good morning. it is 8:00 a.m. at twitter headquarters in san francisco. it's 11:00 a.m. on wall street. and "squawk alley" is live. ♪itis getting near dark when lights close their tired eyes ♪ ♪ i'll soon be with you my love ♪ >> welcome to "squawk alley" for a friday morning. i'm carl quintanilla with jon fortt and kayla. dow's down 53. our big story this morning involved shares of twitter in

rally mode set for its best day and its life as a public company after david faber reported they're moving closer to a sale. david joins us this morning with details. >> thanks, carl. it's been about a couple hours since we first shared with the market. of course twitter has received interest from a number of technology companies considering whether to make a bid. the board of directors is said to be largely desirous of a deal according to people familiar with the situation. while twitter may receive a formal bid shortly, it's thus far engaged in conversations with potential suitors who are examining the possibility of a deal and twitter's willingness to engage on that possibility. those suitors are believed to include sales force and google amongst others and there is a list of potential names, though nose i've not been able to confirm are the case. no assurance they'll get a deal to get done here. one person, though, close to the conversations indicated they are picking up momentum and they could result in a deal before

the end of this year. this morning after our report of the news, saleforce's chief digital evangelist tweeted from a verified account, why twitter? personal learning network, the best realtime context, rich news, democratized intelligence and a great place to promote others. in writing to explain why salesforce might see some interest and other acquirers might see interest in the company, of course. he is a senior executive at salesforce. about an hour later he followed up that tweet which is 26 minutes after our reporter with this one saying that i tweeted my personal views regarding why twitter numerous times over the past couple years, saying, "i simply love twitter." salesforce did decline formally to comment on our reporting or for mr. ash tar's tweet. twitter has been struggling to generate top-line growth. only today the stock dngraded by rbc's mark mahaney citing a

dramatic ad revenue deceleration based on surveys he does of advertisers, but that doesn't appear to be giving suitors pause who are interested in as much as the data twitter general rates as its place as a media company, giving more fodder to the idea that jack dorsey is busy with something in san francisco. he canceled a personal appearance at an ad conference in cologne, germany, that according to the man throwing that conference, ad titan martin sorrel. >> i suddenly got an e-mail from jack to say after one year of planning he was unable to be with us. so i got down on my knees and begged for him to come, but unfortunately for reasons unknown to you in the room and to me, but known to him, he had to stay in san francisco. >> he's got a future as a

journalist, i think. dorsey did go via live stream and joined sorrell who asked him questions about a possible sale. take a listen. >> there's obviously been talk about apple's interest interest, facebook interest, google's interest. do you think twitter will develop, continue to develop on its own or do you think it would be better served by being alined or part of another organization? >> we have great relationships with all the companies you mentioned. there's always been a lot of interest and passion around what we do for the past ten years. and we've always had a lot of speculation around what twitter could become and where twitter could go. but we have a really strong plan ahead of us. >> as for google and twitter at this point, while we have reached out for comment from

them, they have yet to provide any. we have not been able to get to them. let's leave it at that at this point, guys. >> so you're reporting the sorrell bites, jack's schedule, you put it all together. does it seem convincing to you? >> listen, i certainly as you know we've worked together far long time. we're not going to report something unless i know it to be true. certainly what i've reported i've believed to be true, but as far how far along things are, that's always more difficult to get a sense of whether why mr. dorsey is not showing up in a couple places he was scheduled to be. also the lack of insider selling. you can look at a lot of different things and draw conclusions. there have been expressions of interest, some momentum, and there is a board of directors that is certainly and perhaps appropriately concerned with the lack of growth of the company and therefore willing to push it towards engaging. >> a board that has changed in the past several quarters. david, don't go away. we want to get reaction to your

reporting by bringing in kara swisher, who recently along with curt wagner, kara, went through all these potential players and had a for and against case. what do you make of what david's saying today? >> you know, we were talking about a lot of these in that piece, and the reason we wrote the piece because there was clear indications even publicly from one of its board members, evan williams, they were thinking about this. and so what we did is we wanted to go through the possible fires because we felt like we had been hearing this, that they were prepping for sale, looking at all possibility, because it hadn't been able to grow independently and it's continued to sort of wallow arnold its product and perhaps linked with other companies. i think the issue is, you know, i talked to mark denny from salesforce, he said he wasn't buying the company at that point. that tweet from his top executive was rather odd, i found. i don't know if i'd make so much of him not -- jack not showing up at things. he does that from time to time.

i wouldn't read too much into that necessarily. but it's clear this board has to do something and there's a lot of activist interest, all kinds of things happening here around this company. everyone's going to look at it. even though there's a lot of hair on every single buyer, there's big issues around every buyer there. >> kara, the sales process we were so focused on, the first half of the year was yahoo!. and i'm wondering if you have any sense that the company might have some overlapping bidders. obviously google and salesforce potentially interested in twitter, they weren't incredibly active in a yahoo! process, but i'm wondering if there would have been bidding fatigue had they done it early so they wanted to wait and do it later. >> no. they weren't interested in yahoo! by any stretch of the imagination, none of those companies were. we had about seven companies. people aren't looking at news corp. i would look closely at them. i think we said that. a company like news corp.

just recently, they weren't on the list, i've been fascinated with the idea of snapchat. that could be something. i think the question is how much money and how much trouble it would be to do things. i think there's probably a worry on twitter's part that it doesn't wait too long and become yahoo! and can they really fix it independently. i think the answer right now is no for a lot of people. you hooked it up with a google or another company, whether it would be better. i think the google -- i'm sorry. the google thing is a problem because i think larry page is not as well disposed to this, but at the same time it makes total sense. that was our number one choice for the purchase. >> kara, why do you think salesforce keeps coming up in these big-game hunting scenarios given its market cap is arnold i think $50 billion, it would have to pay half that for linkedin or twitter and there's an enormous amount of working to do particularly on twitter? that would be a very, very big piece of prey to bag for our

company the size of salesforce. >> i don't think they get it, honestly. i think there are other buyers that have come in. there's a lot of people interested. every single buyer has a problem. and their problem is a lot of money. the other thing is it really as smart as fit for twitter if i were jack dorsey. in google's case, there's massive regulatory issues. there's a question of how it would integrate into it, perhaps you could put wit youtube. for salesforce thing i think one of the main reasons, mark likes to be in these games. he's indicated he wants to buy things so why not think big? he's a big thinker? why does he have to knock himself out just because google's in there? the second part is bret taylor is on the board of twitter and also bought by salesforce. i think that's an interesting thing. bret gave us a long interview, a podcast recently where he talked about those things. you know, his first company was peeled off by tweter, but he knows this business really well. that's a really fascinating link to me, bret is very thoughtful,

smart entrepreneur and has a close roim with jack dorsey. so that's where i think you see that kind of stuff coming in. >> of course talking with cramer this morning, kara and david, jim's take was there's value in twitter that is not recognized by those who think of it as a tool you and i use to chitchat, that there's data in this, customer resource management software, and information in there. how valid is that? >> i mean, i think it is. i think it's very valuable. people always sort of crash twitter all the time, and of course it gets attention because ego maniacal media pple like myself are interested. we overindex on it. but i think there's a lot there. there's not many global platforms like this, and i think it's a very powerful global platform. there's also -- but with google, there's issues around the trashing of people on it, all the bullying, all the hate speech and stuff like that. nobody wants to buy that.

everybody has a problem with that including google and facebook. every single buyer there's a problem, a big problem. and at the same time there's a big opportunity. >> david, i know that you specifically said that google and salesforce were names that were clearly mentioned as potential suitors. i wonder why -- and i don't know if you've heard me but around this, you don't hear a name like apple come up, because they've been making a lot of noise lately about services and being a services company. they're very active on twitter, particularly when it comes to those services like icahn, particularly apple music. i'm not saying it's a great argument, but if we're talking about sales force, why not an snl. >> listen, you can name any number of different companies conceivably. the reason i didn't name more is because i wasn't able to confirm in fact they were actually active. it doesn't mean they aren't or they won't be fit's apple or verizon or moving towards the media sector in a purer form, a

disney. even our own parent company, there's certainly no shornl, as kara pointed out, of potential suitors for this company, no doubt. now, the sources -- people familiar with the situation that i spoke to indicated that more of the interest was coming from the technology side. but, again, how we define even that at this point depends on who's doing the defining. >> david, kara -- we'll speak of this again, i have no doubt. thanks for coming to the phone, kara. good weekend. >> thanks. >> kara swisher of rico and our own david faber. in the markets we are getting the first drop for the major averages following the post federally earlier in the week. the dow is down by about 50 points, the s&p 500 down by 5, the nasdaq down by 15. we're watching shares of valve screen, the company making its market debut today, pricing within its expected range, $22 a share, currently trading up 9% to 24. when we come back, facebook's under fire for overestimating some key advertising metrics and the

stock is taking a hit. apple reportedly under fire, this time from japanese regulators. and later more on twitter. what is the street saying about news of a potential sale? we'll talk to bob peck and others. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trer pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology

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facebook's under pressure this morning, the company admitting an exaggerated viewing time for its video ads by as much as 80%. the practice has been going on for at least two years although it says the issue has since been fixed. we want to bring in aspen institute president and ceo walter isaacson. calls good to have you. good morning. >> good morning, carl. good to be with you. david, congratulations on your reporting. >> what a story today. we'll talk about that maybe in a minute. this facebook news, we're in this streaming age are people continue to be frustrated with measurement. how does this fit? >> i think it reinforces people like martin sorrell and others, wpt, the agencies that say you have to give us indepdent ways to verify what's happening. one of the things facebook has is very tight control, almost like it's a walled garden of all

of its data. i think that frustrates people who advertise on it because they want more information about, you know, who's watching, where they're from, what their zip codes are. but secondly when something like this comes along, you say, okay, we want some independent verification of what's happening. i don't think it's the biggest deal in the world. it wasn't like -- you know, it was something about as you know the people watching less than three seconds that wasn't counted as part of the metric. i think the larger issue is about the data and secondly about having a system of media that is nailed totally advertising supported and that advertising mainly can work with video where you force people to watch it. it's not a sustainable system. >> but, walter, facebook could argue they're still experimenting themselves with this. how long is the grace period that you give a company of facebook's size still tiptoeing into new territory? >> well, i think, you know, facebook is, you know, 3 out of 4 advertising dollars either

goes to facebook or google in the digital realm. so they've got a lot of leeway. they've got a lot of clout. >> walter, it seems to me this is like me saying i shoot 75% from the three-point line. as long as you don't count my air balls. take out the air balls and it's 75%. the folks who really got hurt with this are facebook's competitors who potentially lost out on advertising deals because advertisers thought the engagement was so much better on facebook, which leads me to wonder, is there a potential antitrust issue down the line, particularly in europe, where the standard is the harm of competition, not the harm to consumers, if home run things like this start to crop up for facebook? >> absolutely. if you're doing it in a way -- i mean, you know, twitter is popping because of, you know, as david faber reported, but also the companies that were competing like twitter and others, you know, they will benefit from this, and so will,

of course, the broadcast network. but once again, i think the way to fix it is to say you've got to open up your data more and have independent measurements and verifications. also, just not have the entire world depend on video advertising as the only way we'll get media. >> yeah. that's a taller order. meanwhile, walter, cyber security is in focus at our upcoming cyber summit and partnership at m.i.t. and the aspen institute. we'll be talking to some of the anaheims in private sector and government. coming on the news of the massive hack attack. that will set the table. >> what's particularly interesting about the yahoo! attack is it's a state actor so, they say, and it's clearly russia, which has been doing this all across the board. we do not have a national policy that's clearly enunciated of what do you do when a state actor comes in, whether it's the democratic national committee

data, yahoo! data, taking colin powell's e-mails, and they're doing it for their own purposes. you know, at the cambridge cybersummit we'll have john carlin, a brilliant guy who works at the justice department on national security, and the deputy fbi director an true mccain. and i think what we're going to be talking about both with academics and business is how do you have a doctrine that says if you do this and you're a state actor, we will name you, these consequences will happen. >> walter, do we need policy that stretches across both the public and private sector addressing some of these things? doesn't seem to be a coincidence. some of these attacks are very much targeted at people's just natural tendencies to trust. and often people will share their work files into their personal accounts to be able to look at them at home, and that way hackers can find vectors to

attack the employer, not just the individual account. does that raise an issue that government needs to focus more on policy-wise? >> well, absolutely. what really is of danger in cybersecurity is spearfishing where you know enough about a person you can know the name of their boss, their wife, whatever, and say, hey, would you open this attachment and do something for me or go to this website and check it out for me. and that allows you into the system. what the government has tried to do is take critical infrastructure, what is our critical infrastructure like the electricity grid and say if you attack that it could be an act of war. well, you know, our airlines are critical infrastructure? yes. is our election system a critical infrastructure? in my mind, yes. so you really have to broaden this and have some collaboration between private industry and government entities to at least quickly roll up and share information about all hacks so that if something happened in

2014 it could be spotted more quickly. >> a long time to wait. i'm sure the conference will be a step in that direction, walter. thanks so much. good to see you. walter isaacson join us today. let's get to dominic chu back at hq. >> watching shares of oshkosh off their lows of the session after the company issued guidance for the current year here. but their 2017 forecast came in a little below some analyst expectations. so that's hitting those shares. they make a lot of specialty equipment, especially military vehicles, certainly one to wash. rising after expansion plans and analyst upgrade yesterday, those shares carrying through for etsy. two of the big movers in the early trade. >> thanks so much, dom. still to come on "squawk alley," how the u.n. is using virtual reality to tackle issues from ebola to the european refugee crisis. and later, shares of twitter as you know by now on the move as the company moves closer to a

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the united nations is using virtual reality as a storytelling tool to tackle issues from ebola to the syrian refugee crisis. as the u.n. general assembly is wrapping up in new york, we bring in the creative director for the u.n. and founder of its virtual reality lab. welcome. >> thanks for having me. >> some of this content originally began on the movie screen. why take it to vr and who do you reach by doing that? >> we found when we started working in vr with these topics it was having a greater em

pathic response to a lot of the people we showed it to, especially with key decisionmakers who are going to be at the general assembly deciding on these issues. we felt they can feel what it's like to be a refugee and relate with these people that would lead to a bet every outcome. >> so this is a tool for plirps or something that you want consumers and people at home to watch? >> well, it started out as a tool for poll policymakers because when we started in early 2015, vr was very nas ept. it didn't have a lot of uptake in the way it's having now. that's why in this general assembly we've launched it on our u.n. vr app, and that's meant to now gopg go to the broader public and people can use a google cardboard or whatever headsets coming out to engage with the stories on their own. >> what sort of resources do you need to collect this kind of content? how much work goes into this? >> it's an enormous amount of work and very resource heavy, but we've been fortunate to work with incredible partners like within and chris milk who have

been some of our biggest supporters from the beginning. . we've had an early advantage because of that and it's been able to kick-start this program and, you know, eventually the costs i think are going to come a bit down and so now we're making more films coming up that i think will be more cost effective. >> gabo, how important are the economics here? as you said, it takes a lot of resources to actually create this content. i believe you said your conversion rate on people actually donating doubles to people see this. what level of donation do you need in order to justify the cost of creating the content? and is that your problem or somebody else's problem? >> no, i mean, i think we need to -- anything we do and started especially at the u.n., we have to take it to scale and we have to show impact. and i think the app is the first step in taking it to scale, because we have 150 country offices and we can engage with people all over the world. and the impact part, you know, usually unicef, 1 in 12 people donate if they're stopped in the street. with virtual reality it's 1 in

6. that's what's allowed us to continue to go forward. we aren't necessarily transaction nal on the exact nature of what it is. i think doubling is a good start. we want to continue not only using it for fund-raising but peace building. our film on gaza, "my mother's wing," was shown on the streets of tel aviv and used to give people a chance to understand the conflict they wouldn't otherwise. >> so many global conflicts and crises. how do you prioritize which projects to pursue? >> a lot is based on our internal and exterm sort of polls of what we think really is something that is in the -- needs more advocacy and is important to do. when we did "clouds over sedra," the first film, it was november 2014 when we shot that. the syrian refugee crisis we knew would become big. we try to be ahead, when something is in the news there will be some sort of virtual reality thing to be there. our next project is climate change refugees, because the

refugees we have now is nothing compared to what we'll have in the future with climate change. that's something we're already starting to be preemptive about. >> important issues and we're happy you're building awareness for them and came to "squawk alley" to do so. gabo, thank you so much. >> thank you. >> europe is closing in about two seconds. let's get the flow. >> european stocks pulling back after two big days of those central bank-fueled rallies that helped the broader market post a weekly in. there's one report being passed around this morning amongst european traders and that's the purchasing managers index. german pmi coming in at 16-0 low while business activity of france hit a 15-month high. that's the exact opposite of what economists were expecting. add to that earlier today at a conference in frankfurt, the vice president saying policymakers are aware that low rates over longer period of time could threaten financial stability. this comes after draghi

yesterday said that competition is a big threat for the european banks. if we take a look at some of today's losers, they are in the european banking sector, royal bank of scotland, commerce bank in focus. there's a report that the german lender is considering cutting at least 5,000 jobs as part of a broader overhaul. another big stock in focus is the subject of a competition and consumer protection complaint filed by 35 u.s. states. the stock losing 4% in today's trade. sticking with the uk, the british pound falling to a one-month low against the euro. the uk foreign minister, boris johnson, telling sky news that he expects his country to begin formal brexit negotiations early next year. that's been the big question following the vote, when will those actual negotiations happen. there's also new evidence the weaker pound is attracting visitors to the uk. data from britain's office of national statistics shows that

overseas tourist visits have increased by 2% in the first month after the brexit vote. you can see that uptick right here. interestingly enough, today does mark the three-month anniversary of that uk referendum vote. john? >> all right. thank you. straight ahead, the exclusive list of the most valuable u.s. companies has a new member this morning. we'll give you details next. and what can drones do for you? u.p.s. take to the skies with new experimental drones. running a business is hard. but th your determination, and a domain, website and personal support from godaddy, you'll join millions who have gone from idea to success. start your success with a $2.99 dot com domain for the first year at godaddy dot co

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good morning once again, everybody. i'm sue herera and here is your cnbc news update this hour. a french court has cut the damages owed by a former trader from $5.5 billion to a much more manageable $1.1 million. it ruled that kerviel was partly responsible for huge losses suffered in 2008 by societe general. a group calling on americans living in germany to register to vote to stop trump from winning the presidency. researchers say flavored liquids could increase the toxicity of e-cigarettes.

while plain vapor contained harmful ingredients, the flavored versions, strawberry, coffee, and menthol, caused even more damage to respiratory cells. and happy meals are coming to breakfast at some mcdonald's locations. on monday the fast food giant will begin testing the meals in the tulsa, oklahoma, area, and if successful the offering could be rolled out nationwide next year. you're up to date. back downtown to "squawk alley." jool twitter's stock is surging nowright on news it received expressions of interest from a number of technology companies considering whether to make a bid for the social media company. you can see the shares up some 20%. could this be the turnaround that twitter has been looking for at least in the stock price? let's bring in bob peck, internet alyst at suntrust, robinson humphrey, and rob sanderson, senior internet analyst at mkm partners. good morning, guys. >> good morning. >> bob, i want to start with you. how long do you think investors

are going to put this potential takeover premium on twitter and what is the downside look like if a deal doesn't get consummated give than you've said the valuation here is quite rich? >> that's the question, is whether it's taken out. it's more of what's assumed right now. if you use linked in being taken private by microsoft as a proxy, the original bid was around 17 times ebitda. twitter today trends around 19 times. microsoft ultimately ends up paying 21 times, which would put twitter in the mid-20s. remember, it has a lot more stock-based compensation you need to adjust for that. puts it where it is right now. we think a lot is being assumed right now for twitter being acquired. >> how likely do you think it is that this deal goes through give than a lot of people have said, kara swisher was just on with us that every potential suitor has some pretty major problems, opt cams getting this deal done? we did a note about a week ago and walked through each name actually, listing each potential candidate there. what we saw was there are pros

and cons for each candidate. it's not necessarily that clear that one stands out. we went through google, went through salesforce. both of them make sense, but these valuations, it becomes questionable. >> you, rob, what do you think? >> i agree. i think it's getting very rich. bob mentioned the stock raise compensation. to me, we're about $20 billion acquisition, and that's a very speculative, you know, investment in twitter. there's unquestionably very good user data. there's a user engagement problem. they're trying to correct that. but even a company google's size that could absorb it, there's still a high degree of risk. and someone at salesforce's size, at $50 billion, to envelope this acquisition, it's hard to see the strategic upside from these levels and rationale. >> with amazon trading above 800 bucks a share means the five biggest u.s. companies by market cam are all tech companies. given that amazon's valuation is pretty rich by several met

ricks, are you sanguine about that one, rob, first? >> yeah. i think amazon is probably the best growth story of the group over a long period. and i think in the near term i think there's a very good profit growth story happening. they're really well positioned to fulfill for third parties in the fourth quarter this year where i think they left some profit dollars on the table a year ago. sellers are understanding they need to be prime eligible is where the action is and the fulfillment by amazon i think is a big et profit driver than a lot of people realize. >> bob peck, what's the risk of having so much market value centralized in one sector? >> it's interesting because they're very different stories. google is much more of a value story, facebook momentum, amazon very much momentum. itinteresting it touches different investor bases. there are different stories there for everybody. >> i wonder do they long in the same sector? yes, they're technology companies, but they're so

different. you have advertising in there. you've got commerce, retail in there. you've got hardware, computers in apple. rob, do you view this as being too much of the same sector or is there actually a certain kind of diversification in there as well? >> i'm much more into the latter. all of them are i think attacking different incumbent industries, using technology and most of them utilizing the internet to deliver a value proposition to users in a more efficient and more effective way. soy really think it's more diversified than all the eggs in one sector. >> speaking of facebook specifically, guys, here's the statement from the company. about a month ago, we found an mair the way we calculate one of the video metrics on our dashboard, average duration of video viewed. the metric should have reflected the total time spent watching a video divided by the total number of people who played the video, but it didn't. it reflected the total time spent watching a video divided

by only the number of views of a video, that is, when the video was watched for three or more seconds. so -- so the miscalculation overstated this metric. while this is only one of many metrics marketers look at, we take my mistake seriously. i wonder, bob, if it will reinforce people's skepticism about all metrics, about maus and robot algos and numbers not to be trusted in social media and beyond. >> yeah. we think it's very important and underscores a couple different things. from measurement and verification. the one take-away to realize is you're still seeing almost 80% of all incremental digital dollars go to google and facebook. those advertisers must be seeing the roi to be increasing their budge its, so very, very important, but it seems near term we're not seeing an impact. >> rob, it seems the damage here was probably to upstarts who are looking to move in on facebook because the picture they were presenting was of engagement being far higher than it

actually was. they essentially weren't counting their air balls. is that how you see it? who do you think lost potentially the most because of this miscalculation? >> it's hard to say pip think it's certainly embarrassing that the company made essentially an algebraic error, but i don't think it alters the roi as bob mentioned. i don't know that that was necessarily a barrier to entry on upstarts as you propose. perhaps there is some overallocation to facebook over some of the more established platforms that are scaled. but i don't think it would really limit an opportunity for a new network to get a piece of the action from very small numbers. >> all right. well, water under the bridge either way, i suppose. thank you to bob peck from suntrust and rob sanderson from mkm partners. have a good weekend. >> thank you. when we come back, uber partnering up with microsoft to make your ride a little safer. first rick santelli, what are you watching today? >> well, first of all, i have jim bianca with me. that's what i'm watching. we'll continue to talk about the

bank of japan. markets are trying to hold it back. what's your analogy, jim? >> king canute trying to hold back the tide. to growing busines across the city, increasing productivity like never before, which is amazing, unless you're a barista. cdw implemented dell poweredge servers with intel xeon processors to allow people to work from anywhere, so lucky me. so nobody wants coffee?! hey, can i get a couple copies? enhanced mobility by dell. i.t. orchestration by cdw. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500,

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price of a lifesaving drug. and find out where wall street's biggest political donations are going this year. and how you can profit from monday night's first presidential debate. all top of the hour on "the halftime report." in the meanwhile, to the cme group and rick santelli for "the santelli exchange." rick? >> thanks, carl. jim bianco my special guest today. off camera we're discussing just about everything that has to do with central banking. in the end, the reason we're talking about the bank of japan more than our fed is because it could have a huge impact on all the relationships between the central banks. so first of all, your notion of will the bank of japan succeed in controlling the markets to the extent they think they can? >> i don't think they can. two reasons. one, what they're doing, what we refer to as an operation twist. the federal reserve has tried this all the way back to the 1960s in various iterations.

it's never worked. two, it's not supposed to work because free markets are not supposed to be under the thumb of some kind of overarching federal agency, whether the central bank or overarching governments. all is fungible. >> stop there. this is huge. when we say all stimulus or all central banking activity is fungible, what we're saying is that if the fed doesn't do anything but the ecb adds boat loads more liquidity and the japanese add boat loads more liquidity, it shoots around the globe. it all ends up in one liquidity jar. >> that's exactly right. think of it as there's one huge central bank. but the federal reserve might be the biggest wing of one huge central bank. even though we've talked about raising rates here all year, the ecb and the bank of japan have been very stimulative and that's why we've seen our stock markets go up and our rates go down. now that the bank of japan is trying to do something, if our federal reserve is going to try

and raise rates at the same time in december or next year, it undoes what they do and vice versa. if we're trying to raise rates and they're trying to stimulate, they undo each other. so they cannot -- >> this is key because you gave reason why there's so much agita at our central bank. how many smart people, and be honest here, how many smart people you deal with a lot have said everybody's making too big a deal out of 25 basis points? heard it a few times? >> more than a few times. >> and this is what really makes me crazy. it is huge. and it's huge for just the reason you pointed out. because if we're all locked arm in arm, all the central banks want to control, all the markets and have an outcome they all agree on, what happens when one person drops out? okay? how do the others react? what happens? if we raise, we break out of that unification, what could happen? >> you could have chaos in the markets with them going automatic one way, and you might have seen that earlier this year. our federal reserve raised rates

in decemb. what happened after that? >> january. now, they did blame it on china, but really what happened in china was probably a catalyst as they scrambled for dollars. >> right, but i was going to say the bank of japan and the ecb aggressively eased to a level we've never seen after -- >> and the markets came back. >> they did. you saw a lot of volatility right after we raised rates when the rest of them weren't. if we're going to start purging again, we're going to raise rates, king canute in japan is going to try to hold back the tide with his yield curve control. mario draghi will keep buying corporate bonds. we'll have markets like earlier this year. >> the point is they'll waste all this energy because in the end the investors in the markets are the only true price discovery and they will win. all the money and time and effort and lost productivity will be gone. gone. jim bianco, thank you. kayla, back to you. >> thanks so both of you. when we come back, morgan brennan has an up-close look at the future of drones. morgan? >> hey, that's right.

she's been called the robot queen. after the break, we're speaking to the woman who's helping one of the biggest companies in the world make its drone delivery aspirations a reality. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

enis really built into theat foundation of the company. whole foods market is engaged with pg&e on many levels, to really reduce energy and reduce our environmental footprint. for a customer like whole foods, saving energy means helping our environment, and we can be a part of that. helping customers save energy is a very important part of what pg&e does. we can pass those savings on to the environment, the business, and the community. pg&e really is an expert in saving energy, and that partnership is extremely exciting. together, we're building a better california. >> ups beating amazon to the punch. our measuringan brennan is live with the latest. good morning, morgan. >> good morning, carl. well, joining us is helen graner, the chief technology officer and founder of sci-fi

word and the co-founder of irobot. thanks for joining us today. >> thanks for coming in. >> so sci-fi works, we had the opportunity to join you, your team, and ups yesterday in the first ever test of a delivery drone package delivery. for the viewers out there who maybe don't know that much about sci-fi works, you're probably best known for these tethered drones that are used for military and security purposes, but this collaboration with ups represents something very different for your company. let's talk about that. >> well, with ups we're doing trial drone deliveries and we're delivering to inaccessible areas and right off the coast of new england. we have many islands. we're also using them to collect data and to generating data and cost data, and we're going to use that to see where else drones can be an effective part of the ups delivery network. we really are looking at the real business of drone delivery. >> and talking about that business, part of the reason

you're doing these tests now is that we have these faa rules that took effect the end of last month. in terms of those rules, things like not allowed to do night flying, the drone has to be operated within the line of sight of the operator. >> running it over water to an inaccessible island. it gives you an advantage. the faa opened up a large amount of airspace, and signalled that they're going to open up more airspace, and as an industry what we're going to do is prove that it's going to be safe, reliable, and then we'll be allowed to do nonline of sight delivery, and also be able to do night operations. >> as we're seeing commercial drones be adopted probably most aggressively right now in agriculture. there's talk about industrial inspection, mining. areas like that.

it's package delivery, the single biggest opportunity for commercial use drones? >> well, we already have a drone defloyd ploid with the military. we just participated in trials for the department of transportation doing traffic monitoring and commercially we have drones that are -- we're looking at them for monitoring facilities, doing security, safety, and then once you have an eye in the sky, can you do a lot of managing of your assets. there's tons of uses for drones. i am a big believer in drone delivery, and, yes, i believe you're going to get your packages or some of it by drone. >> i'm excited for that to happen. the white house came out with estimates that this could be -- the u.s. economy could -- it could be an $82 billion impact on the u.s. economy in terms of drone usage on a wide scale basis over the next ten years. do you think that's a realistic estimate? >> i think it will be $100 billion industry.

they just are so capable robotic devices. >> i could talk to you about this for hours, but i think we have to go back over to new york, so, carl, throw it back over to you. >> all right. morgan brennan talking some drones today. thank you so much. as we go to break, take a look at shares of twitter. close to highs of the day. almost on pace here for the best single day in terms of price action since they went public in november of 2013. as our david faber reports, the company moving closer to a possible sale. we're back in a minute.

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uber is partnering with microsoft rolling out a new feature today that will require drivers to confirm their identities using a selfie before each shift. the real-time id check uses microsoft's facial recognition technology and it's designed to prevent driver fraud. i'm reminded of the olympics in rio. uber had a program to -- you can choose to be tracked as you're in the car driving around town, so trying to attack this from multiple angles. >> everybody wants to partner with uber, though. the list is getting really long. american express, spotify. you could go on and on about the companies that want association with them. >> finally, dow close to session

lows. down 62. next week will be busy. eight s&p companies, including nike, pepsi, carnival, and we'll keep our eye on the twitter news. >> sales force down 5% as people try and digest how building exactly that deal would get done. >> watch that space. let's go to headquarters. scott wapner and "the half." ♪ welcome to "the halftime report." i'm scott wapner. top trade this hour is twitter. top shares surging on a report by david faber that the company is moving closer to a deal. that news coming just as one very visible analyst cuts the stock to a sell. with us for the hour today steve weiss, jim levanthal, john. joining us atul, the chief investment officer at dell tech international group. we do begin with the