good morning, it's 10:00 a.m. at walmart headquarters in arkansas, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ good thursday morning. welcome to "squawk alley." i'm carl quintanilla with john fortt. >> doesn't this make you want to go like this >> at post 9, sara is off. top story this morning, walmart is making moves, the company announcing it will increase its starting wage for hourly workers in the u.s. to $11 an hour, pay

a one-time cash bonus to eligible employees walmart says it will expand maternity and parental leave benefits been a couple years since they took wages up. before a lot of their competitors, took it to $9, now to $11 when you're talking this many workers, it gets your attention. >> i think we have to be careful, though. 1.5 million workers in the u.s this wage hike from $10 an hour up to $11, that's nice, but walmart's wages are that low to begin with and we've been wondering for a long time with the tightness in the labor market when are the increases coming >> starting wage, to be clear. >> not every worker makes that, but walmart is infamous for having workers on public assistance, so how much praise do they deserve, plus this $400 million worth of bonuses, which is great, one time, but let's not pretend this is some huge, amazing, generous thing. there's been a lot of criticism of this company for underpaying

workers for a long time. >> but some money is better than no money, right? >> yeah, but you need to have tax cuts to get some money from walmart. what's that say? i don't know >> mcmillan said the bill allows them to accelerate plans that were already in development. this is the discussion now, what is fair? if you're going to pay forward the benefits of tax reform, how much goes to workers, how much goes to shareholders that's the core of the debate today. >> and they did say they are still assessing other investments and ways they could potentially be putting more money to use as they figure out what their tax plan looks like moving forward i also thought it was interesting, last year walmart u.s. ceo said at that point in time there was an improvement in associates purchasing in their own stores when they would raise minimum wage, so i wonder how much of that ultimately ends up back in stores >> shares, obviously, have done extremely well the past six months, up near 100. walmart is just the latest of

many companies that reported changes in the wake of the new tax law. eric is back at hq watching ones that have. >> good morning, guys. what makes walmart unique, it's the only company in america's top ten employers that publicly announced a plan to raise wages for employees. there's walmart, they are the biggest employer in the country, in the world let's say, they have 2.2 million employees in the world, 1.5 million here in the states all these employers behind me each have over 300,000 workers globally, but not all are in the u.s., but walmart is so big with over 2 million workers, it's multiple times bigger than any other company in this top ten. many of these firms did issue statements about the new tax law, but were generally filled with general comments, not a concrete plan to raise wages other large companies that fell just off the top ten haven't had specific age hikes, like at&t will give a bonus to 2,000 employees, you can see them behind me, along with a lot of

big companies. a lot of banks, notice that. wells fargo said it would raise its minimum wage to $15 per hour and you can see behind me there are other companies that changed the minimum wage there we go, here's wells fargo, walmart, u.s. bank a lot of banks over here boeing, a company that announced an investment for corporate giving and workplace improvements, though, no actual wage hikes some analysts think you might see more big firms announce plans to increase compensation walmart were thinking about and here we are with an announcement there may be other companies in a similar boat that a few weeks from now you might see an actual announcement, but they are the only one of the ten biggest companies so far have given a concrete plan. one theme to watch, telecom companies, banks, these are companies with a lot of regulatory fear. they may want to do these things to keep the white house happy. back to you guys

>> thank you very much for that. moving on to bitcoin, pressure as south korea government says it's preparing legislation to ban currency trading in the country's exchanges. china ordered the closing of operations of the large share of bitcoin supply bob pisani is at post 9 and michelle caruso-cabrera is in washington at a bitcoin mining facility, where she's been walking us through what these servers look like at scale hey, michelle. >> hey there, carl yeah, you want me to explain them right now so, we are in washington state it is home to a dozen bitcoin miners like this one there are 1,800 servers in this room and this particular company has three locations. it's the salcido group they are mining 5 to 7 bitcoin per day, they want to get up to 50 by this summer. they are using enough power to power 11,000 homes

they want to have 42 megawatts of power by july, which is why they are in wanatchi, which is home to the columbia river, with dams that provide extremely cheap power, only two to three cents per kilowatt hour. the public utility says right now there are 12 miners, they've had inquiries from 75 more since the price of bitcoin went up four of those inquiries are for 100 megawatts of power right now their peak capacity is 200, so that's an enormous increase in demand, would require a lot of investment. let me show you more of these servers since this is "squawk alley. these are expensive and intensive. like i said, there are 1,800 in the room two are equivalent to one furnace in your home the latest generation costs $10,000 each they are from china.

they have application-specific integrated circuits. they are smaller than the servers you're used to seeing because there are no cpus in them, no data storage in them. they are doing nothing but calculating all those equations that need to be done in order to achieve getting a bitcoin, which is the whole purpose guys, back to you. >> michelle, don't go too far. bob as we said is here at post 9. this is when you know it's becoming real, when you're looking at the back bone >> i'll tell you what's important, it's great she's there. what i see is no coordinated global policy response to bitcoin cryptocurrencies or the blockchain and leaves open bitcoin arbitrage. remember the banks that moved headquarters into different countries depending on regulations, you're going to see this regarding bitcoin japan accepts it as a form of payment, south korea is thinking of banning it, china has a vague ban going on, so michelle, here's the question, all those

three-quarters of bitcoin mining operations occur in china. if they decide to slowly phase this out, are the people you're talking to, are they saying this is the gold mine, the world's going to come to us? >> so, the head of the public utility when he read about china theoretically banning bitcoin, he said, oh, my god, what if they all come here he was worried about it, number one. two, talking to the local bitcoin miners, they are extremely skeptical. they don't believe it. they said china's threatened to do it before, ultimately the technology will prove so powerful they cannot do this and if they do, hey, more bitcoin for us >> yeah. this is a very dangerous moment for a lot of these countries, including south korea. they have to be very careful not to stifle innovation these countries want to be innovative hot beds of innovation blockchain has the potential to be as disruptive as the internet

was. the question is, do we need bitcoin to build out the blockchain i don't think we do. these countries have to be very, very careful to manage the buildout of the blockchain and at the same time you don't want teenagers in south korea trading bitcoin at stupid prices i get that they are at a dangerous point here this is going to change things >> bob -- >> bob, we have a guest -- >> go ahead, michelle. >> i was just going to say to bob's point about bitcoin, i've been asking that question a lot. we're going to have the founder of this particular mine on "power lunch." he's a big believer bitcoin will be the blockchain of choice. you're right, that's one of the key questions. >> bob, one of the benefits of bitcoin specifically is supposed to be a global currency, can't be regulated in the ways that many currencies are regulated, but prices are so different by geography and transactions, in some cases take a long time to

settle what's your take on whether the utility of bitcoin is living up to the promise in this environment? >> look, bitcoin was not supposed to be a store of value. no matter what anybody tells you about digital gold, it was supposed to be a mechanism to transfer money back and forth between people i think it's good to argue about it as a store of value we, obviously, don't know. i want to see three months from now, how these things settle out with the futures market. if we get a decent settlement, we're going to have options coming on bitcoins within the next six months, i'm quite sure. i want to see how the buildout of the derivatives market occurs and if you can get a market that's reasonably orderly, i think you have a definite chance for things to settle down. did you notice since the futures contracts came in, bitcoin itself has moved in a much narrower range >> it's true been a big compression it's hard enough getting global standards for asset instruments

that are centuries old, much less this. >> people tend to forget what it looked like in the corn market the futures market was created to deal with commodities 150 years ago where they couldn't control the markets and there were people coming in trying to game the system. that's the futures market and took a long time to build that out. >> michelle, i have a quick question for you how long is it taking the miners you've been in contact with there to actually mine a bitcoin? >> it depends on how much -- so, this guy's doing five to seven a day, divide by 24 hours, they issue 12 and a half every ten minutes, so you can do the smath. bigger question for them is how long can it take to get power, six months to a year out of the local utility. >> wow >> the report this week saying that power consumption is essentially equal to what argentina uses this year >> this is the big debate. blockchain innovation has to

keep going we can't allow teenagers to go crazy in south korea on this, but this is the big issue for these countries, how do they keep blockchain innovation going and maintain control over the system >> bob, michelle, great discussion michelle caruso-cabrera, bob pisani when we come back, one of the designers of the ipod taking to twitter to voice his concerns about device addiction he joins us next to talk about who he thinks is responsible president had fighting words for internet companies last night. we'll discuss that with walter isaacson of the aspen institute. stay with us ns, there's something else: an underlying breakthrough that makes it all possible. at qualcomm, we're leading the world to 5g, and a new era of seamless interaction that will make the internet of things, the thing. for us, there's less fanfare. but soon enough, the technology that starts at qualcomm will be front and center

on the world stage.

our next guest has a history with apple and google. developing tools to research the effects of smartphone overuse and addiction on young people. he said adults are addicts, not only kids, and google needs to help tony fidel, one of the designers behind the ipod and iphone, also co-founded nest and is a principle with future shape. you can see what tony tweeted about the report tony, welcome. so, it seems like you're saying -- >> hi, there >> -- tech companies should give us more data about how we're using the services, these devices, how much we're using them, and when we cross into, perhaps, addictive behavior. am i getting that right? >> that's correct, you know, you

don't know you're an addict until you cross the line, and we do not have the tools today, the information, to allow us to see if we've had more than two glasses of wine a day or too much food. we don't have a digital scale for our life, for our digital life and so we need to think about how we understand our digital lives. today apple and others with smart watches, they are tracking every step, how we sleep, you know, if our heart beats and those things we understand our physical lives really well with the technology and these companies reflect that information for us to live a better physical life they have all the data, and apple is at the core of this, and so is google, across all the platforms understanding our digital lives and they should be able to give us back a pretty detailed, but not overly detailed view, of a day in the life of a user so what are your physical habits, what are your digital habits, so you can see it and understand if you're doing what

you want to do or need to address something. >> i'm in favor of us having the same data on ourselves that the companies have on us, certainly, but seems like your solution is also part of the problem should we be relying on technology to tell us when we've had too much technology? or do we need to just sort of physically put the phone down when we get home and talk to the kids and actually physically put the thing away without technology telling us we need to >> i think it's a matter of personal choice and family choice, and so there's different ways of dealing with this situation, you know, if people decide they want to always have devices at the table around, so be it. i'm not going to go tipper gore here on this but at the same time we need to have the tools so that our families and our individuals, right, to be able to maintain and monitor what's going on and try to strike the right balance. and so, yes, i do think in certain times the devices should

go away and other times the devices should be there, because they are powerful tools. we don't have the tools to control our environment today. and if you're an addict, the best you can do is get out of the environment, but these tools are very powerful and important for our education, for our work lives, livelihoods, as well as for doing transactions and living in the world. so we need to be able to wrest control back to the users so they can decide what they want to do with their lives and with their families >> first of all, i see behind you, i'm quite jealous please have one of the butter laden french pastries for me, but, you know, with all the focus on apple, google, facebook, others just sort of stepping in and bringing solutions to consumers, if they don't, or if they don't do enough, are regulators going to step in here and if they do, what's that do to the sector? >> well, i think, you know, at the end of the day that stuff,

irregularlation happened and it takes a long time for those things to happen the tech industry, especially apple and google who control the platforms across tvs, phones, tablets, your computer, they have the data and they can give it back to us. so the sooner they get ahead of it, and apple has been doing a great job, they helped with in-app purchases, made sure there's not pornography, they could make more money, but they could have put pornographyin the apple itunes store, but they didn't so there is a perfect balance, and apple's always taken the right line it's just now a set of unintended consequences after, you know, yesterday was the 11th anniversary of the iphone introduction we're now here now we have to take the right steps. and apple's always done it in the past i'm sure they are going to do it in the future. and with this issue, as well regulation, i think, is going to be a long time away and it's going to take a lot of research. we don't know what all these devices are. i'm not a physician or

researcher i don't know what damage it does i just know i think we need to have both a digital connection with each other, as well as an analog connection with each other. >> i'm reminded, tony, of peter drucker quoted as saying if you can't measure it, you can't manage it. you need something, as you said, a digital scale. as an engineer, how hard is that to create? isn't it something a developer could do in an app very easily >> so, this has to be done at the platform level, across the tv, phone, tablet, computer, swatches, whatever other digital devices you have this is actually really easy to build. this is not like a self-driving car, three, four, five orders of magnitude ardor and expensive to implement. there's family purchases in apple and google, you have all

kinds of other controls and things for content, even apple has usability for students on their macs today that they put in, you know, ten years ago or 15 years ago so this is actually really easy to do. it's practical, they have all the capabilities they shouldn't be relied on for the app developers to do themselves this has to be on a platform way, where the app developers have to give the data or hook into the apis so that the platforms can actually see a real full picture. because, you know, some app developers have the best of intentions and others do not you know, they are about intention and attention. not about, you know, necessarily doing the right thing for the customer or, excuse me, the user, because their customer is an advertiser or someone else. >> tony, i wonder if this is a little bit of a runaway train. here's what i mean, john just got back from ces, internet of things, internet of everything

really coming into your car, you're the cofounder of nest. all the digital technology coming into the home and every aspect of our lives, at what point do you draw the line seems tech is invading everything everywhere right now and there's a lot of positives to that, but how much are we really going to be able to turn off as that becomes a bigger and bigger part of our daily lives >> again, i think this is about truly understanding that if we have the control as users inside of this technology, we'll be able to use it i don't see it -- i see much more benefits than i see negatives. we're talking about the negatives now, but we're forgetting about what the world looked like just ten years ago, and think about all the commerce, all the great things and super powers that individual users have now so, this is not -- you know, you can communicate with people, facetime, all these things, but there are bad actors and runaway

scenarios, but we need to think optimistically we're not going to put the genie back in the bottle i'm glad it's out of the bottle. we need to work on unintended consequences and shape society the way we want to shape it. and so this, you know, and i know the good people at apple, i know how they think, i've been in those meetings. they've already responded to this i'm looking forward to what they are going to come out with and announce in june around this important topic. i think it's going to get addressed. to think this is a runaway, oh, it's taking over, i think that's a real pessimistic point of view >> some people welcome the takeover, tony thanks for joining us and sharing your thoughts on this world that you and all of us have created >> and, by the way, just to be clear, i love the internet of things there are nests in some of the households of my family members, just to be clear all right, as we head to break, a check on oil prices wti and brent both hitting a

four-year high today brent closing in on $70 a barrel i 4. st with us, "squawk alley" will be right back gy is changind we're changing with it. building a smarter grid, investing in new technologies, that's aep's road to the future. and the international brotherhood of electrical workers helped make that happen. the ibew's outstanding union professionals have the skills and training to get the job done right. that's good for our customers and for our bottom line. ibew members are our power professionals. they should be yours as well.

let's get to seema mody at post 9 with the european close hey, seema >> european stocks are mixed today, but check out the pop in the euro ecb releasing minutes from the mid-december meeting they indicate they are ending the bond-buying program, pointing out self sustaining economic expansion there is data out today showing economic growth in germany, which hit a six-year high in 2017 then the part of this economic is inflation, still below the ecb mandate of 2%. something to keep in mind. a tough day for the uk retailers out with their holiday season results. tesco raised almost 2%, but forecast for dvds and computer games offset sales marks and spencer saw declines

in the christmas quarter also off to a slow start due to unreasonably cold weather in october. sainesbury with upbeat results for the week denmark's pandora among the retail laggards saying it expects profit margins to decline over the next few years due in part to a challenging environment in the united states uk home builders also in the red today, led by barratt, which reported flat sales, stock down nearly 3%. on the geopolitical side, european leaders are calling on president trump to uphold the current iranian nuclear deal, saying sanctions should remain lifted of course, we await to see if this has influence on the white house's decision, which is expected soon. guys, back to you. >> thank you, seema. president trump, meanwhile, taking a shot at e-talers. here's what he had to say last

night. >> make sure the internet, they are going to have to start paying sales tax it's very unfair what's happening to our retailers over the country that are being put out of business. >> we discuss with aspen institute ceo walter isaacson ensqwkll" tus.wh "ua aeyrern it'n once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

good morning once again, everybody, i'm sue herera. here's your cnbc news update at this hour. the kremlin says a new report by

senate democrats describing russian interference in the u.s. is unfounded spokesman dmitry peskov reporting paranoid concerns not only hurt bilateral relations, but the u.s. itself. german politicians meeting for a final day of talks in hopes of forming a coalition government trying to find common ground with their perspective central left partners. merkel is confident an agreement can be reached the saga of unclaimed luggage at jfk airport continues. it's now being stored inside a ballroom at the airport's hilton hotel. some 5,000 bags are still unclaimed. and japanese tech giant sony delivering its all-new robotic dog ibo to customers today he is a cutie pie. he's equipped with artificial intelligence, and he grows up via the internet through

day-to-day interactions with the owner. the cost is about $1,700 i hope my kids don't see that. we've got three dogs already although ibo would be easier to take care of that's the news update this hour, back downtown to "squawk alley. carl, back to you. >> thank you very much d.c.'s having a big impact on the agenda today, walmart made the announcement raising wages and bonuses, as some 100 ceos now send a letter urging congress to fix daca legislation. and yesterday the president calling for a new internet tax take a listen. >> make sure the internet, they are going to have to start paying sales tax, because it's very unfair what's happening to our retailers all over the country that are put out of business >> let's bring in walter isaacson, aspen institute ceo and cnbc contributor good to see you. >> good to see you, good to be back with you. >> how loud does this letter

from the ceos on daca ring >> i think it's very important, because they quantify what it's doing to the economy, hundreds of billions of dollars if you start moving out the d.r.e.a.m.ers that are so much integrated into this economy i think, of course, the main thing is you have to make policy also based on humane considerations, but these are kids that, you know, came over when they were young children, now part of the economy. if you're having major u.s. corporations saying this will hurt america, it should give you pause to do a daca fix >> would you expect them to be as vocal about it as they were about tax reform >> well, no, i hate to say it. something that really goes directly to your bottom line, but i think they've been pretty vocal about this, and i hope that it becomes not just a corporate interest thing, but an interest of all americans to say, you know, this is what our country is about, and sure, we want to control immigration, control our borders, but at a

certain point when you're talking about people who came over as kids, played by the rules, got good jobs, you want to have the daca that we already have in place now, the deferred action for the d.r.e.a.m.ers >> walter, i want to ask you about the president's comments on e-tailers collecting sales tax. i wonder what you think the motive behind it is. amazon is already collecting sales tax in every state that requires it on both item that is it sells directly and that it distributes. it's just not collecting it on third-party items where the third-party seller actually ships it themselves, so who does this really hurt we spent a lot of time talking about how dominant amazon is in e-commerce if amazon is already collecting that tax and can still be dominant, is it having that much of an effect >> john, the importance of the question you just asked is you said what is the motive here and, yes, amazon is collecting

where states require it, but one gets a sense, maybe a suspicion, maybe it's unfair, that the president of the united states has a personal vendetta or a personal reason to go against amazon because of jeff bezos and because of "the washington post." i don't know if that's true, but we shouldn't have to have these discussions, because one of the core and fundamental principles of our republic is that, you know, you don't have leaders that take out their personal feelings on people by treating them differently on taxes. so i hope that this is just a pure thing that everybody should be able to pay sales taxes on an even keel basis. the problem is, in this time and in this day and age, you end up questioning the motives. and i find that very disturbing. i don't know that trump is trying to do this out of pure fairness from mainstream

merchants. i fear that we have to ask the question, is this personal >> so i get there's been a lot of focus on amazon and, certainly, the president now multiple times over the years has called out amazon. certainly, just recently where the postal service was concerned, as well, but just this idea of e-tailers and collecting sales taxes there's been legislation kicking around for a couple of years now to sort of fix this idea that states can only require retailers to collect sales taxes if they have a physical presence in that state. so there does seem there could be a potential legislative fix to how taxes, sales taxes, are collected by e-tailers regardless, right? >> absolutely, and that's what you want, a legislative fix that's fair and makes sense. nowadays in washington, not only with the white house, you have such partisanship in congress that you begin to worry that

people can't just sit down and say let's make this fix so that physical presence may or may not be a criteria. let's make sure that everybody plays on an even playing field, but as you said once again in the premise of your question, this is part of a pattern in which donald trump as president has used the power of the presidency to talk about amazon and the postal service to talk about e-tailers and taxes. we got to make sure that this is done hopefully in a smart and bipartisan way by a legislative fix that's not aimed at some personal vendetta. >> walter, the news about walmart, i'll tell you, it's amazing how upset people can get from a company that's going to compensate their workers at a higher rate, because in their view they don't think it's enough where are we in this debate about how much is appropriate and passing forward tax reform benefits >> i think it's a good thing

that walmart is doing and like others, target, costco, whatever, raising their wage level. i think part of it is it's got to be part of the overall economy. if the economy is being stimulated, if unemployment as it has been is remaining rather low, this is a good thing. it means that wages will rise because it's in the economic interest and necessity of these companies to do so so i don't think we should be going around demanding companies do things purely out of the goodness of their hearts it's got to be a mix of being good citizens, but also being good for their shareholder value. >> walter, here's my issue with it, though it's not like we only see executives' salaries go up and their compensation go up when there's a tax cut. are we getting this deal where workers will get some kind of a wage increase or bonus if we get a tax cut, but that's when, and then you have to be grateful for it >> yeah, i don't think that's the way you should be making

policy, which is, hey, you ought to be grateful, you might get this or that i think you have to realize that the market for better usually, sometimes for worse, is going to act like a marketplace and act as an interest of each player in the market you shouldn't go around saying let's premise a tax cut on the fact walmart may do this or mcdonald's may do that or give this back or the banks will get a lot of money, bonuses will go to shareholders or top executives, workers. you can't make deals like that you've just got to figure out what's best for the market and how will that -- and if you keep unemployment low, then workers are going to benefit >> what do you make of the fact that amazon, which is the number two employer in the u.s., hasn't actually come out with anything comparable to walmart? >> i don't think we should be going around sort of casting moral checklists or, you know, score cards and say, well, you

know, this bank didn't, this bank did that's not the best way to make wage and earnings policy in this country. you know, each corporation is going to decide what is best then i hope there would be a shareholder revolt and a whole lot of shame involved, but i just don't think you can go company by company and say, you know, this specific, you know, food chain and this specific retail store gave this or that or the other and give out points in that way. >> walter, good luck to your saints this weekend. we'll see you next time. >> you know, we need it this time vikings are a great team >> amazing amazing run. what a game last weekend

walt walter isaacson. "squawk alley" straight ahead. first, rick santelli, what are you watching today >> you know, i'm watching interest rates in general, specifically we're going to discuss how china may figure in testat tabletop of global inre res all after the break.

coming up top of the hour on the "halftime report," new records for stocks tom lee is making a big call on

the market he's with us live to do that and as oil continues to surge, one analyst says one big-name crude company is prime to benefit the most we'll tell you which one and bill ackman taking an ax to his management fees. leslie picker following the money there, she'll join us with the details. see you at noon eastern, 15 minutes away, carl >> scott, thank you very much for that we've been talking for a while about whether or not 2018 would bring a string of new ipos from high profile private companies bloomberg is reporting dropbox has filed confidentially for an ipo. the last valuation in the last round, $10 billion we don't talk about it as much as other candidates like uber and air bnb. spotify we've had information on recently >> couple years ago dropbox was one of the most highly anticipated ipos there might be some rationalization to happen here interesting to see not only what

dropbox's numbers are profitability-wise, because the premium model has fallen out of favor, to what extent are they still latched into that, but also how investors react to those numbers once we see them >> yeah. i mean, if they are filing confidentially for a u.s. ipo, one would think they think the market is somewhat supportive of the most recent valuation. >> that or they have no choice >> fair enough, this is true >> headlines on motivation let's get to the santelli exchange and rick at the cme hey, rick. >> hi, carl. let's get a couple things out of the way before we get to the meat of this stop. yesterday germany had a bund auction, ended up moving 4 billion, but that's not at the heart of what i want to represent here the new guy is yielding six basis points more than the old guy. when we have an auction, they are reopened, so it's not as big of an issue, but when you have a first issuance, old guy the next

day becomes your benchmark, it's the most liquid, and that's what it's about in germany, liquidity. they didn't sell enough. but that issue, even a billion short tomorrow, will be on everybody's screen today about half and half. so the new guy is trading about 58 basis points. the old guy is trading about 52. the reason it's important is because you're going to see a bit of a pop tomorrow, and that's the reason. you already saw it in the two-year shots, it popped up four or five basis points. you want to pay attention to rates. all right, when it comes to the tabletop of interest rates, what china means is important not for how the tabletop looks, but about how you treat international moves. yesterday, and i don't mean to pick on this story, but it isn't the story that was important story was china may not buy as many treasuries. this comment was made into almost an edict and everybody in the marketplace says, aha, that's why interest rates are going up listen, whether china is buying more or less has been a trend that's been decreasing on their

purchases for a while, but that isn't the point. of course what any big economy does relative to what they do with the dollars they have in hand, relative to treasuries, which is usually what they invest in, can move markets, but in this case it's in lightning after how many years, five, six years, where people, investors, strategists are looking for higher rates this has been a long process you include central banks, include the economy, include a new president, include the special fairy dust called confidence, and things are starting to pop. interest rates going up in the big picture isn't about that story, even though that story may be important quickly, we have rebecca corbin, corbin advisers today. she was just unbelievable in terms of how she really captures investment sentiment and it's robust one of the things i found fascinating is they like the policy of this administration. maybe not his tweets, they like the policy it's all about building a

foundation if your foundation is stronger because your cost of capital is less, think taxes, your rule of law is better, think regulations. your energy costs are lower, think fracking revolution. think of the last discussion we had about sales tax. you can't pick winners and losers whether it's sales tax on the internet versus brick and mortar, whether it's bitcoin versus how they treat you on actual money, or things like uber i know people have bought these medallions in chicago, these taxi guys. you need to have rules be the same over time all these changes are just going to build a better foundation for this economy morgan, back to you. >> great, thanks, rick, rick santelli out in chicago. when we come back, a former dea agent turned pot investor. he's joining us. what he has to say about the government waging war on legalized marijuana. you don't want to miss it. "squawk alley" back after this at fidelity, trades are now just $4.95.

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getting some breaking news we'll go to dom chu back at hq for that. >> so the crypto side of things, we want to call your attention to moneygram international they inked a partnership with ripple ripple infrastructure for use in transferring funds in a faster, more efficient way it's seen as a big rival to bitcoin. it was as the company that just got its merger shut down by u.s. regulators back over to you

>> thank you very much for that. as we go to break, a check on markets at this hour the dow is up 111. we've gorerdt co highs almost across the board "squawk alley" is back in a minute

welcome back to "squawk alley. attorney general jeff sessions pushing back on legalized marijuana, advising lawmakers to prosecute offenses for more on the growing cannabis industry and the issues facing it, we're joined by patrick mohan, a former supervisor at the u.s. drug enforcement agency patrick, thank you for joining us today. >> my pleasure >> so what do you make of this sessions' decision to reverse the federal government's previous sort of hands-off policy where state experimentation around marijuana is concerned is this just optics or cause to be concern here? >> i think it's primarily optics it appears to be something that's motivated by personal animus on the part of the attorney general interestingly, you know, we've seen or appears to be at odds with previous statements that the president made while on the campaign trail and it's clearly out of touch with what the american people

want support for legalized cannabis is at an all-time high over 9 out of 10 americans support access to medical cannabis that kind of support for any issue is virtually unheard of. but at the end of the day, you know, we think that federal prosecutors at 90 some odd districts across the u.s. are essentially going to be continue to be guided by the tenets of the call memo. frankly it's just good policy. and whether it's formally in place or not, we feel like that's going to be the guiding light for enforcement decisions. so at the end of the day we don't think much is going to change, especially when you look at the existing markets. i mean the fact is regulated cannabis works we're taking money away from criminal enterprises we're freeing up law enforcement

resources. we're generatjegenerating tax rn creating jobs, and so it just is good policy. >> one of the biggest challenges has been the banking industry and getting banks and also insurance companies onboard to be able to sort of cater to this growing marijuana industry i would imagine this would have a chilling effect on the financial sector as it relates to this industry >> i do think we might see a short-term chilling effect on investment and banking, but keep in mind a couple things. the guidance that was issued in conjunction with some of the justice guidance which comes from treasury is still isn't effect nor have we seen any directive or mandate from justice to begin some kind of crackdown and so while there may be a little bit of skittishness initially, this is a huge growth sector and i think the financial

services industry is slowly coming to terms with that and understanding the compliance needs of serving this industry we're seeing steady and continued growth in terms of access to capital. >> patrick, what's to stop us from seeing dea raids on retail pot shops in california, colorado, washington what are the chances that we see more of that >> i think it's highly unlikely. i mean it's really up to the discretion of the individual u.s. attorneys you know, we have to look at what's guiding their decision-making. as i mentioned, i think the call memo guidance makes sense for all of them, but at the end of the day they have limited resources and competing priorities they're focusing primarily on the opioid crisis that's facing this country, and they're also heavily reliant on their state and local partners, so to the extent that we've seen governors

and states attorneys general reject this move by the attorney general, the respective u.s. attorneys need that support from their local partners >> patrick, so sorry to have to cut it off right now, unfortunately we're hitting up against a hard deadline. thank you for joining us patrick moen. >> my pleasure, thank you. buckle up for bank earnings tomorrow let's get to the judge welcome to "the halftime report." i'm scott wapner our top trade right now, rally watch. stocks hitting new records ahead of those big bank earnings all this as yet another corporate giant says it will pay its workers more thanks to the tax plan we're debating what all of it means. we're doing it with josh brown, steve weiss, jon najarian, rob and tom lee, the managing partner and head of research