good morning. it is 8:00 a.m. and wells fargo headquarters in san francisco, 11:00 a.m. on wall street and "squawk alley" is live. ♪ jon fortt, kayla, and me, of course. the delayed inventory numbers are out. let's go to jackie at the nymex. >> a build in crude oil industry, 4.9 billion,

surpassing the build we got from the api last night. a drawdown in gasoline, 1.9 million barrels. we were trading $50.18, that was flat before the report. you can see we're under $50 now. it's actually the first build that we've seen in six weeks. seasonally, we expect to build at this time, but we haven't seen it. now it's starting to hit the market. now there was strong support in crude oil at $50, but this really pushed us through. and remember, we're dealing with a dollar that's strengthening as well. so that's going to add some pressure. yes, there's some optimism out there about opec, rush sharks putting a deal together by the end of november, but it's numbers like these that are going to encourage the sellers to come back into this market. so a 4.9 million build, first one in six weeks. pretty significant, back to you. >> we are seeing that selling come in. thank you very much, jackie deangelis. our top story this morning john stumpf is out a the chairman and ceo of wells fargo effective immediately following the scandal. tim sloan is assuming the role

of ceo. wilfred frost spoke exclusively with the newly minted chief executive and joins us from outside wells. >> we've had encouraging comments from analysts including csa's mike mayo saying this is the beginning of the end of the cross-selling crisis. he and a number of analysts not supporting just the change of ceo but also the board changes that we've seen. wells fargo now has an independent chairman and vice chairman, pretty unique for the big u.s. banks. every analyst is united that this is just -- was possibly a necessary change, it is not sufficient and a similar sentiment was echoed by the new ceo, tim sloan, when i spoke to him last night, making it clear there were a lot more changes that were needed. i asked him, what changes in particular he was looking to make. >> well, john set in motion a significant number of changes, some of which we've announced

specific, for example, in our retail banking business. we've made some changes in terms of our management there. we've made changes in terms of some of our incentive compensation system. we've reached out to our customers to make sure that they know if they have any concerns how they can contact us. >> so people want to see more changes, no one more so as a group than lawmakers. the tone from them remains very much intense. and earlier today, goldman sachs writing, despite leadership change, investor concerns about political and regulatory overhangs will likely persist. and with that in mind, the focus turns to earnings tomorrow. we done just hear from wells fargo tomorrow. also from jpmorgan and sitti grou citi group, where there's likely to be questions on the fallout from this sector as a whole on the cross-selling scandal. >> wilfred frost, thank you very

much. thanks for the interview. house financial services committee congressman david schweiker and former chairman of that committee, barney frank. congressman, thanks for joining us today. congressman schweiker, do you trust sloan to clean this up? >> i think the magnifying glass they'll be under, it's going to get cleaned up, but it also demonstrates doing something dumb in both the regulatory, political risks that sort of come with that means you have to watch your own book of business. >> congressman frank, when elizabeth warren equates it to taking money out of the till, out of branch, do you see that equivalence? >> i don't know what she said and i would have to see it in context. i do think it was a serious problem because what you have are people -- and we won't know exactly how this works, but we do know that if you were seen to have been promiscuous in taking out credit cards, dropping it,

that can negatively affect your credit rating. so it's almost certainly the case some of the consumer victims of this were hurt not because money was taken out of their account when it wasn't most of the time, but because it hurt their credit rating. and i think there's a broader point here. it's not just the personnel. it's the structure. it wasn't john stumpf's personal weakness. this is a structural weakness. and it goes all the way up and down the financial institutions. incentives that give people the wrong motive. it is a mistake to have this incentive, and we had them at the top, where people make money personally if they do more of something but suffer no penalty if they do it wrong. >> to that end, senator elizabeth warren tweeted publicly, as i said, wells fargo's ceo stumpf should resign, return every nickel he made during the scam, and face doj and s.e.c. investigation. he's 1 for 3.

congressman frank, do you agree that john stumpf's to do list is just beginning? >> well, e think he should look at more on the money side. on the doj, i think liberals like myself have to be careful. we have always held, and i continue to hold no matter what the climate, that before you send someone to prison, no matter the crime, you have to have something proven beyond a reasonable doubt and it has to be clear that people knew. being careless, having put in place an incentive system, which mr. stumpf obviously did, that they gave people the wrong motives and led to bad behavior, i do not think that should be treated as criminal. but what i do think and at issue here, we put in the bill that we wanted a change in the structure of incentives for people at the very top. we don't want there to be incentives for you simply to get more money if you do more and pay no penalty if you do more than you should. and that's something that has to be looked at. so it's not simply changing

stumpf for sloan. it's changing the incentive structure in the bank at every level so people aren't given the motive to do things that hurt people. >> congressman schweikert, there was a moment in the congressional hearings where i recall stumpf saying something to the effect he would not call this a massive fraud. at that moment, i thought, uh-oh, because i think a lot of people disagree with that. particularly in the republican party, a lot of people speak out against excessive regulation. we've seen this incident at wells fargo, we're seeing how stum stumpf retiring with some considerable benefits. what needs to happen differently so that you don't end up with a tide of people saying government needs to step in and make sure, put in more rules to make sure these things can happen if the banks can't police themselves? >> look, you're asking a brilliant question. i i believe the sort of command and control regulatory structure that dodd/frank and other within

the bureaucracy do not work particularly with complex organizations. barney was just talking about incentives. well, you're going to have incentives in systems. so how about an information base? the fact of the matter is the cfpb had inklings of this three years ago and nothing happened until "l.a. times" wrote the story. how do you design a regulatory structure that flows crowd sources, moves information about institutions and their actions and what they're doing and that information is how you find bad actors instead of sort of the command and control structure as we've set it up now? >> well, now the cfpb is having to think about its own structure and how that looks. congressman schweikert, before we go, tim sloan told our wilfred frost that he wished that during the hearings there was less grandstanding, more fact-finding, fewer speeches and more real, hard-hitting

questions. how do you respond to that? >> to that point, there is sort of this intellectual dishonesty, god forbid, coming out of congress. on one hand, we had members demanding the resignation of the head of wells fargo but supporting the head of the irs and opposing his removal for bad acts. so at some point we need some intellectual consistency from our brothers and sisters in congress. >> finally, congressman frank, do you believe there's anything stumpf could have said in his hearing that would have saved his job? >> no, apparently not. he could have told us he tried to apparently change it, but, again, this is not his personal failing in the sense he's sloppy. he presided over an institution and others have the same issue, it's not solved by a personnel change but the wrong incentive structure. we tried to do this in a number of other areas. you don't want to give the

people in financials from the ceo on down an incentive whereby if they take action, if they increase activity, they benefit, even that that activity turns out to be harmful. and there's pending from our legislation and it got held up because there was appointments of people, the senate wouldn't confirm people, but we have a pending rule that says that there should be a structure at the top of every financial institution that prohibits there from being an incentive structure where the ceo and other top people benefit if they take a risk and it works out well but pay no penalty if it backfires. i hope this will be a spur on them to complete that rule. >> that's a much deeper discussion on incentives in finance we should have down the road. congressmen, thank you very much for your time. david schweikert and barney frank. >> hi, david. haven't talked to him in a while. >> take care, barney. snap, inc., the newly found

parent company of snapchat has hired morgan stanley and goldman sachs to lead its ipo. other banks, deutsch and others in the future will be joint book runners on the offering which could value the company above $25 billion and take place around march or early 2017. i'm told timing valuation still fluid. the company last around $18 billion in may of this year because of the company's revenue, i'm told by sources a confidential filing will take place and that will likely happen before the end of the year. when we come back, one of wall street's most notorious banks getting into the online lending space. goldman sachs wants to help pay off your credit card debt. not just morgthem. we'll find out what max levchin from paypal has to say about it. later on, kings of leon are in town. they're coming out with a new album. what's the value of capital?

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crude, biggest build in six months and it didn't take long for crude to fall back below $50. also watching goldman sachs. the bank wants you to meet marcus, the bank this morning launching its much-discussed online lending platform offering to lend borrowers up to $30,000 at fixed interest rates for two to six years, and there are no

fees, no sign-up fees, not even late fees. the primary use of these loans, the bank expects, is for borrowers to pay off or consolidate credit card debt. similar to other players in this space, like lending club and prosper, which aim to offer personal loans at lower apr, then credit card apr, but goldman wants to leverage the fact it's a bank holding company, which is different from those companies. it has $124 billion in deposits on its balance sheet, but until now it's had no previous consumer facing products. it's going outside its well-heeled kliclientele to fin those new customers. it found the customers for its beta platform by direct mail, working with credit bureaus to find customers with fico scores averaging 700 to 745 with also prime borrowing attributes. it is named after the co-founder of the firm marcus goldman, beta will last for a few months, after which they'll be opening

it up to people who qualify and want to participate. it's pretty simple. we'll see how much revenue it can generate for a very large wall street institution. >> i was wondering about that. marcus and marcus areelius. this sounds familiar, morgan stanley is also making a play in online lending, a $100 million credit line for lending start-up affirmed, which makes loans for consumers making purchases is essentially disrupting the use of credit cards, so what does the future of finance look like? well, max levchin is the co-founder and ceo of affirm, co-founder of paypal, knows something about disruption in this space. welcome. >> thank you. >> great to have you here. your reaction on this latest wells fargo news. if you're in the space of consumer finance, it has to be on your radar. you're trying to build a brand that consumers trust. what fundamentally did wells fargo get wrong and are you

trying to get right? >> not sure they got anything wrong that can be acutely identified. the troubles began well before this particular scandal broke out and the difference now is that people are watching very intently, ever since 2008 every day a new story breaks out where a bank broke consumers' trust. what's going on now is personal accountability, which i frankly welcome. >> when it comes to affirm and this new credit line, what exactly are you trying to build? is it going to stay with these transactional type loans? are you looking to do more the type of loans that goldman sachs is trying to do with marcus? what's the long game? >> so, at the moment, we're laser focused on serving very specific purpose, creating a purchase-oriented, purpose-building loan to help folks afford nicer things, especially young ones who are our customer base and millennials. we're helping them take an expensive item that would hit

the cash load hard, but in several payments pay off, a lot of people prefer that to the flexibility and unbreakability of carrying a credit card balance. that's taken off like wildlife. this new line will help us grow faster. >> consumer credit is perhaps at the healthiest spot that it's been since the financial crisis. but there's a sense it can only get worse from here and i'm wondering if you're seeing defaults go up or cracks in the system. >> you know, we are not. our portfolio is performing really well. i like to claim that we also kind of know what we're doing given the 20-odd years of combined paypal plus experience, but i agree, the credit cycle has been at what seems like a peak for a very long time so one has to be very careful. >> generationally, we hear millennials marry late, buy a house late, more debt averse. does that make their balance sheets more pristine or more impenetrable to understand? >> it makes them smarter. i think they understand that

compounding interest is something that a regular human being cannot estimate in their head and they prefer simple interest loans. they certainly value services that have no late fees, no gotchas, no sort of tricks, and i think that sets generally a good direction. >> the algorithm is the piece i don't get, the most opaque part of your business. what is the data source that you've got that everybody else is missing that allows you to give loans to people who otherwise couldn't get a credit card limit at that level? how are you going to be right so much more often than all these banks that have been doing it for centuries? >> so, let me dispel one important myth that won't go away -- we have no special data source that everybody else does not have. >> okay. >> that's just the way it is. but what we do have is now five years of history of lending money to these specific types of goods and purchases. in that sense, we are our own data source. that is the strongest component of our models. why people are spending money,

what it is they're spending it on. now, the way you -- >> so people who are buying mattresses are less likely to default than people who are buying -- >> slightly more complex than that, but people treat different purchases very differently. some things are seen as i don't feel like i must be paying for this thing, it wasn't all that important to me it turns out for some folks, and others are very, very good about paying for something specific. we're quite good at detecting that sort of behavior but more importantly, perhaps, what we're really, really good at, we're excellent at spotting fraud. that's the pay pel legacy. we're really good at that. >> why does debt make sense for affirm the company instead of equity? >> equity would dilute us pretty aggressively to very, very little given our pace of expansion. the reason we borrow money is because unlike deposit taking institutions like goldman sachs, we have to borrow to lend. >> all right. well, it's a very interesting space.

i wonder to what extent you'll even be interested in the future taking deposits. i mean, i know that is a whole regulatory quagmire potentially, but it's -- maybe i want you -- if ien joy your bread, i want you to handle all my money. >> let's not look too far into the future, but one of the things we found serving our customers is we have a fantastic relationship with our borrowers. we have unbelievably high consumer satisfaction scores and they have asked us for other services so i'll never say never but at the moment we're going to help people buy mattresses and bicycles and all kinds of exciting things. >> your paypal co-founder peter teal has been outspoke en in this presidential election season. he was at the republican national convention in favor of donald trump. you've spoken out against donald trump specifically about immigration. what's your take on the current state of the race, which has progressed in lots of different directions since we last spoke to you and peter thiel's involvement? >> on the race i think we

deserve better as a country. as an immigrant, i'd like to believe i came to a place that doesn't have this kind of mess, but it is what it is. i think from the pure business perspective with clinton we would get more stability, more predictability. that is what markets prefer. as a businessman, i very much would like that. so that is the dominant part of my view. as for peter, i can't speak for him. he's a close friend of mine, and our politics are sometimes different. >> very people would venture to speak for peter exempt for peter. >> no one can. >> max levchin of affirm, thanks for joining us. when we come back, sony's playstation vr is out today looking for a virtual reality edge over rivals facebook and google. we'll talk to shawn layden next. john stumpf may be out at wells but plenty of leadership questions remain. dow down 142.

sony sl launching its virtual reality headset, playstation vr. already seeing rave reviews. what should we expect as virtual reality becomes more accessible to everyday consumers? shawn layden is president of sony america. great to have you. went to a demo. that was great. >> i saw you there. >> unless you have the gear on your head you have no experieid what the experience is like. do you have to do a mall blitz? how do you make it the must have gift? >> just the way you described it. we announced in june we would be delivering it today. and in between that time period we've done nearly 300,000 demonstrations in store with partners like best buy and game stop because as you say a tv commercial, a website, an app,

nothing can begin to get you to understand exactly what the majesty of vr can be unless you try it yourself. >> 300,000 demos? >> can you believe it? >> how many do you expect to do before the holidays are done? >> our target is by new year's day to have done half a million. >> and how many of those translate into purchases? >> well, we're going to find out. they're on sale today. by talking to people who had tried it, somewhere over a third to 40% of the people who actually came in, made an appointment on an app to try vr don't even own an ps-4. they're just interested what virtual reality is and we think we can bring them into the family. >> is that a good thing or a bad thing? the low-hanging fruit is for the people who do have a ps-4 because for them it's only 400 bucks plus whatever accessories they choose for vr which compares with oculus or htc vibe where you have to get a thousand-dollar-plus pc then

more for gear on top of that. don't you want this massive ps-4 installed base to be the tip of the spear guiding everybody else into vr? >> sure, and they are the ones closest to it. our preorder activity on the prelaunch funnels you've done which sold out in a heart beat shows the ps-4 owner for the most part understands vr and they know it an want it. put it the other way, two-thirds of the people who tried the demo are ps-4 owners today. because they're compatible immediately with what's coming out today. we're casting a broad net. >> when vr started to hit, we had people come on the show and say it's going to change real estate sales and medicine. gaming would obviously lead as it often does. but who's going to carry it there? is sony going to do that? >> well, video gaming is our wheelhouse. that's what we've been in for the last 21 years. when we come at vr, we come at it from an that angle. we're excited to see in 2016 so many different players coming to

the vr market, whether they are large-scale experiences like the oculus or the vine or small-scale like strapping a cell phone to your face to do 360 video. this is all happening in 2016. i think we're seeing a great confluence of the technologies and drif behind that. 2017 will be amazinamazing. >> $399 is the price. how did you decide on that given the spectrum of the experiences you just described? >> our time in the market with video game we found 399 is the sweetheart price point to get into this market, the console technology. we worked hard to create a headset that is high quality yet can be put together for a price that's attractive to consumers so $399 is our home base for that. >> within say two years what percentage of the ps-4 installed base do you think you can get to buy at least one vr headset? based on past experience with move controllers, what you've seen with connect weather the wii, what can you do? >> that's it, we don't have past experience with vr. trajectory from ps-1 to 4, you can draw that line and see it

gets faster, more powerful, better graphics, what have you. but vr comes in like perpendicular into the gaming stack. we like to say it's almost like when the smartphone came out, you tried to figure out why do i want to make a phone call with my ipod? but now that's all we have in the marketplace. that's a game changer. >> we'll see if it's just another controller or a whole revolution in gaming, sony's leading the way. shawn, thanks for joining us. >> thanks. meanwhile, the market in the uk and across europe just closed a few seconds ago just like here in the u.s., european stocks under pressure following the release of weak chinese trade data overnight. news out of china taking a toll on miners like rio tin toe, angelo american. those stocks down sharply. angelo american faring the worst, down nearly 5%. banks among the losers today, including deutsche bank. some reports say the lender has instituted a hiring freeze as it grapples with investor worries

over its capital position and tries to reach that settlement with the department of justice. meantime, unilever falling despite better than expected third-quarter sales because number-one uk groegser tesco has removed unilever products from its website. it happened in protest of higher prices. the consumer giant is trying to charge britain's top supermarkets in the wake of the brexit vote induced by the slide in the pound. both down about 3%. the pound has stabled slightly in the last six months, though, down 14% against the dollar. still to come on "squawk alley," john stumpf may be out at wells fargo, but those left on the bank's board still have a huge mess to clean up. is tim sloan up to that tas snk and before we head to break, take a look at the major averages here in the u.s., still deeply in negative territory.

hi, everybody. i'm sue herera. here's your cnbc news update that the hour. the judge is allowing a misconduct complaint to proceed against new jersey governor chris christie over the george washington bridgegate scandal. it now goes to the bergen county prosecutor's office, which will decide whether that case will lead to an indictment. the 193 u.n. member states have elected portugal's former prime minister an known owe guterres as the next secretary-general. he'll begin on january 1st when ban ki-moon's second five-year term ends.

syrian soldiers conducting military operations yesterday. vladimir putin says they were using civilians as human shields in that city. amazon will add 120,000 seasonal workers this holiday season. that's a 20% increase from a year ago. last year 14,000 seasonal workers were converted to full-time employees and amazon expects to boost that figure this year. you're up to date. that's the news update this hour. back downtown to "squawk alley." carl? >> thanks so much, sue. back to our top story. john stumpf out as the chairman and ceo of wells fargo following that massive sales scandal. tim sloan, the new chief executive, stocks under some pressure today, down almost 2%. aditi roy has more. >> reporter: hey, carl. wells fargo is trying to win bacchus mer confidence after many customers we talked to say they feel disenchanted with the bank. >> i'm the kind of person who

doesn't monitor my bank accounts. but i was grieved to hear that highly powerful bankers were being opportunistic. >> i'm pretty disappointed. i've been an account holder i think since about 1969, so a long, long, long time. and been pretty disappointed in it. >> i'm considering options but i'm pretty loyal in that regard, but i'm definitely considering some other options currently. >> reporter: hours before stumpf's resignation was announced, wells fargo sent out an e-mail to its customers outlining the steps the bank is taking to regain the trust of its clients. it has refunded customers who were given unauthorized fake accounts and are working to find other customers the bank might have missed. the bank assuring customers that moving forward lit send them a confirmation after they open up a consumer or small business checking, savings, or credit card account. the company also reiterated it's illuminating sales goals for its

bank members. they doled out refunds each averaging $25 to 100,000 customers to reimburse them for unauthorized fees and has set aside $5 million for payouts. back to you. >> aditi roy, thank you very much. does the the shake-up at the top of wells mean the start of a new chapter or is stumpf just the first chip to fall? henry blodget is here at post 9 and cnbc contributor bill george also on the boards of goldman and exxonmobil. good to see you both. bill, we always turn to you to talk about corporate culture and ethics. you've been a customer of wells for i believe decades. what are you thinking? >> well, i have been a customer since 1970. i served on the board of the predecessor company norwest bank. tim sloan has to go in and make a total transformation of the culture. they've known about this in depth for three years and they haven't acted and shame on them. i think it's going to be a classic of how not to handle a

crisis. they didn't step up to it, they weren't transparent, and they blamed it on the low-level employees. they should replace the people many the chain of command that oversaw these people and do a total transformation of the bank. so he's got to go on two parallel paths. one he has to restore his customer relationships by being fully transparent with them and changing their practices. then he's got to go through a total cultural transor the major leagues of the bank to get back to their original mission, which is meeting clients' needs. there's nothing wrong with cross selling as long as it's intended to meet clients' needs, but not to send out fake accounts. he has to take the place apart top to bottom, replace a lot of people and move very quickly. they haven't moved quickly, but they have to move very quickly to do these things. >> henry, a transformation of culture, this is a bank ta used to both about its culture that emerged from the financial crisis unscathed and had a squeaky clean image before this. how do you transform a culture that was previously a big selling point for you?

>> i think first bill nailed it in terms of you have to now act on behalf of customers and be very clear that you're doing that. the question is how deem the incentive structure that allowed this to happen and encouraged this is. is it a small change? or sit a big change? ultimately, you have to have a performance culture. you have to have it measured in the right way and have to have people focused on the right thing, which in this case should be creating value for customers. obviously creating a secret fake account for somebody is not a pro customer move so you have to get the incentives right. >> bill, i wonder to what extent there's a lesson in this for lots of different types of companies that deal even with companies on a subscription basis like comcast. companies employment all sorts of tactics to get people to sign up for more stuff, to keep people from leaving when they're trying to go away. if you just look at the numbers a and you don't deal with the incentives you put out to salespeople and customer service people, could this happen or the equivalent thing to many other types of companies in our

economy? >> absolutely. insensitives are very powerful tools. we're pointing out to a group of ceos at our harvard business seminar last week. you have to be careful they don't go too far. frankly, john stumpf failed to engage with his own employees. he'd been wandering around the branch. these are people they fired make dlrg 12 to $14 an hour. if they had their hands in the till, i understand it, but if you're putting pressure on them to do the wrong thing, if you were out there, you'd know that. you have to be engaged. there was a hubris that overcame wells fargo. they sailed through the financial crisis, they did a beautiful job of taking on wachovia, and i think they got too high on themselves and lost sight of their customer and what was going on at the branch level. and to do that, he needed to be out there making sure all your incentives, when the board reviews those, manager reviews those, are consistent with what the behaviors you want to get. and powerful incentives force people do the wrong things, and

that can destroy a whole culture. that's taking place at wells right now. >> again, you have to get the incentive right. >>incentives. >> that is create value for you, the customer. how do we measure that? it should have been clear given the noise and this was reported years ago, we're putting pressure on new casualties and that is contributing to people creating fake accounts. that's something if you have your eye on the ball you can see. >> what of the insensitive for customers to say? we heard aditi roy with sounds from customers in san francisco saying i'm considering my options because i've lost trust. does the bank need to do more than just go to the customers who are affected and say we'll give you a refund far? do they need to do a broader scale sort of voucher rebate campaign to actually get people to have insensitives to stay? >> yeah, i think you're going to have to do something dramatic to save their customer base. henry's right.

incentives can be a very good thing, but you have to do something dramatic to change -- i winced when i heard all those comments because that is what makes this bank go. this is not an investment bank. they aren't doing many big deals. this is a commercial bank. and it's all based on trust. and i tell you it will take him a long time to get that trust back and yeah, they'll lose a lot of customers in the meantime but they've got to move fast. >> you haven't told fuss you're going to switch. >> i'm going to stay. i'm confident they'll bring it back. it's a sound board. they're making good moves. but they've got toll trust -- i can tell you, carl, we'll take them one to two decades to get the trust back, but you have to earn it every day. that's why sloan has to totally transform this culture. he can't move slowly like stumpf did. he's got to move fast right now. and the board needs to create a special committee of the board to oversee this not just have an independent chair. they need to have a special committee who's meeting with them every week or two to see

how this transformation of the culture is coming and to measure it. they need a cultural measure of how their customers feel and get that metric on a regular basis. we did this at goldman sachs back in 2010, turned the place upside down with 150 senior partners. you have to do something like that, carl, to get on top of it. >> we're going to talk for weeks about how hard or easy that will be for an insider to do. henry, bill, thank you guys. appreciate it. henry blodget and bill george. still to come on "squawk alley," gopro's latest action cameras sure to be hot sellers this holiday. there's one place you can't buy them yet, amazon. find out why. and kings of leon gearing up for the release of the band's seventh studio album. they're here today.

"shark tank" investor kevin o'leary is here. mr. wonderful bought apple shares at the right time. now he likes samsung. see now noon eastern. "halftime report." see you in less than 15. >> thanks, scott. gopro just started selling its new hero five cameras, but a surprising twist, it's not so easy to find that product on amazon.com here in the u.s. josh lipton is in san francisco

with more on that story. josh? >> reporter: that's right, jon. gopro's ceo not happy with amazon, so you're not going to be able to buy gopro's new hero 5 camera directly from amazon.com in the united states, at least for the next couple weeks. the reason? gopro is not pleased with how its older products were being priced on amazon. remember, like many consumer electronics brands, gopro tells retailers how it wants its products placed, which is standard practice. amazon didn't adhere to those guidelines for gopro's models, specifically on the hero 4 silver and hero 4 black by matching unauthorized resellers. i just talked to charlie anderson of doherty and company, who covers the name. he agrees with gopro's decision because retailers like best buy now price match amazon.com. anderson says the integrity of retail pricing is critical. he estimates that amazon

accounts for some 7% of gopro's annual sales. gopro's stock is slipping today. anderson says when one question for investors is when other retailers like best buy can pick up excess units that would have gone to amazon. apparently this is temporary. gopro says amazon should be receiving the products later this month before the all-important holiday weeks. still, other analysts are expressing some caution. piper's aaron murphy says this news does represent a disruption, however temporary, of a key partner. by the way, we should mention amazon did not respond to requests for comment for this story. back to you. >> josh, thank you very much. when we come back, we'll get to rick santelli and get "the santelli exchange" on a day the dow is down 128. later on, we'll say hello to the kings of leon. we're drowni.

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welcome back. rick santelli here live on the floor of the cme group. it's october 13th. tomorrow a big day. why, you ask? money market reforms. the day has finally come. an there is an old adage, buy rumor, sell fact. basically what that means is that markets adjust early. the lead up to many things is

usually the big event. once we arrive at the destination, many times it's lackluster. will this be the same? i can't tell you. but quickly, let's look at a couple of issues that have already occurred. when it comes to short funding and i picked three month libor, certain aspects of the short funding market commercial paper have ticked up a bit. nothing like in in the crisis, but the rate of change has been pretty abrupt. at the end of the year through about june, pretty flat trading. and then, boom, we gathered close to 30 basis points rather quickly. so you can see visually. now, what we really want to pay attention to here is things like gates, there are boundaries here. investors that i've dealt with over the years, they don't like boundaries, they don't like gates. but that isn't the whole story. because prime funds are going to be treated different than fwo t government hope market funds.

the fed minutes talked about it, but they basically called the effect small. transitional was the implication. but do keep in mind notice that the government will have the better program in many ways, there as been a massive shift out of those prime funds that will have a whole different set of rules. the other thing that is very interesting here is the fed's balance sheet, all these securities, we've heard a lot about reverse repos, the new financing king. that goes a long way into this story because indeed the new york fed's reverse repo facility is now going to be the cashier in these transactions, unlike prime funds. so there will be effects especially if you're a small city with regard to issuance. because many types they had a relationship with these prime funds. but in the end the rope ieason bringing it up is unintended consequences. tomorrow put a red dot on the

short term metrics aplet's see if it's a top or bottom that will give us clues for what happens at the end of the year potentially regarding the fed hike. carl, back to you. and when we come back, kings of leon out with a new album. amazing sleep stays with you all day and all night. with sleep number, you choose the exact firmness and comfort you want - and so does your partner - for the best sleep ever. it's the final days of the columbus day sale, with the queen c4 mattress set now only $1399.98. plus 24-month financing. learn more at sleepnumber.com

. kings of leon set to release their seventh studio album tomorrow. joining us this morning here at the nyc, the gram any award winning band themselves. guys, great to have you with us. it's a lot different now releasing an album than it was back then. >> when we released our first album, our expectations were pretty small. we didn't know what was going to happen. we were just happy to make music. and now the industry has changed so much, so you kind of have to do a lot to get your voice heard out there. so we're very excited. it's a very exciting time for us sgrp h . >> how do you think about the

structure of an album released now with so many people putting it on a streaming service first or an exclusive? >> we're just thrilled for it not to get leaked. it comes out tomorrow, so we were like okay, we made it one day before it comes out. but, yeah, it's an exciting time. >> everybody is too busy hacking political campaigns i guess. you guys got started 2003 with your first album, dawning of the itunes music store era. do you even feel like you're selling recorded music as much as you're selling performance and a brand? because it seems like the music sells other things more than it sells itself. >> for us i feel like we just try to surround ourselves with people who are much smarter than we are so we can just make the music and let them deal with a lot of these things. the industry has changed completely from 2003 to now. so we just kind of continue to do what we do and let other people handle it for us. >> as the industry has turned its focus to performance as opposed to the studio, does it

remain as fun being in a studio versus being on a stage? >> yeah, we have a lot of fun in the studio. that's when we can be super creative. and i think that's really our comfort zone is the studio. but performing live is also -- we can be creative there because we get to choose how the show will look and our set. now that we have seven albums, we have a massive list of songs to choose from. >> how do you buy and listen to your music? do you buy cds, download streaming services? >> i don't listen to my music. >> other music. >> i mean, it's kind of different. sometimes we have friends and bands that give us the music and we listen to it that way. but i guess i tubitunes is the o listen to music. and i do get on youtube to watch music videos. but itunes is normally where i

purchase my music. >> years ago tinkering around in your garage i presume, did you ever think you'd be here? >> no. >> yeah, this was our goal. >> to be at the new york stock exchange. guys, thanks so much. it's xwlat seeis great seeing y. congratulations on the album. let's get back to headquarters and the half. thanks so much. welcome to the halftime report. i'm scott wapner. our top trade, tech troubles, the sector the best of the last three months under big time pressure. just one of the reasons why stocks are in rollover mood. how ugly can it get? ian winer is joining us, co-header of equities at web bush. also joining us from boston is