good morning, it is 8:00 a.m. in disney headquarters, and 11:00 a.m. here in "squawk alley." ♪ welcome to "squawk alley" for wednesday. jon fortt and kayla tausche join

joining me, and our guests as well. and good to see you. and jeff bezos with another all-time high up 40% in the last three months bringing the stake from up to 48 billion. and amazon and macy's going in different direction, and what is your take on the department store drama? >> well, clearly the market is saying something is secular and something faster is going on than we were considering before, and clearly not the weather or the fashion cycle or the apparel, because that is one of the concerns, too, and for the markets, one of the biggest problem is that there is no good way for the investors to express this shift or the play it through the single name of amazon. amazon is one quarter of the s&p retail sector and not 25% of the

sales, but maybe it will be soon, but to me, it is this distortion is going farther. >> and where you are in seattle today, amazon has thought to be changing retails for some time, and at least from the sentiment, but why are the inflection points in retail is happening right now? >> well, look it, it is not just the retail business or the fact that people prefer to buy online. amazon is crushing it in so many areas. i mean, look, they are doing amaze things on the cloud where pr pretty much every business in the future is going to be a software business in some shape or form, and they will build in the backend on the cloud, and most of the businesses are going to be building on the cloud, and that is a big part of the business, and they are innovating in the different areas, and why did amazon buy twitch? what are they doing with the amazon prime and media and competing against netflix? they are way ahead of the game

when it comes to the thinking of the future, the future of entertainment, and retail, and it is not just about online shopping. >> they have a virtuous cycle going, and not only the advantage in the cloud where they have practically invented the modern movement with the internet web services, and also with the mobile where the app is up to speed, and the analytics is good enough for intelligence of what people want, but i wonner won er wonner -- wonder, raoul, if you think that google starts a price war in the cloud, and it is particularly profitable for them, and they are leading the price drops for the cloud services, but google has been known with the gmail storage to break into the market, and attacking on the price, and could that happen here? >> well, look, i don't think so, because the fact is that, look, amazon is competitive on the cloud in terms of pricing, and even if you bring down the

prices down, the services they offer make it easier for the small businesses the to build on, and so they have great service, and the reliability is awesome, and it is difficult to make the transition once you have established the cloud and made all of the investments, it is difficult to make the transition to another cloud and it does not make sense to do so unless there is massive incentive, and amazon has been aggressive on the cloud, and so if they did, it would be surprisi surprising. >> this is a text coming in, do they have the boot on retail to slowly raise the price over time, and on the week that we got this call of the 1,000 price margin, that is fatter than now. >> yes, it is the fear of all of retail, and the storyline that is quietly emerging now, which is that it is not always the best price, but a massive convenience, and basically habit, and so it is not walmart in that case. >> but can we agree that jeff

bezos is very invested in this story, and the wealth is down $7 billion. >> and maybe he sold some stock and not the ideal time. >> and he is the single biggest benefactor if his company fails or succeeds, and he is a wealthy man and invested in the company. >> i expect it. yes. >> and for disney missing estimates for the first time in five years, and comes from a drop in revenue over at espn, and rahul, what are the subtrends at espn may have been better, and so add the revenue declines, but the bulls and the bears here, and what is your take? >> well, disney as a business, 50% of the business is on the let's quote a dying industry being cable. and the fact that many people are cutting cable, and getting on the netflix, and getting the content online, i think that disney has to think differently

like do they embrace netflix. again, we go back to the idea of innovation, and look at amazon buying twitch, and why didn't disney or buy oculus for example, and even the assets like espn, and amazing asset, and espn is thinking of the sports like e sports and that, and that is awesome, but integrate virtual reality into the viewing of sports for example and get out of the idea that they have to save the cable busines business. >> and rahul, you are hitting on something indirectly that i have a question about, because it seems to me that if you like the disney multiple it is because you believe in the ability to turn the box office gold into gold in other places, whether it is merchandise or whether it is in the cable and being able to sell these characters through other types of experiences, and at the same time, they are backing away from disney infinity from getting the hands dirty when it comes to the dujle

tall world. is that a mistake, and do they need to actually invest more in creating the digital experiences, and lest they risk not being able to translate their box office, the stable of characters into the digital gold in the future. >> i think so. look, i think that they need people to sort of think way outside of the box on how can they take the different franchises and businesses, and adopt new technology the grow the market, and with the age group of 18 to -- even 12 to 32-year-old people. they have to engage them in a completely different way, and by having the people who are trying to save the businesses that are sort of, you know, fully deteriorating and rather than thinking of innovating on a different scale, i think that is a problem for them. so they need to have, and they need to let the people go and do experimental things like that. >> and even with some of the

strongest franchises, "frozen" for example, they could not lift the consumer products with softness there, and we saw in the period with steve jobs, whoever will follow bob iger. >> well, "frozen" came out of nowhere and then more than anybody expected, and then a headwind to top it the following year. but if you are disney, how much of a premium the play over the others? because it is too fat, and people thought that it was too reliable, and now back to the market multiple, because people don't want to put a premium on the box office and the hit driven and they should not be the ones hastening the decline of the cable bundle, because that is the way that most people want the buy the stuff right now, and be there and figure it out when the time comes. >> and is there an argument for or against the guidance disney's

case? >> well, it is for their approach which is not giving the guidance, and i give them credit for missing by four cents, put it that way, because they should not have passaged the numbers down and all of the rest of it, but disney, you cannot say they have suffered from not giving the guidance. >> and now, the chairman of commerce is explaining how disney trends after the report that staffers at google buried stories. and most users consider the platform to be a news service, so rahul, how is this playing out where you are, and whether it is an algorithm or the human to give them balanced news? >> well, the whole debate is ridiculous, to be honest with, you and it is no different than cnn editorializing the news or fox editorializing the news or cnbc and there is a human element, and computer algorithm, and facebook is saying they

don't do it, but there are individuals and people who work there, and they may do something based on their own bias, but the idea of it is ridiculous, because they are a media company, company, and they have people working there from all sorts of backgrounds with their own buys ya, and i don't see it as a problem. >> well, no news outlet likes for themselves to be a story, and themodo is saying that facebook is not to be having themselves trending, and yet they are trending for the second day in a row. >> and there might be a story here of how facebook does, if you call it journalism, but gizmodo has not reported it, and now that horse is out of the barn, and now some are wondering if the m&a is at risk because of

the facebook story. >> and they say they talked to the people cur rating the stuff, and they don't say u how many people, and so maybe we will actually get some detail of how many people are working on the c c curation and maybe we will get some facts. >> if they are built on to premise of creating their own affinities, and now people are demanding it to be a neutral arbiter of somewhere in the world. >> where does it end? do we need twitter or snap chat to tell us how they prioritize their stories? where does it end? >> well, it is purely democratic, and see what the uptake is, it is going to be amazing distorted and trivial view of the world, and so you have to have a finger on it. >> it would be all kardashian. >> without a doubt.

absolutely. >> and thank you both for joining us today. good stuff. meanwhile, the markets are seeing a drag today after a rally yesterday. the dow of course weigh ed down by disney down 115 points, and then retail on behalf of macy's is dragging down the likes of nordstrom, and whole host of retailers bringing down the s&p retail sector, and you can see that it is down about half of 1% on the retail sector. and a judge is iding with the blocking of staples and office depot merger. staples is down 17%, and office depot down 24%. when we come back, when not to buy apple shares, according to a top analyst, the new piece

with mick billiton with what he has a piece called uber versus mankind. and a test happening in vegas, and what is that happening there, phil lebeau?

the hyperloop technology is getting the first major test in nevada from a company now called

hyperloop one. phil lebeau is there with a special guest. phil? >> thank you, jon. we are inside of the hyperloop two with 11 feet diameter, and i i'm joined by the ceo of hyperloop one, and this is the perspective of what people may be riding in in the future. >> yes, this is the test scale that we are building here in las vegas, and you are inside of the loop that is made of steel and inside, it is a motor running alongside here, and a track to elevate a pod, and pod in the surface to move people and cargo really quickly. >> and we are talking about up to 700 miles an hour? >> yes, and depends upon the route. this route that we are building in the development site here in las vegas is straight, and it is the first full-scale system, and in the future, spins and turns, and real time switching and h e hyperloop is going to be on

demand and so we don't stop along the way, and just stop at the eventual destination, and that is the beauty of it. >> and this is not very long, and you believe it is a demonstration that this technology on the small scale with work. >> this is a demonstration of the production scale of the linear electric motor that we have develop ed here h at hyperloop. the motor gets energy, and we put electricity into it, and you will see the sled moving quickly down the track, and then the same motor is going to go inside of the tube right here, and in a couple of weeks, we will start the construction of these tee s teeps -- these tubes and almost a pile and a half of material to the site, and a straight shot to down to where we will see the motor here this morning, and this is the first production full scale test. >> and talk about the time frame when we will see the hyperloop to become a reality? full scale test in the first

quarter, and then over to the next four years, how is this going to be in terms of people riding it? >> this is a milestone and then later in the year we will have a k kitty hawk moment, and full demonstration, and the world is watching. >> and the world is cynical. >> the world is cynical, but it is cheering for us at the same time, and so many supporters want to see different in transportation, and the improvement to the i dae, and they believe that hyperloop is one of the methods. so let me tell you that we demonstrate it, and our objective is to find the routes in the world where the governments, citizens, and regulators come together quickly, and build the first prototype, and we believe that we will find the prototypes in 2017 2017, and the first system running by 2019. >> inside or outside of the u.s.? >> wherever the regulator and the people want it. it could be outside of the united states, because we have a couple of projects outside of the united states, and some

within. and traffic on the freeways is is one of the problems to sofl, and doing work on the fast movement of cargo. >> and thank you, the ceo of hyperloop inside one of the hyperloop, and we are going to be watching the test in about an hour, and we will bring it to you live in "power lunch ". >> it is going to be exciting to see how it going. phil lebeau, thank you very much. we talk about the bubble ine increasing outside of the country as well, and what does that mean for this country? we will have that in a moment. medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in.

like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free decision guide. it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp,

an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪

china is taking steps today to contain a technology bubble according to the "financial time tim times." they are saying that some funders are borrowing against b businesses that are attractive to other financiers like

internet and other technology classes. and now, we will have more from ha hans, and what are you seeing about this bubble? >> there are manufacturing and technology and some of them are in the sunset industry, and some of them are in the growing markets of gaming and so forth, but i view it as less than the containable bubble, but preventable bubble from happening. as you know, the china stock index was at a high last summer, and come down since and so a bubble does not exist for the chinese stocks, but a fear that a new bubble could be coming. >> and so you are thinking that

the resets that we saw in the chinese markets last year in january and february of this year, and they were basically responses to sentiment and weakness, but largely averted? >> i think that as the china shifts from the slow growing economy to something that is feed ing feeding to be more consumption-driven, some volatility, so you will see the volatility on the way, but most of the bubble that was there last year has gone away. >> you mean, when you are looking at a chart long of growth, you are nervous they have bought a lot of goodwill a lot of credit over the last few months? >> well, over the longer run, as you know, the chinese debt is on the corporate side and not the consumer debt. the consumer debt is 40% versus 80% of the gdpp in the u.s., and so it is mostly at the provincial government level, and so china can shift it to the local level, and so there is room to contain it. and so you also have 3.6

trillion in the foreign exchange reserve. so it is containable, but the shift is going to be volatile. >> and hans, what is seeing with the pedia that is affecting the mobile markets in those ways? >> china has 600 million smartphone users today in a population of 1.3 billion, and so the next crop of users coming up are buying the low-end phone, and most likely in the rural areas, and so there is a phone that is produced at cost of $# 100 in u.s., and that is the future of the chinese phone. not as easy as the iphone. >> and where china slipped 1.3

billion in the recent quarter, is that a normal run of the mill consumer pullback, or something else is feeding into the market share? >> structural, because the next 300 million smartphones is is coming up in the rural area, and they have less money to spend, and for them, to get online, they need something more affordable, and beolow the $1,100 bump. >> and when you see the apple content taken offline, and then the next day facebook wins the intellectual property dispute, and do you believe that is going to be contingent on how the executives approach the market? >> without question. the market in particular has shown that the chinese government how facebook would behave if it is allowed in china, and he is winning a lot of points in lecturing and taking the morning run. that is amazing. >> and not a lot of the executives can say that for

sure. hans, i know you raced the new fund to invest in china, and as it is going to be moving, come back to talk to us about it. >> i would be happy to. >> thank you, hans. >> and when not the buy apple, and according to a top case, and are plus this afternoon, north carolina governor pat mccrory is fw going to be joining the "closing bell" to talk about his state's bathroom law.

hi, everybody. i'm sue herera, and this is the cnbc news updatet that hour. a white former south carolina police officer charged with murder murder in the shooting death of an unarmed black motorist has been indicted on federal charges. a bystander captured images of the man firing shots of a man after he ran from his car in 2016. and now, after want ing ing delay the entry into prison this week, the court is still trying to the decide if blankenship should remain out for the appeal. he is being sentencing for violations of safety in his mine. and there was a tornado

caught on tape tearing through southwestern kentucky. >> and today is the crash anniversary en route from miami to atlanta when it crashed nine minutes after takeoff. we go back to "squawk alley ". >> thank you, sue. and now, over to simon hobbs. >> negative territory for the european stock markets and the earnings have not been great, and one section that is moving is the italian banks to the downside, and the popularity came through with 8$800 million of write-downs which is increasing the speculation of more write-down, and the capital raises at least from the unicredit. and we have talked about brexit, and the bank of england has

considerable challenges, and doing a huge amount of contingency planning for june 23rd saying that it could raise mortgage costs, and he is campaigning to stay on the side here, and he says that they have house prices which could be a difference of voting to leave the european union. and meanwhile n the uk, the production was poor. not necessarily because of the brexit, but because of the cycles of the uk and the u.s. on compared to everybody else. tomorrow is the bank of england meeting, and is it is going to be interesting if they are more dovish in anticipation of the brexit vote in the commentary or the vote. one thing that uk has done is to try to bolster the economy with great relations of china, and remember they invited the premier there in october something that he described as visionary and historic, and now the queen has put a foot in it,

because the garden party of which the chinese have been rude to the monarch last time, and she is being introduced to the officer of the man in charge of the security arrangements, and then the comment of bad luck. take a listen. >> yes, i will be, and i'm not sure if you knew, but it was a test i testing time. >> yes. >> and the point they walked down to lancaster, and said that the trip is off. >> and one thing that you todon want to do is to be rude to the am boos dor if you are going to be meeting the monarch. >> yes, don't be rude to the ambassador. >> and after apple reporting the first ever drop, the group had news for investors of when to

buy the apple stock, and now joining us is toni sa krshccina and you gave tim cook a difficult time on the conference call in the past when he said that there was nothing to worry about, but there is. and what is your take this time around? >> yes. u mean, last year tim cook was asked about whether the iphone replacement cycle was accelerating and whether the iphone 6 was pulling forward the users, and he said not really, and then on this earnings call they did talk about the fact that there did appear to be a k acceleration in the replacement cycle and this year, a commensurate fallout. so there are some incongruities that we observed in the earnings calls. and look, apple is facing both structural and cyclical issues. because on the structural side,

it is becoming more mature, and last year, you did have a boon year, and that is set upping in difficult comparable. >> when the 7 comes out, and assuming it is called the iphone 7, and does this cycle reverse the trend in the stock or do you expect more pain through perhaps the next cycle as well? >> well, that is the big investor question, because it is at least from the what we know about the 7, it is not a groundbreaking device in terms of the new form factor or strong incremental new feature functionality, and so that the worry among the unves or thes is that this could be another reason for investors not to upgrade or the to push out the replacement cycle. that is something that we worry abo

about. the analysis says that it is going to be bigger when the 7 comes out, and 14% bigger than in the prior year, and accordingly when the upgrade percentages, and the cycles are not pushed out further, you should see unit growth, but if they are overwhelmingly going to see the risk, the unit growth with the 7 is going to be shaped with how compelling that device is. >> and tony on the more tactical strategy, you looked at how the stock performs when cook goes on tv specifically in the last case with jim on "mad money" and general generally a good time to buy? >> no, many of the investors said that if tim is going on television to reassure the investors, does he know somethi something, and is that a good time to pie? and what we found is not really. it is reassuring for a couple of days and then typically the stock underperformed over the forward three months.

what was a more helpful indicator is to look at when apple really accelerates the share repurchases, and does 5 to $8 billion per quarter in the share buybacks, and what we found is that when that amount was double, the stock significantly outperformed in the form of the tune of 20 percentage points relative to the market, and the old adage of do what they do and not what they say holds true in this case with apple. >> toni, isn't that the case for most companies that they are usually more reactive than pro active and not just apple here? >> yes, look, it is human nature, and we have not run the analysis across all of the stocks in the s&p, and what is striking is that when apple had the average buybacks since tim cook is ceo, the stock has underperformed by 5% over the following four months, and when apple did accelerate the buyback stock, it outperformed by 20 percentage point, and so that

discrepancy was very notable. >> we have establish ed cycle change, and the phone is more mature. i recall in the 6 cycle people sa said, well, this is not revolutionary, and it is a bigger phone, and samsung has the bigger phone, and so at what point do we determine or know that the 7 cycle is significant? the first week of sales or even when the phone itself is announced, people seem to get it wrong all of the time. >> great observation, jon. usually the first quarter is going to set the water mark for the year, and the phone is launched in late september, and then mid quarter sets the water mark, and then a traditional and fairly predictable decay in the

sales growth. oftentimes, you can get the read of the first weekend sales, and it is not as proscriptive because the supply may not be equal. what we found is that if you look at the december quarter sales that is a good determine er for the cycle, and it was this cycle again. >> all right. we will be watching that, and those sales numbers that they tend to put out on the first few day days. toni saccanacci from bernstein. >> thank you. and now, rick santelli, what are you watching? >> well, you know, i want to do a little bit of the postmortem on the philosophical issues of the mergers meant to be, but never occurred like staples, and office depot. we have been on a long and winding road where globalization has taken the mom and pop stores and turned them into the big

stores, but what is next? we will talk about that after the break. this clean was like, pow!

it added this other level of clean to it. it just kinda like wiped everything clean. my teeth are glowing. they are so white. i actually really like the two steps. everytime i use this together it felt like leaving the dentist's office. crest hd, 6x cleaning, 6x whitening. i would switch to crest hd over what i was using before. coming up on "halftime report" the dish debate. the hedge fund manager who is making a $100 million against the stock, and the analyst who i saw saws he has it all wrong. and two big buzz kills macy's, and disney. and why pete najarian is buying a name that down 43% this week.

that and so much more ahead on the "half", kayla. see you soon. >> all right, scott. and the trouble to transmission to the chip cards, and walmart is going to the sue visa to allow them to have signatures or pin numbers. walmart says that the chip cards cost them 5% more per transactions, and hard ly the first time that the two companies are have gone after each other over some of the transitional issues. before it was late fees and now it is chip cards and whether it is is the consumer's choice or the merchants' choice, and for what it is worth, masercard lets the merchant decide whether to man dane it -- mandate a p.i.n. transaction or credit card. >> if you are going to make it more secure, you have to enforce certain behaviors within your

store. personally, they should push everybody into using the phone to pay, because that is probably more secure than all of it if you have to verify it by the fingerprints or what. >> issues are all over the place, because the cards are not compatible, to be chip and signature, and just chip, and is so it is hard to know where to lay the blame, when it is a massive transition, and it is happening quickly, but not as quickly as many hoped and it is a learning process along the way. >> and a nickel is going to add up at walmart, because that is a big fee. >> that is true. >> and now, rick santelli for the cme exchange. >> yes, a lot of the headlines that i see everyday, and 2016 is a record year for failed u.s. deals. so, whether it is inability to find a bribe, think connie well s, and canadian pacific, or stranded at the altar, and

staples, home depot, and halliburton and baker hughes, there is something to be learned here, and if you are looking back to the days before globalization, it was really an expansionary time before the capital was deployed and before the tech grab, and bad deals, and people looking for some business that could grow and turn into an apple, but we managed to find ourselves digging at the seed corn itself. seed corn, you know, wa you save to grow the corn crops of the future. we are down to almost a baseline where the entities left are big and gobbled up the smaller playe players, and so what is the encore performance here? it makes my think that the road to normalization is a whole lot more than raising rates. it is a long road, and it is going to take to a lot of effort and a lot of reengineering, and

today in the notables and the quotables on the same topic, mervin king, and the england banking governor known for the large proportions around and the book that came out in march called "the end of al kkchemyal what a great book. this is the notable quote fund dalal changes are needed in the way we think about macroeconomics as well as the way central banks manage their economi economies. today, however, we are struck with extraordinarily low interest rates, and in some ways we are already down that road. that is what we are talking about there in the last line "we are already down that road a good way." because now in my opinion, i have come to epiphany, because in order to improve it,

everything begins with the letter r. we will have to reverse down a long road as mer vin king put t it, to get off on the right ramp, and start it going. this is not going to be happening overnight. if you think that the low interest rates are here to stay, you are probably kr correct, because one thing that the many pundit s pundits in the marketplace do is to see the things that are not correct and profitable, and think that they will turn the corner quickly. i have learned over the last 36 years, it always takes longer. kayla, back to you. >> it is a good lesson the heed. thank you rick santelli in chicago. >> and up next, the new piece from vanityfare called "uber versus mankind." we will have that for you when "squawk alley" returns.

has the on demand economy been so disruptive it is changing the social norms? our next guest explores that in the latest article talking about the ching of uber in the los angeles area. and the special correspondent of vanity fair joining us. you are looking at the see di underbelly of uer be, and i am looking at the quote a this the driver said to you, i pick up hookers and drug dealers all of the time, and what does this mean? >> well, it is -- well, i was in the uber recently, and the driver as i asked the typical

questions, what is the longest drive, and what do you do for the living, and the driver said that he had recently ended a three-hour trip down south, because he was giving a drug dealer the ride, and the drug dealer in los angeles at least, it is easier to transport drugs using the uber than in his own car where he can be pulled over and so on and so forth, and it is fascinating, because i was looking into it, and if you look on the forms off all of the uber sites, they talk about it being a norm, and one of the things that is fascinating is that you will see the new technologies coming into the society that end up changing things that we don't believe they will affect such as drug dealers in los angeles. >> nick, what is the upshot here? is it that we need regulations on the ride sharing companies that require this they report to somebody who has a duffle bag full of cocaine? is it that just the way that people are using the services assume that you have certain

benefits already, and you have a smartphone and a car if you are a driver and so the on demand economy is not benefiting the poor, and what is the main take away? >> well, the thing they found interesting as i started to report this is that there are a lot of good things, and bad things to the ride sharing services. a million things written about the negatives, and so on, and the positives are that in los angeles, and this is the focus of the article, because los angeles is one of the cities truly benefitted from the services, and you don't need the tourists or to rent a car when you come here to get lost and have to deal with the maps or that, and if somebody wants to try the city, they don't have to buy a car and get a driver's license and the things that you have to do in a city like los angeles, and you can say, i will use uber and lift and services like that, but many of the studies say that it is not

benefitting the poor, and they don't go to those neighborhoods, and there are tradeoffs, but one thing that i find fascinating is that you don't see the way that the ek technologies will affect people and cities and so on until they are pervasive and that is what we are seeing now, and once the driverless uers be and driverless lifts, what is that going to do to to a city like los angeles, positive or negative effect, and that is something that we will see in a short time. >> and one problem, nick, the regulators have not allowed the company to expand more quickly, but it means no czar or the consumer protection bureau where uber is one of the protected entities, but are we getting close to that? >> well, yeah, i do believe we are. it is unavoidable, and for the first ten years, facebook got away with whatever they wanted untul thil they were regulated

the privacy issues, and that is going to happen with uber and lift and those services. so it is a little do whatever you want. i tried for a few weeks going without a car in the city, and it is great to get back to work for $6 or $7, but when it is raining, it is $70, and that is not going to help the poor people get around the city, and i don't care what you use for day the to slice it and dice it. >> and my brother-in-law does go to law school two days a week on the uber, and it does help. >> yes, that is the whole point, good sides and bad sides, and for the people taking advantage are of the services like the drug dealer or the companies taking advantage of the people in those instances, there has to be balance and don't get rid of the surge pricing or track everybody in the car, but there has to be a regulation, and

those things exist in the taxi industry, and they are diabolical when it comes to most issues, but they have regulation that protects people in most instances, and that is necessary, too. >> yes, that what i like most about the piece. what happens if you disrupt, and destroy the taxis, and what is going to stop you are from gouging long term at the end of the piece. >> yes, exactly. no, i think that we are, and the other thing is that we are with a big fear of the question around who is going to win, and is it going to be uber or lift or somebody that we have not thought of, and are teslas driverless taxis, but before we get there, the government has a responsibility to protect the citizens when it happens. >> good read, nick. take a look at it nick billiton in los angeles, writer for

"vanity fair." and we will talk about chelsea handler next.

chelsea handler was opening last night on netflix to mixed reviews. but it is only going to be streaming wednesday, thursday and friday, and she said that she feels like network tv is over, and she is not a network tv kind of girl. >> unless you are swrimmy fallon and then in which case it feels line it is happening. >> and when netflix is going from $130 to $90 and that is going to make you wonder what is over and what is not? >> the executive on the netflix conference call said that this is the closest to live tv, and only a couple of hours after a tak take. >> and the also steph curry's lights' out oftivertime, and th is on tv and you weren't getting that on netflix. so you wonder how the business model is going to inch toward life, but do they have the depth of the pockets to get that sort

of the spectacle? >> well, al law twitter nfl. that is going to be a big test in the fall. meantime, how brutal is retail getting, tiffany and -- >> fossil is down 27%. >> yes, a tough guidance for the next quarter. that does it for us here, and we are going over to scott wapner and "the half." all right. welcome to the "halftime report" i'm scott wapner, and the buzz kills macy's and disney. and two stocks getting killed. joining us are the group, and now after posting the fifth straight quarter of declinindec macy's is down, and it is a wreck, steve weiss, indeed. >> yes, and you have to buy it to know that you will beat their ea