren't they market survey? Go down and they do Dan. What did they know that nobody else knows? And look at this point. It's it's pure insurance. It's trying to loosen liquidity. And if you look at what they're looking at already you look at people looking at mortgages. They're already started looking mortgages so mortgage rate on Saturday. Consumer which is sixty percent of our economy and more is kind of saying things are going to get a little bit cheaper and relatively you know how much more cheaper can they get. But if you're locked in for ten or through your mortgage yesterday was Tuesday all right. So it went down eight hundred after that it's up sharply. Today maybe Biden maybe the sanders we're not going to nationalize everything but at this point. Maybe maybe there's enough people over thirty five. Did you see. He won big time. Anyone thirty five we will but maybe it's got something to do with that but I still think it has something to do with just yesterday. What does the gains today are? Let's by Friday. Let's see what the Fed did you think that I think I think yesterday? The knee jerk was sell on the news of the federick but I think it is going to be helpful. And hopefully it helps stabilize and we have to look at your point global coordination so if the rest of the world starts doing coming in the. Fed didn't do anything and they'd be wait a second. So let's just look at this and all and all. I think they had to do this to that position. We know that the economy is definitely taking an impact. We don't know how steep we know. You can just look around and see things from people eating out to people even driving doing. He's Afraid Conferences Spread. It happening right now. He's a frightening times. I tell myself a lot of things that that it's ridiculous to be thinking so much about all this stuff but but now we're talking about flu season's if we hid rushed on with a headline then another person died during the flu season. We would have done that thirty. Forty Fifty Thousand Times. So what if what? If the mortality rate is fourteen to twenty four times would put right now even in China Country of one point. Four billion. People you're talking about less than one hundred thousand total cases in the world still. Yeah but don't you think that in the next week we're going to hear big numbers are because we can't do it. China did no because we can test. We never got big numbers and we got. Eighty thousand is a lot on one point four billion. I don't think eighty thousand globally. I just think everything down and we're not going to be. We're not going to be able to do that. That is true Vice President Joe Biden winning primaries in nine States Virginia North Carolina Alabama Tennessee Oklahoma Arkansas Minnesota Massachusetts in Texas and Bernie Sanders when Colorado Utah and his home state of Vermont. Good Report. We're very much alive about it. This campaign aide will send Donald Trump packing tonight. I tell you with absolute confidence. We're going to win the Democratic nomination. We all going to defeat the most dangerous president in the history of this country delegate. Count still to be determined as we don't yet have a final call on California joining us right now from Los Angeles pollster and political strategist. Frank Wants. Frank is good to see you this morning. We haven't mentioned by the way the name Michael Bloomberg who spent something on the order of half a billion dollars thus far with very little to show for it can't get it done This morning but Frank the idea. That Biden was going to have such a win. I think he's been. I think it's fair to say a surprise for many well the it's you have to look at both sides of the coin. It's not just a Biden Win. Which was very impressive across the country. Not just in states had a large African American population which Biden has has been doing very well and it's the complete collapse of Mike Bloomberg. In a number of these states he didn't even reach the fifteen percent threshold to get delegates. Never in American history every seen so much money spent for so little outcome and it is proof that message matters. It is proof that character traits matter. Mike Bloomberg performed badly in two debates. Joe Biden did excellent in the most recent debate and in our focus groups in California. We could see people switching over the last seventy two hours from Bloomberg to Biden. It's one of the reasons why the polls did not pick it up. It was a very late last minute shift as well as Elizabeth Warren. Her votes shifting the Bernie Sanders. Frankly I think it's a two person race the two person race. You WanNa handicapped too person race. I can't and I've come on the show and I've talked about Bernie Sanders and I expected him to be in a stronger position than he is right now. He's going to win. The Lion Share of California delegates wants those numbers are allocated and the two of them are going to essentially being dead heat. The most important date right now is the debate Arizona next week. It binding can perform as well as he did. In last week's debate in South Carolina he will be front and on her but a Bernie Sanders continues to out debate him in some ways to outshout him this race. I think is going to go all the way to the convention. Okay and then. Who Do you think has a better chance against the president to the degree you believe that the Democratic Party is a is is voting in a rational way meeting that? You're going to try to pick the person you think. As the better chance to get to the White House there are too many people who won't vote for Bernie Sanders doing too many people who find him too extreme. I know she's like healthcare The so called Medicare for all or environmental policy energy policy tax policy. I know that I actually believe that. One of the reasons why stocks are up today is not just as a reaction to yesterday's market conditions. I think that investors are looking at the possibility now of Joe Biden winning the nomination. And he's going to be very good for stocks by is more centrist. He understands Wall Street better than Sanders. And he's less likely quite frankly to put forward confiscatory economic policy investors want by and they don't want sanders. I just think I don't know if I describe as much to the debates as to the you know in a philosophical sense some of the stuff Bernie says is good but when when en masse the democratic population suddenly sees the real possibility on the predicted markets at sixty five percent that it's GonNa be Bernie Sanders and it starts actually becoming the reality. I think that's what they saw last week. And it's like if you're not if you're over thirty five or thirty. At least that is a horrifying prospect. I mean someone like me. It's a it's a it's just unthinkable and I don't know why you nominate someone who can't win in the general election. I think a lot of Democrats finally realized we're going to nominate a guy who is going to be McGovern from from day one he's going to be McGovern so it had nothing to do with the debate like we came back. They came back and decided the joe out of all the other candidates. That Vice President Biden is the best one for lack of of of an alternative Bloomberg. A billionaire I was GONNA ask you frank. I can't remember exactly what I thought. You were kind of positive about Bloomberg. What is your most in the last ten appearances on Squawk box? What's the most prescient point that you gave us over the last ten where you are absolutely right about that? Democrats and I've said this again and again. Democrats will not vote for billionaires. They did not vote toddstarnes. I thought you said don't underestimate him. Money can go a long way not advertising. You have to perform well and debates and my Bloomberg performed horribly and he agitated people focus of building their hold on this focus groups that we've been doing these are Democratic voters not pundits those focus groups for showing us that people will lead leaving. Mike Bloomberg in droves for Joe Biden. They've found Biden particularly over the last week. South Carolina debate performance performance speech. He gave in South Carolina. We saw last night. Joe Biden is hitting his stride. This was not the same Joe Biden that began the debates six seven months ago but he is just as likely to have the same type of gaps that he's had over in terms of public speaking gaffes. That's not going away right well. That's that's why I'm telling viewers to watch the debate in Arizona. I think it's going to matter. Tremendously and Biden is is gaffe prone but at his best. He is a very strong candidate. He delivers a very powerful passionate speech. And in looking at the polling data looking at the voter response Biden is on his way up and Sanders might. Well have hit his peak. Frank really really quickly What does this say about? Not just Michael Bloomberg but the idea of spending lots of money. I'm thinking of Tom. Style and everybody else is there. Is there a walkaway lesson from this? That this is not going to happen again. They may still try. Republicans donate money. Republicans donate Billionaires Democrats. Do and the fact is if you're wealthy unsuccessful. The Democrats are not going to vote for you. It's just a fact highlight the media's performance Let's see we went from maybe warn to Kamla Harris to Mayor Pete. Then clothes are had a short little time in the Senate. They couldn't hit if fell out of a boat. They couldn't hit water franken terms of what was going to happen here. They mix up what they want as as completely compromise media saying they're non biased. They go from from what's actually going to happen. They have no idea what this may be the first time in the six months. I've been doing this show that you and I agree. The worst pundits. I'm glad we haven't agreed at one point over the last six months. I want you to tell us what it was because I put my money on a bunch of different things based on what you said and none of it ever came true right. I told you billionaires. We're not going to win. Democratic primary. We agreed then too so we were actually in agreement on that one. I think you grow that. We grew that beard so people would remember you at the same guy and six months ago. Tough-guy thank you frank a stock to watch today Campbell Soup. Shares are rising Right now after earning sales beat the street and the company raised its full year profit outlook in a bet. You lots of people you go to the shelves in the supermarket and Souso anything can right about now. They were trying to get away from soup and get into all sorts of fresh fresh foods and things but Designer soup to soup is a soup is good. She can noodle for if you're not feeling great. Well that's a separate. Tease will be next next on swap pot once we take care of the threats to human life than the next stage is going to be the economic implication Texas Republican Senator Ted Cruz on the rise in corona virus cases in the US and the Dominos to fall. We'll be right back this. Cnbc podcast is brought to you by td Ameritrade with td Ameritrade. You get everything you need to become a smarter investor get help. From knowledgeable professionals get customizable tools. Get Investing Education designed just for you get no hidden fees and no trade minimums get smarter with Td Ameritrade where smart investors get smarter for. This is squad. Here's Becky quick. Oprah CEO's of major airlines are scheduled to huddle this morning at the White House to talk about the corona virus crisis as the disease spreads airlines are starting to feel a bigger and bigger revenue head. Philippine joins US right now. He's got more on that story. I felt hey becky. This is the corona virus Gut Punch to the revenue stream for the airlines. How much will the airlines be? Hurting as the cancellations mount. Well it depends on how accurately we get this data and the most recent data from a couple of weeks ago from the International Air Transport Association. Known as I- ATTA. They said that global traffic would drop four point seven percent in twenty twenty and it would cost the airlines about twenty nine point. Three billion dollars in lost revenue. But if you take a look the airline index keep in mind that that estimate for my Atta. That was two weeks ago. And we've seen the cancellations pickup since then this is why analysts are saying for the airlines. It's all about managing cash flow right now as you take a look at the four largest. Us Carriers Delta American united and southwest over the last month American basically since February Twelfth. The stock has lost forty two percent of its value. The CEOS of those companies will be here at the White House today. They're supposed to meet with at least vice president. Mike Pence we could see them also meet with the president if he decides to join that meeting but guys at the end of the day. I'm not sure what the White House can say to. The short of. We'll do something to help you out financially. Which I don't think is going to happen because if you help out the airlines do you also help out the hotel industry. Do you help out other industries that are suffering because people are simply canceling their trips. Right now they're just going to have to work their way through basically the fact that they've got too much supply and the seats are just not being filled on these planes to the degree that they expected just a few weeks ago. I guess what's unique about the airline industry is they collect fees upfront for the tickets that you're selling you so In a certain sense it's kind of like the float that the insurance industry is to an extent to an extent but you also have a lot of people who will say we'll pay the two hundred dollars to cancel the ticket now a lot of airlines and you heard from United yesterday that joined American and Alaska as well as jet blue in terms of cancelling change or the fees that goes with changing ticket or canceling a ticket but those are in certain areas in terms of tickets that are bought now between later in March. What's interesting here? Becky is that their costs. Don't drop they still have to. Let's say a you're you're leasing narrow body aircraft and it costs you three hundred thousand dollars a month in terms of what you have to make on a lease payment. You gotTA come up with ten thousand dollars a day in revenue one way or the other and if you have to sit down that plane or you're not flying it is often. It's going to be tougher for you to come up with that. Ten thousand dollars is liquidity and issue for the large airlines. Not Right now. They're fine. The issue is going to be with your low cost carriers particularly in Southeast Asia. They don't have the liquidity that you see with the large carriers here in the US as well as in Europe. Thanks Phil in addition to today's airline CEO meeting at the White House the Aviation Subcommittee of the Senate. Commerce Committee will be talking about the corona viruses morning. Senators will be examining the role of global aviation and containing the spread of the disease. Texas Senator Ted Cruz joins US now. He's the chairman of the aviation subcommittee. It's been a while center. It's good to see we. We were just talking off camera beck and I about. What is rutgers suggesting nobody go abroad it said? They made the decision this week to cancel all of their spring break semester. Study abroad programs and their international spring break programs and the President says that staff and students really shouldn't travel overseas so I mean who would go overseas now Senator and not only that. But what what? How do we help the airlines? And what what? What are you going to be looking for today? As far as questions from it from the executives well I think the risk profile varies depending on what geographic area you're looking at and what's important is that we actually follow the science here that we listened to the scientists and the experts that we do everything we can to contain this outbreak and and to prevent it from becoming a full fledged pandemic. The numbers are troubling. And we're right to be concerned as we sit here this morning we've got over ninety. Three thousand confirmed cases of the virus. We have over thirty one hundred. Nearly thirty two hundred confirmed deaths of of those cases of the virus. We were sitting at one hundred twenty seven in the United States so the bulk of that as overseas and the overwhelming majority of that is still in China. That's that's good news that that is good news. The extent to which it's been contained. Now you look at where else? It has spread heavily. We know that his spread heavily to Iran. We know that the spread heavily to South Korea. We know that it's spread heavily to Italy and so all three of those are are dealing with significant challenges. The hearing that I'm sharing this afternoon it's to bring in the CDC the Center for Disease Control and the department transportation and customs and Border Patrol. Terrific listen to the experts and to understand what's going on. I know a lot of people are concerned but I think it's right not to panic not to give in to to to hysteria but to be driven by the facts and and the Marshall every resource possible and necessary to to protect life to contain this and hopefully to get it behind us and once we take care of the threats to human life than the next stage is going to be the economic implications of what the slowdown means and in particular right now the the the inability to travel back and forth to Asia to China in particular you know by definition senator the migration from Wuhan Tana to just about every country in the world now one hundred percent mediated through someone that was on an airplane that someone get on a boat and go somewhere. I mean we can pretty much assume that that this moves globally from the airline industry. So there that's the first place we should look to try to to try to. They should be doing things to try to stop this from happening. What do we need them to do? Well and that's something. I think. The trump administration acted wisely when they stepped in early and halted commercial air travel back and forth to China when they set up a quarantine regime for for any Americans who were abroad. The affected region to go through quarantine before coming back. Those are both extraordinary steps. It's been a very long time since we've seen the federal government do either one of those and listening to the health. Experts visiting with with Tony Fox headed. Cdc Yesterday the health experts are telling us that doing that significantly slowed down the spread of the virus. That if we hadn't done that if there had been unrestricted air travel back and forth from China from the time of the outbreak. Two now that we would in all likelihood be looking at at a significantly larger number of cases in the United States what slowing the spread down does is it gives you time to develop to develop vaccines to develop treatment protocols and the administration is is meeting with me met with pharmaceutical. Ceos earlier. This week is is is meeting with the experts at the FDA and the CDC and and working to getting testing kits out. That's one of the significant steps next week. A substantial number of testing kits are are being sent out so that by the end of next week. They're expecting to have the capacity to conduct over one million tests. Now we don't have anywhere near that number of cases but obviously a lot of people right now are concerned if you're manifesting flu like symptoms a lot of people wanting to get get checked out get the test and so I think they're stepping forward proactively to get those tests out in available people who've still coming in from around the world and if they're asymptomatic or if there we don't have tests. I don't see how you know we. We can expect to be expect to be screening people at this point. We're just we're not screening people. Are we well it? It is a challenge. We are certainly a screening people. If they're coming from they're coming from China Wuhan region in particular. Were not allowing commercial air flights and so that limits some of the flow and we got how many places I mean you in trump. Should we be people from Washington State of We're just talking about seeing if they have a temperature right. We're not seeing if they actually have the crow virus well and that's right and part of the challenges that the incubation period. We don't fully know we think it may be fourteen days although there some conflicting evidence on that that's going to be one of the questions we're gonNA address at the hearing today so so one of the questions that we are trying to ask people that come in. Have you traveled any of the affected regions? Not just on the plane. You're coming from right now but in the past two weeks. Have you traveled there and getting those questions I met with the head of the Airline Association? Yesterday they were talking about some of the some of the challenges. They're finding implementing what CDC is asking for in terms of getting the full travel history of every international passenger. And I think they're they're working hard to do that. One of the challenges is also. Cdc is wanting airline employees to take temperatures of passengers before they board airline employees naturally are are hesitant to do so. They're not healthcare professionals and so some some of the ticket agents are saying. Wait a second. Why am I taking a temperature? That seems a reasonable question for an employee airline employees to be asking. Hey senator. Today's Wednesday right so super Tuesday was yesterday. Yeah okay so we saw what happened in the great state of Texas. And I'm just wondering I mean you you've spoken passionately about Cuba in and your feelings on on the Castro regime etc seeing Bernie Sanders. Are you gratified that the Texas gave the vice president and a big win or would you rather have donald trump face sanders? Because he might be better. Where are you on? You got any comments on that. How do you look at it? It's like look online enemy is i. Don't know how to view it. I'm certainly grateful that Texas didn't vote for Bernie there are a lot of things. Bernie embraces that. I think are really wrong and really dangerous and served with Bernie. He's a true believer but but he is a socialist and you mentioned Cuba. He has for decades gone out of his way to praise communist dictators weather. Fidel Castro whether Madero mother whether Chavez Weather Ortega Nicaragua whether the Soviet Union wh-whether Communist China one of the things I did last month during the impeachment trial is I started a podcast. It's called verdict with Ted Cruz and it went from being non-existent to it became the number one ranked podcast in the world with over four and a half million downloads in just a few weeks. The latest episode verdict with Ted Cruz. I I actually flew my aunt. Sonia from up to DC. And I interviewed her. Because my Tia Sonya what was imprisoned and she was tortured by Castro's goons she was there when the revolution happened. She thought the Counter Revolution Against Castro. She saw the misery and poverty. And so the podcast. It's become one of our most downloaded podcast because it's a chance to to really listen to a firsthand story. And what Bernie is saying of of Cuba as the Socialist. Paradise is just utterly false. As anyone who's lived through it could tell you unless you like. Those cars are pretty cold. fifty-six Four or but. So what did you say? Did you say you'd rather have the president faced Bernie or you'd rather have a face. President vice-president by burning scares me and the reason Bernie scares me. I know a lot of Republicans that are that are celebrating. Every time Bernie wins. Let us run against Bernie. He so extreme that that that trump gets reelected the thing that scares me about about Bernie's we're divided country. There is a chance. This country could elect a wild eyed socialist. And you want to see something that we do devastation to our economy to people's lives that worries me a great deal. I'd rather not even roll the dice so personally. I'd rather biden because he's at least in terms of the overton window. He's at least slightly closer to rational. He's still very liberal. I mean I mean what qualifies as moderate in. Today's Democratic field is it has moved dramatically. That's only right there. That's exactly right. All right Anyway Santa Cruz. Thank you listen to a Tom Cruise. Podcast I don't what's her name ears again. Crews on lert verdict verdict you listeners in the Squawk Pot. I don't think that we have that. We passed Joe Rogan. We rose to number one when squawk by the comeback. I'm not granting you that right. Now you've probably next unsquashed Fahd Robin Hoods Mishap acce- business editor on the APP outage. That might have cost millennials. A lot of money its most regular users. It's a mess. Welcome back I'm Katie Kramer. And you're listening to squawk three two one. Good Morning Welcome X. Box right here on CNBC. I'm Andrew Ross. Sorkin along with becky quick and Joe Kernan our guest host this morning contributor throughout Steffi of Douglas Lane trading robinhood suffered a second outage yesterday. That apple is down throughout Monday. Leaving users unable to take advantage of the largest ever point gain in the Dow and was fully operational by noon yesterday as stocks fell after the Fed surprise rate cut reports. Say THAT THE TRADING APP. Now faces regulator scrutiny. Joining us right now for a look at how this will impact Robin Hoods reputation. Is Dan primack? He is business editor at Axios and Dan. Robin Hood has been the darling for a long long time. They set the standard of zero cost trades. Now you see this happen. What does this tell you well? It's a disaster. Obviously for Robin Hood and particularly kind of for its high volume users. Now remember lots and lots of robinhood users didn't really experienced an outage but they probably didn't notice right because they weren't necessarily trading over the last two days before its most regular users. It's a mess and the thing about Robin Hood is while it's got a really clean interface and people loved that there's a cash management feature a big piece of it. That zero dollar trades everybody else's followed suit on that starting last fall so that's no longer really differentiator for them. So if you're somebody who feels you got screwed over you can go to another service and get the same benefits that you used to only be able to get from Robin Hood. What what was the problem too much. Trading activity who were the systems? Just not ready for it We don't exactly know They provide the they originally said. Oh our systems. We're having problems communicating with each other. They then took about twenty four hours to come out with a statement apology but a statement last night. Yeah which says basically they're DNS didn't work. They got overloaded by too much activity. there's a bunch of engineers on twitter who are questioning pieces of that. Don't quite understand it. There's going to have to be a serious audit of this. A third party audit to figure out what really happened. Do you see kind of moving now. Toward the Schwab's Fidelity's I mean we saw Schwab is buying td Traded is now going to be part of Morgan Stanley. All this was caused with zero trading days a year from now do you think Robinson's still exist because individual investments can do all this themselves. Well I think it will still exist. I think one of the questions is is someone GonNa Buy Robin Hood and if if somebody was thinking about it particularly when Morgan Stanley announced a trade deal a lot of people jump and said Oh. Someone's now going to try at least to buy robinhood. Why wouldn't you? It's very popular. You know one of the things about Robin Hood is even after. Everyone went to the zero trades. Last October Robin Hoods user. Base grew in fact it grew faster in Q. Four then it grew in Q. Three grew faster. I am told in January and February. Then it didn't Q. Four so it was still expanding. Robin Hood was wonderful acquisition. Target for somebody else. Who wants to rival with Morgan? Stanley did what happened over the last two days though clearly but that question. And what do you think regulators are going to do? Well I think they're going to look you know it's interesting There is a law on the books here. The Congress could actually theoretically take a look at this although it's supposed to be based more on bigger systemic issues for example like the flash crash what happened robinhood affected robinhood users. It didn't affect the markets as a whole but look regulators are going to have to take a look at this and as I said there is going to have to be a serious audit. What Robin Hood has said? So far just doesn't cut it. How many customers do they have? I honestly don't know the exact answer except to say a lot and definitely skews younger. They are they are known as a millennial focused company so you think they still would be an acquisition target just at a lower price. I think so and look. Obviously we'd be talking longer term. Anybody and I don't have any information that somebody was in talks to buy them tomorrow but anybody who was clearly is going to understand what happened and why the outage happen but yeah they could definitely still be an acquisition target. There's still a very popular company. They still run a lot of trades. There is though probably a new litigation risk. Now I mean you have to be able to prove. I don't know how you would prove that you were going to make trades but if you were Robin Hood user if your money was sitting inside a Robin Hood and you didn't get to play on the biggest gain points day ever for the Dow you've got to think there's GonNa be a class. I think anybody not tried to log in day. Who couldn't actually has what you don't even have to do. But if you were trying to log in on that day I think you have a claim by the way just to answer your question? It's a little over ten million users right now substantial. What's worse than not being able to get in that day or what's down to try and back in eighty seven New Orleans picking up the phones. We'll look I mean Robert Robert Unfortunately I mean it it. It came back online after a couple of trading hours yesterday in theory. Maybe you could. Have you know if you couldn't get in on the upside? You also couldn't get in on the downside but you missed on both say you've missed the whole turn up and down Dan. Thanks good to see you. Thanks for listening. Squawk box is hosted by Joe. Kernan becky quick and Andrew. Ross Sorkin you tune in weekday mornings on CNBC at six am eastern on or want to get the smartest takes and analysis from our TV. Show right into your ears. Subscribe to Squawk pod wherever you listen to podcasts on apple podcasts. Please leave us a rating or take a few minutes to write a review that helps other listeners. Fine spot will meet you back here tomorrow. Thanks guys this. Cnbc podcast is brought to you by td Ameritrade with td Ameritrade. You get everything you need to be smarter. Investor get help. From knowledgeable professionals get customizable tools. Get Investing Education designed just for you get no hidden fees and no trade minimums get smarter. Td Ameritrade where SMART INVESTORS GET SMARTER?

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Tick, Tock, TikTok

Squawk Pod

32:26 min | 9 months ago

Tick, Tock, TikTok

"It takes conviction to see beyond the turmoil in today's markets. That's PG. The investment management business of Prudential with a legacy of risk management discipline and investment experience through thirty market cycles. PG is prepared for today's challenges. Pgn Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with he ju- find out more at PGE DOT com. That's PG I im DOT com. This is qualified I'm CNBC producer, Katie Kramer today on our podcast Tiktok and we chat locked I don't use took talk but I should probably do it right. Now may be your last chance my friend, the trump White House to prevent downloads of two popular Chinese social media APPs insiders, lodge it I. Hope For the sake of tiktok users and we chat users around the world that this is just a last minute. Let me show you how tough I am you have to bow down to to what I'm demanding And Dr. Scott Gottlieb. Former FDA head on CDC virus recommendations that weren't written by the CDC government is very important that the author of guidance represent the guidance that they can defended. CDC wasn't in a position to defend document that they didn't draft those stories plus influencers in the making. Are you lip sinker? You could do little. or No. Today. I like my Walkman. It's Friday September eighteenth twenty twenty swap hot begins, right Good morning and welcome spark box right here on CNBC. It's just the two of US I'm Andrew Ross Sorkin along with Joe Kernan Becky's off. Its next see much friend. I'd still work you look. To Me Oh and you? Write working. Right. It's Over their. First up on today's podcast another wild ride in the tick Tock Saga. When we start in the day, the biggest piece of news we had was this in conversations with the US government tick talks parent company by Dance, proposed a US IPO for the platform in order to sweeten a possible deal which oracle and Walmart would become minority stakeholders in Tiktok of course like. Everything else in this short-form opera, the newseum bit of the story was quick to change as of now, the US Commerce Department plans to block new downloads of Tiktok and also we chat the tencent owned messaging APP ubiquitous in China and crucial to communication with people in China the band set for both APPs for this Sunday but don't worry Tiktok talkers technically if you already. Have the APP you'll be able to keep ticking talking until a full ban in mid November today's announcement from the Commerce Department is separate from but related to president trump's standoff with Tik Tok and possible suitor Oracle. He's expected soon to either approve or reject a deal for Oracle to take over as Tik. toks quote trusted technology partner in the United States if you remember. Back in August that was yesterday or maybe last year I can't tell president trump had signed an executive order threatening and Tiktok Band if might dance the parent company didn't hand over. US. Operations of the out to a US company. The Commerce Department's Action. Today is an enforcement of that order. Now, the president might scrap this Sunday ban if everyone reaches a deal over the. Weekend. So what does this all mean a busy news day an even busier weekend for Oracle Walmart and bite dance. Here's Andrew Rush and bringing in CNBC reporters with the rest of this quickly moving story I want to get the latest on Tiktok from Java's in Washington. Amen Yeah this Commerce Department Action Andrew as you point out applies to both Tiktok and we chat. and. What they're doing is saying this will go into effect on September twentieth that is two days from now unless the president agrees to a deal that's been on the table pending among all these companies to get. American. Control over some of these assets, here's what's in the commerce. Department. These some of the actions that Commerce says they're going to take your on September. Twentieth if that doesn't happen, they're saying that this order would block the distribution and maintenance of these APPs in the United States, it would block mobile funds transactions within the United States on we chat itself it also current US users would be able to continue using the APP software software updates won't be available. So that's all from the Commerce Department. This morning is a lot. Of actions that they're taking just some of them and what this does Andrew I think is is really puts that muscle into that threat that the president said that by September, twenty th, there's no deal we're shutting these things down. This is the US government now using its legal authority to do exactly that on Sunday and the big question mark year is going to be. Over the weekend can there be some kind of resolution here. That's going to check all the political economic and technological boxes that have to be checked in order to make this thing happens back to you before you go I one real question which is as I've been looking through this this release and I. Don't know if you've had an opportunity to to to see what seems like a very strange discrepancy it says, as of September twentieth that would be the Sunday four we chat, and then it says, and as of November twelfth for Twenty Twenty Tiktok the following transactions are prohibited and it goes through a list. Does that mean that there's more negotiating time? Somehow on the table for dance and tectonics that sounds like what it implies based on the language that you just read Andrew. But I don't know why there would be a separate timeframe for tiktok on that point and believe me we're trying to get US officials talk to us about this right now to to explain exactly what's been done here. we know that they're going to explain this throughout the course of the day to day we'll. We'd like to do as all these companies are being impacted. Moment to moment right now is is talk to them and get us get them to explain it to us right now. Yeah it's all it's happening. happening. Right now. Thanks Rosa Bosa covers these companies and what comes next we just we'll try to figure but especially for ten cents and we chat Good Morning Laura. Hey. Good Morning. Joe Andrew was looking at that exact wording as well that November twelfth date and it looks like. The order says that these actions prohibitions in the order maybe it on that date. So I, think starting on Monday when this executive order takes effect or Sunday night that as. We chat and TIKTOK users. Will still it sounds like they will still be able to use the APPS. But as agents said, they will not be able to receive software updates and they may not be able to download at. So there may not be new user. So you actually see a rush we've seen this in the past for different situations but when an APP that users know that it won't become available they all rush to download it could. Actually download spike between now, and then the implication though is no software updates. You've actually seen a similar thing with wall way remember that's a big Chinese company that has also been right in the middle of this trade war they stopped receiving updates from android and that has really hurt their business not being able to update their smartphone, which is a huge business for them with that android operating system. So we could also see. plausibly big hits to chat tencent the chop parent and Tiktok if users are no longer to receive updates we chat is like water in China because everyone uses it. In fact, there's a group that asked a judge in the United States to delay this executive order and they described it. Some of them described it as if they were losing a limb because they are so reliant on many Chinese Americans use it to communicate their. Sole Means of communication to family back in China I mean I even have someone on my we chat it's my only mode of communication with a family friend whose primary language is Chinese. There's also so many implications here for American businesses. Do you think about some of the biggest one the most successful ones in China like Disney, McDonald's starbucks Walmart their operations are so entrenched in the we chat APP there's questions over will their usage Seinfeld by this executive order that would have major implications. There's also guys perhaps the biggest one will be on apple and android but if apple and android cannot update their operating systems or even hosts, these APPs on their platforms will users turn away in China right now as I look through this, these guidelines guys are to they say that they are not going to be able to access it in the US. So it sounds like at least for apple and Android, they'll be able to. Give users we chat over there, Chinese APP source guys, but also just one more implication payments implication here the guidelines that any provision of services through the mobile application for the purpose of transferring funds or processing payments in the US will be prohibited and not as a big opportunity for tenth, the biggest competitor Alibaba, which is not involved in this executive order member they run alley pay here. So this could be a good advantage for them. Rudra I guess. A lot of people downloading tiktok Now, right now, I guess it's moved up to number two this more I don't know whether we showed that There it is. So it is. The Justice Department actually ruled earlier this week that we chat users would not face criminal or civil penalties if they continue use the APP beyond the executive order. So it's likely that users are going to continue to use the end businesses. They will the same thing for businesses. There was talk yesterday, a potential preliminary injunction a delayed this executive order because it was so vague. But now that we have a few more specifications, those hopes may be dashed. All right. Thank you. Dear, Andrew. I guess maybe I should do this. Shit. You know I I don't use TIKTOK. But. I should probably do it right now may be your last chance my friend I mean even even though I don't know whether I wanted or not. I now I feel like I'm going to be missing out on something if If I what's my apple password? Do you do you know? I got its. Pre-, and blind. Maybe. He'll. We'll do it to. A video together maybe with Henry if we do. We'll do lip sync altogether. Let's bring Henry into this conversation. I know he's been. In been waiting to join US CEO and of course, Co founder of insider. Let's just sort of walk through this Henry a are you surprised that thus far the administration did not blink. Do you think this is part of a larger negotiation or do we think that this? This is now the law, the land. I think in looking at the press release that came out this morning the two words in the first two paragraphs are president trump and president trump tough on China and I hope for the sake of tiktok users and we chat users around the world not just in the United States that this is just a last minute. Let me show you how tough I am you have to bow down to to what I'm demanding, and obviously let's hope that there is no security risks to get into the details but I assume that this will be resolved in the next. Twenty four to forty eight hours I would also has been and it's going to be extremely disruptive not can you imagine a scenario? Let's do Tiktok I but then get into each at. Can you imagine a scenario where if you're if you're a coil right now, your general, you have a stake in this in in bite dance where you call it the patterns that you know we now have to sell a majority of this company to the United. Sates, we just have to. But at the same time you have to change government I believe telling by dancing, you can't. So how how do you square that eady's tough for the owners and operators of the company's no question about it and and I it sounds like there is a deal that could be approved. It could satisfy this again I. Think we've seen in other negotiations like this president trump's Mo is to make a grand announcement and then declare victory while accepting tiny concessions that don't move it and. My guess is that that's what the boards of the companies in the management of the companies are hoping for. Otherwise there may be major retaliations here and I know that we WANNA think it's America first that's the mission and we're GONNA decoupled from China, but these economies are totally interlinked, not just technologically, and so that is much easier said than done and you could easily see this escalating. If we don't in fact, resolve a situation like this. Henry the what what is that escalation look like and one of our viewers by the way points out we're talking about we chat which we haven't really discussed if there's any solve for the we chat situation because there's no conversation about selling any of its business to the United. States. Of you're making the point guess what you can't use what's APP for example in China why? Because the Chinese government blocks it We it's not. Everyone is arguing it's got to be the same in both countries. It has not been for a long time, but again, our economies have still gotten incredibly interlinked and. Approaching it this way where it is last minute huge diktat. This is the way it's going to be. It's just going to be very disruptive even if the ideas that over the next five years, we really do try to couple and we've seen there's no way to wave a wand or say something and make it the same in in both cases, and yet the idea is I think that both companies do well, our economies do well and we worked toward a better situation that we've had but tar understate how important or overstate how important is it is so much more integrated into but then most of the US apps that we're using comparison. Henry part of me wonders whether these negotiations can actually drag on much longer. Than the, Sunday, maybe not for we chat. But for TIKTOK enlarge part if you look at that that statement and that what seems like a bizarre? Different Date September twenty, three chat but then November twelfth for for Tiktok well, guess what happens between now and November twelfth the election. So if there was some political pressure on the president and the administration to to not to to end tick tock, this will allow the service to continue at least through then and does that provide both time and provide political cover to some degree for the president and the administration over these issues? Yes and I thought it was great that you pick. That up, and this is something that we actually see in a lot of Chris releases from this administration where there are inconsistencies or something that immediately has to be clarified. But as you point out that does lead time to actually get into the details and so again, my guess is that this is a big high-profile announcement that says we're tough on China and that there will be some extension that will at least give everybody time through that November date right you're out all the details. Henry, we have heard that there have been a number of US companies that have made calls over the last several months. To the administration around the implications of shutting down. We chat I don't know if we've heard so much about that in the context of tiktok. But if you're Tim Cook who is Happily. Proudly, Frost oftentimes watcher of this program if you're waking up this morning to this news and your your apple, how much risk do you think this puts that company in? Well, I assume Tim, Cook as better information than certainly than I have on this and it has been following. It probably has a lot of lines into it and it really do think there's a lot of showmanship here. This is no this is the way our president negotiates and sometimes he does follow through so you can't get years unpredictable there but I My guess is that that's the way apple is looking at it but yes, you've been talking about the idea let's say does escalate in there's real retaliation suddenly apple has to close down China something like that implications are huge. This is where so many of apple's products are made they can't just unplug bad and so that is a it's just if it continues to escalate, it is a huge deal. It is not a matter of just simply decoupling and going about our own business. The global economy is structured that when more. So this. News is News Henry. So obviously, we're focusing on this, but I think we wanted to ask you. What you're GonNa do with all your snowflakes stock and that you got on the you are you. Have you already sold. Are you buying more what? What did you make of that? What you think and I don't think you have an M. kidding I don't think you probably in you need to discuss it. You don't you don't actually have any, but it was crazy. I I wouldn't have been able to get any didn't put it in time, but I wouldn't have been able to get in the anyway and This high. Highlights some of the challenges with the current, IPO? Process. Obviously, the stock was very underpriced relative to the market demand I. think that as we talked about this in the past, it is extremely hard with a company like this to get a very precise valuation and evaluation is very high. There's no question about that. It doesn't matter that they're not profitable. Now, this this kind of business ultimately becomes profitable. Later, we saw that with salesforce and many others. So that's not the concern, but the valuation is extremely high and Celine here but after say just looking at the fundamentals of company looks great. So I can certainly understand why lots and lots of investors are excited about it, but valuation does matter. Yeah Yeah. Take. Okay. Good. Thanks for playing along. You GotTa be pretty special to get in on on something like that when it moves like that and not that you're not special. But Not Special enough. All, right. You're welcome. Thanks. Next. SWAPAN DR Scott Gottlieb on the likelihood of a safe effective feedback scene and how soon by the idea that the vaccine would read out before the trial widens to completion is very remote. Nearly Circumstance Rica possibly envision that happening is if the vaccine is really effective, I'm talking about ninety percent effective we'll be right back. It takes conviction to see beyond the turmoil in today's markets. That's PGN. The investment management business of Prudential with the legacy of risk management discipline and investment experience through thirty market cycles. PG is prepared for today's challenges p Jim Brings long-term perspective and deep expertise across public and private markets globally outlast today's uncertainty with PG. Find out more at peace Jim Dot com that's PG I am DOT com. This squad todd here's Joe Kernan. Testing guidance from the CDC that was issued. Last month was published against scientists objections. The guideline said it wasn't necessary to test people who don't have covid symptoms even if they had been exposed to the Mars and the time says that the Department of Health and Human Services Rewrote the guidance and dropped it. into the public website avoiding the agency's strict. Review process but then. The. White House came back and said, it was reviewed and you know it's another one of these. I don't know another one of these examples of of you know differing. Viewpoints being pushed. The that it's implied for political reasons I guess join us now Dr Scott. GOTTLIEB. He's a former FDA commissioner and CNBC contributor. He serves on the boards of aluminum adviser and we're you know we keep hearing listen to the scientists. We follow the science it's almost reverential sometimes. But we fail to mention Scott that the science. Over the past six months is I, mean some of its one hundred and eighty degrees from what we thought. So the scientists say. It sometimes it's an art and sometimes it changes and evolves as to what we think anyway. So it's been difficult. It will continue to be difficult. Well look. They're scientists also on the coronavirus task force the Department of Health and Human Services. Not just that say if those scientists inside hhs have a different view about what the testing guidance should be you know they are free to draft. An opinion on that they just should put it out under their name. I. Think the challenge here is that it went out presumably under CDC and left the implication that had signed off on it. I think in government. It's very important that the author of guidance represent the guidance that they can defend it CDC wasn't in a position to defend a document that they didn't draft and. It appears didn't agree with right. So Scott the one of the things you want to touch on today was we got some restaurants. People can go. You know have a nice meal and a few cocktails but in New York City, they got squared away but not the school. So that's that should have been one should have been a little bit maybe prioritize over the other and we're still not there. Look. I. Think that that's right. This came up yesterday where New York City announced another delay in the opening of the schools. Now, the city's moved forward and opening up a Lotta businesses including restaurants. There's no reason to argue that they shouldn't be doing that there's a very low prevalence right now in New York I think new. York. Can Afford itself some ability to restart aspects of life recognizing that they were able to drive down the infection for now but I Think. We should be prioritizing trying to get the schools open and do that first and foremost and see how that goes and clearly the city's been delayed in being able to do that I don't think they had an effective plan in place on how they were going to do that, and you see them stumbling to try to be able to accomplish that goal. We had the switched to vaccines we had modern on yesterday. We see they're getting close to thirty thousand enrolled. We're trying to figure out how quickly you would know whether this works and I'm wondering if it was a homerun vaccine and I don't know whether we'll be i. don't know whether you know it will be if it was a homerun vaccine? would. You know early on? Enough, to where you do that compassionate used to give everyone the vaccine and take you know the people that were getting the Placebo should get the vaccine if it really does work is that possible if it was really good that you'd know more quickly than the time line that we're seeing mid next year so would you know in October or November? Well, this I, don't have any information that's not in the public domain. Knowledge amount of border Pfizer. These are event based trials. So they're gonNA read out when they get sufficient number events and he's trials I believe them during the trial reads out at one hundred, fifty, one events. I believe the Pfizer trial weeds at one, hundred, sixty four, and there are some interim analysis. So they're gonNA, they're gonNA, take a look, the data safety monitoring board and blinded fashion is going to take a look at the data when they reach a certain number of events to see how affected the vaccine is I think that the idea that the vaccine would read out before the trial runs to completion is is. Very remote I think it's extremely unlikely and the only circumstance where you could possibly envision that happening is if the trial if the vaccine is really effective, I'm talking about ninety percent effective or somewhere in that neighborhood, then they can make a determination of the trials almost run to completion the otherwise feel comfortable about the safety of that. Perhaps they should make it available sooner given the outsized efficacy against the backdrop of an epidemic but I think that's an extremely unlikely stance and I would expect these trials to run to completion and read out when they reached the sufficient number of events that her pre specified in protocols. All right. Thanks Scott we appreciate. That, we saw you a few times this week. Hopefully, we'll repeat that next week and we always have a lot to talk about with you. Thanks. Coming up on squawk time the rest of today's stories mcdonagh's talking and Joe. Andrew Flip the switch we should do a squawk dance. If we did a dance particular I, think we can get a lot of followers. You're listening to squawk. Todd. Good Friday morning everybody. Welcome back to Squawk box right here on CNBC Andros Zorkin along with Joe Kernan it is just the two of US Becky is off today. Okay. Here's A. Few feel good story for me My beloved draft kings. You know I looked yesterday here, Andrew and I was thinking you know I kind of like this, and then once again it said. You can't do this. You can't do this. You're not an and it knows it knows where I am all the time so I have to wait to I. Have to wait drug. Anyway. Shares of Penn National Gaming are higher cook in the pre-market after seven percent jump during yesterday's session stifle hike its price target to eighty five dollars citing portnoy momentum trader for another company steak and Barstool Sports led by day. Portnoy. Here's Portnoy on mad money last night talking about the rise in legal sports gambling in the United States. You, really had to go out of your way in the past the place whether it's a legally with like a bookmaker which should be doing offshore casinos which fell you're your credit card information stolen. So the element that you know somebody who maybe casual can now do it easily I think will lead to obviously much bigger market. And that stocks up more than one hundred and eighty percent today. Andrew. No spring chicken and I, never had a book in my entire life. I never made a bet in my entire life on sports. You know until until that's what he's talking about. So there's I don't know what the the market potential. Is But there's a lot of. Guys that were you know I used to watch him and think you got a problem you know when they're you know because usually they were these NFL games and I got them I. got this and I was like, wow. But a small amount of money on a five dollars bet on a on NFL game in it's like, Oh, my God they fumbled you know or you get. So it's your engage your engaged. So I think Puerto is right about that and I should share this my grandfather who's no longer Lonzo of chester rock loved dearly. No, he wasn't a bookie, but we used to on on. On Monday he used to, he used to bet all of the Games on Sundays and on Mondays we'd have lunch Italian restaurant I, believe on thirty seven, thirty, eight, th street in New York, city and he would either come with an envelope or there was another guy who would stand at the bar or he would come with envelope and there would be an envelope that was that was passed. A Monday morning ritual based on how things went on Sunday. So enjoyed Sundays, that's the old way they used to do it, and when you say he enjoyed his Sunday's he and. Yeah, he loved it, and if you're not very much, did I gotta say You know my problems with the Bengals I wipe the slate clean optimistic They lost last night to the browns but I mean. You you probably see. Joe. Borough and and and bengals got some good players this mixing guy and You know you got a Baker Mayfield, passing Odell for for the touchdown. It was all good. All good even though they lost. And naturally the the person in New York Post it said take the bengals in the under and you saw what happened. FACEBOOK is. Being sued for allegedly spying on instagram users the lawsuit stemming from media reports, July that the appears to be accessing iphone cameras even when they're not actively being used facebook blamed bat on what they say is a bug which it says generated false notifications the suit filed by an Instagram user from New Jersey claiming the APPs use of the camera is intentional and has done for the purpose of collecting valuable user data and by the way throw one. Other thing into the mix, we're just talking about facebook and Instagram Joe. Did you see the News It's a bit of speculation that potentially one of the CEOS who is in contention to run TIKTOK is Kevin System who founded instagram and what kind of battle royale that would be we had Kevin on the program I don't know just a couple of maybe a month and a half ago because he's working on on this covert website that's tracking. Tracking the the are not but he founded instagram of course left you remember. Mark Zuckerberg, and now Zach attention to go run the biggest competitor. That would be a story. This just so I understand exactly how it would work it. They compete directly because I. I don't know my kids use a little Tiktok but not anything like what they do with instagram. So what would the would the rationale? The young the TIKTOK is the new instagram unless, of course, instagram able to to overtake tock in terms of the the younger market and one of the things an instagram has now put in place this product, a feature called reels are. S. and that effectively is a tick tock competitor if you remember. INSTAGRAM also puts on the called stories in a couple of years. Ago Now, and that was basically to snapchat. COPYCATS and now basically instagram is copying tiktok on one side and. Snap on the other. And the question of course is whether whether somebody like Kevin System would actually go to a tiktok tried to make a go of that. It'd be very interesting to watch. So even younger than the people that are doing an instagram so this so it's just So. There might be something after. Lots of lip synching are you lip sync? You could do little little million. Date today. I was thrilled with my flip phone thrilled to be able to make a call when I'm not near a putting a quarter and that for me was, you know I liked my walkman anyway. I. Hear You. On, Tiktok are are you a big and you're not even a big instagram person? Are You I'm on Instagram I have I don't have a lot of followers industry because I haven't really made A. Car. Thinking you're not like. I have I think I have a TIKTOK account no way. I've never really done I haven't done any dances or anything yet, but we should do us a squawk dance. If we did a dance for Tiktok I, think we can get a lot of followers I. Think was her earth wind and fire, and you were talking about how much you liked it and I was worried you were going to start moving that none of us need to see. It at six in the morning. That's squad pod for today, and for another week, thanks for listening squawk box is hosted by Joe Kernan Nike. Quick and Andrew Ross. Sorkin, all three will be back next week tune into CNBC weekday mornings at six am and to get the smartest takes and analysis from our TV. Show right into your ears anytime of day subscribe to spunk Bob Wherever. You get your podcasts. We'll be back here on Monday. Have a good weekend. It takes conviction to see beyond the turmoil in today's markets. That's pgn the investment management business of Prudential with a legacy of risk management discipline and investment experience through thirty market cycles PJ is prepared for today's challenges p Jim Brings long-term perspective, and deep expertise across public and private markets globally outlast today's uncertainty with PJ find out more at Pge m dot com. That's PG IM. Dot Com.

Tiktok US president China Joe Andrew apple US Commerce Department CDC CNBC executive New York City instagram PG Joe Kernan oracle Dr. Scott Gottlieb Department of Health and Human Andrew Ross Sorkin Henry
Snapchat Surprises, Netflix Disappoints, Amazon Picks Up, & Robot Dogs Take Over

Squawk Pod

30:47 min | 8 months ago

Snapchat Surprises, Netflix Disappoints, Amazon Picks Up, & Robot Dogs Take Over

"Today's podcast is brought to you by pm where the pursuit is on for outperformance with deep expertise to out think across asset classes out steer actively managing investments in global markets out scale with resources to serve fifteen hundred clients in fifty two countries and outlast with long-term conviction that looks beyond today's volatility join the pursuit of outperformance at pge him the investment management business of Prudential. Learn more at PG IM DOT com. This is squad pod I'm CNBC producer Kate Kramer today on our podcast stimulus will they or won't they continues and frustration builds on and off the hill. If you're playing politics, I don't understand why they didn't into sooner and if you want to make sure that you get a deal passed and you actually WanNa get money out I don't know why they didn't do this sooner. It's stupid Netflix. The pandemic staple may have to step it up to win streamers, tech, Watcher Bridge Greenfield. There's just a ton of content coming and really no competition and see spot help the robot dogs could make essential workers a little safer Boston Dynamics, CEO Robert pleader. Act into logistics infrastructure in the country, and if you can reduce that somewhat having robots doing some of the repetitive menial tasks than maybe you can reduce density. Those stories plus Joe's Big Day out kings a beautiful great. It's a great place I do go into a what is the ultimate shoprite or something you can't believe different prices and Andrews big night in. A. Couple of Apple Plus it's Wednesday October Twenty First Twenty, twenty squad pod begins right now. Good morning everybody locking the squawk box here on CNBC. I'm becky quick along with Joe Kernan and Andrew Ross Sorkin Andrew Okay let's get over to Washington. We're GONNA, talk about called a soap opera, but really it's it's a reality show and it really means a lot to so many millions of Americans. House Speaker Nancy Pelosi says, she's now optimistic the Democrats may be able to reach a deal with the. White House on a new covid nineteen package you get that eight out by early next month. But Senate Republicans, she says aren't on board he joins us with more this morning good morning. Well, that's right. Andrew the White House and Democrats are still trying. To work out a deal but Senate Republicans are ready to throw in the towel majority leader Mitch McConnell has reportedly encouraged the White House not to commit to a deal until after the election he is worried that this could affect the timing of a vote over the Supreme Court nominee as well as divide the GOP caucus ahead of the election now Senate Gop Republican Mitt Romney said flat out that he is not going to support a one point eight, trillion dollars price tag that the White House is offering and he is not sure that that would even pass the Senate meanwhile has colleague Kevin Kramer said that he's not sure the president can change anybody's mind. where he could get Republican votes if if they would come to some sort of agreement around that number. I'm not sure. So still the Treasury Secretary and House Speaker Nancy Pelosi, we'll be back on the phone again, this afternoon as for office does say that they are moving closer to an agreement guys even though they blew past the deadline that she had set yesterday she did say that it showed that both sides are serious about finding compromise back over to you. So so here's the. Question I'd have for you in and by the way credit to becky because she's made this point over and over again that even if the president comes up with a plan that the Republicans may not ultimately go along with it. What does that mean in terms of that disconnect for I hate to say the politics of the next two weeks I think they I. We saw division over dollars. Then we saw a division of policy right now, what we're seeing is a divide over politics and I think the calculus for a lot of vulnerable GOP senators who are looking at whether they can even get reelected is, do they go along with what the president wants but if they do that, do they risk alienating part of their base? that. Are Fiscal Conservatives at heart. This puts them in a really tough position, and that's why they just don't WanNa take this vote or have to make this decision before the election. This is something that politically could be better for them to kick. The can down the road see how things shake out on November third and then go from there, which is what Andrew Through. The building I mean, that's kind of the point I've been making for a long time wh why wouldn't Pelosi say okay cut a deal with the president who does want to get twelve hundred dollars stimulus checks out to everyone with his name on it, and then put the pressure on the Senate. I don't understand why they didn't take this tax sooner unless it's a situation where Nancy Pelosi can't control her own party she needs to talk tough on this she's Not Going to have the folks I I don't know the answer to that. But I, mean, if if if you're playing politics, I don't understand why they didn't do the sooner and if you WanNa, make sure that you get a deal passed and you actually want to get money out I. Don't know why they didn't do this sooner. Stupid hard to say that Nancy Pelosi wouldn't have party with her because they already passed. They've made multiple efforts in the house little. Stuff before and they have so I'm not sure that that Naples doesn't have. The. The other thing is if you don't do it now right now you have a president who is going to put pressure on the Republicans in the Senate, and if you don't win the Senate as the Democrats, then you're going to have an even less likely chance of getting anything past post the election. Right now. Wants to get stuff out we. Raise one more point to Becky is that you know Pelosi has been saying throughout this process that she is optimistic about finding a deal right. But she says she's optimistic and then list the fifteen points of where they have disagreements and where she says that president trump disrespect side is willing to crush the virus, etc. so by continuing negotiations, she's actually able to keep a spotlight on the talking points that Democrats have been trying to hammer home, which is the president trump doesn't have control of this perhaps by continuing to negotiate, she can continue to. Show the way the Democrats and Republicans are handling this differently, and that becomes a political advantage I. Think you're right and that they waited almost too long and now that they're so close to the election, they simply can't bridge the political divide you want us from about one about you made and you've made this point over and over again that it very well maybe we don't plan till after the election. But if we don't get one two left election, we really may not get one till February. What how do you handicap that you know I? Think it really depends on what the dynamic is after November third. It is possible that all of the negotiating that we're seeing right now is just laying the groundwork for a deal on December eleventh when they'll have to pass the government funding bill that does provide some urgency, some sort of vehicle toward getting something done but if the nation and if Capitol Hill is even. More divided than we are right now, which is hard to imagine but certainly possible, then it could be not until after there is a new administration or a administration if you will. So I think it really will depend on November third, but it could be that they take all of the work that they've done so far and just transfer that to December. It is an option. But we'll just have to see you. Thank you so much for helping us. Try to understand this what seems like endless saga. Amazon. Is launching a new service for prime members free one hour grocery pickup at all whole foods stores in the United States to qualify orders have to total at least thirty, five dollars before today's announcement prime members could only pick up grocery orders at select stores. Big Questions about this guys I don't know if you've tried this service the whole food service through them. At the biggest problem I've seen it's a little bit of a rare misstep rams on but the biggest problem. I've seen is that they don't have a very good idea of the inventory in any of those stores. So you can order something online they may not have it in the stores and they substitute some pretty crazy things and again for something like Amazon, you expect the technology to be really good but I haven't seen them able to link up with inventory in the stores with what they're offering you online to this point if try to no, no, no no, i. got a great kid. I was talking to a new. Above my pay grade, they call it whole paycheck. We're not. We're not. We're not a whole foods family. Do we have we have? You know. tweeting about some of the yogurt or frozen ice cream or something that you're eating how much that pint? Yes. Sir The most expensive yogurt. You could possibly buy I think they might I don't know if they sell that a whole foods I think they do actually in a couple of them but we have not we're not a family. For whatever reason? No No. You can go to King's, which is three quarter paycheck not quite hoping I mean you you I mean why pay less kings beautiful. The Great. It's a great place in it's closed. Stores they they. Are? Not. And that is one of the things that has been different. I had gone either every day or every other day. Since through this. Shopping I appreciate it. I do I I'm home to do of workload. My wife's got about six jobs. She's busy as do I do a lot of things I do. I is a big step up for you helping out a little bit at home. I appreciate it. That's true. That's not true. I haven't loaded the dishwasher very often, but but I do shopping and make my son lunch and stuff like that. So Lakers. So okay. Okay. That's Yeah. That's All right king. The dogs why pay less I mean I do go into a what is the element shoprite or something you can't believe the difference in prices I mean it's like, wow, four dollars for for gifts. It's like twelve dollars is. Joe I love that. You know this you can do prices right any day. Good. Yeah. Good prizes I'll take what's behind door number two. Next on Squawk pod netflix's has a rare quarterly. Miss is this hot stunk of the pandemic cooling off analyst Rich Greenfield fifth start to look out over the next few years in terms of their pricing power. This thing's GonNa generate dramatic free catch them back after this. Today's podcast is brought to you by pm where the pursuit is on for outperformance with deep expertise to out think across asset classes out steer actively managing investments in global markets out scale with resources to serve fifteen hundred clients in fifty two countries and outlast with long-term conviction that looks beyond today's volatility. Joined the pursuit of outperformance at pge them the investment management business prudential learn more at PG DOT com. This is squawk pod from. CNBC. Here's Andrew Ross Sorkin. Netflix's just reported in its worst ever earnings MISS INVESTORS BANS quarterly results from the streaming giant Jillian. Boston's on the West Coast this morning joins us with what went wrong in Q. Three. Was it Netflix's or wasn't the analysts Julia? How well expectations that were certainly high and then? Netflix shares today we see them plummeting on the biggest earnings myths and snatch flicks went public those earnings falling nineteen percent short of those analysts expectations now with Netflix. Of course, always about that subscriber number, it fell short of the companies already lowered expectations the company outages two point. Two million subscribers in the quarter in guided the addition of fewer subscribers in the fourth quarter then anticipated. Now, that's not all looking ahead to next year. NETFLIX's warns of some very tough comparisons but co-ceo hastings saying he's not concerned about competition we compete. So broadly, we compete for time against you know tiktok to as well as HBO as well as I tell really, the limiter for us is you know what's the quality of our service How often how many nights you say Oh my God I want to go to Netflix and and watch the next show. In contrast to Netflix snap shares soaring after beating expectations about twenty one percent beating expectations really across the board snaps revenue growing fifty two percent more than double the growth rate than analysts projected with a surprise profit of one cent per share that's compared to the five cents per share loss than analysts anticipated. Now, Becky what's really interesting here is that snap has really benefited from Kovin pushing advertisers to try their augmented reality ad formats and also guys there was a subtle dig at facebook sounds like they may have benefited from that facebook ad boycott well. Julius stay here we want to bring in another voice to the conversation as well. Rich Greenfield joins US right now he's of course, partner and Co founder light said partners and I want to start with Netflix's first. Then we'll get back to the snap story, but but Netflix, you say the real story here is that the bear story is gone. What do you mean these are disappointing numbers, but it does come after a very strong first-half for the company for for a subscriber ads. Yeah. Look look I heard the commentary that you were just talking about in terms of like the biggest. History of Netflix. But remember this is a company where again people are very focused on the subscriber trends and the subscriber trends in the first two quarters far out seated in terms of the beat far outside at Amiss here I think the real story that people should be talking about is that not only are they generating substantial free cash flow this year, but even next year as production is in full swing again, they're talking about that they may be at break even free cash flow and so the financing the sort of the bear thesis on Netflix for years was that they. Don't have the money to finance all of this content they're going to run into capital, they won't be able to finance. They won't be able to raise capital and that was sort of the the the bear thesis that's been ongoing for years and years. They're basically self financing now. So the view that Netflix has a capital raising issue is now gone, and if you start to look out over the next few years in terms of their pricing power and you're starting to move up price in Canada recently in Australia, we think the US will happen either in or early Q. One. Pricing Power and all of a sudden you don't have any cash flow needs in terms of having to raise capital. This thing's going to generate dramatic free cash flow and you're going to see the scale to billions and billions of free cash flow a year. That's what people should be talking about look beating lieutnant missing numbers is never a good thing for stock I get why it's down today make sense that it's down at Ted a huge run this year but I think this is more about consolidating as it continues to move higher. into. The point I think the company said on the call that if there had been another forty eight hours in the quarter, they would have met their projections or even exceeded some of the projections on this. But but when you see a pullback of about five point, three percent today does that represent a buying opportunity to you given how much the stock is already run this year? Absolutely because I think the thing that you need to be thinking about Becky is when you think about what's happened over the last sort Of like six weeks, what's really become clear one, the pandemic isn't just disappearing. You're seeing it flare up again in the US you're seeing flare up across a lot of Europe it even parts of Australasia like this is not going away. So we're all going to be more homebound or in terms of you know kind of entertainment activity for a longer period of time unfortunately over the course of the next six to nine months at the same time, the movie calendar has cleared out like all of the movie studios have. Essentially delayed all of their content two, second-half twenty, twenty one if not into twenty, twenty two, and so the path for Netflix's the runway has been completely cleared. They were going to be putting out movie after movie they've got a Ron, Howard movie hillbilly comes out in a few weeks an animated feature over the moon there's just a ton of content coming and really no competition and so I think that's GonNa really well, and so I would use this opportunity. Exactly. Yeah. The new there is no, there is no alternative. Richland let's talk about snap and this this other story that Julia just fed up with it. I let's see crocodile. First of all, you did say a year ago today that you were initiating coverage on the stock with a twenty dollars price target and you took some heat for that. Obviously, we're well past that. Now especially, with these games that we see overnight on this, but is this pandemic story I mean you think about kids who use this so heavily not being able to do so many other things they would. There's Very little out very few outlets for where kids can spend their attention. These days is this something that you think outlast the pandemic. Sort of the funny thing is, is that this wasn't really about user growth in the US I mean users daily active users, which is that da you metric but a lot of people focus on the US was flat. So this wasn't about skyrocketing numbers of users in the US overseas and I think they grew a lot in Indian that was very helpful but the real. Story here is that advertisers are embracing snapchat and I think the team that's been hired Jeremy. Gorman, who came over from Amazon Peter Naylor who came over from. Hulu they have really done an amazing job of showcasing to advertisers the power of the snapchat audience. This is a very tough audience to reach on. LINEAR television through most other mediums it's hard to reach this group. They've done a great job showcasing that they said on the call last night that they had a record number of new advertisers come on board. They're still a fraction of facebook. The trends. Here's this is not just snapchat right I. mean this is helping facebook helping pinterest helping twitter. There's something going on fundamentally where advertisers because of covid think are shifting faster away from traditional evening television and looking for how can they reach this audience especially a younger audience more and more content on places like snapchat. Obviously, there's a lot of upside. As you think about growth you know they talked about fifty percent growth in q four which I think you mentioned was sort of their guidance commentary but remember they exited the quarter probably growing in the sixties if not mid. Sixty so feels pretty conservative especially, if we're going to be locked not locked, but certainly more homebound over the course of the next several months, which is probably going to be in the ECOMMERCE trends that you've seen sort of broadly across the market will continue to be a nice tailwind behind snapchat and I think it really speaks to Evans Spiegel has done a great job bringing on executives and pulling you this company was dying two years ago I mean it was a five dollar stock it was dying and they've got Morales up people are excited and advertisers want be there now doing. Yeah I think what's really interesting Becky as you Asif as cove story and I think the Cova. Story is really about the advertisers and enrich mention this but it's really about advertisers being pushed to try new formats. The advantage that snap has the has all this augmented reality technology that was I only useful for the fun filters that were just for fun. They were not really revenue-generating but now those filters are being used to help sell things and we're seeing such a broad array of advertisers say, okay. I'm not going to be putting my ads on TV or I'm you know look for more measurable? Way To invest in reaching my younger consumers, which is the hardest to reach. So let's let them try on the Nail Polish with an augmented reality filter, try on the glasses, and so there's this whole push of advertisers trying to figure out how to leverage these new tools and I think that if those tools are really working which it seems like they are the not could benefit snap over the long run and really convert those advertisers more permanently. Becky Julia Rich. Thank you. Great to see both of you. Thank you. Wonder if there's so much money that the mediocre developers and writers or or getting. Shot or something I mean I would think that more money would mean better better stuff I think the pandemics affecting it too but I haven't seen it. I'm looking all over I. Look at things that are you know people are watching this I go you know on the at the? Amazing in terms of this is what you've watched. This is what most people. This is the top ten and I I'm aware. Of what Netflix's offering me right now, I'm just not buying most of these things. So let's get some you know. Let's get back get our nose to the grindstone. Get these guys working on some good creative content. You got a good one for me. I'm like back on the tutors which was like two thousand eleven or something. So I don't know what to do I tried to watch the bridges but I got tired I. Can only watch things about the pope for so long I guess Andrew You got anything for me. There's no. Way So. Foul. Be. Friday night is going to be huge on apple plus. Six episode. Tehran is going to drop hold on and then your favorite and Becky's favorite. Bill. Murray in a movie with Sofia Coppola. Is Dropping on Friday night and my wife, and I have an appointment to watch it. So I'm worried about that. We can all. You on Monday worried it's going to be like the Adam Sandler Bomb Amaury about that movie no way I've watched. The. Extended preview I want in. Okay okay on Friday. So if. Apple plus. Coming up on Squawk pod the robot dog that's headed into the workplace but don't worry our human jobs aren't going anywhere. CEO Foster Dynamics. Important people will be managing teams of robots and dealing with the common sense kinds of intelligence that robots volume are capable, and you actually are saying that most people do have that common sense a robot to listen. Welcome back to Squawk pond. Good morning and welcome to Squawk box here and CNBC I'm Joe Kernan all with Becky quick at Andrew Ross Sorkin. If you have ever watched any squawk box, you'll probably recognize the Boston dynamics robot spot. take a look those spots getting an upgrade, and in the time of the corona virus also now being used to help take care of patients join us now to talk about new robotic applications for pandemic world is Boston Dynamics CEO Robert. About three hundred. Spots deployed at at this time and and I understand Robert you just had a yesterday at the first developer and customer event explain spot in some of the new applications. In features that might work during the pandemic it was virtual obviously but. There's an arm now. And a docking, also an enterprise version to can you just tell us what all that means? Robert or would it be used for? A. Yeah. Sure. So yeah, we're just approaching our one year anniversary from the launch. We have about three hundred robots out in the field now with customers. And one of the needs was a recharging station so that that's the dock so that the robot can. Automatically, go back and recharge itself, and then continue on its missions that allows spot to cover a much broader range and be located remotely and. Autonomously, the arm. Is. A module that we can add to the robot Alexa. It actually do work it'll be able to open doors or drawers you're throw. Power switch or turn avow. So you could remotely you dial in and if there's an issue and needs a little manipulation. The robot do that for you. So at seventy five or approximately a base level. What is it with the arm in the docking wh spot goforth that. We haven't figured out exactly what the pricing is going to be for those additional items. They would be add ons above sort of the explorer option that you mentioned there. We're calling that the enterprise version especially when you add the recharging station. And that arm. You also, we'll get get to the pandemic uses, but I just want to quickly mention this alliance with Trimble where you're going to be able to actually I mean unfortunately I think there's there's there's people doing this now, but it's it's the way of the future I understand that but could you explain the the alliance with Trimble and what that would allow you to do it construction Sites. Campbell is very excited about this partnership that we just announced. Yesterday Trimble is one of the biggest manufacturers of precision scanning and survey equipment. And by mounting that equipment on spot. You can repeatedly and even continuously collect data on your construction site and so. Yeah people are doing now, but I think to increase the data rate that were you know operating a construction site with you might WanNa robot that's doing it every day for example exactly. Okay now so Work. None of us obviously. Would like to be around covert and we we the greatest heroes we have or the people that put themselves in that position. How does how has spot taken? Some of the onus off of of people for for dealing with the pandemic. Or even on construction sites, you know they're trying to control how densely workers are located there. So I think if you could have spot collecting some of the data that normally would require people to be there and do it in a remote fashion, you can get the same day to Arabe even better data. I'd have fewer people on site. And that's generally true about all of these mobile robots in the logistics space same deal you know there's a lot of workers act into logistics. You know infrastructure of the country, and if you can reduce that somewhat I haven't robots doing some of the repetitive menial tasks than maybe you can reduce density. And so that's a point that you make and you made it in an op. Ed for US last month I. Thank for C. Actually it was a different op-ed if you've written one for us but. It's not gonNA take away jobs. It's GonNa make the jobs that humans perform safer. And more. Efficient. You know the reality is yet to days ago the Wall Street Journal reported that. Logistics United Parcel delivery infrastructure is already at capacity. They can't get enough workers in place and keep them safe. And the reality is these robots still need to be managed by people, and so we don't see it as taking jobs but really elevating what they do allowing people to use their true intelligence and comrades which robots don't really have and managed them and that. infrastructure. Operational During the Internet of things and we're technology's moving I can think of like dozens more. Add Ons to spot I. Guess You have a hold of this and trying to figure that out at this point right? You know I think it's one of the interesting things that we built spot as a platform that has both software and hardware interfaces so that you can build different kinds of payloads. You know I saw one the other day Sensing payloads. So for win spot goes in and looks at a nuclear power plant you can measure that or maybe they'll be gas sensing payloads trying to find that indies. again, the arm and different manipulators so I there's a lot of options and working with over a dozen companies building applications on top of spot. which you know they have expertise for, and we provide basically the mobile platform. Hey John Real quickly. I don't mean to sound cute with us but with artificial intelligence making such leaps and bounds I really do wonder. Do these robots have self awareness. Is there a point there that they will have self-awareness? How far off are we from like I robot? We're a long ways off. You know we built enough intelligence into these robots that they can really get around you know their mobile, they can avoid obstacles. But they still don't have commonsense. You know something silly might happen that. Any person who recognize instantly, but the robot hasn't been trained to recognize that. So I that's why I think. It's still important that people will be managing teams, robots and dealing with the common sense kinds of intelligence that robots early articulate you and you actually are. Are saying that that most people do have that common-sense robots. Have you not been. Following the election season this year you're not talking about politics. I'm talking about whether a box chip. Picking on spot I think it's a lot closer than you think between spot. In human. As a kind of intelligence that we work really hard to build in, we call it athletic intelligence and it's sort of a smart and intelligence about the way. It's body moves in the world and you know it was really hard. It took decades to figure it out so that robot could really be as mobile as it needs to be. There is some real intelligence in spot. It's it's just not why people normally think of you and I take that intelligence for granted. You know we've had it ever since we were two or three or four haven't haven't seen my play golf now I, don't have any. Any Robert Thank you. Appreciate it and we look forward to like years in the future to see exactly what spots up to because it's Very. Cool. Okay. Thanks. That's the podcast for today. Thanks for listening. squawks is hosted by Joe Kernan Becky Quick Andrew Ross Sorkin tune in weekday mornings on CNBC at six am eastern and to get the smartest tanks and analysis from our TV show. into. Your ears subscribe to Squawk pod wherever you get your podcasts and don't forget tweet us at squat, CNBC tell us what you think. We'll meet you back here tomorrow. Today's podcast is brought to you by pm where the pursuit is on for outperformance with deep expertise to out think across asset classes out steer actively managing investments in global markets out scale with resources to serve fifteen hundred clients in fifty two countries and outlast with long-term conviction that looks beyond today's volatility join the pursuit of outperformance at him. The investment management business of Prudential Learn more at PG IM DOT com.

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Quarantined on a Cruise Ship; New Hampshire Feels the Bern

Squawk Pod

29:48 min | 1 year ago

Quarantined on a Cruise Ship; New Hampshire Feels the Bern

"At IBM problems inspire us to push the world forward. That's why so many people work with us on everything from city traffic to ocean plastic smart loves problems. Ibm Ibm let's put smart to work visit. IBM DOT COM slash smart to learn more bringing in show musically this squad squawk pod the daily podcast brought to you by the team behind squawk box control to CNBC. Essential morning show every day. Get the best stories. Debate and analysis assist from the biggest names in business and politics are coming to a next today on Squawk pod the wealthy and powerful will start paying their fair Cherif taxes. New Hampshire feels the burn poster. Franklin says it's just the beginning of one heck of a ride. This is going to be the best selection in my lifetime. Quarantined on a cruise ship. Would you go back. You'll all be refunded for everything you've spent and you'll be offered another crews. Would you ever go on another cruise. We've we kinda kick that around plus bed bath and the way beyond didn't say bed bath theon barbecue those stories and more go. Where's IT's my popcorn I'm CNBC producer? Katie Kramer it's Wednesday February Twelfth Twenty twenty squad. pod Begins Right now becky by in three two one one good morning everybody welcome to Squawk box here on. CNBC we're live from the Nasdaq market site in Times Square. I'm becky quick along with Joe. Kernan and Andrew Ross sorkin itself bancshares. They are soaring Japan overnight. who was the socks first opportunity to trade after the? US approval of sprints merger with T.. Mobile southbank for a major shareholder era of sprint. But don't expect the games to last long. The company reported results after the close in Tokyo. Third quarter profit was nearly wiped out by losses of one hundred Billion Dollar Vision Fund. If you've talked so much about that fun posting an operating loss of more than two billion dollars seal massive son defended banks performance saying the Vision Fund has gained about a three billion dollars on its investments since the beginning of this year so the losses for ending ending in December correct and. He's saying that it's been turnaround since then right also because of how they were again. The Vision Fund is marked right to whatever. That's the question question. However you know it was interesting because we interviewed Marcello the other day and night and we didn't get to talk about this the forty seven billion dollar valuation that we all talked about with we work our way working and we all talked about as as something that they were marking up themselves? Mini was one of these smoking on supply. kind of situations where you're just making up your numbers. They had never marked entire investment of forty seven. They marked sort of like the taxation there now five no no no no I know but that was not not the high water mark was really not saying we didn't lose forty ten billion dollars. No not even that that a majority of their steak was never. That was never that high so tell us the real numbers. It's it's a lot lower hobbies but it's just I think I think the headlines in how we've all described arrived I can understand is a little bit skewed. A friendly reminder that the Marcelo Andrew was referring to is Marcelo Caloric soft bank's thanks chief operating officer. He also happens to be the executive chairman of we work and the Executive Chairman of sprint. His extended conversation with our very own Andrew. Ross Sorkin is available on Mondays. podcast just check your feed for two podcasts. Before today's bed bath and beyond said fourth quarter sales were hit hit by increased promotions falling traffic. which we've got to take some ownership to that? We have not been to bed bath and on Wall Sorkin and falling traffic. They talk but they said there were some really good promotion. So now I'm thinking why didn't we Go check things out. Same store sales. In December January dropped five point four percent. That was more than expected. The CEO says the company's experiencing short term pain and efforts to stabilize the business that's true short-term invest in the business short-term payment is not when your customers don't show up long-term when the stock is down. I'm forty percent. It's let's see it's consolidating at lower levels is building a base it's Yes exactly. It's short term. Pain stabilized belies the inventory issues. They had maybe maybe temporary but when you are offering bigger distance traffic is still dropping. That's when you have a much bigger problem and that's the question. They saw a lot of stuff. There they do. Your husband's either wants to buy grill. Master thing that it it had you filled it with water and you told me where these at bed bath and beyond didn't say bed bath beyond barbecue but they did have That they're so that we go for you know. Some people go for the bar who we go for the vase. The heavy heavy delays Tequila. They feel safe in bed. Fires and you you you everybody needs Netti Pot. You guys need have over here no you got an anti pot I love it. I'll talk about Netti Pot all clean your disgusting Gross Nettie. Well so I actually very interesting Christian. You can do it in a dishwasher dishwasher if you want you do it every day. No but that's how you really should send your being very aggressive about it meantime the one. That's actually good actually happens to be as self cleaning. I've seen advertising okay then all the Nevada advertising I'm just saying it's spectacular ocular and he will change can we get supplemental income. You know. There's a whole influence. Our economy going on instagram. Legal updates updates to tell you about right now. First Nissan has filed a civil lawsuit in Japan. This against former Chairman Carlos Goan the automakers seeking an initial amount of ninety million alien dollars in that suit. The company says it's looking to recover monetary damages inflicted by gone as a result of quote years of misconduct and fraudulent activity. The Joe you've got the other. This is a bad story. Well maybe not bad but we get to talk about Elizabeth homes again. Did you read that book you You did. Yeah pretty interesting. It's very interesting so you still read. I do read the second half is way out in the first half is my personal. Obviously you don't what is right. There I will now. Federal judge has dismissed the charges against their Founder Elizabeth homes. The judge ruled. That patients were not deprived private of any money or property by using the company's blood testing services and there was no evidence showing that homes directed doctors to misrepresent theranos services to their patients. The judge did uphold wire fraud charges against home. She and former president sunny about Wani who they were. Data pleaded not guilty. That all reads very strange to me. Because I mean she's I think she had full knowledge of what was going going on and and part of that was a bad thing. What her lawyers are? Arguing is that it didn't harm anyone when they got false test results back with. That's that's BS. That's what I'm talking about for lawyers. You're seeing your joy with the drop in your actually sending it out to to conventional testing. Know that you're doing that and it seems pretty uh-huh straightforward but again. Some of their claims are that People Ninth Circuit Judge Andrew. Is this one of the ones out in on the West Coast in California are they. I think they are so. We're going to give like eighty years Roger Stone. But we're going to let her off the nine. Although the Justice Department I love that they wanted us guys on Andrew he is unshackled justice. That's true too. I mean what's going to happen. I mean this is like Gross Abuse Right. You must be scared going to get a pardon. No I'm talking about trump just being just unshackled now I mean bad before anyway. I didn't. They were cheese will be next next. UNSQUASHED pod pollster. Frank luntz on the New Hampshire vote and the future of the Democratic race. You could actually see a battle one month from now between the three BS. Good a judge Bernie and Bloomberg. We'll be right back at IBM problems. Inspire us to push the world forward. That's why so many people work with us on everything from city traffic to ocean. Plastic smart loves loves problems. Ibm Let's put smart to work visit. IBM DOT COM slash smart to learn more fan Andrew by and three into one queue Andrew. Good Morning Welcome squawk box right here on CNBC. I'm Andrew Ross Sorkin along with becky quick and Joe Kernan and we are just getting things started this morning Another step closer to the twenty twenty presidential election another interview with pollster and political. Strategist Franklin's last week on Squawk pod after the chaos ask was the Democratic caucuses in Iowa we heard from a nearly despondent. Frank luntz very bad very very depressed that our democratic system failed last night. After yesterday's New Hampshire primary. Lunch was a little more optimistic as you'll hear. So were the candidates who seemed to have shaken confusion of Iowa and two night in New Hampshire as everyone had counted us out even a week ago I it came back and we delivered. We dare not risk for more years of this presidency. We must get this right if we have the hope that comes with dreaming big. If we have the courage to fight hard we are going join to win the candidate. Getting the most attention on Wall Street this morning Senator Bernie Sanders Bernie Sanders. Winning the New Hampshire primary after the victory took a jab at Pete alluded jets and the nation's billionaires in this point in the campaign. We are taking on one billionaires and we're taking on candidates funded by billion F. But we aren't GonNa win because because we have the agenda that speaks to the needs of working people throughout this country healthcare. So you mean right not a privilege the wealthy and powerful will start paying their fair share of taxes exits former Goldman sexy. Lloyd Blankfein tweeting from Jeffrey Katzenberg's yacht. No I don't know that actually but tweeting after the speech if dams go on nominate sanders the Russians will have to reconsider who to work for two best screw up the US because you know working with with trump has screwed up the US so much sanders is just as polarizing as trump and he'll ruin our economy and doesn't care about our military. If I'm Russian I go with Sanders. There's this time round joining us now to discuss the result pollster and political strategist frank. Luntz I gotTa make one comments. Lloyd blankfein please. He's kill your twitter account. Delete your it is not a good look when a billionaire is fighting with either Elizabeth Warren or Bernie Sanders. The business community needs to understand that. This is a direct threat to your bottom line. This is a direct threat to your income and it. It doesn't help you at all. If you'RE GONNA make tweets like that that actually give sanders ammunition to run ads against you to attack you from the stage. Your your tweet will be seen by thousands of people sanders will be heard. That was going to be my first question to you because this is such a weird election season that we're in what's more likely likely a a Republican voting for a socialist or a Democrat voting for a billionaire. That's the challenge for my Bloomberg right now. No is gaining and gaining gaining every single week. He's going up a couple percent. By the time I get to Super Tuesday. He will be over that fifteen percent threshold to get him to earn him some of those delegates and you could actually see a battle one month from now between the three BS. Buddha Chech- each Bernie and Bloomberg. I think we're seeing that that's what's happened. We split down the middle. We're seeing that right now. I think I think that's exactly right. Those are the three well two things here number one is we got us. He does Mike Bloomberg. Enter the debates. I'm told that he will as recently as next week in Nevada. How well wow this he performed? I bring you. Your view is back to rick. Perry who is surging against Mitt Romney back in two thousand twelve gaining five points a week. He then participates in in the debate does very badly and his campaign goes to hell. In a matter of days. Bloomberg's the expectations for me will be incredibly incredibly high and remember. He does not really start to compete until March third so he could turn down these two debates. That are coming up next week and the week after I actually think he forgot the agency that he ended up running to the which was the ultimate irony remember he was gonNA close down three of them and I think he forgot the forgotten energy and then he ran and then he ran energy Bernie. I mean Biden. Got On what to tell you about when you said three beads. You didn't say four BS. I noticed sat. But what Bernie. One sixty percent last time. He only twenty seven percent this time. Didn't he new Hampshire. That's not I mean that's headed the wrong direction into but last time it was basically a one on one contest so it was very easy to get over fifty percent this time. You have a lot of significant candidates imitates now you mentioned buying them and take that opening last night. Joe Biden should've fired his entire debate. Prep people fired than they should be arrested. They should never be allowed to work in campaigns again. Joe Biden is performed worse in the presidential debates than any front runner. In modern times. He has not had a single effective effective debate performance. What whatever his people are teaching him is failing? Now on the flip side we cannot ignore amy KLOBUCHAR senator from Minnesota. She had an outstanding debate performance on Friday. It clearly added to her numbers onto say fifteen percent of the Democratic primary caucus vote is is changing their minds in the last forty eight hours. These debates absolutely matter they took her from a distant fourth even fifth-place in some polls to a very strong third and she is going to be able to compete but the one candidate that I'm still watching because it is unclear where he goes he's viable and that's Mayor Pete. He's raising more money than the other candidates except for Bernie. He's got a monitor presentation for a progressive message. And a number of those states on Super Tuesday are good states for him. They have the type of democratic voter. Who will like him? He's the only young candidate in this race. Right now. Small towns gets nomination nomination near how come okay. So That's enough not to be. VP candidate. Maybe but no we all focused on Elizabeth Warren when she was leading and then you took a good look at it. And it's like Whoa and then you will focus on Biden he's leading and then all of a sudden you take good look look at him and it's the same thing happens probably to Amy Klobuchar. She's not going to be the nominee. Either I don't think so I don't know it's probably Bloomberg but then you you know without a billionaire right billion state here. I'll say it here on Bloomberg is going to get a significant number of delegates on Super Tuesday. Stay he's got the money he's got a message. He's got a record but there are too many Democrats in our polling and focus groups too many of them that will not vote for a billionaire. Her and with Bernie Sanders and Elizabeth Warren explicitly attacking Bloomberg can get up to thirty five even forty percent of the delegates. I don't see a path for him to get to the majority fifty thirty five to forty percent of the delegates. What does that mean to anybody else? I mean again. You're talking about a contested convention convention. At which point. Yes the rules. Are you know who knows and then watch what happens because the super delegates cannot vote on the first ballot but they can on the second. Yeah and those super delegates wired against Bernie Sanders. You'll see maybe Bloomberg that's if you look through it that is it's got to be a Bloomberg's burks team is thinking his pathogens but you'll have a democratic party that is more torn apart than any year since nineteen sixty eight it will be a disaster for them and I want to leave you with one message the most important question on any poll right now. Are you better off today than you were four years ago. According to Gallup sixty one percent say yes US only thirty one three two percents. They know. These are the best numbers for any candidates seeking reelection in six election cycles. I think five. There's they need A. They need a composite candidate right now. I've been saying this for a while. They need the electability and experience of Biden Haydn. The youthful and articulate presentations of Pete Buddha judge at the I mean that person there isn't they won by Bloomberg confidence and pragmatism. Put it all together. I could make a drawing and if you can find two of them who check off. Most I don't know and who's WHO's who's WHO's the end result frank. Give me. I want to know I went on on a predicted. It's Bernie Sanders that he's going to get the nomination right now. He's well ahead of anyone else in the market. And I think he's got the lead and that's why you have a vice presidential candidate that usually balances these people. That's what you have to look at Sanders trying to find a woman and by the way this is really important we assumed that Elizabeth Warren's vote would transfer back and forth with between Bernie Sanders Marsh. We happened. Is that her vote. Transfers back and forth with any club Shar that there is a significant percentage of the female female vote in the Democratic Party. That wants a woman nominated and we assume that was all about ideology no for about fifty percent of the female vote. It's it's about gender. And that's another reason why Amy Klobuchar did so well last night so sanders pick a VP. That would allow him to win the presidency. Yes I think it is way too close to call most surveys have the Democrats winning the popular vote but Donald Trump doing very well among those swing states that he needed. I think we could be setting ourselves up for exactly what happened. Two Thousand Sixteen. The Democrats win the Popular Vote Note. Donald Trump's wins the electoral college. Really going to happen in November isn't it. We'll know all these things. Then what will we talk about. Aren't you glad you grew up to be who you are months that this because of this election I mean sue is going to be unbelievable. This is GonNa be the best election in my lifetime. I I owe someone for that. Thanks Frank. We'll we'll see you coming up. We'll the corona viruses impact lesson with warmer spring weather. We'll check in with the biodefense doctor on the outbreak. We cannot contain it. A with wishful thinking and one couple quarantined on a cruise ship in Japan along with thousands thousands of fellow passengers. Think of it as stuck in your bathroom for two weeks here. We are quarantined healthy sixty bowl in the same location. I think that why did squawk pod. We'll be right back. This is squawk pod from CNBC. Eighty global cases of the corona virus have top forty five thousand and the death toll from the outbreak is now at more than eleven hundred but earlier today China reported its lowest number of new cases of corona virus since late January with a number of new confirmed cases about half what it was a week ago. So are things getting better or could undetected cases mean the virus is still spreading the Senate Committee on Homeland. Security and governmental affairs is holding around table people today Wednesday to discuss protecting the US from global pandemics. One of the experts. Speaking to that panel is Dr Luciana Borio former director of medical biodefense is prepared this at the National Security Council. Here's Becky quick with doctor. Borhan what can you tell us about what we know right now in terms of the potential for this to be actually become a pandemic. Yeah so even though. There's a lot that we still do not understand about this virus The features are very concerning. We continue to see an expansion. The number of cases a both in China and globally and there are several countries that are yet to report cases And we we believe that they. There's no reason to believe they don't have cases already given. The transportation hubs watching the number of cases pickup in Singapore where it happens to be very warm weather weather in the eighties. Right now. how much do we kind of fall back on this idea that we hope things die out when it gets warmer when it gets to be some spring spring and summertime. That's right so we cannot contain an epidemic with wishful thinking and Even though it's true that some viruses wax and wane with a temperature temperature fluctuations. There's no reason to believe that. This virus is going to abate in the warmer months. Given what we're seeing in Singapore so we have to prepare for a more cases in the United States and elsewhere more than thirty five hundred passengers and crew on the diamond princess. Cruise ship have been quarantined. Nineteen off the coast of Japan for a week due to the spread of Corona virus on squawk box. Today we heard from two of them Phil and Gay Quarter are seventy seven and seventy five years. The old she's a novelist and he's a filmmaker. Their vacation has certainly changed course. Passengers on the carnival ship or isolated to their rooms with meals delivered advert. And there's no quick end in sight Phil and gay joined us by Skype from their stateroom on board the ship. Here's Becky quick again. I've been I'm trying to imagine what you all have been living through the last week. Can you describe it for us what what's happening there. Well first of all another thirty nine cases today. Hey I believe one of the remainder the forty s cases one of the Japanese quarantine officers who was on the ship early in the I days of the outbreak. So we're over two hundred cases now and those numbers that we hear from the captain over the loudspeaker terrifying especially the exponential curve going up just like in China do you feel. You've you've been confined to your room through most of this time. Have you been able to leave your rooms at all. No not really I mean they. They are trying to arrange for short periods of time live for people to go up on deck. They keep people split apart We have not actually been taking advantage of that because we have to have a nice balcony. We can go out and get some fresh air and especially we want to see the people in the inside cabins who are really stuck a you know inside get get a chance to get out and get some fresh air so I think that's a lot Gordon and we're trying to do what we can to let them have that time. Also they're letting the the whole strategy of the the Japanese government has pivoted their leading. Some people who they claim are the most elderly invulnerable off the ship. They're taking the big coach buses and they're putting people on them but they do it behind plastic wrap and they could fire engine. So the press can't see but that's just proof that this whole thing has failed and they're usually triage to prevent deaths of the most elderly. That's that's stunning. I know that from your balcony. You all can see the the medical evacuations when you hear things like this. The cases have jumped beyond two hundred with I think originally there were thirty. Six hundred thirty seven hundred people on board. And you feel like you're trapped in a place where you're just waiting to get infected with this. You know the whole thing is here. We are quarantined. Healthy people in sick people in the same location I think that whole idea that that's how you're supposed to do. Quarantine Martin is crazy. I understand how they want. The Japanese want to protect you know they're islands But for us on board it's not very helpful and we believe that everybody needs to come off. We all need to be tested. We have not detested beyond under temperature. On the first day we have not been swapped. They need to find out. Just like the Hong Kong cruise ship if they're healthy get them off and They they were able to enter court. He'd after four or five days we've been here almost eight days. You know we take our temperature a couple of times times a day voluntarily We're supposed to voluntarily call if our temperature gets higher than the standard they've sat But that's voluntary. There's nobody checking on anybody and And then we see the numbers going up so frankly it's terrifying. Have they given you any guidance as to when you might be able to get off the ship. If if you're watching other people that are now being evacuated as if yesterday better healthy they say the nineteenth is you know we're healthy on the date but uh-huh yes a fourteen day quarantine but I don't believe you know that's that's not they say we're all safest here quarantining meaning in place. We'll if that's true. Why are they off? Loaded bus loads of people that they don't want to get sick so we have a couple of hundred new cases since since the quarantine started. This is not making a lot of sense. I've seen from the cruise ship lines that you'll all be refunded for everything you've spent and you'll be offered another crews just when you ever go on another cruise we kinda kick that around It'll be a while. Oh now the offer financial offer from princesses generous and pretty much fair but then we have a lot of people who are losing income. Come though I think that can't be replaced or you know they have children. That are being cared for elsewhere. There's all kinds of expenses for people besides just getting at home. But that's not the point. We're healthy. We wanted to home now safely. We'll go home in quarantine conditions. We haven't accepted hospital title in Florida. That will take us under quarantine conditions game leading certain people off. We WanNa go to. Everybody should go I Absolutely thank you for your time today. We wish you the best of luck and we hope you'll keep us updated on what happens and when you're allowed to leave. Thank you so much for your help. We're not going anywhere so we'll be here to help. Help get our message out there. Thank you very much. We appreciate your time today. I'm please let us know what's happening. Thank you remember ten days ago. Scott Gottlieb said vaccine's one thing takes well but a a point of contact tests and that shouldn't be that hard to really should you. There should be a way but since you have the entire genome of this virus plants plants and if you could immediately testimony and you know they have a word takes two or three days without using that to find out who has it and who doesn't and then it look part of it must be Japan doesn't want this fourteen day quarantine of WHO's where you want to do. You're listening to go. That's the podcast. PODCAST for today unswayed pot. Of course we bring you the biggest names in business and politics and hopefully keep you informed on the furniture issues of the day that you could go all the away or don't you're either really well or you just talk and woke. squawk box is hosted by Joe. Kernan becky quick and Andrew. Ross sorkin tune in weekday mornings on. CNBC at six Johny store to get the smartest aches and analysis from our TV. Show right into your ears. Subscribe to Squawk pod available for free wherever you getting podcasts. If you like what you hear leave us a rating overview on your platform of choice that other listeners find us. We'll be back here tomorrow. Career at IBM problems inspire us to push the world forward. That's why so many people work with us on everything from city. Traffic to ocean. Plastic smart loves problems IBM. Let's put smart to work visit I._B._M.. Dot Com slash smart to learn more.

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Silicon Valley Whisperer Kara Swisher & Whos Hiring

Squawk Pod

36:58 min | 1 year ago

Silicon Valley Whisperer Kara Swisher & Whos Hiring

"What kind of Tech Company does the world need today one that applies smart technologies is partnering with Clients to Develop Smart scalable technologies that help businesses bringing show musically this squad this from the biggest names in business and politics are coming to enact today jobs wisher journalist and podcast or on Apple TV plus his big launch and that looks so expensive community we've got those stories and more from culture at we work led commuting time I'm CNBC producer? Katie Kramer it's jobs Friday November I twenty live from the Nasdaq market site in Times Square I'm becky quick along with Andrew Ross Sorkin joe is out investment partners his take on all of these things we're going to get through the morning as well as the latest unemployment number jobs Friday is always on a Friday and the it's have key content CNBC's lawnmower was live at the Labor Department in Washington really beating expectations the unemployment rate ticked up slightly just three point six percent race over the year the worker strike at General Motors had an impact on last month's this the employment in motor vehicles in parts with down by forty two thousand if the strike last week so it won't affect next month's report but something to keep in mind today the policeman surprised and optimistic give it to the potentially each higher sustainable rate Kate Moore who is asset manager blackrock it doesn't turn out to be the case I mean I think this is an unequivocally strong report pretty rosy ah look at where we are the thirty thousand foot yes we're stronger than we thought we were yesterday the numbers another metric watch today manufacturing hires the Institute for Supply Stories and other workplaces that came out after broadcast today slightly below forecasts just if the market reacted negatively to a weaker than expected I am and the last element of rate came in at tick higher than September's clocking in at three point six percent overall monthly workforce report and this time the focus is on a sector of big important for the upcoming holiday transportation sir guess is surprising it is surprising to me yeah I mean I think walks and you would have to assume the transportation is going through this massive change of probably people it is much more if you look at the top people being hired right now transportation the biggest growth watchi- rise above the rest story the places that are doing the hiring are Chicago Dallas is on that list is that because you being there that's exactly right they're there is big hiring they'll seasonal jobs sometimes turn into a fulltime jobs just to residences and believe what drive by his right to our door right away is something that we now all we've grown to be like yeah of course let's see what we work because this is a fascinating story ousted we work Adam manning against her and other women for becoming pregnant and taking maternity leave saying new mail that was hired the same position when she was the job interview and referred to her maternity leave as vacation she said it has zero tolerance policy for discrimination intends to vigorously defend itself this read the suit where you say to yourself this doesn't make sense you think to yourself are I don't know if anybody knows the rules I don't know if anybody understands what's right and what's Eh the behavior is repulsive freight and the impact on the mark there has been an impact into mega cap technology large-cap technology finding that's coming out of the IPO market is accenture hoping the venture capital that's a good thing ultimately but it's gotTa wash out a lot of the garbage that kind of got put in where people apor work to change his residency from New York to Florida court documents showing the president now people of New York and always will but unfortunately despite the fact that I pay millions of dollars in a statement good riddance it's not like Mr Trump paid taxes here anyway he's all the full history of his taxes for in part because we won't tell us about all trousdale but by the way he did that so with like just call a spade the Florida swing state you need Florida and using by becoming a resident somehow get it you're never going to win New York go with it but I thought the same thing he's the victim of the tax a lot of guests lot. I'm just hoping that that if this is really true does this choctaw shopping commuting traffic there's you yeah well maybe they knew this was coming the latest salvo a critical letter from Cooperman to Warren and the senator tweeting in her to Senator Warren yesterday saying her quotes Soak the rich and vilification marketer up twenty five percent all the billionaires that I know are self made and give back what in a bit more cooperman writing now in this letter that as the son of a plumber from the South Bronx didn't earn their riches and now don't pull their weight socially indicates that you're either grossly passive he'd be willing to pay more though not through wealth tax more so through eliminating the step right Leon is wrong I'm fighting for big changes like universal childcare investing public schools so interesting to me about this is Leeann sends a letter and who leaks the letter is going after the wrong guy I understand her views on the world and what she's trying to do but I was also GonNa say his views on progressive taxes are actually pretty mean a lot of those things are some of the low hanging fruit that we've talked about on this show and given his who's going to do nothing but use it for pollute email she must jump Lee offered he invited her to engage in a conversation she completely sit down this is what I was going to say is what happens talking about her base I for free no no this was the point he went to Hunter College for free this is equivalent dollars back in two thousand thirteen if you don't think he's paying his fair share you know go find somebody else I the question is to what effect clearly there are people like even to the email I was getting last which was I am willing to pay more I believe in fact we do have a progressive system but he believes he's paying about fifty percent right now I don't think personally curric- Howard your character character worthy and what's just over the top it's all about the content and the question is if you're gonNA technologies at scale with purpose expertise not just for some but for businesses work better together let's expect more from technology let's squawk pack up and enter Hugh Good morning welcome back to squawk box right contributor Cara Swisher is here in the house she's executive editor Co founder of course of recode apple is rolling out its streaming service costumer who bought a new apple product and it's priced at five dollars a month for everyone else correa Swisher in Ed Lee of the New York Times carrots great to see you good to see you thanks for ah this is more akin to kind of Amazon it's including them prime we'll see if it works it seems like a lot of us that it's very traditional television I think some services and that includes the music service all the other things I feel like it's a different measuring stick success in this one doesn't necessarily mean that halo effect of everything that they're trying to do I have a subscription question actually for both of you can remember they got all the big news organization right to join with exceptional once you get this lands and if that's an example of subscription to any I mean maybe that should not us service so nearly off the I think that was sort of an interesting number relative somers until they get to what they feel are good milestones release or they may never release those numbers if they don't hit actually very good I have kids and they've moved apple music I don't know why they did through with consumers now the question can take that from gave up spotify or they added the music versus television or news is that the music stuff I mean it's commodity right you're be getting different shows you're supposed to be getting things are exclusive either to apple TV plus or to Netflix doesn't shows a at the start it will build up over time but they're good those shows Golfer Spencer yeah and I think it's interesting a lot of the ones that are getting better reviews are things acce the Dow there's tons of these things and they bought some shows friends I think they have the better shows on apple will I move is it an either or or can there be multiple from those gacy content don't they they have a lot of good content but HBO has great we love Hbo's content like Hbo is going to be the most Max is going to be the most expensive it'll cost the same if you have cable right it's let's what you cost you that's to me that's sort of I in that because they're trying to bundle it into the things right serve you that'll be a big part of it the fundamental relationships they're gonNA start putting them into the the monthly bills when you get them on and then there's a separate brand issue which is that Hbo I think always had sort in a good way does it then take away on the other end I mean that's sort of a to someone or should it sell to someone to get better distribution and link it with distribution I think that's mark that they've said for the US December sixteen ninety million right so they're already hitting that mark they're they can sort of you know dominate with the so can we expect to see Netflix at a lower price point it needs to do more self-funding to all the content that they're spending eight to ten billion policy for political ads on facebook going to change his mind you think you will change percents three two one up Andrew Welcome back to squawk between the NSA and big tech companies facebook's internal purpose whether enrichment and damn the consequences this is actually precisely no I think he's sort of religious about what had happened to information all about people finding each other and a very different one and when it changed into this mass surveillance was he a whistle blower given currency land. I don't know if you spoke to about encryption sir absolutely no no no he wants he just he thinks and it moved to facebook and Google and the whole Internet and so he feels that uh-huh worse and worse than me became a full surveillance state here where do you come down on that question you raised I'm sure you've

Senator Warren smart technologies CNBC Apple facebook Katie Kramer Andrew Ross Sorkin producer Cooperman senator becky Google six percent thirty thousand foot twenty five percent fifty percent five dollars
Kara Swisher on Elon Musk: Hes not bluffing

Squawk Pod

40:18 min | 1 year ago

Kara Swisher on Elon Musk: Hes not bluffing

"Every day at Invesco we bring together ideas with technology data with inspiration and investors with solutions. Let's invest in greater possibilities together. Find out more at INVESCO DOT COM slash together invesco Distributors Inc. This is squawk pod. Cnbc producer Katie Kramer to Dan. Our podcast reopening the economy. Some say it's too fast and others like Elon. Musk say it's not fast. Enough Tech journalist and fellow podcasters Swisher on Moss and his plans. For Tesla you can't see Tim Cook doing this or anybody else doing this. Texas Nevada would probably welcome them so I don't know why wouldn't accept the fence. Senator Rob Portman the Ohio Republican response to house. Democrats latest Corona Virus Relief Proposal. This is three trillion dollars. This is more than the last four packages combined and it does nothing as I see it. Tale economy moving and the founder of direct to consumer shoe brand. 'em Jimmy like those instagram. Ads considers the path forward for sure. Demand has changed. We're actually still selling product but it's a very different type of product. We're focusing on comfort product. It's Wednesday may thirteenth. Twenty twenty squad. Pod Begins Right now. Good morning everybody. Welcome to Squawk box here on CNBC. I'm becky quick along with Joe. Cronin Andrew Ross sorkin first up on today's podcast reopening America during Tuesday's hearing of the Senate Committee on Health Education Labor and pensions. We heard from the White House is to infectious disease expert and in many ways the face of the American response to covert nineteen. Dr Anthony Algae Dr Fao isolating in his home. Office like us and in fact many of the other hearing attendees testified virtually and he issued a warning to Congress about reopening state economies too soon if that occurs. There is a real risk that you will trigger. An outbreak might not be able to control which in fact have reduc simply will set you back not only leading to some suffering and death could be avoided but could even set you back on the road to try to get economic recovery. Was it would almost turn the clock back. It's a delicate balance. And this week we're watching one st on the west coast closely as it attempts to gradually revived businesses. Here's Joe Current. California Governor Gavin Newsom announced plans for the next stage including allowing some offices malls and outdoor museums to resume operations but there will be modifications offices. That can't telework would be allowed to reopen with safety upgrades and shopping malls and strip malls. It'd be allowed to offer curbside. Pickup car washes pet grooming and dog. Walking would also be allowed to resume. The governor didn't provide a date for the changes. Meantime the California State University System which runs twenty. Three campuses is planning to hold. Its fall semester. Online there will be some exceptions for in person activity obviously like research labs the announcement though dims the prospects for college football in the fall the president the NC Double A. Has said he doesn't see a scenario where athletes can take place. Athletics can take place if students can't return to campus and lot swirling yesterday with the The the hearings the remote hearings and very somber sort of tone others have pointed out that FAO cheese job is to talk about the public health and to talk about risk and to talk about mortality and morbidity and everything else. It's not necessarily to mix that all in with with the steps. He needed to reopen the economy's that he said that self yesterday in fact when he was having during one of the answers he said look is to tell you about the health implications. There are other people who can talk to you about the economic implications so but rand Paul and with rampal to. There's the click bait websites. I can't help myself drudge. The other ones and they're getting worse with what the headline is and then I read. It's like that's that's not what they're saying you you're lying you're so I don't know what to believe. And what not to but it. Productivity IS INCREASING WITH PEOPLE. That are doing their jobs from home. Did you read that one? Productivity is your. You read that one is. It's true that people are more productive. They're not commuting not commuting. Do you time saves people. I still think when you go into the work environment so all this time ended up. Chat Chitchat Chacha. So no one's ever going back to work. Twitter people are never going back to work. People that work at twitter. I'm worried about you to. They're not going back. It'd be like this forever on this from here. You're okay from there. Well Hell whooped up Florida or something. Sorkin months ago there. I know that word right. Lotta reasons lots of reasons but you know what I'm saying. Income tax down their tax. Right right right right I I wanNA come back again. Come back to the NASDAQ. What's that Andrew? See you in person. You come back together. I'm going to come back. You'll be you really believe people more productive. I don't believe that I'm by do that. Part I'd I. League for for a lot of white guy describes white collar work. I do. I think that you can get a lot more done. And I think it's true. Becky exception. How how often by the way even during the Commercial Breaks Chitchat? We a lot of Chitchat. Goes on but I will tell you. The one exception to that is when you have kids at home. It's very difficult to work day. Sign now when they're asleep but if it gets a lot tougher to work later in the day and that's a huge issue all these office workers all so they'd all wouldn't have been possible before but we're so wired into where we work Maybe it's possible. It's a whole new world. Can I tell you andrew and I got an email yesterday with the concerning the we work interview and I won't say hey let's from because yeah. I don't know if we're allowed to say it but someone brought up a very interesting point and it's in terms of trying to get people to come back to work it. The real question is how do they get there? If you can't use public transportation how do you possibly get all of those people in? There's not enough parking space especially in place like New York City. Okay I but I wonder you I think. New York City may be a particularly major cities but New York Chicago. Maybe washing anyplace that has people genuinely rely on. Public Transport that to me is is going to be imagined. The gaining factor for for a lot of the the opening of the offices and things like that no. Yeah no I agree. Yeah what might be for the for large parts of the country where where where. That's not the case it'd be a different story but we're soft we are so we're we're ready we you know. We couldn't believe everything would be closed down now. It can't believe that will ever be back to normal people in World War Two. I mean they they were in that mode for years and years and years men were gone. People had to do different things. There were rationing. I mean for four years four five years they had to to do. It was Never GonNa end and you must have been in a position back then where you thought you know I've been in. We've been at war for my entire life is is what would have been and I feel like we're getting in that mindset now that we never think we're gonNA come out of that out of this and don't think we'll look back we will ever remember. Twenty twenty. We'll we'll come out of it but that's the thing you will remember it because this is life altering and it's it's lasting for a while. I've been well the kids go through. Every it's without Netflix okay. I'm GONNA leave with a positive a- Amazon. Mosque is known for breaking the rules. He defied stayed home. Orders by opening tests Fremont factory and has become a leader of sorts of the movement to reopen overnight. Amita County Health Department tweeted that it received eight prevention and control plan from Tesla and held some productive discussions with the company and its representatives. It said that if Tesla includes suggestions and conditions remained stable or improve. It has agreed. That Tesla's factory could operate with its approval as soon as next week of course it's already operating at least that's what Elon. Musk is said. Now by Cara Swisher Co host of the pivot podcast and of course a CNBC contributor opinion columns for the New York Times and so much more and no sunglasses this morning. Carrots great to see you help us understand along. I don't know what else to say. He's operating it right now. The officials are sort of rushing to keep up with him He sort of calling their dare. What are they gonNA do when I think it's an you know very few people would do this but I think you can't see it? Tim Cook doing this or anybody else doing this. But it's very much in keeping with his personality The companies under pressure to to make cars. And he's in the San Francisco Bay. Which is the harder hit than other areas that were manufacturing is being allowed to proceed in California? And so you're gonNA see struggles like this everywhere I just think he's he's just. It's very typical him to do this to to push them as far as they can. I suspect he's been talking behind the scenes but they were moving at the pace that he wanted them to be moving at and he's been around a public with that do you think it's a bluff that he would leave. California completely take the company and its factories effectively Texas or move everything to the other facilities Nevada probabilities. There and he's working there. I don't think it's absolutely I think. Know it's it's expensive. Obviously but people have given him an enormously way and look at the price of the stock you know since corona rights gone up quite a bit and I think people would do it. I do I think of anybody I think a lot of people might not and sometimes he does block and sometimes he. Does you know sorta pontificate on twitter. But I think he has. He's he's done manufacturing facilities. Lots of places I think Texas OUGHTA welcoming you don't so I don't know why wouldn't was most Silicon Valley. Ceo's and tech CEOS talk about their relationship with their employees aloft. The relationship with employees is very very important and and the reason I mentioned that is if you're willing to effectively give up ten thousand people in California to go elsewhere also. I should also mention at least online. Their employees that appear to have leaked memos from the company suggesting that they've been bullied or threatened to either come to work or to lose unemployment insurance in the like that was happening at other big tech companies. There would be an uproar. Yes yeah I had a long history of this. And there's a lot of reporting on it and he pushed back really hard against it and and you know it's a really interesting question. He's he remember the last time this happened when they were building A. I think it was the three. That was the same thing. He was sleeping on the factory floor. They felt safety standards. Weren't in place. There was lots of leaks in just kept going and this is kind of his. He feels like he's on a mission whenever you talk to amid it feels like he's on a mission and he has to have this happen if you notice he was saying that other automakers got a break but only tesla was singled out He feels if this is critical. I know it sounds like that is not so I think he really does like a man on a mission so he is. Impatience is very clear in these tweets. I you know. Some of them are unfortunate some of the tweets and I don't know if he understands kind of the IMF the overall impact of what he might be setting off But I he's just going to go forward and it'll be able to the officials to respond Love to graduate. But it's not the these techniques are not are not the not just similar. They're not dissimilar techniques. Let me ask you a somewhat political question. It relates to trump. He now has the backing of trump in a very public way. And he's sort of on the trump side. If you will of the liberate America concepts but on the other end for many many years he would least privately and in some cases publicly. Derived trump and sell Tesla's enlarge part on the idea of of trying to end climate. Change in all of these things. So how do you? How do you square that up? He's a complex person to tell you. I don't think he's necessarily a trump supporter. That's not I've never heard that night. Gore's you know. He has been critical and he was on. That business council was he wanted to try to get as an impact on climate change. And so it's a complex situation. It doesn't mean that he's not. He's not using twitter to the same effect sort of rally his troops and he does have a lot of fans You know it's his technique of doing this. This is a you know high drama I dodge in the rents than he manages to. Somehow settle things Sometimes it turns out well. Sometimes it doesn't but this is a guy like he went up against the SEC. From what I can tell they didn't really you know they warned him and they said he can't do it again and then he did it again and so I you know. I don't know if he feels there's a lot of consequences for doing what he's doing and his aim is to build these. Tesla's An and you know he had a lot of criticism from the Alameda. County officials. What are they going to do? I mean I think the mistake is is getting into this kind of fight with him publicly. But I guess it wasn't working out privately scenes and then you have Gavin newsom in the middle of it which is really interesting. You know. Because he's been supportive of loss really important to keep manufacturing in California That eventually just like happened Amazon. You either saying we want this or we're GONNA put up with this or we're not gonNA pay for this and then you can go elsewhere so I you know this is it struggled for all local officials including protecting the safety of workers which I think starting-point Tara Switzer good to see you got to have you back to talk about the other big valley story which is people that are going to work from home forever. Given Jack Doors Is Planet Twitter Day Jack and live in Africa. Now silly he can live wherever he wants now. Great all right thanks Karen. We'll see very soon coming up. Ohio Republican Senator Rob Portman on the House. Democrats latest relief proposal for the American economy and the cautious reopening for business in the Buckeye state. It makes it very difficult to get people back to work if they're making more on unemployment than they can make it work. Why not provide a bonus to people to say if you go back to work you can take some of this unemployment insurance with you. Squat pod be right back if you want to learn more about one of the fastest growing trends in investing we've got the podcast for you. It's ETF edge. I'm Bob was on each join me as I'm joined by top market participants. Help you bill. Your best portfolio at the end of each episode stick around for our markets one O two segments. Where we round out the conversation to help you better understand. Dt FS listen now and subscribe for exclusive content. Not Bird on television. You want even more tweet US AT CNBC. This is Kuantan from CNBC. With Joe Kernan Becky Quick Andrew. Ross Sorkin here's Andrew House. Democrats unveiling a three trillion dollar relief. Bill N- effort to try to deal with ongoing economic and health effects of the pandemic aiming. Javed's is in Washington this morning with the latest on. What's inside that Bill? And whether it's going to go anywhere get good morning Andrew. Those are both very good questions this morning. Three trillion dollars is the size of the bill. One thousand eight hundred and fifteen pages overall from Nancy Pelosi and House Democrats and the size of the bill is really the controversial item here with Republicans over in the Senate They're looking at this saying it's simply too big too soon so we'll see where it goes. What's in it? Well start with the big ticket item. That's a trillion dollars in aid to beleaguered states. Now remember the state's budgets have been so hard hit by this. You've heard Andrew Cuomo in New York complaining about that other states as well. The states can't simply print money. The way the FEDS CAN. They need to fill the hole in their budget. Somehow this would go a long way to do that. Also in there as a second round of direct payments to individuals two hundred billion dollars in hazard pay for essential workers. Seventy five billion dollars for testing and contact tracing related to the virus in one hundred and seventy five billion dollars in housing assistance. Nancy Pelosi was on mad money with Jim Cramer last night. She said this is the opening bid. Here take a listen. This is a negotiation. We think this is what is necessary to meet the needs of the American people state and local testing testing testing and putting money in the pockets of the American people. All of these provisions have appropriate provenance in our former four bills. That passed in a bipartisan. Way All of them are supported by Democrats and Republicans across the country Republican leaders in the Senate and at the White House and said they want to see a pause here in any additional aid digest all of the trillions of dollars that have already been spent on aid to the country to figure out what's working and what's not Working Nancy. Pelosi says she doesn't WANNA pause. She wants to push ahead. She's going to hold this vote on Friday in the House of Representatives. We'll see how the White House reacts but I can tell. You I've talked to people Andrew over at the White House who say that ultimately this economic crisis is getting worse day by day. There's a real sense of urgency to do something and we'll see whether they agree that any of the things on Nancy Pelosi's list are the things they think ought to be done. Andrew Join US. Take on this latest proposal and what it's going to take to get the country back on. Its seat financially. Ohio Senator Rob Portman great to have you on the show again senator. The show we WANNA keep doing things. We WanNA keep trying to help. People are The Democrats just going about it in the wrong way or there's some merit that was the first offer right Doubt arrival but are there some things in there we need to do and the Republicans would be willing to to work with the Democrats on well? Of course there are but Joe. This is three trillion dollars. This is more than the last four packages combined and it does nothing as I see it to help get the economy moving and that ought to be part of at least our proposal next time is to say. Let's not just have another rescue package. Which is going to be needed in certain sectors. We get that. But let's do some things to actually move this economy forward. And that's you know traditionally tax relief traditionally things like spending on infrastructure. Smart spending where you can actually create jobs and get the economy moving instead. This really goes in the other direction. So it's not only three dollars that's more than we've already spent four packages at a time when our debt and deficits are at record levels? But it's also not helping in terms of the money it is a wishlist There are things like salt relief which For those living in New York you might like that but Fifty percent of that benefit on salt release. She has no. This is for state and local taxes is going to go to the top one percent so this is something that blue states senators have been pushing some sure. They'll be happy to see that. But not in the context of this crisis. Let's focus on. Yes some things to close the gaps from what we've already done But then let's move on to. How do we actually get this economy moving again? And I don't see that in the bill. trade representative to and IT'S A. It's a political hot button whether we say that you know whether you discuss the origin of the virus or but if you at least admit that maybe initially China wasn't forthcoming enough with all the details about what they had. And now we're in this. Is this position. I mean people get a lot more strident about what they say. China did but either way I do you think we need to to let this affect recent trade negotiations future trade negotiations. Should we go through with those? I and and maybe consider this later after the the globe starts recovering from coveted award or does it. We never do it. What the trading groceries we have ongoing with China right now are in our interests and they're actually in the global economy's interest because begins to level the playing field between the United States and China and face of a huge trade deficit. So one we ought to be sure that China continues to implement phase one which includes by the way buying more of our products including our agricultural products which need that market right now. Badly because prices are low But second we have face to that we're supposed to be negotiating which is also fundamental because it gets at the issue of Chinese subsidies including their state-owned enterprises which don't just image the US economy that damage economies around the world are forced to compete on an unlevel playing field. So the trade negotiations that are going on right now. Completion of phase one and then moving on to phase two is China has promised and by the way to make their commitments on on these things. Though should proceed. Of course the question is. Where do we go from here? And there's so many issues as you know. I spent a lot of time looking at this issue of China taking our technology. Our Secrets Military Economic C- Truce Back to China through these so-called talent programs. We had unfortunately another example of that this week. We're in Arkansas. Professor has now been arrested. allegedly again engaging in these Chinese programs without divulging it fraudulently taking money from the Chinese. This is taxpayer money. That's you going out to do good research and then China's taking that research they've done it for twenty years. It's fueled their economy and the rise of their military. So we need to cut off things like that and then we need to look at the supply chain issues because we need to bring more onshore more to us to our shores of essential products whether it's pharmaceuticals or in the case of the protective gear. That we're talking about the gowns the mask and so on we need to be able to rely on it and therefore it needs to come back to the United States. How do you think? Ohio and Governor de- wine are progressing in terms of reopening the state. I've got you know I've got a lot of relatives still back there. Centers you know and I don't want to winds got his popularity's up a lot. Some of my relatives are are like they think it's too That it's taking too long. Maybe and that and that the the time that that he's talking about is then pushed back too far I it's a microcosm of what we see in in the political debate that we're having right now. How do you think the Dewine's doing in terms of opening trying to get the economy back open for for people. That aren't working yeah. I think he's doing a good job. Because we are reopening So on Friday. We re re opening restaurants for outdoor dining as an example We've got factories up going offices or back You know at work an instruction is is going again so I think it's smart because we're doing is we're reopening in Ohio as bringing on more testing as we have more protective here. You know as we're beginning to see rendez severe and hopefully more antiviral medications. Those are the three big things now. We need to focus on. So I think the reopening smart. I think it's being done in a proper phasing and I think you're GonNa see in Ohio that because we're doing it right. We're not gonNA see this resurgence. Are we going to have hot? Probably and Joe. That's why the testing is so important. Because the testing contact tracing and all that is what you throw it a hot spot and stop the spread of the virus. So I think we're doing it about right Ohio. Look nobody knows. What's what's right this we heard yesterday in the testimony. The experts all over place but the reality is we. GotTa get back to work. We gotta get back to a normal life here and do it safely and I think those two things can be done together and we're doing it in Ohio under a senator had got a couple of questions for you. One is as one part of that bill which I know you have questions about but as one part of that bill. There is the intention to extend unemployment benefits through twenty 2021 Given the remarkable efforts that the Fed is pursuing to help businesses and also so much of the previous stimulus effort. My question to you is. Would you be an advocate for unemployment insurance to help people through the through two thousand twenty one at the route? That's an example in this legislation of something. That's GONNA hurt not help economy. That's how I feel about it The additional six hundred dollars federal benefit is on top of an average of about three hundred sixty dollars at the states. Have meaning that in our states right. Now if you're making say fifty thousand bucks a year it is more advantageous to be on unemployment insurance and it is to go back to work. So what is it necessary to do something to pump up You I absolutely but the level that we took it to makes it very difficult for many small businesses in Ohio around the country to bring their employees back in some states. They say they're going to enforce the rule that you have to be seeking work for a job. You have to leave you. I other states are not able to do that. In fact I think many are not maybe most because they're just overwhelmed and many employers. Don't WanNa do that to their employees so we put together a package. That says okay. Let's continue to help people but how about having a bonus returning to work so instead of an additional six hundred dollars of a federal benefit again almost twice to state benefit. It's currently place in places like New York. It makes it very difficult to get people back to work if they're making more unemployment than they can make it work. Why not provide a bonus to people to say if you go back to work you can take some of this unemployment insurance with you if you take four hundred and fifty bucks with you. As an example per week remember this is per week that would mean that in every state for minimum wage workers it would be more advantageous to go back to work than to stay on unemployment insurance. That four hundred fifty dollars would go back to you. You work place between now and the end of July when there's unemployment insurance runs out the extra benefit and this would give us an incentive to get people back to work it would help the individual workers who centre many WanNa get better. Get back to extra company but the House bill goes. Let's just continue this till next year? Senator What do you tell? What do you tell the person who's out of work? Who doesn't have the option to go back to work because the job that they had no longer the restaurant that is now distance world that the economics of the business. Don't don't work anymore right. If someone is out of work through no fault of their own. They can't go back. Of course they should get unemployment insurance and you know. We extend unemployment shrimps and other thirteen weeks by the way also in our legislation also provided for people who are self employed. So you know that can all continue but the point is Andrew. We should all want people to go back to work. I mean that that. Oughta be what we're doing here in Washington is trying to help the economy move forward not to encourage the economy to remain stagnant and to encourage people not to return to work when they're needed so. I hope you're talking to employers out there about this because I think what you'll hear is a consistent message. Which is we're now beginning to reopen. But we're having a difficult time getting people back to work who unemployment transfer for good reasons. You can see you know if you're if you're making in New York about fifty five to sixty thousand bucks a year. It's more advantageous to be on. Unemployment will be back to work so why not provide a bonus to that person by the way if you did the four hundred fifty bucks of a bonus to workers good for workers. They'RE GONNA get their salary plus that it also is great for the tax payers saves two states and the Federal Government just back to the envelope calculation about forty five billion dollars just between now and the end of July forty five billion dollars and it helps the workers because again they're getting the bonus plus their salary gets him back to work get some reengage with their company. So it's not gonNA work for everybody because there'll be some business won't be able to reopen. Its quickly but those are reopening are looking for workers right now so we should not be standing in the way of that. We should be helping to facilitate that. I think this is a bipartisan proposal. That has has real promise rather than what in the House? Bill which is going to make it harder to get our economy back in going. Hey Senator I actually love that idea. I think it's fantastic. Because it has the added benefit of rewarding the workers who are on the front lines the minimum wage workers who are going in and going to work when so many other people get to stay home and work but how much support is there actually in the Republican Party for this. I mean because it's it's not cheap. You're still talking about paying people. Four hundred fifty dollars a week. It's not the six hundred dollars a week. They'd be making on unemployment alone. But how how much support do you actually have both from? Republicans and from Democrats on an idea like this well. I think a lot of people are looking at it for the first time Becky I'm talking to Republicans and Democrats about it. People are intrigued. Fight because you know. The alternative is is unacceptable Because you know again we need to get people back to work and encourage that and yet we want to be sure and help these workers by the way I think it pairs nicely with with the president's talking about in terms of a payroll tax cut because those workers who have stayed on the job will be getting a payroll tax cut. And that's important too so I think it does reward workers as you're saying and I think it's important for us to do things right now. In Washington that reward workers reward work in general and help him move the economy forward without getting revenues into our hospitals without getting revenue into our universities and colleges without getting more revenue into the federal government to deal with our unprecedented level of deficit. That we're looking at this year. You know we're not GONNA be able to turn things around and that requires US getting this economy moving again so I think that's sort of our focus. Here is how in a smart way to actually help ensure that we can get this economy up and going again safely and that includes getting people back to work. Senator. The the question that I would ask you and I want to get people back to work as much as anybody but I would also advocate what you just said at the end there. Which was we all want to do it safely. And there are lots of people out there that don't feel necessarily that their employers have set up a system right now to do it safely for example there's other people. Obviously that are either a particular age cohort or have underlying conditions or other things that may not be able to go back to work or may not feel comfortable going back to work and I think there's a real question of trying to find a balance between getting people back to work in the safest possible way I'd remind you even Dr Fao. She says we don't have the testing in place the tracing in place. We have none of the things that you would actually one in place to set this up so there is a somewhat doing this a more blindly than I think anybody would want to and therefore the question is what kind of protection should we put in place for citizens in this country at a time when providing all sorts of insurance for businesses and do look at the guidelines because the guidelines that are set up by the state of Ohio and by CDC Require that these businesses do safely. So you do wear face masks when you're in the foul factory floor You do have hand sanitizer available for everybody. You do temperature testing as you're walking into the office building. I mean these are. These are measures that are common sense. It should be taken social distance and continues at work so I couldn't agree with you more. Of course you need to have a safe workplace in terms of the testing in Ohio. Compared to two weeks ago as of two weeks from now we'll have about six hundred percent increase in testing. Now has not every state that kind of testing is beginning to ramp up around the country. One thing that I will tell you that I do support in the Democrats. Bill that they're talking about yesterday is more testing and contact tracing. That's smart that helps us reopen economy in a safe way and keep it open because when there are hot spots. We're GONNA need as I said earlier to throw everything at it in terms of testing and contact tracing. I mean diagnostic testing the traditional testing. Antibody test is great too but it doesn't replace the need for a diagnostic test. So I mean I think nursing homes we ought to be testing much more frequently so I I think there are ways to get at this and reopen economy. That are smart. I'd much rather spend the money on more testing than continuing to have more money. Going to rescue because more testing is going to result in more economic growth. Because it's going to get people as you say more safely back to work. So that's money well spent and Dr Phil She. Also indicated testing is increasing So is this antiviral medication. Thank goodness finally and Rendez fears the I. I hope they'll be many other the FDA approves that are their affective I was told by Francis Collins at the NHL Yesterday. That's coming and then third. You GotTa have the P. And finally we're getting control that we have now masks available around the country because it can be recycled that can be decontaminated quickly. We have a four point five million a day capacity just on recycling thanks to our company Battelle We're have more gowns finally here. We have you know more gloves and so on so all of this is important but it it should be done in conjunction with US beginning to get people back to work beginning to get back to a more normal life Senator Portman thank you. I I guess five thousand a month you'd be is just out of the question for you at this point but Anyway thank you. We appreciate it Virtual baseball the reds are ready to go. Yeah fine the quarterback and you it's during this mess Anyway there's always the other side to look forward to. Hopefully he'll be on the field all right. They'll be on me and many fans but they'll be on guys next onslaught pod the path forward for a direct to consumer shoe retailer trying to meet today shoppers. 'em Jimmy's Ben Fischman. And we actually are seeing the content advertising telling stories explaining you do how you do why you do is working better than ever whereas three months ago short add big picture move quickly about what worked. We'll be right that you're listening to disqualified. Here's Andrew Ross. Sorkin Italy just open for business last week. That's good news though for a company closer to home and GM is a Boston based online retailer. Whose line of designer shoes are manufactured by smaller factories in Italy. It's CO founder and CEO. Ben Fischman joins US this morning. Ben should also says founder of RUE LA so anyway. It's nice to see Ben. Help us understand what the last couple of months have been like? And how opening in Italy the reopening Italy has changed chain business for you. Yeah thanks for having me Andrea big news last week with Italy reopening. We started this business. Four plus years ago with the idea of putting Italy back on a pedestal as an manufacturing community make this incredibly unique in Douglas. Product and much of the world is leaving Italy and manufactured product in areas that can be done at lower prices. We went there to put on a pedestal and had seen great success. And then obviously we were hit with this with this terrible virus and we got hit. Two ways one is the. The consumers stop spending pretty dramatically on our type of product to Italy shutdown and with Italy shutting down so did our flow of inventory but last week with Italy opening up very very quickly things turned around from a manufacturing perspective. They actually got back to business last Monday. And our first shipment of goods is coming shipped out of Italy on Friday so big news for us so far is is getting mature flowing again but speak speak a little bit about the other side of it. Which is the big question for a lot of people? The demand picture. I happen to be wearing sneakers today. I typically when we're on the set and wearing a nice pair of Italian shoes and back so the question is if people aren't going to be going out has much. What's that GonNa do to the demand picture for you? You think? Yeah so I think for sure. Demand has changed. We're actually still selling product but it's a very different type of product so we do make Italian sneakers and our sneaker businesses quite strong for men and Women Dress. The dress business is very soft right now and we don't foresee address business. I mean back in any significant way anytime soon. So we're focusing on comfort product. We're also a little bit apprehensive with what happens when the world starts to reopen the amount of inventory that out in the market and the level of discounting that's GonNa take place so not only is consumer demand different in his are people wearing seekers and not dress shoes. But you know there's GonNa be a lot of product at very low prices out in the market. We believed for a very long time. So we're paying close attention to the fat and watching that. Luckily our product is sold at a pretty unique price point. But it's going to be a pretty interesting. I am for for consumers to find value and for brands. Like Jimmy to make sure that that we can maintain our business and our margin at levels that that that we that we need to survive. What's happened to the customer? Acquisition cost most of this for you is online direct to consumer you hear about ad rates coming down but then again. There's the demand picture. So how's that changed for you so Cpm's advocates on all the major channels are lower than they have been before the difference though is conversion is also lower. What does that mean so you see ads on facebook? You see ads on instagram. You see ads on Google and you click on them but as the consumer buying at the same level. No they're not so yes. You're getting eyeballs. No that's not necessarily leading to sales so businesses like ours. I'm Jami workflow on as much as possible trying to leverage our customer file but once again low. Cpm's for us does not mean high sales in fact low CPM's with low conversion. Gets you probably a pretty negative spot? Have you seen any shifts? In terms of which service is more useful? These days is has more as a greater efficiency. I has anything changed. People keep talking about us. All being at home is there. Is instagram working better than it used to? Or snap all of a sudden moving to the top of the spot so we're finding content. It used to be that that when you when you wrote long content on the Internet people would say people into the patients for that. It's a you know it's a it's a soundbite economy and we actually are seeing that content advertising telling stories explaining what you do. How you do it. Why you doing is working better than ever. Whereas three months ago short add big picture move quickly. That's what worked storytelling engagement is working. Better ever for US right now and. We're looking for new venues to do that. Actually which really opens the door. When a brand can tell a story you can create some unique engagement ban. We wish you all in the world and to keep track your progress and hope you come back on a couple of months from now. Let us know how you're doing? Ford you put those dress shoes back on text. That's the podcast for today on our rundown tomorrow Eric Schmidt. He Ran Google for ten years taking the company public and now is advising New York state on integrating technology in Pandemic Response Squawk box hosted by Joe Kernan Becky quick and Andrew. Ross sorkin tune in weekday mornings on. Cnbc at six am eastern and listen subscribe share. Squawk Pot will meet you back here tomorrow if you want to learn more about one of the fastest growing trends in investing we've got the podcast for you. It's ETF edge. I'm Bob Join me. As I'm joined by top market participants help build your best portfolio at the end of each episode stick around for our markets one to segment where we round out the conversation to help you better stand. Etf listen now and subscribe for exclusive content. Not Bird on television. You want even more tweet us at ETF EDGE CNBC.

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Mark Cuban: No Buybacks; Bailing Out Boeing; Staying Safe

Squawk Pod

31:33 min | 1 year ago

Mark Cuban: No Buybacks; Bailing Out Boeing; Staying Safe

"No one likes to feel stuck boxed in or held back especially by your cloud. It's a problem but the IBM cloud is different. It's the most open insecure public cloud for business. It can manage all your apps and data anywhere across all your clouds so it can help take on anything from re booking flights on the fly to restocking shelves on demand. Without getting in your way. Smart loves problems. Ibm Let's put smart to work. Visit IBKR DOT com slash flexible to learn more this squad. I'm CNBC producer. Katie Kramer Today on our podcast airline seeking over fifty billion and government assistance three times the size of their bailouts after nine eleven aerospace analyst. Seth Catholic. This is an industry that thought it had put itself in a position to get through absolutely anything. And you know it will probably wasn't a position to absolute he takes up this mark. Cuban says the US government has taken risk out of the equation but bailouts are needed for workers. When you're really blessed like I am the value of one. Marginal dollar becomes middle. It's not just about how much more money I can make. But what types of impact and I have the latest on staying safe with Dr Scott Gottlieb former FDA chief we're certainly having an impact on this scoping In the contours of the epidemic. It's Wednesday march. Eighteenth Twenty twenty squad. Pod Begins Right now becky by three gene. Good morning everybody. Welcome to Squawk box here on. Cnbc WE are coming to you. Live from all over the place today. I'm becky quick along with Andrew Ross Sorkin and Joe Kernan and again we are making sure we continue to broadcast to you through this pandemic that we're watching at this point. I up on today's pod the US government's plan for economic stimulus. The Federal Reserve has announced measures. That it's taking. We've discussed that here on. Squawk POD now the US Treasury Secretary Steven mnuchin has pitched a one trillion dollar package to Senate Republicans now. This plan includes sending Americans checks to help. Households and businesses stay afloat. The trump administration has backed but other Republicans are split. Here's Andrew ultimately what's going to happen is you're already seeing the Elizabeth warrens and others say we're going to give money. We need to clamp down in executive compensation we have these stipulations these stipulations. Frankly what needs to happen and I think from chronically and the two thousand eight crisis and every other crisis is you just need massive stimulus. You actually don't want strings attached because you want as many people that take the stimulus as humanly possible. Which is antithetical. Yes you're right politically where where you typically base to happen Andrew. You want this to happen as quickly as possible. But you probably want it to be more targeted you start thinking about how to handle that much money away and you know look at it needs to go to the people who have lost their jobs who have been put out of work from the small business owners who are in that position of already having laid them off. I. I saw a letter this morning from a guy. I'm hoping we're going to have on the show tomorrow He's a restaurant tour. He's based in Ohio but he's got restaurants I think in. What is it thirty? Seven restaurants fourteen states on Monday. He laid off four thousand employees. He's saying that it would basically take at least two weeks of revenue to get all those places back up and running because he has to bring and managers and staff ahead of time to get restaurants clean to get everything back up and running. I mean I don't need money you don't need money right now. Joe Doesn't need money right now. I'd like to see that money. Go to the people who need it. I talked to an accountant yesterday in New Jersey. Who says that? He's got about twenty clients that just this week have had to lay off fifty percent or more of their staff. He was talking about cancellations of business. That's been booked out of the next two months and no new business coming in. These are people like caterers. Limo service providers moving companies tree service providers. He said they're all dead in the water. And that's where the immediate incredible shock has come across this country and that's where the money needs to and we're definitely having different hats shifting around I saw. Afc yesterday yesterday said something. About wait. A second Boeing had thirty billion in buybacks over the last hour many years. Now we're talking about sixty billion dollar bailout for the industry and I found myself going. I mean that's I mean definitely. There's some some book political. Nobody was savings as being. I agree with that. I almost agree with that here. You blow all this money up at three and four hundred dollars a share joe suggest that ultimately whatever it is and I'm just going to suggest that whatever whatever stimulus program we're going to have is ultimately going to privatize the gains and socialized the losses. That's what happens in a crisis but when the crisis is over there needs to be a real discussion about financial responsibility in this country which we don't have in the best of times to actually have insurance policies in money on hand when these things happen. And that's that's the probably one hundred thousand people because she used to the crisis to change. The policy in the moment is too painful. The problem is that nobody is willing to use not to use the good times to change the policy. And we've had that to be no what's wrong with you. I agree with you. I agree with you but I think that we gotta look at all this. Espn stakeholder stuff that we went through and realize holy cow. We need prophets to do all these great things do. We need profits to share with our stakeholders. And if you if you blow all this money on some CEO's PET PROJECTS VIRTUE SIGNALING. And then you come to a time like this you realize wow shareholders really do need to have prophets share with took satisfy any other stakeholders you need to be profitable and not planning trees and Africa but we will be asking for tens of billions of dollars in government. Aid this coming as treasury secretary. Steve Mnuchin called this crisis worse than nine eleven for the airline industry. Joining us right now to talk about is Kaplan principal at Kaplan research. Good morning to you seth out. Let's talk about the need for these bailouts. What happens to these airlines? Greg suggested that unemployment in this country just on travel alone would go from three point five percent to six percent right that just the travel related job losses would would drive the overall rate up to up to six percent. This as everybody has said is worse than nine eleven in a lot of ways and we do have to sort of try to put ourselves back in that mindset. It's easy now to say well. The thing about nine eleven is that that awful first day was the worst day and then there was recovery. We know that we didn't know that when we were in the middle of that remarkable that these airlines you know nine eleven happened on a Tuesday by that Saturday. They were laying off tens of thousands of people. Seventy thousand jobs were gone within a few weeks this time. These giant airlines laid off anybody in terms of direct employees yet so that speaks to the position. They were in going into this thing but but but obviously window. What's what's the run rate. Keeps you to speak to the run rate in terms of employment costs if if the goal is to keep people employed to keep people on payrolls across the country and this is in all businesses but specifically in the airline business where we could just take a Delta or American Airlines as an example. What what isn't there people. Yes Sir pay people to do to do to stay at home to do nothing yes so for the US for US. Industry just trying to do quick bath. Delta was what is what does six billion dollar profit on forty billion in revenue. And and something. I mean it's it's up for the industry. I have sixty seventy eighty billion dollars or something to you know just paying salaries for you. Yeah I mean that's very very very bad but anyway it's it's not five billion five hundred billion. That's just you know very very roughly. Yes so so. That's you know that might be part of the grand bargain here and that might be part of why I mean. At some point Look People. Running Airlines have this fiduciary responsibility and everybody to save the company but in terms of why they are still paying people to do nothing that might be the leverage here because they know there are people out there saying you know. This industry earn tens of billions of dollars in profits. Last we're good at this becomes a question long-term if there is a targeted bailout. And this goes to whether you wanted to target a ballot or nationwide bail out if you do a target of ballot that the airline industry by default you're going to determine their common carriers. That's what's going to happen right. And therefore you're going to have to put some forms of other regulation on them. Forget about buybacks. It's GONNA be about building this remarkable insurance cushion over the years and it would change the entire dynamic an industry. I'm not suggesting that's the wrong thing to do. I just it's the political thing if this is the way if this is the path they're going to go down especially because I mean as as Greg was talking earlier. Rabbits impacts absolutely everybody. I mean this is the idea of too big to fail. The problem is that it's not a redistribution anymore. Right because everybody's in the same situation so if we're going to say that this industry is special even though you know the the guy at the Greek Deli in my neighborhood is you know is is feeling it just as badly than than than yeah you. It's reasonable save the and you've got the unions saying that of course Unions representing flight attendants pilots and others. That that should be tied to it and and so right today right now. Delta is worth something on the order of twenty twenty billion dollars. Does that make sense to you is that is that a bet that investors are going to be bailed out by taxpayers. Is that what's happening here? Yeah I mean I think yeah. I think that's that's baked in the I mean that's what's all the usual granular stuff. Obviously nobody can look at it now but no I think at this point. Four fifty billion or twenty five billion in grants and loans and and and. Yeah I mean I think at this point. That's the expectation that they said hang on. We got becky. Who's got a question for you becky. Hey if that's baked in how come you're looking at some of the airlines down by another ten percent this morning. My my guess is investors are thinking okay. The the industry may be mailed up. But we're not sure what that means for shareholders shareholders. Know exactly and and and you know you've heard this calls out there that For for shareholders to somehow get Get diluted by all this but but no exactly that's fair fair point that's two separate questions jobs and is they're still something called American Airlines versus. What does that mean for shareholders? And therefore the question. I'd ask you this if you're an investor out there today who actually owns these airline stocks. What are you supposed to think? Well there's opportunity to use you. Buy The stocks and bet. The government's GonNa save you and protect you and protect the shareholders and others might say you need to get rid of this immediately. Because they're going to private they're going to affectionately nationalize the airlines when everything's done and you're going to lose everything. Yeah I mean I you know trying to think of baby bath water with allergies. I don't think I I think. The industry legitimately reformed itself enough. That you that you know that that's probably not not what's going to happen here. But but yeah I mean obviously if you are still holding shares of these airlines. That's your bet that the industry is not going to be nationalized or something like that that that this is going to be the banks just like you know what happened there with the with the ratios and everything that this is an industry that thought it had put itself in a position to get through absolutely anything and you know and it will probably wasn't a position to get through absolute anything except this right and and so. That's that's better I think. If you're holding these now is that. Yeah it's going to look different But but but but they're not gonNA put the equities obviously wiped out a chef. Thank you as always and Stay safe meantime. Nba team owners. Were some of the first people to pledge support for their arena workers as the corona virus hit US shores now Dallas Mavericks owner mark. Cuban says companies are bailed out all employees should have the chance to benefit from apostle turn around in the form of stock compensation mark. Cuban joins us now on the phone. Good morning to you mark. Good morning we've been through these bailouts before and there have been a lot of political fingerpointing afterwards. You have a thought about how this should be done. Yeah we already know what's going to happen. You know a year after this you know plays out and it will We'll look back and say why don't we consider the workers they everyday hourly worker The people making minimum wage. Why don't we reward them as well and so let's get ahead of it and whatever we do in a bail out. Make sure that every worker Get compensated and is treated equally and that the executives don't get rewarded extra stick around because they got nowhere else to go. You know the government's taking the risk out of the equation. Let's treat all workers equally. So but how would we do that? Because one of the things that look there's going to be all sorts of stimulus plans bailouts and the like and one of these WanNa do is get that money into the system as quickly as possible. You don't want people not to take the money and so the more strings that you attached to it and I'm not suggesting you don't but the more that you do the more likely it is that certain people may hold back and so I'm trying to figure out how to how to capture that balance. Okay two different things one getting money into the system as a function of the Fed. And they're obviously taking those steps right now too is when there's a bail out when those bailout in The government comes in and offers assistance to an organization Y. Public Company in particular whether it's an airline. Whatever it may be there there are most likely going to be steps taken by the company and historically this is what has taken place where they reward the executives and then re price their options they give them more stock they give them warrant they give them options whatever. It may be whatever it is that a company does for their executive they should be required to proportionally. Do the same thing for everyone else that works for the company period end of story. Part one part two no buybacks not now not a year from now not twenty years from now not ever 'cause affectively. You're spending taxpayer money to buy back stock and to me. That's just just the wrong way to do that. Do you think that we're going to have a national bailout for for companies across the board? Do you think we should? We should look to airlines or other specific industries for help that we should be helping. How would you approach it I think we have to. I mean look. This is cascading. And it's getting worse by the minute. The number of layoffs is just skyrocketing and so if if if I walked in the door first thing I would do is prioritize and I would create effectively and. This isn't the right word but effectively. Create two buckets budget number one and we have to do with these things in parallel bucket. Number one is how do you? How do you help? Companies of all sizes to keep paying their employees and not. Lay them off or fire because we want to keep people employed even if it's make good work even if this is the Tennessee Valley Authority all over again and we're just Subsidizing companies to keep their employees on the payroll and finding things for them to do because keeping them in the payroll will pay off more in terms minimizing tax payer requirements than releasing them. Fire them laying them off and then having to go find jobs in the future. So that's bucket number one. Do all you can keep people employed bucket number two. We've always seen significant layoffs. There are people who are already unemployed. That's where we might consider helping people whereas if you're going onto unemployment or any type of government on federal government assistance then maybe we pay them a bonus and that's the not a good word for this but give them check for the thousand dollars to help them get through the immediate need Because they've just been laid off or they don't have a job and that helps people get through these problems times but they should be just two very distinct buckets but the priority has got to be working to keep Working to help people stay employed. I actually don't like the idea of just giving everybody a thousand dollar check because for a lot of small businesses you know if they know that their employees are going to get a check in that. Business is struggling. They may say you know what I'M GONNA release. I'm GONNA lay off or fire them because I know they have a backstop but some sort and when this is hopefully all over in three or four months like people are predicting we'll we'll figure it out then that creates a far greater stress on the system. So I really think that the priority needs to be one keep people employed and to those who have lost their job. You know. We've seen the entertainment industry. We've seen the hospitality industry the the airline industry the transportation industries all decimated and where there have been layoffs. I don't have a problem with those people as they get onto federal assistance giving them a check upfront to help support them and the economy. But we've got to deal with both and I think the priority needs to be on helping people keep their jobs okay Mark. Hang on for a second. We could joe into the conversation. Joe You there sure. Hey Joe Hey mark how are you I you know? Nobody likes any of this stuff but all bets are off aren't they? I mean these are anytime we think you know. We don't want to do this moral the I mean. Do we really do. We need to talk about moral hazard when you're talking about a deadly virus. I I don't know it seems like any other time. I understand but I agree. Joe Perfection is the enemy of progress. You know in normal times you WanNa look at all the distribution of outcomes and try to do the best thing that helps the most number of people but this is. This is a new world literally. This is this is the new normal and we have to just look at. What's in front of us and deal with it You know and yes. There's going to be people. Who Scam the system. But you can't hurt. You hurt the people who need it and risked arrest supporting the economy and and the tragic things that can happen there. Because you're trying to avoid some people scamming the system but you do bring up a good point in terms of moral hazard what we can do is increase penalties. And so like you know when we went through the financial crisis you know people talk about how no one went to jail. Well as part of all of this you know whether it's a bailout whether it's a thousand dollar check For those who have lost their jobs we should add if you try to scam the system in any way shape or form. There is jail as your penalty because we wanted to introduce a moral hazard. I'm GonNa talking about something ridiculously draconian but still there. There should be something. It shouldn't be a civil issue. It should be fully a criminal issue and everybody should know that going in and mark. I I I just if we have to decide. What kind of snapback we're GONNA get when we do get through this and I pray that it sooner rather than later. How are you going to be sit on the side? I mean did you. Did you appreciate it enough when you're sitting there? What I'm Joan draft kings. I'm like I'm going to bet on each sports but I don't think he can do that either but I mean but missing the fun that's GonNa snap back. You know we all we all use sports as a way to celebrate the way to get excited to way to come together. throws a parade when apple or Google. We'll have the most amazing quarter they've ever had but when the team wins the championship they throw a parade and so hopefully we'll have the Olympics and we'll be able to come together as a country around our team are you know the US Olympic team and that'll be great for us. We'll all get out out of the House while all celebrate together hopefully when the NBA NHL Major League Soccer Major League Baseball Football all start to really happen again. All get excited about our teams and as communities will come together. Sports will be a vital mechanism for bringing people back together when this happens. And so yeah. I'm excited for that. But in reality basketball is the last thing on my mind right now but I will say that we're using the mavericks to try to do as much as we can to keep. People energized engage while everybody stuck home. Hey Mark I. Hey Market's GonNa talk to you. I I saw your reaction. I think we all did the cameras. Were on you when you're on the sidelines of the game to find out that the NBA was shutting things. Down your reaction. I think at that point was something like are you kidding me or something along those lines. Maybe changed your tune really quickly. What what kind of walk us through your emotional You know the hill time on the other side. Yeah I mean we had considered all the potential options the mavs management and and really it would really a knighted. My response was prior to the game. I met with the players and one of the players that what are the chances. The season gets this show Suspended or postponed and I said five ten percents most and considered it. But I really didn't consider it likely. Based on the information we had at that time and then when it came across that rudy go bare at been sick that one game has been canceled into season cancelled it. I was just stunned and you know then my mind started thinking. You know the entrepreneur. He took over. Okay what are the elements that are that? I need to consider going forward you know. What am I responsible? Who's going to be helped? You know what are the opportunities and who's going to get hurt and this was so drastic and so outside the realm of anything. I really considered likely that's when I started thinking about okay. Who's going to get hurt? The most and what can I do? And and how? Can we make sure that every everybody lands on their feet? Because you know let me just say that you know when when you really blessed like I am. The value of one marginal dollar becomes minimal. And so I've gotten to the point in my life where it's not just about how much more I can make. But what else? What other types of impact and I have and and so that literally was the one that first thing that crossed my mind. What can I do to try to help people and try to make it better and starting with the mavs employees arena employees? That was my focus. And so you know that that's so when I did that interview. That's what I was thinking about. And then obviously my family and my mom is eighty. Two and other people like what what happens next because it was a complete uncertainty. Then you invest in the markets Yes what do you thinking what would you do? You know I've been putting in you know one one and a half percent to work on every down day By mostly espy wise and dipping. My toes I bought a little live nation. I actually sold some puts And sold some calls on some things I had because just the premiums are just incredible. I mean it's stunning. The premiums that are in place right now but it looks like we're starting to get into a training trading range. You know a five percent down. Five percent up five percent down five percent. And I'm not quite sure why. And I'm not quite sure. If the Quanta kickback in yet and feel like they have good data to start making a lot of trades. And so you know I. It felt like for a while. We had active management doing all the work and try to figure things out and now over the last three days. It feels like we're starting to get more rhythmic trading coming into the market and now today based off of the you know being up yesterday and being down about the same today it looks like we may be starting to fall into a range so you know I'll act accordingly but it's just every day this is just like how much information can you acquire and what was coming along. And how does that change things? So I'm like everybody else okay. I'll get my toe in the water hoping that two years from now. You know this all be a nightmare that we put behind us. And the market will be much higher Let's hope you're right mark Cuban Thank you so very much. Please say stay healthy and keep working. I mean it. It's it's good. It gives us all sense of normality when we're stuck at home and we get to turn the squawk box on CNBC all all day long for that matter. Pillow better thank you. Very much really pervaded coming up on. Squawk pod more ways to curb the spread of Corona Virus Dr Scott Gottlieb squawk regular and former head of the FDA. You hear from him a lot suggests there could be more to come. Do we require people to wear not in ninety five mask which are in short supply but procedure mask if we know there's asymmetric spreader Marley medic young people training environment. We'll be right back. No one likes to feel stuck boxton or held back especially by your cloud. It's a problem but the IBM cloud is different. It's the most open insecure public cloud for business. It can manage all your apps and data anywhere across all your clouds so it can help take on anything from re booking flights on the fly to restocking shelves on demand without getting in your way. Smart LOVES PROBLEMS IBM. Let's put smart to work visit. Ibm DOT com slash flexible to learn more this pod from CNBC years Andrew. Ross sorkin up and enter hugh worldwide coronavirus infections have now topped two hundred thousand. Almost sixty five hundred cases have been confirmed in the United States. Nearly two thousand more than at this time just yesterday hundred and fourteen people here have died his latest op Ed in the Wall Street Journal. Cnbc CONTRIBUTOR DR got Lebed talks about the capacity of the US hospitals. And how they're still could be time to flatten the curve of the rising number of cases. Dr Gotlib joins us now on the phone. He's also the former. Fda Commissioner of course and serves on the boards of Pfizer and alumina and we are always grateful to have his expertise with us. Good morning to you Dr. Let's talk about flattening the curve for a second because there have been lots of steps that have now been taken over the past several days across this country and in this state and city where we are right now in New York and as people are trying to look at the time line of what this May or may not be the present of course mentioned July and August. Recently investors are trying to figure out what this time line looks like. Of course the time I gets extended out the better. We do in terms of flat curve to some degree what are you. What are you seeing in? Terms of estimates in how that flattening is changing or is it. Thanks for having me this morning. We're certainly having an impact on the scoping epidemic in the contours of this epidemic. And how how? Many cases we're going to get at the peak and how long it's GonNa last the steps. We've taken the last two weeks very aggressive. I think I'm heartened by what. The mayors and the governors have been willing to do. These are strong actions. I think the president's references probably to the analysis that's that's circulating in Washington and the White House. It shows US peaking out late. April early. May remember if you peak and in April in the end of April seven weeks from now. You still continue to accrue cases for another seven weeks. That's just the peak. It comes down so that analysis would show this epidemic continuing course into late June. And that that gets you into July so I think that might have been what he was referring to. I'm not sure on that peak issue though. So let's say we're in late. April early May situation gets extended out through the end of June. And maybe that's the way businesses should think about this investor should think about it if that's the case though the social distancing steps and everything else that we're taking today in your mind they need to last through the end of June. I mean I'm trying to understand. People look at the peak and because people look at what took place in China and elsewhere and after it started to peak out his you know at least in China some people started to go back to work and starting start to see an increase of business again. Is that the right way to think about it or not so much. I think it's going to be very hard to take foot off the brake if we're still accruing cases And that's why I think a lot of school closures are going to be in perpetuity. Probably the school year is lost for these districts where there is community transmission Because you don't want to lift the restrictions too quickly and then have another resurgence in cases. But you can you can lift them. And then put in place other measures and so for example you know one of the things we might contemplate is do. We require people to wear not n ninety five masks which are in short supply but procedure mask. If we know there's as symptomatic spreader mildly symptomatic young people spreading this virus. The procedure masks aren't in short supply. it's ninety five mask so that the health care workers need so there might be other things. We can substitute in That could provide some protection as as transmission. Slow down and the risk isn't as great doctor in terms of we've been talking you literally daily and try to understand the progress that's being made one way or the other if you look at. What's taking place in Italy? The numbers continue to ramp. How much should the United States take away from that experience relative to the experience of South Korea? I think one of the other things investors. And frankly policymakers are trying to do is look at these different models and it's very hard to ascertain why certain things are happening in certain regions. Well I think what? South Korea did was very aggressive testing right at the outset. And and Make an effort to contain isolate people They tested one in two hundred people in South Korea and they even tested. You know young people right right now in the US even though we have more testing capability in terms of platforms. We're still not able to test everyone. Certain people are being told to just stay home and assume you have corona virus. The problem with that is that. If you don't have a positive test result you probably less likely to self isolate and take it seriously. And you also can't enforce the quarantine without a positive test result most cases so testing people telling them they have it could be very helpful In Italy the there were a couple of things that went wrong number. One people showed up at the hospitals when they were sick and they spread the virus in hospital setting. It's an older. Population is higher smoking rates. For those reasons why Italy the background in Italy was more conducive to a bad outcome relative to what I experienced could be. We do the right things. Okay Dot. It's always good to speak with you and please stay safe out there. And I'm sure we'll be talking to you later this week and that Squawk pod for today. Thank you for listening. Squawk box is hosted by Joe. Kernan becky quick and Andrew. Ross sorkin together in spirit if keeping social distance please continue to tune in weekday mornings on. Cnbc at six am eastern to get the smartest takes and analysis from our TV. Show right into your ears. Subscribe to Squawk Pod. We're on Apple. Podcasts stitchers spotify. Wherever you are listening these days we are working so hard to be there so stick with us and we back here tomorrow clear. Thanks guys no one likes to feel stuck box stand or held back especially by your cloud. It's a problem but the IBM cloud is different. It's the most open and secure public cloud for business. It can manage all your apps and data anywhere across all your clouds so it can help take on anything from re booking. Flights on fly restocking shelves on demand. Without getting in your way smart loves problems IBM. Let's put smart to work visit. Ibm DOT com slash flexible to learn more.

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Pandemic Jobs Report; Sen. Amy Klobuchar; Eyeing $43B from Bezos

Squawk Pod

30:16 min | 11 months ago

Pandemic Jobs Report; Sen. Amy Klobuchar; Eyeing $43B from Bezos

"CNBC'S WORKFORCE Executive Council is the Premier Group C. Suite human resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences. The networking resources HR leaders need now apply to the Workforce Executive Council at CNBC councils, dot com slash WNYC. This is pod. I'm CNBC producer Cameron Costa today in our podcast the July jobs numbers are in one point eight, million jobs created ten point two percent unemployment former chair of president. Obama's Council of Economic Advisors. This was definitely a relief but I wouldn't celebrate who much. Senator Amy. Klobuchar on what the next round of stimulus could look like the point is that we just can't do something small right now we've got a big gigantic crisis and we need to respond in a way that makes sense. And the billionaires who may be efficiently asked to help Jeff bezos would be on the line for nearly forty three billion dollars, those stories plus a global pandemic widespread power outages and escalating tensions between the US and China. Just another day in this year's news cycle we are in twenty twenty, becky. What could go wrong. What could go along? It's Friday August seven in this wild twenty, twenty squad begins right now. Good morning everybody happy Friday and welcome Squawk box here on CNBC I'm becky quick along with Andrew Ross Sorkin and Scott Wapner Joe is out today on vacation technology push the Nasdaq closed above eleven thousand for the first time ever yesterday check that out it wasn't just a slight step over the eleven thousand line it was up by one percent and it closed at eleven thousand, one, hundred and eight. By the way this is seven straight sessions in a row that the Nasdaq has closed higher and it's the thirty second time this year that the Nasdaq has set a record close once again Andrew. Thanks Becky meantime some news breaking this morning for those of us in New York City woke up and thought my goodness. What just happened Con Edison investigating widespread power outages throughout New York City including Harlem, the Upper East side central park and I can tell you as an upper west sider no power there as well. It was A. Power Andrew it was a true blackout. We are in two thousand and twenty becky. What could go wrong? What could go wrong? I woke up I, looked around and I thought to myself. So dark what's going on and then I looked at the window and it was dark and I thought it was. Is the Nasdaq going to have how, what am I going to do anyway here we are. We have power here. Away, from where you have no power everybody by the way, this is a short term problem. I'm told that they're working on it right now relative to so many of our friends up and down the east coast tour who continued to be out of power Sadly, it sounds like inserting places for days if not longer but Yes a at least a minor blip. We'll. We'll call it a blip on a relative basis everything else that's going on in the world right now guide you look reasonably reasonably well put together for having gotten dressed in the dark so. There's a plus actually. To be with you, I didn't do very well saving right here is where I have a little bit of extra. I didn't I didn't really get the full that I did that in the dark the shaving and it didn't work out. So you showed up and then at the Nasdaq and your pajamas no no no I didn't put my my tie everything altogether. But I, my hair was a little messed up. You know. It's still probably. Oh my gosh. Way Too well at this, we're glad you made it. I up today's podcast jobs Friday the Labor Department reported a reassuring set of numbers this morning about one point eight million jobs were created in July versus the expectation of slightly fewer than one and a half million. This report follows the fastest two-month month rise in US employment history from May to June over seven and a half million jobs were added as employees laid off during the pandemic returned to work report today on July's jobs mark can't flex the return of another way of these workers, but it also reflects the reclosing of businesses. As cases kicked back upward in some states, the unemployment rate fell to ten point, two percent from over eleven percent June that's the third straight month of decline but template to is still the ten highest unemployment rate on record United States all in all, it's an encouraging report but by no means is a sign that the jobs market is out of the pandemic woods. Here's Becky quick digesting the report with Jason Furman former chair of President Obama's Council of economic. Advisers keep more had matic strategy at blackrock and Steve Leeson, CNBC's senior economic quarter. Jason. It's. Much. Better numbers than had been anticipated much better numbers than we'd seen in previous months but we're still talking about an unemployment rate of about ten point two percent. This is better than anticipated. Though, does that change your outlook about where we might be towards the end of the year when it comes down employment? This was definitely a relief but I wouldn't celebrate Huma. You look at the number of people on temporary layoff that fell by one point, three million. So most of the people who got jobs in July call back jobs, what we're worried about is that even if everyone went back to their jobs, the unemployment rate would still be about seven percent. It would still be a mild recession. You saw the number of people transitioning from employed to unemployed was three and a half million. In the month of July, that's a record for any month on prior to the pandemic and the other thing that unemployment rate in part it's low because so many people have left the Labor for I think about I might have number about five million people have left the labor force since this. Virus struck have stopped looking for jobs. So underneath this report, there's just a lot a lot more work for the to do and a lot of economic policy will be needed to speed that work Jason Real quick. There's a little stability in that number I just want to tell you the participation rate with sixty one point four it ticked down a little bit. Jason's right over the course of time. You have had something like four and a half or five main people leave. But the good news in that regard worth mentioning is it looks to have stabilized at about a one hundred and fifty nine, million people hunting sixty million. Ninety. Is that as bad news I mean you, you think the participation rate should be improving and the unemployment rate falls the fact that it got a little bit worse. Was a little bit of a negative surprise for the month of July. Hate the numbers better than anticipated but and you are starting to hear from a lot of companies that are taking this as a time to kind of reorganize and do layoffs of not because of covert but because they're kind of reacting and trying to make their business respond better. Does that worry you for what to con? What's come down the road? Yeah, look. Here's the thing the point Jacomb. With just making a lot of people got jobs were coming in a temporary laid off and rehired by their previous employer. The big question I have for the second half of two thousand twenty in back in the first half of twenty, twenty one is going to be you know what decisions companies making about the structure of their labor force because look this remote working environment is shedding some light on what is necessary, who's most efficient where the greatest productivity lies and I think people. are going to use this pandemic opportunity to streamline across structure. Again, you know we get a little hints of that companies reporting second-quarter from watching that very closely. But I think that's going to be a long tail and it may end up being this is sort of a terrible thing to say, but it's going to be nf being strong for margins will companies that manage their cost structure in the lower economic growth environment are gonNA reap better product. So it's not great my perspective, but it certainly in backdrop respected. President trump signing two executive orders. Last night banning US transactions with Chinese tech firms ten tencent and BITE DANCE CENT owns Chinese messaging. APP. We chat and bite dances the popular company the parent company excuse me of popular video sharing. APP. Tiktok the we chat order says the APP captures Info from users that could be accessed by the Chinese. Communist Party the TIKTOK ORDER was similar and said, it could be used for disinformation campaigns by China. The orders would effectively ban the APP in the United States taking effect in forty five days. The order say commerce secretary. Wilbur. Ross shall identify the transactions that will be subjected to the prohibition. Microsoft announced Sunday. It is in talks to acquire tick tock business in the US within the next three weeks. The big news here. Becky is the crackdown against ten cents and we chat does not from what I've read impact the video game platforms which include fortnight and league, of legends or otherwise there would have been a march on Washington, not by people with pitchforks but a bunch of eleven year olds with video game controllers. So rest easy. It's all good. I was so clear when I I read this news last night I was trying to figure out does this mean Americans aren't allowed to download tic TAC and that doesn't seem to be what this is, but it certainly cast a pall over what's happening with Chinese stocks. The huge. Negative impact that this has had on Chinese technology companies and just worrying about those that are looking for an international presence like we chat is it's incredibly popular in China has not made as much success. In the United States, but you're going to get into some very tricky issues and I believe by dance, the parent company is saying that if it feels like it's being discriminated against, it is going to sue the United States in the US courts. I. Think that's possible. I think the big issue on Tiktok is literally whether the user base is going to flee over the next forty five days. You obviously saw facebook through the instagram product come out with reels, which is basically a copycat service of it and you're seeing people migrate over there though I don't know if you're on it right now you're seeing a lot of actually just tick tock videos effectively being republished over there. So the question is sort of weather people leave, and if they do what value is lost, we chat to different story because we chat dozen have an audience particularly outside of the United States. Right outside of China Rather in the United States. So unclear, what kind of value I mean what kind of value destruction may or may not happen as a result of that? How I can't imagine around the table at the negotiations Andrew No, you've spoken to people who are sitting around that table I. What does this mean in terms of how you try and put evaluation on any of it? It was one thing when the president said, he wanted to cut it. Now you're trying to figure out if there's how valuable the property. would be forty five days from now I mean that is a mess. I think what you're literally I think they're literally watching the numbers on a daily basis and try to see how how, how, how many people fleeing, what is the user base look like? Does it change? I think within forty five days if they can still have confidence in the business? And the president has made comments that have been positive about the Microsoft transaction that maybe you hold onto those hold onto those customers. So I don't know it's going to be. Fascinating to watch David Faber also has done some interesting reporting just about how Microsoft would be the only one. That would really be able to pick up and take all of the coding and get it over here and forty five days or years. From now if that transaction goes through and forty five days there only a few players that would be able to do that, and if you take a company like Google out of the picture, you know Microsoft is about the last one standing. You know it's undeniable at this point that we have these ratcheting up tensions between the US and China I. I'm looking at the futures guys and I'm just wondering at what point does the market start to care about anything. Other than tech stocks going up whether it's the stimulus talks which we're gonNA talk about in a few minutes I'm sure and then this and these added tensions between the United States and China whether it's this action by the president or the rhetoric regarding. The virus by that the president himself or people within his his administration is there ever going to be a fallout? In the stock market as a result of that, and I don't know when that moment becky or or Andrew is going to be but you have to figure it's gotTa come sometime I think that there's a bet going on right now in the market both between professionals and retail investors about whether you think of axion is coming or not and I think there's a view that you want to be in the market when that vaccine comes in, it's almost a binary decision either there's a vaccine and it comes. Earlier than you expect or not. You saw Goldman Sachs out with reporters yesterday saying you might want even start thinking about cyclicals and other and other companies that have not benefited from this because when that vaccine hits, there's going to be a jump into those stocks. So when you want to be there I, it doesn't always feel completely rational on a relative basis given the numbers that we're seeing but I think that that's what the bed is I'm not saying the right bed but I think that's what's happening. That's a really interesting bobby. Some logic to that too yeah. We should also mention to Scott's point that that move Tiktok and we does come after the White House issued new recommendations to ban Chinese companies that don't comply with US accounting rules that they would prevent them from listing on. US Stock Exchanges that proposal which was outlined by Jay Clayton, and Steven mnuchin would force you listed companies list US listed Chinese companies. I should say to D lest in less regulators can get access to their internal audits and Scott to your point that really ratchets up the tensions that have been continuing to to really flare up between China and the United States. It's likely to continue becky you would think right up until election day to right the the president certainly knows that he has an audience. That likes the red meat if you will that that he throws. In increasing those tensions between the two countries, you know you're going to have some trade. Meetings coming up and you'll have to see what what comes there but you had this you know this trade deal that was so much talked about and then you had the virus outbreak in the pandemic, and then the tensions have been rising ever since that and then with these actions, it just continues to increase increase but as we said, you know. If, you're an investor in the stock market. Do you care because of the reasons that Andrew said if you're betting on vaccine, which you know is coming at some point it's awfully dangerous to be either short the market or too negative because I do believe as Andrew said, it is a binary event the minute you get news that you have a vaccine. That is going to be widely distributed. You are going to have more money come into the market, and you may very well have a move like Andrew suggested away and Goldman has talked about away from technology and some of these growth areas into more value cyclical plays even Kramer, has been saying in the last couple of days with. His so-called go index of the stocks that are going to rip the minute you get news of vaccine. The question is, when do you get into those before or after already happened? It's always a timing game Scott until always the timing game. We told you yesterday about a proposal by Senator Bernie Sanders to tax the wealthy that billionaires have added to during the pandemic the senator released that proposal yesterday it would impose a one time sixty percent tax on billionaire gains between March Eighteenth of twenty, twenty and January. First of twenty, twenty, one, those funds would be used pay out of pocket healthcare expenses for all. Americans for. A year if the taxes were calculated right now based on the game we've seen in the market. Here's what some billionaires would pay. Jeff bezos would be on the line for nearly forty three, billion dollars Elon Musk would pay twenty seven and a half billion dollars Mark Zuckerberg. Well, he'd have to pay about three billion dollars and Walmart's Walton family would pay nearly thirteen billion dollars. Andrew obviously probably something that's a nonstarter, but it's Certainly going to be an exercise that has people running through what billionaires have made where that money could go the other issue by the way, and I'm sure other shareholders who might not otherwise sympathetic with the jeff basis would become sympathetic with the Jeff Bezos is because he would have to sell his shares. To actually pay the tax bill in which case all of a sudden there would be an overhang on the stock and people would get upset about whether you know the value of their stock is going to go down. Because he has to sell his share also just how much control you lose over a company at that point to a Lotta these founders like to keep their company to make sure that they can continue to do it. Some of them can do it through a different voting share structure but not all of them have that setup Amazon doesn't right. That's true. That's actually very very, very true. meantime. Boundary. Didn't he didn't he billion dollars worth of stock earlier this week how much he? Regularly. To pay for his space explorations S. Facie. Typically must be nice. He's trying to find. That's that's what he said when he sells the shares that's what he's selling for. He He. Must often talk about the reason that they do this in terms of resources is in terms of money at this point is literally to fund the the other endeavor which I've always found. Next unsquashed todd. Senator. Amy Klobuchar. On the latest stimulus negotiation I believe we need to do something immediately we just can't put our heads in the sand and I think in the end we will get an agreement we'll be right back CNBC's workforce executive. Council is the Premier Group C. Suite human resources executives from leading companies across the country. It offers a members only portal and chat plus exclusive industry contact with access to breaking news calls and digital networking experiences. The networking resources HR leaders need now applying to the workforce Executive Council at CNBC councils. Dot Com slash. This is not perfect. He inderal Sorkin and Walter Injure. Congressional leaders still have no new economic stimulus package to fight the coronavirus despite widespread agreement one is needed urgently. President trump has said he's looking at executive orders to help with unemployment benefits and to prevent addictions, but it's unclear what he could realistically do without a new law from Congress. UNICEF right now is Minnesota Senator Amy Klobuchar senator it's great to see you this morning. Thanks. For joining us what is your thank you what is your sense of the state of play and what do you think the president means and what do you think he could do? Well, first of all the negotiations are going on strong they have been. It's you know for a week and we want to get something done. We have to twenty weeks of over a million people. Filing unemployment claims the president himself. Let me quote him saying it's GonNa get worse before it gets better Jerome Powell at the Federal Reserve talking about the fact that there just aren't going to be enough jobs in the short term for people. It's one why I want to get Joe Biden elected president because I think he's GonNa put in a team and put in policies that are gonNA put us on the right course but it's also why I believe we need to do something. Immediately, we just can't put our heads in the sand and I think in the end, we will get an agreement senator. We can talk about the election just a minute but just on this very specific issue why? Why don't the Democrats and maybe I'm wrong here tried to do a skinnier deal if you will get something across the finish line now I know that there's a larger effort at play and I understand the reasons for wanting that but I also recognize the hardship that's out there. Across the country. I think we agree on those facts. But when you look at the numbers, we did one big package at the beginning that was important. But remember we were in an emergency. We know a lot more about what's happening with the economy right now, and what we know is that the annualized GDP reduction and you know this Andrew going to be thirty three percent but low what it was. That is not something where you say, let's get a little skinny band-aid and put it on. There is no way. That's what we need to do. What we need to do is make sure we're focused on some of the areas where employees don't have jobs and where businesses are going completely under we need to make sure testing is actually testing so. People. Don't wait seven days in their basement to try to get the results and they're not working and then they find out in fact, they don't have Cova we need to do helper hospitals and we need to make sure that we've got unemployment rental mortgage assistance. Those things we're in a crisis I want to focus on the day after tomorrow which. Is next year and I know that's what we'll do with Joe Biden. But for now, we must pass a deal that is not just some little skinny thing that you think you can put a band aid on for a month. I'm quoting the president it's going to get worse before it gets better, it will get better but let us please respond. Appropriately to this, instead of just doing something and then going home for Aug senator alumnus about the six hundred dollar number though because that's obviously been a big point of contention throughout this there are there are there are there are places where six hundred dollars is not enough and we can debate whether whether everybody frankly deserves to be paid more than the. In this country a week, that's a that's a larger philosophical debate and I and I know there are Democrats are having that debate but I think the question is there are also markets or or areas of the country where there are people who are not necessarily going back to work because the six hundred dollars is more than they would otherwise make what do you do about that conundrum? Well as we've done before when we had the last downturn, which by the way Barack Obama and Joe Biden got us out of we taper down the federal assistance and we look at different areas in what was happening I. Think our point that right now we're not at that moment as we're seeing spikes in rural areas as we're seeing spikes in the south and in the West and in states that before we hadn't seen. Them. In But there will be time of course that happens and I understand exactly what you're talking about that's part of the discussions at they're having right now but I think overall Andrew the point is that we just can't do something small right now we've got a big gigantic crisis and we need to respond in a way that makes sense we as I said we know more now we know that there's areas like tourism Of something I'm working on the music venues that have been hit harder We also know that we have to make some changes and adjust to the business program. We also know that we've got elections that are coming up and Republican, and Democratic voters have been voting in record numbers by mail and the Republican Governors and democratic governors are asking us to respond to that and assist them in a cataclysmic change to how people vote. That's why this can't be just a little skinny band eight one related question. We've been having a debate on this program for the past couple of days about it about this new effort for a second bail for the airlines where do you stand on that? Well again, we're looking at the numbers to figure out what's happening. I am really concerned we just put all the money on the business side as much as I came out of A. Private sector background I believe in a strong economy but we've got to make sure that we look at how that money's being spent that it's being spent right and that we do this in a way that we don't let the people who are being kicked out of their homes right now or don't have electricity tax sit there hanging. Do think taxpayers should. Get shares in the company or warrants and I know there were warrants involved in the last airline bailout but but more more meaningfully more meaningfully rather than as a quote unquote gift that I think that is something that we should be looking at. We've got to look at how we have accountability how we start getting money paid back from companies that are successful and the like. But again, I am someone that step back and said, we're in a crisis we can't have the old political fights right now donald trump has put us in a really bad place with all of his divisiveness and all of his lack of planning for this the minute he heard. About this before anyone else back last fall and did not get a testing regime underway and did not get the testing standards that would help our businesses reopened right now and also did not plan like he should have with the rest the world and how we handle a vaccine. We know all of that happened, and so there's a direct connection between how he is handled this crisis and where we are economically and I think everyone in America that has someone that lost job someone got sick like my husband did really really sick someone who's tragically lost a loved ones to this disease knows who should be held accountable and who can better fix it. So, Senator Scott Wapner good morning to you. There are those who agree with you. That would say we do need to go big. The question can still be do you need to go that big is it is it three and a half trillion dollars or close to it or bust for Democrats would would you be willing to vote for a package of say two trillion dollars meeting somewhere close to what the middle would be. I think you know Scott and you've been government that there's compromises going on and that's what's happening right now. So yes, it doesn't have to be that exact same number. But I think also could I add getting the input from people in the Senate can be a good thing and I will say Roy Blunt and I have spoken several times every day to talk about our we're gonNA manage this election funding and how how much money we should have and what rules should attached to it. That's been good. I. Talked to Senator. Rubio. Yesterday. There's a lot of negotiation going on in the Senate at the same time that there's the meetings that you read about in the news is senator. While we have, you did want to get your thoughts on the administration's take on Tiktok, and recently we chat just past twenty four hours some concern about whether there's going to be reverberations or a backlash in China against. Companies. Are you supportive of the way the administration, his approach this I've been very clear when it comes to China that we know they steal our intellectual property. We know there's privacy issues, but to me, this feels once again and I'm looking forward to hearing more getting briefed by the administration on this but he suddenly issues an executive order Ray when there is a sale potentially pending and you know, I don't think it's the worst thing in the world have an American company by this company So we have more control over the data, but I just want to know we're was donald trump when we've been trying to pass privacy legislation. I. Don't see them pushing for. Some of the great bills that I've seen out there including bipartisan ones and the leadership we'd like to see. So we can actually do something to protect the privacy of Americans, and we haven't had any major privacy overhaul or bill passed, and that's one thing I'm excited about having Joe Biden come in to help lead that effort and so let's See what happens here but I have serious concerns about China and privacy and national security but I don't quite understand it to me. It feels like just another donald trump executive order to try to play politics with something instead of getting the actual result, Senator Club shirt we appreciate your time your perspective as always we look forward to see who do who Biden's going to pick for his VP You think I'm going to predict this on that show among no I just think you'll pick someone who is excellent who will bring competence and compassion to the White House. Meals. Give us a name. Okay. Come on back. Vice President he's going to know how to pick a good one. I will come up. Yes we will give you guys a scoop. Thank you. Squad will be right back. That's the so pretty day. Happy Friday. Thanks for hanging out with us for being with us today, and this week squawk box is hosted by Joe Kernan. An injury Ross sorkin tune in weekday mornings on. CNBC at six. Mr. To get the smartest takes in analysis from our TV show right into your ears subscribe to swap pod wherever you get your. And let us know what today send us a tweet at Flock CNBC WE WANNA think the entire Swat team and our CNBC editors, John. Laceration Edward Ventner, and his Mulligan who hoped this show and the TV broadcast to all. Despite the pandemic despite the power outages despite the other power outages, another shoutout to all the friends and family who opened their fully powered homes to us. So we keep continue delivering you the news. Back here hopefully, not from inside my aunt called it on Monday. Have a great seeking. 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Because More (with Andrew Ross Sorkin)

Stay Tuned with Preet

1:15:42 hr | 2 months ago

Because More (with Andrew Ross Sorkin)

"From cafe and the vox media podcast network. This is stay tuned. I'm pre- ferrara whether you have a fancy title on your business card or you have a million dollars in the bank or a billion dollars in the bank. The human instinct. I don't think is actually that the different people want more. That's andrew ross sorkin. He's a columnist for the new york times where he serves as the editor at large of dealbook the daily financial report. He founded in two thousand. One he's also co anchor of squawk box a business news programme on. Cnbc sorkin is the go-to authority on all things wall street. And it's been that way for a long time in two thousand nine. He author too big to fail the definitive account of the two thousand eight financial crisis today. Sarokin joins me to discuss the psychology of wall street. Titans relationship between the stock market and the economy. And what it was like to interview. Bernie madoff that's coming up. Stay tuned are you a small. Business owner self-employed or a gig. Worker wildly has helped over one hundred thousand. Small businesses get a ppp stimulus loan and proudly serves more than six hundred thousand small businesses across america. Wobbly also design their ppp fastlane with gig workers and mine act fast as funds are limited. Apply now at one dot com slash pre to see if you qualify for a loan and to see the terms and program rules that's w. o. m. p. l. y. dot com slash preet. Stay tuned i take your questions about power policy and justice. I want to recommend a podcast. Called all worth money matters which enters your calls about money and retirement money matters is hosted by to financial planners who offer straightforward actionable advice. They break down what the headlines mean for your 401k. Listen to all worth moneymatters wherever you find your podcasts. Hey folks exciting news. Stay tuned with preet has been nominated for people's voice webby award for best episode of news and politics podcast the episode features. My conversation with dan goldman last year. Who offered us his first interview. After serving his lead house majority council during the first impeachment of president trump head two webby awards dot com to vote. You can also find direct voting link in the show notes of this episode. Thanks as always for your support before. I get to your questions. I want to mention that you stick around to the end of the show. I have a special surprise a one on one with my brother. Then he berrara so. I'm recording this. On the morning of wednesday april twenty first and still processing and digesting the historic verdict in the case against derek. Chauvin for the murder of george floyd and i spoke about it yesterday. A mcafee insider podcast and also we talked about the case together with joyce vans and some questions about it so answer those and of course. It will be a lot more to discuss in the coming days. The one thing i want to reiterate is just how important is verdict was not just for the stakeholders in that particular case in the family of george floyd but for the country and a sense of relief that so many people have felt which is natural. I've been in a lot of courtrooms. And i've seen and taken a lotta verdicts including in cases that i personally tried and i think my heart was beating just as fast waiting for the verdict to come back in the chauvin case as any other case that had a personal involvement in because we had an hour's notice that the verdict was coming in my kids. Were all home. We all gathered in the family room which is an unusual event in my house lately together as a family. See what the verdict was. And i'll never forget that. So the case is not over. More things have to happen. We've gotten questions about the sentencing as you may know when the three counts on which derek chauvin was convicted. He faces statutory maximums of forty years. Twenty five years and ten years respectively probably won't get that but those the statutory maximums sentencing will be in about eight weeks but between now and then the judge has to take many things into consideration. And here's a question about that in an email from listener kyle high pred- after show wtn's guilty verdict was read. The judge mentioned something called blakely factors. Can you explain what that means. And how it affects this case. Thanks kyle. so the blakely factors as recalled come from. Us supreme court case from two thousand four called blakely v washington and. It's one of a number of cases that basically held in connection with sentencing any fact that increases what the proper sensing should be for a defendant needs to be found beyond a reasonable doubt by the jury. The judge ultimately renders. The sentence imposed the sentence. But there's some fact like drug way or something else that affects the range of sentencing. A defendant has a right for that to be determined by the jury and in blakely. The supreme court held the presumptive. Sentence was whatever the sense would be under the guidelines federal state or otherwise and here the prosecution has indicated that it seeks an upward departure from whatever the guidelines would ordinarily suggest based on a couple of factors including that. The killing of mr floyd happened in the presence of children that mr floyd was treated with particular and that he abused his position of authority as a police officer. Now although it's the case under blakely that chauvin had the right for the jury to decide those things. He waived that right and allowed it to be determined by the court. So the court when it considers these aggravating factors like particular cruelty and abusive position of authority. We'll get briefing from the party's there'll be a hearing an argument about it and then the judge will decide. Here's a question in a tweet from brandon at bj. M eleven who asks when chauvin appeals one. Is the court required to give him another. Hearing cannot be declined to would a subsequent trial start on a fresh slate or does the prior guilty verdict have any impact so for some years as an initial matter. Chauvin has a right of appeal no matter what. And in most jurisdictions there is a an oral argument so wouldn't be a hearing but there be an argument in which chauvin and the prosecutors argue about whether or not there was some error that the trial cordon engaged in that should undo the trial verdict. I think by and large the judge judge kale did a pretty good job but the defense lawyer made a record and every single time he objected to something and his objection was overruled. Ken form an arguable basis for appeal. Defense lawyer for example complained about how the prosecution in its rebuttal summation and otherwise belittle. The defense there was an objection to proceeding with trial on the timetable. Did and in the venue where it did because of potential prejudice that came from the twenty seven million dollar settlement on the eve of the trial. Commencing there were issues about jurors. There's an issue about representative maxine waters. Having said something about not accepting an acquittal in the case all of those points remained by defense counsel they could form the basis for an appeal. My judgment is very very unlikely for those points to be successful but in case it were going to your second question and the verdict were overturned and there was a new trial scheduled. The prior guilty verdict for say has no effect. You begin with a clean slate. With the presumption of innocence with the burden of proof resting on the prosecutor shoulders to have to prove once again to unanimous jury there's complications that could potentially arise depending on how the second trial would unfold which i don't think will take place but to honor the hypothetical. I'll mention a couple of one. Is jury selection will be more difficult. It was already difficult. Given how sensational the case was and how much information public information there was about the case defined people who knew the facts of the case. Could they be fair or not. It's going to be hard to find people who were not aware of the fact of the guilty verdicts. You know. naturally that might affect some people's abilities to be fair if there were a second trial jury selection will be a challenge and then second to the extent some of the witnesses in potential trial testifying away. that's at variance with how they testified in the first trial you can imagine the judge allowing cross examination of those witnesses based on the different testimony they would have to be careful not to indicate that there was a prior trial of derek chauvin and there was a guilty verdict their ways to get around that but anytime people testify twice create complications for those witnesses and the side. The calls that witness as i mentioned jury selection might be a little bit trickier. But as i said. I don't expect there to be a successful appeal here. it's time for a short break. Stay tuned As you know. I'm pretty used to legal battles but in business. It can bring teams down. 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How effective teams meet their goals. If you manage a team visit. Monday dot com for your free two week trial. If you have thirty three minutes you never have to worry about a break in at home ever again. That's how quick and easy it is to set up a security system from simply safe. It's the kind of thing that so easy to do. You can do it during a netflix. Binge watching the game or listening to a certain podcast. I was shocked by how easy it was to set up simply safe. And just as happy with the high quality camera footage any unintrusive devices. Simply safe is incredibly easy to customize for your home just go to simplisafe dot com slash preet. You can easily choose the exact sensors you need or get help from. One of their experts will get to your house in about a week. Which means by this time next week you and your whole family can go to bed knowing. Your home is being guarded. It's easy to assume everyone in your house already feel safe but they might not and it's worthwhile to talk about it. Simply safe is a small easy step to make sure everyone feels safe at home. Go to simplisafe dot com slash pre today to customize your system and get a free security camera that's simplisafe dot com slash prete today. My guest today is andrew ross sorkin. He's a financial columnist for the new york times and co anchor of squawk box on. Cnbc sorkin is perhaps the most well sourced journalists on wall street every morning. He publishes dealbook a business. Newsletter that essential reading. For ceo's and policymakers alike today sorkin joins me to discuss eeo pay. How money changes people and whether we should be worried about some of the recent trends on wall street andrew. Ross sorkin welcome to the show. Thanks for having me long overdue. I don't know what's taken this long. You know i'm a big fan. And a longtime listener so to be here with first time caller. Yes very much so before we start. I want to say one thing Off the top. We were scheduled to record this interview on tuesday of this week april twentieth and the time set for some days. You're super busy person. The times that was four thirty and we got on the zoom as as we do now in the pandemic and the whole world was waiting for the verdict in the dark chauvin case and you very gallantly suggested. Let's put this off so you in us and and everyone else can see what happens with the verdict. It's a big important date. And so i appreciate that and we scheduled for this morning because you were gentleman. I appreciate it. Well i i appreciate you and i also knew that we were. You know this. This was a big moment in our country and And also given what you do and the important commentary work you do and everything else That this was something that usually to be focused on. So i thought here viewing me was not very important but i think i think i think i think it'll be less distracted and more focused interview And as far as i'm concerned it was the right result yesterday and we'll see what more good comes of that. Here's the thing that happened recently and it made me think of conversation that you and i had some years ago. And that is the passing of bernie madoff the most epic ponzi schemer in history. Who prosecuted by my office. The southern district of new york and you had occasion to spend a lot of time with him. I think five years ago. Two thousand sixteen. Yep what did you feel when he passed away and tell folks what it was like to spend hours with him in his prison. Oh goodness You know what. I felt more than anything. A journalist was actually a regret Because i even to this day. Don't believe that the public got to see him. Truly face not justice because obviously he was but face real questions about his conduct in his behavior. And as you know what. I was trying to do in the reason i was going down and visited within prison. Twice was effectively persuade him and ultimately the prison to allow us to bring cameras inside for the first time because he had. He's never he's done some interviews but all written either in books or magazines or or whatnot but to me for the public to see what the public to see. What deception looks. Like and to viscerally be able to see that i always thought would be very worthy in part because as a culture i don't think oftentimes and i don't mean say the cynically but that were that we as a culture not skeptical enough especially when it comes to our own personal finances and really trying to understand. What's going on with these things. And i think it would have served a just an important public service for people to to see janaka cautionary to i believe it not because it would have been revelatory insofar as that his answers would have shocked you but because it it at least for me. It was just such a profound Demonstration of deception and in in fact even for me. When i remember visiting with him there were times he would tell these enthralling stories. That all sounded true. And you'd swear to believe it and then for leaving. The prison wants standing in the parking lot. And it was like you couldn't tell what was factor fiction you know and i find him to be contrite. At all the first time. I went down there He was not contrite. It all not contrite at all and then it was it was like the opposite of contrite which i also think would have been fascinating for the public to see the second time i went down. I mean i think he he cried for like two hours. It was it was so it was fascinating which also of course raises so many questions about what i saw the first time and maybe this goes back to the idea of the way a sociopath acts but what did you ask him. Got him to cry for two hours. It's funny. I'm not sure what inspired the crying. Remember talking about his son. Who commit suicide. But i just think i think he was so sad about his condition The question was contrite or was he just depressed about his own situation. When you talk to him did you think to yourself how this guy fooled and ripped off so many people many of whom are sophisticated not all but many or did you find yourself thinking how the hell do this guy. Swindle people out of you know literally billions of dollars. Oh no i could see it. I see it in fact it was so clear to me because he he was a remarkable storyteller. I mean look here i was. I know his background. I know the story. I know he's swindled billions of dollars out of people and then and then i'm believing certain stories. He's telling me. In the moment. In fact then i as i said i had to almost double back in my head to realize okay even that. I'm not sure it was true. So you know there was something. He had to say. He had a talent. Maybe is overstated the case but he had he had a talent to be convincing. No question in your travels talking to people. I use the term sophisticated person who we think of as somebody who you know sort of inured to lies and you know being cheated and time. After time when i write about some of these examples in in my book you know people who we think of as polished and sophisticated and smart get duped. Do we make too much of a distinction in the financial world. Between sophisticated unsophisticated people. Yes no i. I think that there is a level of sophisticated person who clearly understands the markets and finance economics at a level frankly that puts them at a remarkable advantage. I mean i would argue. The markets themselves have never been a true level playing field in part because of that and because of a Sort of financial literacy that exists but at the same time. I think there's a lot of folks even at that level that are willing to sort of either closed their eyes or believe in in all sorts of things. I think by the way. I think we're in a bit of a you know whatever you think this doj coin bitcoin whatever. There's a bubble going on of some sort with lots of arguably very sophisticated people who believe they're believers and Even the even the most sophisticated. I think in can get sucked into certain things. You mentioned financial literacy. And i've asked this question of a number of people what do you think is the rate or level of financial literacy in america abysmally low. I think most people have no idea his because people don't watch cnbc everyday. No it's because some of the stuff is hard but more importantly it's really not taught in most places especially at young ages so the idea of credit is credit a good thing as credit bad thing. How does credit really work. That's a fundamental part of our economy. And i can tell you the credit can be a great thing. Correct me a terrible thing but you have to understand it to some degree before you can even begin to even think about it or a pine on or so. I'm just not sure that people appreciate a lot of these issues. I think. I think it has a huge implications for public policy. How we think about tax policy in america how we think about our in d. How we think about incentives all of these these things you know. Have such a huge impact on society. And yet i think if you really talk to people around the country there's just very i hate to say because you're effectively people think that you're effectively saying ignorant and that's not what i what i'm trying to say but i think there's not necessarily a a particularly acute since about understanding a lot of these issues and separate from the policy issue it has an impact and effect on people's own personal finances right and then on the one hand you say well if you're not sophisticated or You know very sort of immersed in these issues how to manage your money you supposed. You're supposed to rely on a financial planner or some other person stockbroker if you have enough money to invest in stocks and then you have people like bernie madoff who take advantage and it's hard to know who to trust and who not to trust and i guess one question i have is. I was only kidding about cnbc. If you're a thoughtful person who's listening to this program and you want to become more educated on issues of finance and the stock market and everything else. What's your advice to them too. They watch your every day or their books that they can read. Should they pick up the wall street journal. There's something more obvious than that or less obvious. I think it's a combination of of all of those things. But i think the most important thing is to actually do do research. I do think i think that you. I think there's some great instructional stuff online. That's really helpful. I think you need to be reading the newspaper every day with wall street journal with the new york times. Hopefully dealbook look. I'm sorry. I mentioned the wall street journal mr new york times but i but i was talking to know but you should absolutely. I think everybody should be. you know. Rioters right oh i for me. Personally i read all everything. But i but i think all of that is helpful in terms of trying to get your head around. What all of this means in whether it's your personal finances that you're trying to figure out or whether it's some of these larger as policy issues in where you stand politically on them. I think it's important to try to get educated on on what all the different component parts are and by the way also to listen to both sides especially when it comes to the policy stuff because you know these things are on the surface. Few your oftentimes sound very political. But if you actually dig in and you can look at the numbers once you understand it. You can make your own decisions about so. Maybe you can help educate me on something. Things with respect to the stock market so the stock market politicians say with great emphasis. The stock market is not the economy does not reflect the economy. Is that a slogan or is that correct. It's right and wrong. The stock market reflects what will call the investor class in some of the investor class of course a retail investors. Which means you know people in the street who have who have used in more and more you know People on the street are not not talking about wall. Street are investing so there is as sort of. I don't know if you call it. Wisdom of crowds issue going on but it's what. The market is projecting out. What they what people think the economy is gonna look like twelve months eighteen months twenty four months out from now so during the pandemic one of the things that i think blew. Everybody's mind by the way including my own all the time was you know we'd hear these terrible things going on. In terms of unemployment rate the economy falling. It just terrible everything. Tragic and yet you'd see the stock market. Go up and you'd like what is going on here. This sounds this is crazy town at this makes sense and the truth is what was happening. We investors were saying okay. We're not looking at what happened today or even in the rear view mirror of what what happened. Yesterday were effectively making a abed than twelve months from now and eighteen months from now you know the vaccine will be out. People will go back to work. And what's what's that world going to look like. So while the i guess i guess the answer questions. While while the stock market doesn't necessarily reflect the economy per se especially right now in by the way people can be wrong because they're guessing right. There's a this is all a bit speculative The speculation if you will is that the economy will be better and so there is a bit of a correlation but not in the here now should everyone who has some savings in the stock market. Oh goodness i hate. i know. We need to have some kind of caveat here and say. Mr andrews is not providing financial advice. And you indesit your own risk. Thank you sir. Thank you councilor Yes because i actually. I don't like to offer stock at true. It's sacrifice look my sense. Is that if you have some savings overtime. It is better to be in the stock market than not on a long-term basis as long as your long term investor if you're buying stock index and you plan to be there for ten twenty thirty years yes absolutely. If you're telling me that you need this money in six months from now no. It's a very bad idea to put that money in the stock. Because anything can happen you can them happen a pandemic and we who knows who knows what's gonna happen tomorrow. But do you think. I guess you sort of answered this is there any real rationality to the market. And you've been covering it in writing about it and thinking about it for years and years so your pronouncement matters to me. I do think it's reflective of where the economy is going. I think that's that's true. I mean i think you you saw where we think it's going where where people think it's going. Yes i think it is able or often wrong just like the politics about donald trump and everything else. People are often wrong. But i think it is as a as a signal indicator if you will of of where people think things are going absolutely and by the way you know there are companies and they that make money and you can see their balance sheet and you can see if they're making more money this quarter or less money this quarter in their employing more people or less people and There's no question you look at a company like amazon stock has gone through the roof Tech come back a little bit but that company has been a great success story was became an even greater success story during the pandemic and the stock market reflected that when i was earnings or he look i remember amazon began in had its rise and i would hear people say about amazon. What a lot of people say about some other companies and maybe their distinctions to be made but in the late ninety off by a few years but in the late nineties in the early two thousands amazon kept growing and growing and growing and there was no profitability in sight. Right i remember the same thing. People people used to call it. I remember there was a cover story was fortunate to forbes said amazon dot com dot com right and how amazon during the pandemic fabulously i mean unbelievably and profitability huge gigantic but that that required a remarkable level of patients among the investor class And there was a belief that that jeff bezos was going to get there. He was sort of given dispensation away. Frankly that most companies don't have to make these kind of long term investments to lose money for as long as he did and along the way it's worth noting that while you and i and most people think of amazon as a prime membership or something that brings you packages to your home. A huge part of the business developed in the middle of it called aws which is offensively a cloud service which is actually the most profitable part of that business in l. Helped to some degree subsidize the rest of everything else allow back to the build and grow but do people some people. I guess this is true. As i say it i realize it must be true of some folks. They look at the amazon story. And i think back well you know. I thought that lots of people thought of amazon dot com as amazon dot com as you mentioned and now when i have an investment opportunity with the specter. Something that's new and different as amazon was at the time. And it's not profitable and there's no near-term expectation profitability. I think to myself well. This could be the next amazon. And i could be an easy street and early retirement if i put all my money in this. How often does that happen. I mean that's the you're you're speaking. The american dream is the american dream but in many ways amazon was the shoot the moon american dream and it succeeded and the truth is that so. Many of the other companies that also had no earnings or revenue. Back then disappeared and went bankrupt and so it is very hard to really be able to choose and be able to identify accompany at that early stage as a winner the venture capital model. Is you know effectively. Most of the investments are going to fail. And you're effectively trying to you're hoping a couple of your investments are grand slam home runs Because the rest of them united me get to first base and and so it really depends on how you think about how you invest and do you have a portfolio if you're if you're investing in thirty different companies your sort of praying and hoping against hope that one works admitted actually not be a bad way to do it if you're putting your chip down on one of these companies did that's that's a riskier play so we talked a little about sophisticated people's fisted investors whatever that means but there is a definition that is applicable in connection with cooking money into a hedge fund. And you spend a lot of time thinking about hedge funds I have from a prosecutorial standpoint. And we've prosecuted. People who are hedge fund managers prosecuted firms that are in fact hedge funds themselves and this was not a concern of mine when i was in office. My concern was about insider trading and criminality and misconduct and ripping people off. And that sort of thing as a practical matter do you know what percentage of hedge funds over time beat the s. and p. five hundred of the most part they don't don't so explain so explain this to me any idiot like myself then. I'm going to call the people edits. I'm calling myself an idiot if you do what they say And you dollar cost average meeting every period. If you're lucky to have access you know savings am i am and you put a certain amount of money in the and s&p five hundred. It's kind of idiot. Proof to use that term again and over time you have a certain gain on your investment and there's very low cost they don't have to prove myself to have you know certain metrics to qualify as a sophisticated investor and then there are other people who have millions of dollars and they put them into these fancy hedge funds. And i do better. How do hedge funds thrive. If that's the case. I don't get it so i mean as a dumb question but the life of me i don't get it so first of all you're right and you are right there with warren buffett. That's had company. It's very good company and he has advised every renton own in his own annual letters. He says look. If i was telling my family what to do i would tell them to buy a stock index. I would not tell them to buy into a hedge funder or or put my money elsewhere. In fact he's had a running bet against hedge funds with certain hedge funds about whether they're going to beat the index variable. He's right so it's some really small. I wish i had the figure in front of me. But it's some it's not the case it's like well. Sixty five percent beat the index and thirty five percent. Don't some some very small number over time. And you know and i know i have friends who work at hedge funds and i like them in. They're very smart And and they're upstanding people but if if we're talking about an area that is susceptible to analysis and mathematical analysis and rationality. I'm going to repeat my question. Because i like asking it. What the hell are people doing putting billions of dollars into a thing that over time by almost every measure at least in the last twenty years. Maybe it's not true before that by every measure cannot outperform the s. and p. five hundred. Two things you're talking about the american dream people dream they they. They believe that they can perform the market. And because some of these hedge funds due for a short period of time they wanna play in that arena. That's the that's the book looking for the lottery ticket. It's a lot. This is a lottery ticket gate. We think about a bill ackman. So bill ackman's at a famed hedge fund manager who has been remarkably successful in certain years. I mean literally this last year. He's up some seventy percent. During the pandemic he called it a hundred percent right and in kudos to him but there have been years where he has lost a small fortune making terrible bets small small fortune to him to be able to big for a small fortune to him exactly but but but the point is that i think unfortunately what happens is people say to themselves. I want to. I want that lottery ticket. That's that's why people go to. That's why people go to the. Bodega bide lottery ticket. And and this is in some to some degree. that's that's the equivalent of that just with a lot more money. I hear you. But by definition the people who are permitted to invest in hedge funds by a lot of people's metrics have already won the lottery by and large. They are millionaires already. And so you're saying the millionaires want a lottery ticket to absolutely. I mean look the it does that will come as a surprise like that and now i mean you know you and i are talking about this sort of adam saints blase but that's a little bit of a shocking thing to the ears of the average american that people who have millions of dollars kind of money that most americans will never see in their lifetime that those people are prepared to invest in ways that they feel are lottery tickets for them to go familiar to billionaire. I suppose and end up not doing as well as somebody. Who has the patience of warren buffett or someone else but isn't that one of the great lessons about money. Money does change people. And i don't want to suggest a dozen at all in any way but i do think the one of the the truths that i've discovered after covering this world for less twenty years. Is that whether you have a fancy title on your business card or you have a million dollars in the bank or a billion dollars in the bank. The human instinct. I don't think is actually different. People want more people want more. You know there's a great line in wall street and it now not the original wall street. Which of course has the great greed is. Good line but in the Wall street to which was not as good. I'm news not as it was. It was a question that i think. Michael douglas or somebody asked they said gee i find that everybody has a number and it's usually an exact number so what is yours more. Look you covered these cases. These trading cases we brought. When i was in the us attorney's office one against man by name. Roger rutland who's millionaire and other against a man by the name of rajat gupta who was estimated to be worth about one hundred million dollars hundred million dollars pretty good and when you bring a prosecution you're not overly concerned about the psychology of why someone does it but the sense. I got in my armchair psychologist role is that he wanted and he looked at a guy like roger ratnam this speculation on my part and what i know of human nature and he said i can't believe that guy has a billion and i only have one hundred million and so we entered into a conspiracy with him and gave him inside information and lost his reputation in the process convicted at trial and went to prison and he already had one hundred million dollars because more because more and i would also just add to that by saying what you see over and over again especially among those who have a lot to begin with his surrogates is actually not even about the money per se in terms of what that money can buy. It becomes at some level at at those levels a scorecard for for power and for for pride and for Status addis i mean. That's i think that's what happens. You know it's so interesting. Because i think there are people at the you know who who don't have money who are robbing stores or Doing other things because they they want they want to pay the mortgage or they want to pay for rent. that's different. That's the sort of a very different motivation when we're talking about insider trading when we were doing those cases in those sort of a revelation. At least that i had because the defense always is i mean the inverse of all of this is when someone gets caught. Who's already rich they say. Well why would i do that with my client do that. He's already rich. Playing on the question that i just asked you. And of course it's much more complicated to explain the more philosophy To put it tersely and then you realize that in many contexts. It's the people who are already successful in already. Have a lot of money who are built a certain way that they cheat. So for example the analogize was a used was people doped up. And you know it wasn't the crappy player. Who was the backup quarterback or you know the benched. Baseball player is people like lance armstrong. Who did work hard did have probably more talent than anyone else in the world. But he wanted more and he wanted to always win. And that's not something that people are necessarily you know built to understand and you look at people who are successful like that and he said well why would you. Why would you. You're already the best in the world. Why would you cheat. And even for lance armstrong right because more because more but also and i've spent time with him as hell you'd like to hang out. Hang out with me. i love you know what. It's i love fascinating stories in fascinating characters fascinating people in various brooks you like well. The truth is that there's a great drama through to crooks and to people who have had these ups and downs. I'm somebody who believes ultimately that underneath it all if you can get if you can actually get there to them and sometimes you can't That there's a way to understand. It not not necessarily a way to accept what they've done but i'm always fascinated tried to understand why they think what they think and why why they thought in the moment that that they conduct the crime or whatever. It was How they thought they were going to get away with it. But so much of these these examples that you're talking about are the some of the most competitive people in the world whether in sport or on wall street a it's a. It's a battle of wits right people trying to outsmart each other. That's part of the wall street by where that's part of the business. It's how do you outsmart the other person and some some time outside outrun the bear have to outrun but sometimes outright but sometimes outsmarted the other person unfortunately there little too smart for their own. Good if you know what i mean. 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By and large they are more happy less happy or no different from people of ordinary means. Goodness mostly no different. I don't know if they're materially. Less happy per se. But i think sometimes money obviously can create great unhappiness because people are fighting over money and changes relationships and dynamics in all sorts of things happiness. Look make maybe some of them get gonna better vacation. I do think you know what the what the money does do. And people have said this to me many times whereas it insert while while can create lots of issues for certain people depends on what how much money we're talking about. It can take sort of one issue off the table as something that the bills paying the bills that you not think that those people are not thinking about that in the same way that most americans are. Most americans i think are spending You know a decent part of their life thinking about paying the bill am. I can have enough money and my My kids my kids gonna be able to go to school. Am i gonna pay. Or there's there's insecurity yup if you lose your job and look at look at the pandemic and people have a lot of money had a better time of it totally during the pandemic because they had a cushion exactly in many ways by the way it all money also allows people to take risks that they might not otherwise. Take as well because of the cushion that you just talked about. Well it's you know. This is the the mathematics of compounding interest or whatever other analogy want us. It's a lot easier to get to two billion from one billion than to get from zero to one billion and from one million to two million from zero one million one hundred percent. But i always think about Dick fold richard fold. Was the ceo of lehman brothers before the financial crisis And into the financial crisis in. He's somebody who had over a billion dollars of stock in his company and he rode the stock all the way down to fifty six thousand dollars and people said there's there was a guy who was a true believer but if you turn the story around somebody who also had made in had in the bank several hundred million dollars ready and so he was he was able in many ways to take a remarkable risk and while it may have looked like he had a billion dollars a stock in his company. You know all the skin in the game that we always say we you know people talk about wanting in terms of trying to incentivize people in many ways it was just the cherry on top. And maybe you could afford to lose that jerry. Yeah although some people you know in his position still would not have done that cash or something. Else that angers folks and angers me too okay because we didn't really we didn't resolve hedge funds and that's that ceo compensation. And i know that over time has been more dramatic gap between the lowest paid person in the company or the average paid person at the company and the ceo and most people in america are not ceo's but there is a question about what value they bring in whether their interests are aligned with the companies and this was an extraordinary report. The came out not that long ago and it sets forth that. Ceo pay generally surged during the pandemic medium pay for the chief executives more than three hundred of the biggest us public companies went from twelve point. Eight million to thirteen point seven million and then most dramatically and people love to hate on this kind of thing myself included the norwegian cruise line up which recorded four billion dollar loss last year. Because i don't did you take a cruise last year andrew. I'm not sure. I don't think i've ever taken a cruise to be honest. I don't think i ever will i. I did take a cruise once with my family that. Ceo of norwegian cruise line. His pay doubled to thirty six point. Four million dollars. Not that you're his keeper. But what the hell is going on there. I don't know if i can speak to the norwegian cruise issue. But i can definitely speak to the larger issue. A ceo pay which is literally makes no sense at all and the reason is it really is. I don't know if you could. You could bring a rico. Case against companies will not now not now but podcasters. Don't have rico capabilities you know. What's so strange about. Ceo pay is it. It's set by a board oftentimes with consultants. The consultants of course are are are paid by by the board to keep effectively. Rach i would argue ratcheting up these numbers but it's not about it's there's nothing of competitive pricing. So you know if you prayed or i were were hire somebody today. I think you would probably say to yourself. I want to try to hire somebody for whatever that job is at a fair market rate. You probably don't wanna pay too much more than that and hopefully don't wanna pay too much less than that 'cause arguably would like to make this a sustainable job But that's not the conversation that happens in the boardroom. Nobody says is this. If the ceo left tomorrow and had to go get a job somewhere else what would they get paid know. How can they can they really. Are they really also get paid fifty million dollars a year. There's in another place that is going to do that. And i've always been sort of struck by the fact that there is no genuine market in that way now yes. There are certain executives That that probably could get some some of that Kind of pay. But i think most of them probably couldn't but one other thing that says you. Will we look at public company. Ceos because we see these numbers and their public and you get to see it but the thing that's extraordinary that often is not covered enough is numbers of private companies. And you talked about hedge funds and the like there are people forget about. Ceo's making forty million dollars a year. They're people making eight hundred million dollars a year. I mean literally eight hundred. And i'm not just talking about people who have stock in their company because the stock went up there you know you look at steve schwartzman at blackstone. He's made enormous amount of money. I mean just literally off of the fees of the company in a given year Some of these other hedge fund managers have have done remarkably in so won't believe it. It's one thing and those are extraordinary figures and i don't know how those places do overall but it's one thing to make a lot of money if the company is making a lot of money and you're taking some share of that but the logic of of making an enormous amount of money and having an increase in your salary when other people are being laid off seems just not just nonsensical but downright corrupt to people. They right to feel that way. I think they all are in many ways especially when when a company is is failing where we're company's not doing well. It seems crazy that would be compensating. That the ceo for more the look. This is the complicated part to me about. And how we think about employees in america all too often. I would argue over the last thirty forty years. Employees are thought of in the same way that simply thought of as cost. Maybe just as cost you know you have a. You could spend money on technology you can spend people spend money on marketing on this. Spend been money on that and so when a company takes out cost whether they are people or whether they are light bulbs the investor class treats them the same. And that's that's the problem that we sort of lost a sense of humanity. All this and i think it's coming back a little bit in terms of the conversation that the business is now having about the role that they played society. But i think still has a long way to go. I'm gonna move onto something else that makes people angry and i think this makes you angry too. And we've talked about this. And we mentioned insider trading before so. You're a journalist. You've done very well and you talk about companies and you talked a lot of people who are at companies. Are you allowed under the rules of your journalistic employers in your times. Cnbc either or both. Are you allowed to invest and trade an individual stocks. Not at all wise them one is. I'm often privy to effectively information. I you know my job is to ferret out information before it reaches the public And secondly I would never want and neither would the news organizations that i work for ever want there to be even a scintilla question about My motivations were incentives to write or or or report talk about a particular issue or particular news item. I mean to me. That's that's sacrosanct. Right so yes absolutely so and and no not to to To downplay your importance and influence could you but but let me ask the follow up. Question are you. Are you now or have you ever been a member of the house of representatives for the us. Senate i have not i. I'm not now nor have ever been nor do i imagine ever will. And if elected i shall not serve And would you agree with me that those people senators and representatives have real power and authority as lawmakers. Correct absolutely yeah. I don't know why i'm doing it. No a like a prosecutor. Should i'm with you. I feel like doing a directly knowing. This is the right way to do it. Because it's it's. it's it's ludicrous. It's ludicrous and members of congress can invest and trade an individual stocks even though on a regular basis. They serve on committees and they vote on legislation. Even if it's not something that they're the chair of the committee for but vote all the time on things that they presumably have either inside information about or conflict of interest. The same things that you talked about and we put up with that. I mean i i i was staff. We talked about this before. You're your column of couple months ago. There was excellent. I was just a staffer. And i found it. You know crazy to trade an individual stocks because all day long. I had meetings with people and they were folks who had interests in the telecommunications industry various technology fields etcetera and this is why you get these questions about members of the senate in the last year and no cases were brought but there was a case brought against a particular congressman was pardoned by the president engage in communications of insider trading while in the white house lawn. But what what the hell is going on with that. Why doesn't congress police itself better and say you know what if indra sorkin who again not to downplay. Downplayed is a mere journalist. Ethics requires the hino trade individual stocks. How about our elected representatives in congress. Look i i. I don't understand it. I can't. I can't get my head around it Congressman unwilling to police itself of the regulatory agencies have been unwilling to make it a priority to try to police them. You know what. I wrote this column effectively. Suggesting that the sec. Stand up and say we're gonna we're gonna start policing congress ourselves of course the conundrum if you're running the you're against running the sec is your budget is set by these same people. And so i think over the years no regulator appointed or otherwise is really wanted to new bite the hand that feeds it and that is the problem and an asking people to police themselves has never been a particularly successful strategy. And so so here we are. And i think it's gonna take some leadership from somebody I'm not sure who who who's gonna be. The one to stand up to say enough is enough because why should we even have two quite the american. The american public has so much skepticism and cynicism already about politics and about policy and how it's made why not. Just take this. Take this piece off the table. I mean it's just so it's so crazy that this is even allowed to happen when as you've said you know i'm not allowed to own stocks. There's a lot of businesses that don't allow their employees to own stocks or they have to go through remarkable preapproval remarkable vetting programs a law firm. Generally you have to do if you're a staff member at the sec. You have to deal that at and the congress to do anything anyway. Put that on the list of things in your platform for when you when you run. And by the way full disclosure. I should say that. I am allowed and do own. Shares of my to employer. So i do own shares the new york times company and comcast. But i m a long-term holders they say got it that makes sense. Here's a thing that you need to help me understand in other people understand. So everyone i think over time has come to understand the idea of initial public offering and going public and people have a general sense of what that means. Now there's a new thing called a spec. What on god's earth is a back and should we be concerned about that thing. We should be so concerned about Here's what's happening at people. Trying to call it with a cullen ipo two point. Oh this is the new version of of going public two point because more and what it is effectively as there are effectively investors. Who are starting. What's called a blank check company. They go out and they actually do. Have a real. Ipo and they raise money. Let's say a couple of hundred million dollars billion dollars and it's called a blank check company because literally the company does nothing except take that money and go find an acquisition target usually a private company. That effectively is then going to be brought public. If you will sort of through the back door if you think about it like this into the public markets through this publicly traded company so so you avoid a lot of scrutiny you avoid a lot of all of that are plied to an ipo. Which effectively means you. Wait if you're a company going public for the first time you typically can't make crazy future projections about what's going to happen three or four five years now The sec looked down upon that There's there's a lot you know you go through a whole process or roadshow. Investors have to look through your books. It's a very difficult in often. Arduous process this spec idea in many ways sorta short circuits that process and most of the companies that are going public through this. don't have revenue they. This brings us back to the amazons. are they they they. They don't have revenue that have profits and so they have to tell you what they're going to be doing three four five years from now. Of course call me in three or four five years. Now we'll see how accurate those projections are. But there's a lot of investors that have gotten a lot of excited a lot of excitement around these things possibly too excited. But so do i understand how this works. People can follow. It can be anybody you know. An individual has some means pre. We could do it together. We raise the money right now. Okay let's make me wanna or you andrew and you're going to create a step and you have a goal of raising. I don't know if you have to have a goal in advanced five hundred million and you call up your friends and his starting spot. It's the new hot thing it's crazy. It's amazing and you'll get rich with me and then i ask you the question okay. Andrew will what. What kind of company do you intend to buy. Do you have to tell me. Do you even have to do not. I am not supposed to know. I'm not supposed to know what company i'm trying to buy or even even an industry would know. There are people who was eight. Yeah with a specialty though. Say in case this. I'd go by a media company so i'm going to look i'm you know. I have an expertise ardley or maybe not. We'll see how the media space i. I'm going to go buy a media company so people would say okay. So we're going to give you the money and you then have effectively twenty four months. It's actually really it's like a sprint and then there's a deadline because if you don't interestingly if you don't spend the money in that twenty four month period you have to return it in fact you you lose then that what what. What requires the time limit. It's just the way the the the the instrument if you will is effectively set up arguably i guess they. They could make three years four years five years if they want you. Effectively provide interest on the investment. They've given you if you can't find an investment so it's actually for the people investing in these things. Initially they're not really long term investors. Most these guys are just to financial play for them. The attractiveness of it is the wherewithal of the person. Starting this back and in your case. Potentially i'm knowledgeable media someone else might be knowledgeable about tech cetera et cetera. And so it's a little bit of putting money in the back on spec can i can. I say that that's exactly what's happening. And then part of the reason why you're seeing so many celebrities big names trying to do this people in business. Every you know colin kaepernick as spec a rod's got everybody's got us back in fact it's a terrible terrible line but a wall street. There's a running line going. That says i know more people who have a spec than who have covert but bum but not really so anyway but but the reason they're doing this is because if they find an acquisition target they get to keep twenty percent of the money that was put up. Initially it is. It's it's like the greatest deal around multiple. When when you call me to set up your back. Do you have to put a dollar into it. I do have to put a little bit of money into it. Yes i've to not twenty percent after. No no no no. I put it in a tiny tiny tiny amount just to show. I have a little bit of skin in the game. But i don't really have any skin in the game. Of course no. This is this. Is this how how ordinary people should be worried about this. How can this affect the economy. Well a bubble situation above. Look i think where the person on the street should be worried. Is you have a lot of companies going public. Don't have real earnings don't ever revenue. You have a lot of these sponsors. The people who are putting these facts together who go out on tv. They put out press releases. They're on social media trying to tell the public. When you buy some company how great it is and i think people should just be wary because these quotes sponsors who are arguably saying. Hey i'm here. I vetted this thing. I'm buying in. I'm an investor in. It aren't really any of those things they've they've got. Twenty percent of the company for free effectively and most of the time intend to sell their shares within six months to a year far earlier than any of the projections that these companies are making about. What's going to happen in the future. And i would imagine to sing about this off the top of my head when you have a two year deadline and you get to month twenty among twenty-one with the prospect of having to return all of your investors money that maybe you don't make the most intelligent and best decisions about your acquisition exactly in the days leading up to the to the democratic hundreds of billions of dollars chasing you know not enough companies effectively. That are sustainable businesses. That are doing this. And i think one day The next priority will be subpoenaing lots and lots of emails that are going to show lots of misbehavior around what they know. And because there's an incentive to misrepresent when representations have to be even though you're representations have to be made in this context because there's a lot of money to be made a lot of loss to be avoided. And i guess i guess it's great to be efficient to see Who's being sought out by spec. 'cause your evaluations you're going to go way up on that's the thing evaluation. We'll go way up and a lot of venture capital backed companies are using this moment effectively to try to get out as quickly as humanly possible. And there's a rush to the if you own a business. There's a rush to the exit. This is your this is your shot. Of course you know. Were already starting to see a lot of the stocks of these companies are starting to fall so We'll see we'll see who ends up holding the bag. Can you explain in sixty to ninety seconds. This whole business of takes sixty ninety seconds to clear my throat so this craziness with game stop. Which is a retail store chain chain store which presumably would not have a brisk business during the pandemic lots of people the hedge funds. We talked about hedge fund folks. A few minutes ago have been short on game. Stop meaning there to placing a bet that revenue and profitability will go down at that store chain and then some other group of folks said. Screw that we're gonna go long and that's going to hurt the hedge fund folks. Some people say was brilliant. Some people say it was rogue some people say it was a reckless. Some people say it sends a message. What the hell's really going i. I feel like. I've asked you this form of question. Three or four times. What the hell is going. So what's happening here is basically game. Stop has long been assumed to be like the blockbuster of our era which is to say great at one time in a bricks and mortar world but long-term is going to struggle because in download their games not gonna show up at a store so the value of the company had gone down but was still relatively high and so there were a number of big hedge fund professional investors who said this is nuts and they start shorting company expecting the value to over time be much lower at the same time. There was a group of investors online might be described as a retail audience on reddit and elsewhere who say two things one is that they actually believe in game stop and some of them genuinely believed that the business can be improved but another very clever group said themselves. You know what there's so many shares that effectively are being held short and the we can talk about what it means to our. How you short accompany but so many people betting against it that there's a way effectively to have what's called a short squeeze that if if if enough people by the stock and go long at the same time you can actually create almost self fulfilling prophecy that will go even higher because those who have sold the company short effect we have to re buy the shares. It's a little bit in the weeds. Little complicated but and therefore it will affect sally pressed the price even higher and we will stick it we will stick it to the man we will stick it to the suits by doing this and we will. We will demonstrate. Just how screwed up. Wall street really is and so. That's what happened. You had a group of people go to read it Get on get in the markets. Start buying and buying buying buying to the point. Where a number of hedge funds lost billions of dollars on their short bets now. The stock is so high today. I mean it's it's to me. It defies logic sense but it sort of is representative of of this moment That were in the markets and also the power of social media to sort of bring people together used to be and look. You used to look at these things. With hedge hedge funds used to hang out have dinners together and they would get together and pushed the price of stocks and these guys are saying. We can do that too interesting. Thanks for making the time and explaining so many things to me. Oh goodness thank you for having me explain so many things. Let's do it again. Conversation with andrew ross sorkin continues for members of the catholic insider community to try out the membership. Free for two weeks had cafe dot com slash insider again. That's kathy dot com slash insider. So i want to show this week with a little bit of a follow on to what i said at the end of the show last week where i talked about the sale of accompanied. Vox media thanking folks bidding farewell to milligram and at the end thanking my brother who made all as possible and i thought what better way to follow up on that discussion then by asking my brother to stay tuned and so he's my special guest at the end of the show then he are you hear. Hey how are you. How are you now at the outset ask you. Do you prefer to be called kid. Brother or baby brother Boss brother boss boss. Br so you you're not my boss anymore. true. I think officially unfortunate did it. Did it fulfill some childhood fantasy to be my boss. Yeah ever since you've got you said this yesterday for since i was five i five. You used to say i. I believe you would say things like you're not the boss of me exactly. You're very specific now because the whole remote control is you as you like to hold your audience last week. Needs to fight about the rope. Remote control used to win more than i did. You were mom and dad's favorite. I was so this is my mom and dad are going to listen to this. You can't say they know everybody knows so no no revenge now. That's not true. Okay how did you get me to do a podcast. I don't did. I get you to do a pot if you were a member. Voice got very high. Why did it did. Because i'm just trying to remember back to remember. I'd let me refresh your record. So i got fired. You remember that right. You're aware that i do remember that. I think you read it in the in the papers. All day on cnn. That was breaking news. And then you. And i had a conversation not long after that about what i might do next. And i'm trying to remember how the podcast was my idea or your idea. You may not remember the prior to this discussion about you joining our medical e-e-eh at one. Yes at some point in the future. We discussed one day. i would. i would have to leave. Although i never really fully expected. Whatever leave that this was an option. I remember that now. Yeah you convinced me when. I was amazon. Trying to figure out what to do next you were one of the folks that influenced me to go into media. I don't know if you remember us as i was ex. Yeah you said media go to go to media media is you can have an impact you can now influence. Did you have podcast already at the company. Now my recollection was we chatted. We wanted to get you involved. I wanted to get you involved certainly in some capacity and we were trying to figure out how to do it. I was your brother. Because you thought i was a cash cow. I thought he'd be good. I thought you'd be good. I knew you'd be good and you didn't want to have to wear any makeup so we talked about this. You really wanted me to do video wall video. I'm not this is before i I decided to be a commentator on cnn so this was like sort of. Let's go slow. Let's try something that's a little easier. No makeup on your own schedule. And that's what we did. That was my recollection. Palley started and then. Did you expect it to do as well as it did. I don't think l. stretching it to think that you'd be excellent for a bunch of different reasons much trying to brag about you hear make you feel good you're you're a missionary and as opposed to a mercenary and what i find is that missionaries when they're doing new products or any product at all the best products. Come from them. And you care now you care about your audience. You care about delivering the great product more than the financial part and so. I knew that the product would be excellent. I knew you'd be really good. What i didn't know by the way is this soothing. Voice you have. I realize afterwards voice you hate. It is nice this if i had known that. Yeah as a soothing voice. That was something. I didn't know it's nice of you to say all that now and i think you were optimistic and you have faith in me faith in you. I've invested in every single one of your every single one of your companies and always will because they get the best business mind. I know but you know it was still a leap of faith in a good bit of confidence. You had to me and you know. Sometimes it's awkward for relatives to work together. Yeah but i don't you know we've we've had we've had not one fight or argument. People might not believe that. But it's not one it's true. 'cause i'm very easy going guy guy. I think we've been it hasn't had any to your point. No disagreements arguments no fights no awkward moments and yet i mean. I don't know just just paranoid a little bit you know. It was something lurking beneath the surface. That made you want to offload the company of oxo. You didn't have to be my boss anymore. Lau okay now. Wanted to get that on the record. Sold your audience why we did that. I'm wondering you may be could give a minute of your own thoughts as to as to why this is a great thing and what the future holds for us with. Vox media while. I got to know jim bank off at at box media a couple years ago and we kept in touch and we had a conversation in the beginning of this year about our respective companies in what they were doing. And you know i just. I have a lot of respect for jim. And when i've sold a few companies in the past the biggest thing for me. And that i found is the culture fit. You know when you're going into a new company or if you're going to sell your company to someone it's a marriage and you have to connect and click and you have to have respect for the party that you're going to marriage and so that was the big huge pieces this with jim and vox and those people over there are good people and they're similar and we got along really well so i thought that was you know the first piece. The second piece was just tactically now as a business. I thought that it was a great fit. You guys you and your team provide produce super high quality journalistic content in it fit really well with fox's mission and what they do really well and they have a lot of resources. It could get you a lot more audience and i think he could get go fast a little bit faster with them. Then you could have been with us. How hard is it to turn a startup into a successful company. Hard hard free. you know. Now you're now you you were part of it. But i'm lucky so i did it one time and and and it worked out in the industry. I mean i'm not really a business person in the industry and you've been you know i don't people know you went to law school too. We both went to columbia law school. And then you stop practicing law. Although you're still an excellent lawyer. I can see your legal skills still work from time to time but having been out there and raised capital to start businesses including diapers dot com. Which you sold amazon. Maybe not everyone knows that story. What's the rate of success for the average startup but most startups fail. I think over ninety percent fail. And then i think a much smaller percentages one thousand. Have the success that you had popular audience. Millions of people listening enjoying your product and then having a successful exit so the odds are stacked against you. I think the hardest thing of doing these things is an analogous that you've been part of it. Is that you know you. You're building something from scratch. You don't always know what you're doing. It's like trying to ride a bike and time you're often facing extinction like on a regular basis. You know you really don't know if you're gonna make it and so emotionally that can be pretty challenging. Because you're in this gray scenario and you are responsible for a lot of people your employees your investors and you just don't know if you're gonna make it and so being able to kind of navigate that is challenging at the same time it's also super exciting. You have controller destiny when you succeed. It's extremely rewarding as you have you know because you beat the odds and so there's nothing i would rather do but it's i. I do think it's one of the hardest things that you can do. Which is to do these startups. What do you think the future digital medias or media generally well. i think what you're starting to see. is this consolidation between a lot of these players. And think you're going to see more of that you're gonna see a lot of companies go public or try to go public market. You've seen over the last couple of years. You know the really good media companies have survived. Some had some unfortunately have gone away. And i think with this consolidation. I think you're gonna see some strength. So i'm optimistic about it. The platforms keep emerging. You know you see podcasts. I don't know ten years. I guess they existed but look at where they are now and i'm sorry it took three and a half years to have you on the show. You know in fairness. I have asked you before. And you declined. 'cause you're you're more shy than people but it's been wonderful. It's been great. I often say to people if you can work with people. Who are your friends. Which i always have or tried to. There's nothing better than that and it was kinda wrong. The only thing better than that is working with your family. Get along. We do so. Thanks so much you keep in touch. I'm going to say and i love you too. Thank you well. That's it for this episode of stay tuned. thanks again to my guest andrew. Ross sorkin if you like what we do rate and review the show on apple podcasts or wherever you listen. Every positive review helps new listeners. Find the show. Send me your questions about news politics. Unjustice tweet them to me. Creeper are with the hashtag. Ask pre or you can call in. Leave me a message at six. Six nine two four seven seven three eight six six nine two four preet or you can send an email to stay tuned. Cafe dot com stay. Tuned is presented by cafe studios. Your host is pre perahera. These executive producer is tamara suffer. A senior producer is adam waller. The technical director is david tattoo. Shore and the cafe team is matthew. Billy david curl under sam. Didn't know as ally not winner. Jake kaplan jennifer corn. Jeff eisenman chris. Boylan sean walsh and margot mealy. Our music is by andrew. Dost i'm pre- berrara stay tuned.

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