re-election. you have syria and mark zuckerberg the s&p down 24 and the nasdaq down about 53. oil been strong. the ten year yield has been lowered. down under 280 again thank you. >> thank you for hanging out. >> thank you for having me. >> at lot of people want you here and becky back, too i don't know what it means there's only so many chairs. anyway. >> you don't have time to explain the back story. >> it's better that way. >> join us tomorrow "squawk on the street" is next. ♪ looking at a live picture of the hearing room on capitol hill where mark zuckerberg will testify for a second day welcome to "squawk on the street." premarket took a spill about two hours ago as the.open twitter told russia to get ready for missiles in response to the

suspected syria chemical weapons attack oil jumped yields dropped, as well. in about an hour, mark zuckerberg goes back to capitol hill he'll appear before the house energy commerce committee. yesterday faced a senate from the senate judiciary and commerce committee members here are some highlights >> if you and other social media companies do not get your act in order, none of us are going to have any privacy anymore. >> it's clear now that we didn't do enough to prevent these tools from being used for harm we want to offer a free service that everyone can afford that's the only way we can reach billions of people. >> is it alternative to facebook in the private sector? >> yes,senator the average american uses eight different apps to communicate with their friends and stay in touch with people. >> mr. zuckerberg, would you be comfortable sharing with us the name of the hotel you stayed in last night >> no.

>> regulation? >> i think the real question, as the internet becomes more important in people's lives is what is the right regulation not whether there should be regulation. >> you as a company welcome regulation >> i think if it's the right regulation, then, yes. over all i would say we're going through a broader philosophical shift in how we approach our responsibility as a company. there will be a version of facebook that is free. it's our mission to help connect everyone around the world and bring the world closer together. in order to do that, we believe we need to offer a service that everyone can afford. >> how do you sustain a business model when users don't pay for your service >> senator, we run ads. >> i see. >> we'll bring you live coverage of mark zuckerberg's second day of testimony in less than an hour from now. best day for shares since april 16th. >> yeah. some people were saying that tech breaks down it can go lower.

he handled himself well. you kept waiting for him to say, senator, if you don't want privacy, don't post things on social network these are 40 some people that didn't grow up in an internet era. they didn't understand facebook invades privacy the way the allies invaded paris they don't get it. the new news cycle the president saying it's the worst for russian since the cold war the president wasn't alive during the cuban missile crisis. no, actually he was. i lived in philadelphia and the sky was black with planes because we were next to the naval air force base what happened to the sun it was because, you know, all the bombers were going down toward florida so i remember, you know, he probably wasn't there when the sun was black with the planes. >> we got a tweet much of the bad blood with russia is caused by the fake and corrupt russia investigation by the all democrat loyalists

or people that worked for obama. mueller is most conflicted of all, except rosenstein no collusion so they go crazy. >> leads the continuing speculation he'll move to somehow either fire mueller or rosensign. replace rosenstein you had a chorus on both sides of the aisle saying don't do that that would be unwise schumer, of course, the democratic minority leader saying they want legislation to protect mueller. and then everybody likes to yell constitutional crisis. >> well, you know, i guess it can't be good for the stock market if were to happen. >> i was watching twit per yes, it's true i was going to be a professor, i was offered a job as an assistant professor. >> i don't believe that.

i think you're not being honest with us. >> that was fake news. the thing most irritating about the president. president nixon felt it was important have the attorney general. but i want to go back to the fundamentals and point out that yesterday was a day where we saw that the market cares much more about trade than it cares about syria. and trade was good yesterday so i think that what will happen is unless the president, you know, says 9:31 missiles launched. >> so trade, syria, mueller, trade, mueller, syria, mueller trade. >> mueller is hard to figure out. but trade isn't. >> yeah. >> trade is, i mean, not to be too material i know a lot of my friends involved with tariffs. i don't want to cut numbers. that's what i worry about

because i'm a stock guy. syria doesn't allow me to cut numbers. >> it's going to affect oil. >> yes. >> right. >> yep it's funny we're going into an earnings season we'll have mueller, syria, trade, tech regulation, inflation. i don't know if you saw cpi fastest in 12 months. >> the interest rates went down on that. >> the yields go down on that or get ready for missiles >> yeah and a trillion dollar budget deficit we haven't seen in a long time. >> we talk about mueller and people say mueller mueller that jp diamond we'll be buy it i don't know if wells fargo can deliver a number okay and mueller. >> you think the banks will move the market higher if we get decent numbers, which we're likely to, right >> well, i think at friday at

3:00 we'll have to worry about a constitutional crisis. >> does that mean you're not going long into the weekend? >> i'm not a trader. i'm not saying much to do about nothing. when missiles are launched it's a little external. >> i'm feeling china town here my mother and sister. >> it is a mother/sister situation. i have people who care more about syria and earnings except for when the earnings come out right? right? >> right. >> forget it it's earnings. >> forget it. >> the lofty expectations for q 1 does it make it, i mean, if you miss, is that bad or easier to miss because the estimates have gone up >> how lofty with facebook at 17 and jpmorgan at 12 on 2018 numbers? >> we just had a record in terms of estimates moving from the start of the quarter to the end of the quarter. >> that's something. >> yeah. i mean, that's what i'm saying. >> look, i continue to believe that in the end this has been

the amazing vacuum of earnings i mean, there is just an incredible vacuum. we trade on the tweets and the president has us going look, i've been telling people to buy amazon because he's distracted by potential for world war iii. he can't focus as much on amazon i will tell you i have many packages stolen this week. if i were president, this would be world war iii against amazon. >> you need to install the ring. >> call the police can you imagine that with the police they stole our packages. that's priority number one. >> i would think it's not. >> it's not. >> and everybody recognizes you're being a bit sarcastic when you discuss world war iii. >>well, i mean, no more sarcastic than our president is in his tweets. >> that's true. >> we have missiles. >> look, if you're going to compare the worst. you say this is worst than the cold war and you have the crisis in cuba in a new perspective which is that wasn't as bad as

this am i wrong if you're going to say this is worst than the cuban missile crisis, which is what the president said. >> he did. >> yes i remember having to stick my head in the cubby hole. >> your two other anchors were not alive during the cuban missile crisis i have heard a couple of things. >> dad, why can't i see the sun? because there's bombers in the sky. there was an unnerving moment. >> for 18 of the past 22 sessions the dow moved triple digits up or down. we're down .2. >> i know. a lot of stocks below the 200. and that does matter to me but, you know, i'll tell you there's demand for shares. the other day hilton priced 60 million. >> yeah. >> by the chinese hna. >> yeah. stock is up big. >> yeah. they took 10 million down. they increased guidance, by the way, at hilton. >> yes.

>> there's demand for stock. and how about the fact that t-mobile and sprint. that story happens and nobody cares >>well, there are a few people who care the third time may be the charm for the two companies, jim. >> stock went up a lot. >> no. i'm saying that was a major focus for me. >> i was more focussed on than where zuckerberg stayed last night. >> dick durbin say, did you mind staying where you stayed what hotel who you talked to. it caught zuckerberg off guard. >> it did. >> he didn't realize he was walking into a trap by an older person he wasn't so contentious. >> by the way, it applies to zuckerberg another quote from the "china town. you're a nosey fella, kitty cat, want to guess? they lose their nose." >> that's my nose, i like breathing through it for zuckerberg today, let's

say for the moment that the house has a little bit of a stronger questioning a lot of questioning people have seen his notes for better or worse. ap took the picture of the notes he had prepared. maybe that forms some questioning today. >> remember the business model apple is not to recruit names. it's self-product. and tim cook, obviously, can say we don't sell names. let's say you were to go buy the mlb app, which i love. you think they would give your name up? no that's not their business model. the business model of facebook is to here is the way you can reach those people tim cook is not in the same business it's a little facetious. >> the notes suggest he was prepared to answer back to apple on privacy and tim cook was prepared to answer questions about whether they should be broken up. >> right. >> which they did not get to yesterday. >> no. he did something i thought was extraordinary. he bored the heck out of me.

>> yeah. >> he can act like a erson. >> by the way, tim cook, interesting to change -- he'll be deposed in the qualcomm litigation, i think, in june that will be interesting. >> yes. >> yes. >> the companies themselves on friday are going to dominate the discussion yes. i'm worried about a constitutional crisis. only because i remember in -- now i'm old. i remember in '73. i remember saturday night massacre it was bad for stocks. when you're nixon. >> one of the last great years in new york sports >> '74 was not great shakes either. >> no. not a good time. but, you know, bezos could skate through because of this stuff. i think you buy amazon on this.

>> and now back to amazon. >> commerce lives. >> okay. what am i supposed to do this is not ms it's not espn. it's not nbc news. okay you buy amazon what am i supposed to -- i'm not suddenly going to become a constitutional scholar i certainly did well in that class. i'm not going to become someone who is trying to figure out the cold war crisis. i'm someone that said you have to buy amazon because the president's office is not attacking the sweet ordeal that amazon has with the post office, which was not sweet. there's a what i thought it was. a chance to get into amazon. i'm limited. i'm small minded i'm happy. >> do so you hayou have a list s in case of a constitutional crisis do you have a top five >> clorox. do you see how much clorox is now? like $6 a bottle. >> clean. >> that's a reference to when

michael cohen, right now there's a clean team of people at the justice department going over the e-mails to see which ones are actually discoverable and which ones they have to hide and which ones are hilarious no. >> i'll tell you one thing, you don't seem shook by tweets about missiles, about the prospect of mueller getting fired. you don't seem to be unnerved. >> i think the market goes down on this stuff and it goes down, you know, they sent the market down 300 and then the traders faded and suddenly you get the opening and people start thinking, you know, it's time to step up and buy some alphabet even though morgan stanley said be careful. people don't have that kind of attention span. >> no. no they don't they don't

and the prospect of thermonuclear wall what is the stock market >> the president is diffusing from a nuclear war in north korea, right i mean, the chinese decided -- no one paid attention to it, they won't ship the products that could be weaponized it was a big win for the president but it was ugh now we have a new situation. i don't know who can keep track of this. i would rather focus on whether jpmorgan is going to beat the low. >> there's a lot to process. no doubt it's hard for us and it's all we do, really when we come back, zuckerberg will return to capitol hill for a second day of testimony. we'll bring it live. we haven't yet mentioned axioss is reporting that paul ryan will tell colleagues he will not run in november. th wn quk on gehe"sawon e street" continues in a moment i am an independent financial advisor.

i left a traditional brokerage firm because i wanted to be free of their constraints. at my firm, i act in the best interests of my clients. i can tell them i'm supported by one of the world's strongest, most admired financial firms. fewer constraints, the freedom to do what's best for my clients. that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant.

play [music plays]his". [dog barks] [concert roaring] [music stops] dinner in 5. when everything's connected. it's simple. easy. awesome.

you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. still awaiting mark zuckerberg's arrival on capitol hill for a second day of testimony in front of the house energy and commerce committee. take another look at the premarket. still in the red giving back some of yesterday's gains. we'll get cramer's mad dash. we'll count down to the opening bell coming your way in about 12 minutes.

at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item. don't juggle your home life and work life without it. ♪ ♪ don't skip that office meeting for a board meeting without it. don't keep it real... keep it going... or simply keep it in the family without it. and don't turn that business trip, into an overdue family trip without it. ♪ ♪ the more you live between life and business, the more you need someone at your back. the powerful backing of american express. don't live life without it.

so lionel, what does 24/5 mean to you?rade well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you? you ok there, kurt? we're about to move. karate helps... relieve some of the house-buying... stress. at least you don't have to worry about homeowners insurance. call geico. geico... helps with... homeowners insurance? been doing it for years. i'm calling geico right now. good idea! get to know geico. and see how easy homeowners and renters insurance can be.

all right. a price target cut from 15 to 12 you're talking about the general

electric corporation and this is another piece, which says that, look, it's going to be confusing quarter you have pension issues. you have long-term care issues there's a lot of doubt of what i reported on is more likely than not. namely real possibility that ge and the least will outline potential split of a number of its businesses why do you think that is. >> i've talked to a number of executives in the industrial area, and they are a chomping at the bit to buy they wouldn't be saying that unless there were things for sale obviously, you have a pension umbrella that has to be paid down. >> yeah. there seems to be a concern

about shared liabilities across the spectrum and how you split it, but accountants, bankers, lawyers are nothing if not creative on the matters to try to figure out a way to potentially consolidate. >>yes. i've got my eye on some of this what i regard being as mris. some life sciences businesses. so these guys can't be -- investment bankers are throwing these divisions at people. every single ceo i talk to said i'm going to fleece them. >> okay. that's ge for today. >> yeah. >> maybe we'll come back to it. >> well, you know, that was the $2 number. >> yeah. we're below $1.

>> 50 cent is what people are saying. >> 50 cents? >> not 50 cent the rapper? >> how did he end up >> he's still going. >> his financial >> i know. we have an opening bell. we'll get to those talks between sprint and t-mobile. of course, we're still awaiting zuckerberg's arrival on capitol hill more "squawk on the street" after this

one second. barely enough time for this man to take a bite of turkey. but for cyber criminals it's plenty of time to launch thousands of attacks. luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world. it's a smart way to eat lunch in peace.

sweet, oblivious peace. in the 2018 lexusxus saes and es hybrid.standard it's a smart way to eat lunch in peace. lease the 2018 es 350 for $399/month for 36 months. experience amazing at your lexus dealer. something we all think about as we head into retirement. it's why brighthouse financial is committed to help protect what you've earned and ensure it lasts. introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. while maintaining a level of protection in down markets. so you can head into retirement with confidence.

talk with your advisor about shield annuities from brighthouse financial established by metlife. you're watching "squawk on the street." the opening bell is three minutes. a busy morning as we watch not just the president's tweet but the hearing room in washington, d.c. mark zuckerberg will arrive soon we expect for his testimony to begin at house energy and commerce in about 30 minutes time official statement from speaker ryan's office shared with his colleagues this will be his last year as a member of the house. he'll serve out his full term, run through the tape, and retire in january. >> retire what representative tanner did i mean, you go into the private

sector what is your thinking there? >> i don't know. it's certainly possible that the republicans will not be in control of the house after the november election, so is that a surprise i'm saying it's possible i'm not saying it's likely. >> are you aware midterm elections are coming up? >> yeah. i'm trying to figure out fact. >> right. >> so you tell me. i don't know if the house is controlled by democrats. that going to matter >> i'll tell you what matters. i saw yesterday why the market has a problem with fang. most of the people don't seem to understand how these companies make money i mean, it's not like exxon. we know exxon makes money. proctor makes money. we know how a walmart makes money. there's a lot of issues about how these companies make money and i think it's a little scary to people who are in their 60s

and 70s. how do they do it? you know how many guys in their 80s on the panel >> no. >> leahy, hatch, feinstein. >> that's why the times called it a five hour tech support session yesterday. >> brutal. i anyone under 30 has any understanding or expectations of privacy? think about what you put on facebook did anyone think it wouldn't be shopped? how could they not think that? honestly, guys i think people are surprised yesterday the journal did a piece on what is uploaded every time you a selfie. it's your battery power, the location, your face. >> when someone sends you do you know what they say

i'm sending a picture of me. >> i'm out there. >> okay. i'm saying, you know, you hear what people say? [ bell ringing ] >> that's the opening bell discovery is celebrating the recent acquisition. >> synergy members there of course they are far higher than at least they had anticipated initially. they've done a bit better, certainly, since they came close. i did want to talk speaking of m & a. sprint and t-mobile. the journal reported yesterday, we confirmed it, of course they are in talks.

spirit and t-mobile. controlled companies t-mobile controlled by the germans and 85% of sprint is owned by soft bank about $30 billion or so in debt at sprint. larger than its market value it's the third time. we know that it's the third time. will it be a charm i don't know i tweeted this yesterday, they've done this so many times before they can move pretty quickly to deal terms. they only stopped talking in november and the deal fell apart over issues of control it ended with a dinner in tokyo where they said i can't do it. i can't give up everything here. will the economics be any different this time? last time they were where around .75 maybe as high as .8. i don't know what i will tell you is this, the massive cap to run a number

that is number four, of course, that doesn't have nearly as many customers as t-mobile or at&t and verizon. that's getting tougher and tougher the longer you go. he has so many things on his plate. not to mention the $100 billion vision fund that part of his team is running. why not try to engage yet again. see if you can't get something done this time in terms of reaching an actual agreement then you have regulatory you get to things like a change of controls in the house, if that happens, or the senate. or the presidency a couple of years from now, potentially, maybe they're thinking now is the time we have a better shot now getting this through on the regulatory front of four going to three than in a year or two we'll see. but regulatory is going to be tough, if they do this time, finally, get to a definitive agreement, which, of course, they failed to in the past

first time they were knocked down by regulatory before they got there. the second time issues of control. we'll see if we can make it happen this time. >> do you see the numbers being quoted >> no. >> yeah. >> they're enormous. that's why they keep coming back to this. >> did you see the stocks just fold people know. no one has enough power. and the cap x for the networks is enormous. and sprint, in particular, is a heavily indebited company. they've been creative. but eventually you have to come back to it he did the charter deal and couldn't get it done he tried they owned 5% of charter, by the way. don't think that isn't the preferred deal it is. they're just not there.

>> recommending t-mobile holy cow 61 or 60 what a great call. the numbers are very good there. and i think, you know, i've been surprised. that's another stock that has been -- no one has been focussed on t-mobile. john ledger has been quiet of late i tweeted him to see if high school co-- he'll come on i'm not getting any reaction i think that's an inexpensive stock. >> yield curve has gotten some attention. 530, 1030 spreads. >> i know. and the impacts we're seeing the bank stocks go down badly today. >> >> come on. when you see this up, down, up, down remember i worked at goldman we're an dry cleaner no inventory this is goldman's environment.

>> trading to the rescue. >> yeah. look i've said that he would not be retiring unless he felt it was the best environment in the world to retire. it is. that's crazy i think that's ridiculous. these stocks are too cheap. >> remember when they sued for the 100 target remember that? >> yeah. >> just a rocket ship. >> i'll never forget you said 115 i think by christmas. >> yeah. take a look at the retail. the ceo of gap is making changes that are good.

>> how about on the cpi numbers year on year apparel down -- or no up .30. used cars up .40 food and home up .04. >> car max reporting such bad numbers and used car prices coming down. how do they get those numbers? we should go to the favor report i'm itching to hear it. >> all right want to do the report now? >> yes. >> all right time warner after that back to cbs and viacom the story i know i can't get enough of it in the coming days or weeks, it's likely the controlling shareholder of cbs and viacom is going to fire moonves. >> i love your report. right now it's zuckerberg arriving i tease you on this. too soon. >> i'll start again.

i was so busy watching zuckerberg's clothes he's going to be fired you did say that >> we have to watch zuckerberg go through security. >> okay. >> because moonves what does he mean >> by the way. just before we get back to david, facebook is up this morning. third straight day of gains. haven't had that since february >>well, he doesn't testify every day. that's how you get the stock higher. >> yeah. >> every day. >> shall i get back to it? >> yeah. >> all right i'll start at the top. in the coming days or weeks it's likely the control shareholder sh sherry redstone will fire moonves as he battles to impose

his will this is an outcome not guaranteed it is made likely because the intransigents on both sides of the deal, when it comes to the differing view of who is going to manage any combination. it was not supposed to go like this and this is the second attempt by redstone to put the two companies together it was thought while negotiations over price might take time and the special committee would go for it and push hard, the two sides would yield to the inevitability of the deal, as would mr. moonves after with speaking to numerous people, it appears a break down in communication and trust is at the heart of the current impasse. when the two met early in the process to discuss the potential management team, redstone made it clear while she was happy to have moonves run the company with his team, she wanted a role for viacom's ceo for bob backish. mr. moonves did not say yes or no to the request, redstone

believed he ascended to it months later the two sides are apart. moonves doesn't want backish to be a part of any combination at all. and redstone is determined that backish not only have a role but the role be president, coo, and board member it's a situation that could force redstone to embark on the moment momentum undertaking she has an equal stake in each company. before we get to the current $2.8 gap in value between the two sides. they're supposed to counter viacom with a bid that is higher than .55, that's what it offered. but not much higher. and issue is the expected cost synergy both sides see as attainable people close to viacom's special

committee tell me they believe there are cost synergies as much as a billion dollars in the presentation to cbs, they identified the high point of cost savings at $770 million now cbs, as i reported yesterday, is cost synergies closer to $500 million finally, to give you a sense of how far each side is on value, it's instructive to know that cbs' management team decided against presenting their views on synergies to viacom's special committee because their views were so far below that of viacom's management long-term plan, they thought it would be insulting and counter productive to getting any deal done to actually do that guys, i come back to this time and again. because it's already so unusual. it's going to go from unusual to extraordinary if redstone -- it appears given how likely it would be attractable moves to impose her will. >> but you're saying is just

sort of, i mean, these are publicly traded companies. >> yes but she's a controlling shareholder. it would be difficult. and she'll get sued left and right. but are you going to tell me she can't do it? >> i guess she can but it shows you when you have these companies that are public traded, you center to have to bl cbs stock has been horrible and cbs business -- >> that is a great point cbs believes the stock prices would be a good deal higher. in fact, was penalized in part even in the price negotiations as a result of expectations. it would have to embark on this deal to acquire viacom and therefore that's why they come back to .55 or perhaps a bit higher as a reasonable ratio. >> i'm following this one. >> the price is not the important part here. you can figure out price it's the other side and the growing distrust. >> it's a bad deal. >> and not what they anticipated. >> not what they anticipated

mo moonves knew the deal was coming and ready to accept it i've spoken to so many people. >> totally off the rails. >> wow. >> we're down 163. goldman leading the dow lower with most components in the red. bob? >> this is another reversal day. are you getting a headache traders are going crazy. the market issues come and go on a daily basis. just look. yesterday we cared about the china trade wars today we care about syria and the mueller investigation. tomorrow maybe something different. here is what we have here is where we are in terms of the trading activity we have a lot of volatility. a lot of 400 and 500 point moves and the dow jones industrial average. what we don't have making everybody nuts is volume

there's not a lot of vul yum there's not a conviction one way or another we don't have a lot of leadership that's a major problem now we need to have a few days where we can settle out and see where things are going a little bit. sectors here is the hope i have. banks are having a tough day now. health care materials are having a tough day. energy there it is. finally energy has been several days in a row. more than a week we've seen outperformance on energies so companies like anadarko, hess they're all up 4, 5, 6% so far in the last four or five trading sessions that's a very, very good sign. even if energies is a fairly small part of s&p 500. banks are a little bit a problem. yield curve is continuing to get flat it is again today. that's a problem for the banks remember the earnings season coming up. jpmorgan will be on friday so all the banks are lagered these are financial in the dow

that's dragging the dow down the most now what can we do change the conversation. thank heavens we can talk about companies and earnings on friday one thing that bothers me, a lot of people say well we're in a black out period therefore the stock will be weaker let me clarify there's no federally mandated black out period that's a mit most companies do have black out speerds restricting when they can buy back stock to avoid accusations of insider trading they can get around it by establishing regular plans to buy back stocks on a regular basis. so they say we're going to buy back stocks the next three months and this amount every day. they can avoid the insider trading and get into a safe harbor period. you can see it with a company like jpmorgan. they had a report on friday. look at the third quarter, they bought back stocks not as much as october and december but 14 million shares in october and december. 19 in november they bought stock every single month and that's because they

were likely using these safe harbor provisions. next sometime somebody said the stock is down because they're in a black out period for the next four weeks take it with a grain of salt there is probably some other reason we're off the lows 133 down on the dow. back to you. >> all right thank you. let's get to the bonds, as well rick santelli. good morning, rick >> reporter: yes it should be fascinating i'm not a big guy for minutes, but jake's first meeting resulted in a tightening, of course we see a lot of world events transpiring. might be interesting reading 2 -2-year. cpi arguably the most important. certainly wasn't cold it wasn't as hot as many traders were fearful of you see on the 2-year at 830 and a little beyond. we're at the low yield but that short end zoomed back

it was a historic flattening if you look at the 10 year it's smaller. the long end maturities are down three basis points let's look at the yield curve. hovering bid the mid 40s that's been sided a bit and you see almost an exaggerated response if you open it up to october of 2008, you can see how much damage we've done. and if you look at 30 minus five going back to the summer of '07, now under 40, another historic move you can sort of see there is even in the middle part of the yield curve you know 2, 3, 5 they're holding up better. the five is right in the middle. pay close attention to that. overseas there isn't a whole lot different actually

their curve has been flattening, as well. you see the long end ten year we're making fresh low yields should we close here which is around 48 basis points. it's the ninth of january of this year and finally year to date dollar versus rathun the dollar is closest. it's not on the lows like everything with the dollar, it can't get out of its own way. karl, jim, david, back to you. >> talk to you in a bit. still to come this morning, a house panel preparing to grill mark zuckerberg after he testifies in front of the senate yesterday. we'll bring you live coverage from capitol hill. dow down 146 to start this busy wednesday. don't go anywhere.

♪ lower carbs. ♪ lower calories. ♪ higher expectations. the light beer you've been waiting for has arrived. introducing corona premier. anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest.

holiday inn express, it wi called usaarst and the first thing they asked was 'are you ok?' they always thank you for your service, which is nice because as a spouse you serve too. we're the hayles and we're usaa members for life. day two of mark zuckerberg on the hill testifying before house energy and commerce. let's get to julia boorstin who is watching the arrivals >> hey, carl

we just saw zuckerberg arrive with his security detail he's here for round two after nearly five hours of testimony before the senate yesterday. yesterday he took time to apologize for facebook's missteps, to clarify how facebook works and also who owns their content on the platform. >> we want to offer a free service that everyone can afford that's the only way we can reach billions of people >> therefore, you consider my personally identifiably data the company's data, not my data. is that it >> no, senator the first line of our terms of service say that you control and own the information and content that you put on facebook >> zuckerberg seemed cool under pressure investors seemed to respond with the stock ending up 4.5% we expect members of the house to continue to press zuckerberg

on what facebook will do different to manage users' privacy. >> it's not just enough for facebook to say, well, the consumers agreed to that they pressed that agree button i think we need to know that they on their own are protecting our privacy. not sharing it with companies that are going to sell it. >> in response to a question about #delete facebook, zuckerberg was quick to point out that facebook's user base has not been dramatically impacted by this scandal he also said facebook's profitability will be significantly impacted as the company dramatically ramps up its investment in protecting user data and growing that employee base just focused on security in just about ten minutes, zuckerberg will face off with 55 members of that -- of the house. it will be interesting how he fares in this environment here back over to you >> julia, we'll come back to you

pretty soon. our eyes and ears on the hill. >> it's interesting because netflix, goldman sachs it's incredible to see they just rotate to the next one and remind you why you like this group. a lot of up side surprises >> when we come back, house speaker ryan says he'll not run for re-election. he's going to deliver some remarks in just a few minutes. 're ing wegoto try to take those live as well and we'll get stock trading with jim in a minute. you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them.

uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. facebook shares have been making their way back to the flat line. if they close positive, it's a three-day win. haven't done that since february 26th you called it short covering earlier. >> people just must have felt he was going to be a water works, tense, loosening his tie, come in with a hoodie it had such a big run today. i expect some profit-taking today. nothing big. >> what your doing tonight >> we have art peck on he never does tv he's gap stores. gap has been a decent stock. by the way, retail has been really great we don't talk about it much. there he is. there he is.

>> there he is >> well prepped. well prepped yesterday >> yeah, he was really well prepped. i'm glad he didn't launch on tim cook that would have been wrong >> he's 33 years old, remember and yesterday was spent talking to some people in their 70s, close to 80. age gap will be a little more narrow here in the house >> at one point he'll have to tell them how to on board facebook don't you think? he's going to have to say switch to instagram i believe that's a competitor. >> it's a very odd time. >> we'll see you tonight, jim. "mad money," 6:00 p.m. eastern time when we come back, we'll get to zuckerberg on the hill dow is down 129. don't go anywhere. s. using the lenovo x1 carbon. powered by intel core processor technology. now we can access our network and work together from anywhere. hey! hey everybody. you coming back for the team building?

mobility by lenovo. no? it orchestration by cdw. ♪

live shot inside the hearing room on capitol hill where mark zuckerberg will start his second day of testimony in front of lawmakers. this time house energy and commerce on the company's use and protection of user data. we'll monitor that and take you to the hearing as soon as q&a begins good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla

markets trying to pare some early losses as we had the premarket rattled by some presidential tweets. cpi out at 8:30 and fed minutes at 2:00. >> speaker paul ryan is getting ready to give a statement after announcing he'll not be running for his seat again and will retire in january. we'll take you there live as soon as he begins speaking the president tweeting moments ago, speaker ryan, paul ryan, he says, is a truly good man and while he will not be seeking re-election, he'll leave a legacy of achievement that nobody can question. we are with you, paul, according to the president unclear the market implications of all of this the market is looking toward the midterm election and whether this complicates efforts for republicans, remains to be seen. >> we'll wait to hear what the speaker says back to facebook zuckerberg's testimony about to get under way. julia boorstin is there with more on what we can expect and how day two might be different

>> well, it's day two here and mark zuckerberg is seated here in this room behind me he's about to start his prepared remarks for the 55 members of the house committee on energy and commerce now each of those members will get four minutes to ask a question the total hearing is expected to last about four hours. there are a couple of key topics we can expect zuckerberg and the congressmen to focus on. one is facebook's accountability and another is explaining how facebook works and handles user data another is changes the company is already making in the wake of the data scandal and whether those changes are enough also the potential for regulation we may get a little more on that potential today than we did yesterday. zuckerberg did note yesterday he is definitely open to regulation and we could also hear some questions on whether facebook violated the ftc's 2011 consent decree this of course comes after yesterday zuckerberg weathered nearly five hours of testimony and we heard from a number of

congressmen this morning about what they want to hear differently today. congressman walden saying he wants to hear zuckerberg go beyond his talking points. that was one critique of zuckerberg that he really stuck to the talking points yesterday. and this morning on cnbc, congressman burgess said he's focused on transparency and whether users can withdraw their consent to share their data after they've already been on facebook and had certain privacy settings so we're about to head inside. it's totally packed here and definitely a lot of excitement so we'll see how lively the q&a is today guys, back over to you >> julia, we'll talk to you in a few minutes. with us, early google and facebook investor. and kara swisher with us as well guys, good morning to you both the take among some is that zuckerberg and facebook won yesterday, if you can win it, by

default. and you definitely saved your fire for the senators and what you'd call a lack of inquisitiveness. >> yeah, yeah, i said he got hit by soft, soft, very nice cashmere pillows by the senators it was a very easy thing for mark to do because the questions were broad, generalized. some of them rather nice what kind of regulation would you like, mr. zuckerberg would you bring fiber to our constituents and stuff like that, which is not what i was expecting. i thought they'd ask actual questions about real problems that facebook has created. and they didn't. so he did a good job he did as good a job as you could by saying almost nothing and we'll see if he can pull that off today >> that's actually not a joke mean was asked whether or not he'd help bring fiber to one senator's district >> the senator -- >> so to me, the great challenge was there are so many problems that have been exposed at

facebook that, think about it. i lost track at about a dozen. no way to have focus so if you really wanted to grill him, you were going to have to pick a topic and ask five or six questions. each one was asking about a different topic and they basically -- he was able to run out the clock without ever having to -- >> it's a hearing. it's how it always goes. a bunch of people not particularly well informed at the issue on hand and are looking for an opportunity to say something that the cameras will capture and you never get that interchange or very rarely that actually alluse dates the real issue and illustrates the real crux of it. >> i look at the 12 or 15, whatever different number of problems that came up yesterday. every one of them is the result of choices facebook made in implementing its business model. it all comes down to a central set of things. i'm with kara. i think mark did very well i think expectations were super low but i don't think that's the

right question to me, we've got a problem right now. it's related to data security, election security, civil liberties. all of these various things all emanate from facebook's business model. if we don't do something about that we've got a lot bigger problems than the dysfunction of the senate >> is the up shot of all this that regulation for facebook looks less likely, or that the regulators themselves aren't going to understand how to put this regulation in place >> i have no faith in those regulators when they're asking mark to help them with the regulation i know they do that in washington but to say it so basely. one question was about what happened with cambridge analytica. he said the system worked as it should and it was just a bad system he kind of admitted he built a platform that was -- that could be misused and, obviously, i'd like to know what he's going to do about it i would imagine the senators or the congressmen should want to

know what he's going to do about that >> as we're talking -- as we're talking amongst ourselves, chairman walden says it's time to ask whether facebook has, quote, moved too fast and broken too many things. if we were going to pick something, roger, pick a topic to drill deep on, is it consent decree tracking movement of users is it simplification of terms of service? >> if i could ask one question it would be different than that. it would be, do you expect us to believe you, mr. zuckerberg, that you did not know that the three employees from facebook who were inside the trump digital headquarters working side by side with the cambridge analytica people on a gigantic data set, are you asking us to believe that you didn't realize that was the same data set that you had failed to get eliminated six months earlier in which there had been this huge kerfuffle?

i just think they need to drill down on facebook's actual actions and complicity i do believe the consent decree is part of that. but the starting point i would ask is facebook's actual engagement on behalf of a candidate in a general election, which they've done in 2012 and 2016 different candidates, different parties but in 2016, it was, obviously, a lot more impactful because the system works way better >> you don't believe that they had no knowledgeof it? >> there's no chance they knew they had employees working for trump. everyone knew that cambridge analytica worked for trump i mean, the data set, no way to re-create it between december when they discovered it in the guardian story and june when they started working alongside the campaign you can't possibly think we're that dumb. >> which may be raised actually going into midterm elections and today's testimony. i think the other big one is the anti trust question. we got a little bit with senator lindsey graham

what was more interesting is the notes he left on the binder on the table. we saw pictures of it. got news reports and there was an answer he was prepared to give about breaking up facebook in that he was prepared to say u.s. tech companies are key asset for america. breaking them up strengthens chinese companies. that's interesting >> right well, of course, they used the china card why not? i don't think they're in any danger of being broken up at all. the issue is the transparency and not telling -- i'd like to know why they didn't tell their users what happened earlier. why they waited so long. so many questions. so many good questions, including there was a guardian story yesterday about them hiring a cambridge analytica person working there and continues to work there. there's all kinds of -- it was sort of like mistakes were made.

my team will get back to you. that is a great starting place because that focuses on data privacy for users. then you have this question. i'd like to have the conversation of breaking off all the noncore pieces from facebook and the noncore pieces from -- >> what do you consider? >> my notion here is -- >> instagram is the core of

facebook in many ways. >> what i'm suggesting here is i think these guys are too big to manage and i think they do represent a huge threat to the entrepreneurial economy. they're stifling innovation in a number of categories >> that's a different argument not being had today about competition and to your point, does the market power these companies such as amazon, alphabet or facebook >> lindsey graham tried to get to it when he said if i'm unhappy with my ford, i can buy a chrysler or chevy, i think, was his word mark zuckerberg didn't bite. >> carl, it's not going to happen we can talk about it all you want this is not a microsoft situation, although somewhere oren hatch mentioned microsoft perhaps everyone can have an opinion about this, but this is not going to happen. it's not even going to be close to happening and facebook has been very adept at avoiding this kind of conversation >> roger, it was interesting to

see as you said, questions coming from all different angles and places and all sorts of bad behavior they were trying to get at but one common thread is there does appear to be an increasing appetite to regulate facebook. even, i thought, a little surprising among some republicans who are usually very anti-regulation. >> to me, the challenge of this whole thing is that we can see it's broken. what do we do about it and with all due respect to kara on this point, i think there are precedents here. they claim that they are a platform, not a media company. the last time we had a problem with a platform was at&t there was a consent decree that created silicon valley boxed at&t into the market it was originally in and took all his tattent portfolio and opened it up to the world to license for free what was in there? the transistor so literally silicon valley was created by that. it didn't hurt at&t.

it's a relatively less harmful form of regulation you put the fence around them and you basically say we're going to let people come and compete with you enough is enough >> that was bell labs. >> that was at&t before the modified final judgment. >> way before. >> that -- >> it was not a complete solution to the problem of at&t but turned out it was fantastic for solving the problem of innovation we unleashed 50 years of extraordinary innovation from that and my point here is, i don't know that we could possibly do something like that, but it should be on the table and we should have conversations like that because right now profit is the only thing that seems to matter to anybody. i look at this and go, i like democracy a lot. i'd just as soon not have one company or two companies' profits be the one thing that keeps us from having a democratic country >> go ahead. >> go ahead. >> go ahead. >> go ahead. >> i was curious as to how you

think the executives at twitter and google reacted to watching yesterday's testimony. >> i think they thought it was great for tech that was that they didn't do anything what i'm saying, roger if you start with facebook you have to move on to google and amazon >> absolutely. >> i don't have an opinion about what should happen it's just not going to happen. there's not any chance, except if perhaps democrats get in charge i've done some pod casts with cory booker, mark warner they're a little more aggressive more closer to what europe is doing. so that will be interesting because for the most part, democrat or republican, nobody has put a hand on any of these tech companies forever and i don't expect them to do it any time soon. >> i completely agree with all of those points. i do think, however, it's really important to have the conversation and if i can help to make that conversation happen, that's what i want >> you are, roger. >> nothing in what you heard yesterday suggests that is coalescing into policy

>> oh, no. it suggests kara is completely correct. and you look at this and we're so far out of bounds in terms of our ability to self-regulate as a country that kara is absolutely correct and the tech industry has been a huge beneficiary of laissez-faire and we've all made a ton of money on it and now you have to sit there and go, do you want to make money on anything else or want that to be the last thing? >> do you think the shares have been on a pretestimony tear because they expected him to wither under the lights or some kind of expectation about no policy happening >> no, they agree with kara. they think -- the market, obviously, was going into this thing realizing, wait a minute this is congress we're talking about. >> i thought on the soft point, interesting to watch the stock senator orrin hatch asked, how do you sustain a business model in which users don't pay for your service and he said we sell

advertising. and it may be a serious point. here are the people that are tasked with regulating this industry or at least looking into these 21st century problems, and they have displayed a real lack of comprehension. >> i want to take you to the hearing. we want to listen to zuckerberg take the first few questions >> a few questions about what other types of companies facebook may be. facebook is great at its own video series starring tom brady and has over 50 million views. it's twice the number of the viewers that watched the oscars last month also facebook obtained exclusive broadcasting rights for 25 major league baseball games this season is facebook a media company? >> thank you, mr. chairman i consider us to be a technology company because the primary thing that we do is have engineers who write code and build product and services for other people there were certainly other things we do, too. we do pay to help produce

content. we build enterprise software, although i don't consider us an enterprise software company. we build play-ins to help connect people but i don't consider ourselves to be an aerospace company. when people ask if we're a media company, what i hear is, do we have a responsibility for the content that people share on facebook and i believe the answer to that question is yes. >> let me ask the next one you can send money to friends on facebook messenger to split meals, pay rent and more people can also send money via venmo or their bank app. is facebook a financial institution? >> mr. chairman, i do not consider ourselves to be a financial institution, although you are right that we do provide tools for people to send money >> so you've mentioned several times you started facebook in your dorm room 2004. 15 years, 2 billion users and several, unfortunately, breaches of trust later, facebook today is -- is facebook today the same

kind of company you started with a harvard.edu e-mail address >> mr. chairman, when i started it, i certainly didn't think we'd be the ones building this broad of a community around the world. i thought someone would do it. i didn't think it was going to be us. we've definitely grown >> and you've recently said you and facebook have not done a good job explaining what facebook does. back in 2012 and 2013 when a lot of this scraping of user and friend data was happening, did it ever cross your mind that you should be communicating more clearly with users about how facebook is monetizing their data i understand that facebook does not sell user data, per se, in the traditional sense, but it's also just as true that the user data is probably the most valuable thing about facebook. in fact, it may be the only truly valuable thing about facebook why wasn't explaining what facebook does with users' data

higher priority for you as a co-founder and now as ceo? >> mr. chairman, you're right we don't sell any data. i would say that we do try to explain what we do as time goes on it's a broad system. every day, about 100 billion times a day, people come to one of our products whether it's facebook or messenger or instagram or whatsapp to put in a piece of content, whether it's a photo or message they want to send someone and every time there's a control right there about who you want to share it with do you want to share it publicly to broadcast it out to everyone? share it out with your friends a specific group of people message it to just one person or a couple of people that's the most important thing that we do and i think that in the product, that's quite clear i do think that we can do a better job of explaining how advertising works. there's a common misperception as you say that is just reported, often keeps being reported that for some reason we

sell data. i can't be clear or this topic we don't sell data i think we could do a better job explaining that given misperceptions out there >> given the situation, can you manage the issues that are before you or does congress need to intercede i'm going to leave that because i'm over my time that and i want to flag an issue that vietnam veterans of america have raised, too, and we'll get back with your staff on that about some fake pages that are up but i want to stay on schedule i'll yield to mr. pallone on that for four minutes. >> you talked about how positive and optimistic you are i guess i'm sorry because i'm not. i don't have much faith in corporate america, and i certainly don't have much faith in your gop allies here in congress i really look at everything that this committee does or most of what this committee does in terms of the right to know

in other words, i always fear that people, they go on facebook and don't necessarily know what's happening or what's going on with their data and so to the extent that we can pass legislation which i think we need and you said we probably should have some legislation, i want that legislation to give people the right to know, to empower them, to provide more transparency, i guess, is the right way to put it. so i'm looking at everything through that lens. so just let me ask you three quick questions and i'm going to ask -- answer yes or no because of the time. yes or no. is facebook limiting the amount or type of data facebook itself collects or uses >> congressman, yes. we limit a lot of the data that we collect and use >> but i don't see that in the announcements you've made. you've made all these announcements about the changes you're going to make and i don't see how those changes limit the

amount or type of data that facebook collects or uses in an effective way. let me go to the second one. this is my concern that users currently may not know or take affirmative action >> is facebook changing any user default settings to be more privacy protective >> congressman, yes. in response to these issues, we've changed a lot of the way that our platform works. that way developers can't get access to much information >> i don't see that in the changes that you propose i don't really see any way that these users, the default settings, you're changing these user default settings in a way that's going to be more privacy protection but let me go to the third one yes or no. will you commit to changing all the user default settings to minimize to the greatest extent possible the collection and user -- and use of users' data

can you make that commitment >> congressman, we try to collect and give people the ability -- >> i'd like you to answer yes or no will you make the commitment to change all the -- to changing all the user default settings to minimize to the greatest extent possible the collection and use of users' data i don't think that's hard for you to say yes to. >> we'll listen briefly to speaker ryan speak to the press about not running for office in november >> i'm going to keep fighting for that let's go over here yeah >> -- if democrats possibly take the house back or at all >> no. none whatsoever. you all know me. i didn't take this job to get the gaffele in the first place this really was two things i have accomplished much of what i came here to do. and my kids aren't getting any younger. if i stay, they're only going to know me as a weekend day and

that's something i can't do. that's really it right there >> do you worry about the impact of your announcement on the 2018 midterms and perhaps sending a signal that -- >> yeah, i gave it some consideration but i really do not believe whether i stay or go in 2019 is going to affect a person's individual race for congress i really don't think a person's race for congress is going to hinge on whether paul ryan is speaker or not i don't think it affects it. if we do our jobs, which we are, we're going to be fine as a majority i'm grateful for the president to give us a chance to get this stuff done i'm grateful we have unified government that the president with his victory gave us we'll have a great record to run on a great economy. great accomplishments. more to do and i really don't think that the american people are going to want to have the gridlock that the democrats are promising. i'm confident we can run through the tape and get this done >> on the president, he has been

openly talking about firing bob mueller, potentially firing the deputy attorney general. what are your thoughts on that >> it's a principle we all uphold i had no reason to believe that's going to happen i've been talking to people in the white house about it rachel >> [ inaudible ] >> i have great confidence in this leadership team obviously i came with a big gulf in leadership when i came here i think we have a fantastic leadership team. i have more thoughts on this i think this is probably not the right time to get into that and i'll share those thoughts later. that election is in november it's not something we can sweat right now. hannah >> to what extent -- by the way president trump has changed the character of washington? >> not at all. i'm grateful for the president giving us this opportunity to do big things to get this country

on the right track the fact he gave us, they bility to get all this stuff done makes us proud of the accomplishments i've been a contributor to makes me satisfied that i have made a big difference, and he's given us that chance i'm grateful to him for that and that's really how i see it thank you, everyone, very much >> that is speaker ryan talking about his decision not to run for re-election in november saying if we do our jobs, we'll be fine as a majority. really don't believe whether i stay or go in 2019 is going to affect a person's race for congress we'll take you back to the house hearing and mark zuckerberg. that's a success story in anybody's book it is such an integral part of young americans' lives that you need to work with congress and the community to ensure it is a neutral, safe to the largest extent possible private platform do you agree with that >> congressman, i do agree that

we should work to give people the fullest free expression that is possible. that's when i talk about giving people a voirce, that's what i care about >> let's talk about children children can get a facebook account of their own, i believe, starting at age 13 is that not correct? >> congressman, that's correct >> is there any reason we couldn't have just a no data sharing policy, period, until you're 18? just if you are a child with your own facebook account, until you reach the age of 18, it's -- you can't share anything it's their data. it doesn't go anywhere nobody gets to scrape it nobody gets to access it it's absolutely totally private. what's wrong with that >> congressman, we have a number of measures in place to protect

minors specifically. we make it so that adults can't contact minors who they aren't already friends with we make it so that certain content that may be inappropriate for minors we don't show the reality that we see is that teens often do want to share their opinions publicly. and that's a service that -- >> we let them opt in to do that >> yes, we do. >> but don't -- unless they specifically allow it, then don't allow it that's my point. >> congressman, every time that someone chooses to share something on facebook, you go to the app. right there it says who do you want to share it with. when you sign up for a facebook account it starts off sharing with just your friends if you want to share it publ publicly, you have to specifically go and change that setting to be sharing it publicly >> i'm about out of time i actually use facebook. and, you know, i know if you

take the time you can go to your privacy and click on that and go to your settings and click on that you can pretty well set up your facebook account to be almost totally private but you have to really work at it. and my time has expird hopefully we can do some questions in writing as a follow-up. >> chair now recognizes the jen gentleman from illinois, mr. rush, for four minutes for questions. >> thank you, mr. chairman mr. zuckerberg, welcome. in the 1960s, our government acting through the fbi and local police -- into participating in something called -- which was a counterintelligence program

where they tracked and shared information among civil rights activists, their political, social, city, even religious affiliations and i personally was a victim of the probe. your organization, your methodology, in my opinion, is similar. you are truncating the basic rights of the american promise of life, liberty and the pursuit of happiness by the wholesale invasion and manipulation of their right to privacy mr. zuckerberg, what is the difference between facebook's methodology and the methodology of the american political pariah j. edgar hoover.

>> congressman, this is an important question because i think people often ask what the difference is between surveillance and what we do. and i think the difference is extremely clear which is that on facebook, you have control over your information the content that you share, you put there. you can take it down at any time the information that we collect, you can choose to have us not collect. you can delete any of it and you can leave facebook if you want i know of no surveillance organization that gives people the option to delete the data that they have or even know what they're collecting >> mr. zuckerberg, you should be commended that facebook has grown so big, so fast. it is no longer the company that you started in your dorm room. inste instead, it's one of the great american success stories that much influence comes with

enormous social responsibility of which you have failed to act and to protect and to consider should facebook, by default, protect users' information why is the onus on the user to opt in to privacy and security settings >> congressman, as i said, every time that a person chooses to share something on facebook, they are proactively going to the service and choosing that they want to share a photo, write a message to someone every time there is a control right there, not buried in settings somewhere but right there when they're posting, about who they want to share it with >> mr. zuckerberg, i only have a few more seconds in november 2017, pro publica reported that facebook was still allowing housing advertisements

to systematically include advertisements to specific racial groups and explicitly prohibited -- this is just one example where facebook has allowed race to improperly play a role what has facebook done and what are you doing to ensure that your targeted advertisements and other components of your platform are in compliance with federal laws such as the civil rights act of 1968 >> congressman, since we learned about that, we removed the option for advertisers to exclusive ethnic groups from targeting. >> when did you do that? >> the gentleman's time has expird the gentleman from michigan, mr. upton, for four minutes. >> thank you, mr. chairman welcome to the committee a number of times in the last day or two you've indicated

that, in fact, you are now open to some type of regulation, and we know, of course, you are the dominant social media platform without any true competitor, in all frankness, and you have hundreds if not thousands of folks that are -- would be required to help navigate any type of regulatory environment someone argued that more regulatory environment may ultimately stifle new platforms and innovators some might describe as desperately needed competition a regulatory complexity helps protect those folks like you it could create a harmful barrier to entry for some start-ups, particularly ones that might want to compete with you. so should we policymakers up here be more focused on the needs of start-ups over large incumbents and what kind of policy regulation -- regulatory

environment would you want instead of managing maybe a fortune 500 company if you were launching a start-up to take on the big guy. >> congressman, thank you. and let me say a couple things on this. to your point about competition, the average american uses about eight different apps to communicate and stay connected to people. so there's a lot of competition that we feel every day and that that's an important force that we definitely feel in running the company. second, on your point about regulation, the internet is growing in importance around the world in people's lives. and i think that it is inevitable that there will need to be some regulation. so my position is not that there should be no regulation but i also think that you have to be careful about what regulation you put in place for a lot of the reasons you're saying. it puts in place rules that a company that is larger that has resources like ours can easily

comply with but that may be more difficult for a smaller start-up to comply with so these are all things that need to be thought through very carefully when thinking through what rules we want to put in place. >> to follow up a question mr. burton asked about silk and diamond. i don't know if you know about this particular case i have a former state rep running. he's the former michigan lottery commissioner he's a guy of fairly good political prominence he announced for state senate just in the last week, and he had what i thought was a rather positive announcement. i'll read to you precisely what it was i'm proud to announce my candidacy for state senate as our next state senator i'll work to strengthen our economy, limit government, lower auto insurance rates, balance the budget, stop sanctuary cities,

pay down government debt, be a pro-life, lawmaker and it was rejected and the response from you all was it wasn't approved because it doesn't follow our advertising policies we don't allow ads that contain shocking, disrespectful or sensational content including ads that depict violence or threats of violence. i'm not sure where the threat was based on what he tried to post >> congressman, i'm not sure either i'm not familiar with that specific case. it's quite possible we made a mistake and we'll follow up afterwards on that >> okay. >> overall, yeah, we have -- by the end of this year we'll have about 20,000 people at the company who work on security and content review related issues but there's a lot of content flowing through the systems and a lot rchts and unfortunately we don't get these things right when people report it to us. >> thank you >> chair recognizes the gentle lady from california, miss eshoo

for 40 minutes >> good morning, mr. zuckerberg. first, i believe that our democratic institutions are undergoing a stress test in our country. and i believe that american companies oh, something to america. i think the damage done to our democracy relative to facebook and its platform being weaponized are inicalculable the purpose of influencing an election is deeply offensive and it's very dangerous. putting our private information on offer without concern for possible misuses, i think, is simply irresponsible i invited my constituents going into the weekend to participate in this hearing today by submitting what they want to ask

you. and so my questions are theirs and, mr. chairman, i'd like unanimous consent to place all of their questions in the record >> without objection >> so these are a series of just yes/no questions do you think you have a moral responsibility to run a platform that protects our democracy? yes or no? >> yes >> have users of facebook who are caught up in the cambridge analytica debacle been notified? >> yes, we are starting to notify people this week. we started monday, i believe >> will facebook offer to all of its users a blanket opt in to share their privacy data with any third party users? >> congresswoman, yes, that's how our platform works you have to opt in to sign in to any app before you use it. >> well, let me just add that it is a mine field in order to do

that and you have to make it transparent, clear and pedestrian language just once. this is what we will do with your data. do you want this to happen or not? so i think that this is being blurred. i think you know what i mean by it are you aware of other third party information mishandlings that have not been disclosed >> congresswoman, no, although we are currently going through the process of investigating every -- >> you're not sure >> -- that had access to a large amount of data >> what does that mean >> it means we're going to look into every app that had a large amount of access to data in the past before we locked down the platform >> so you're not aware >> there are tens of thousands of apps we will find - >> i only have four minutes. was your data included in the data sold to the malicious third parties? your personal data >> yes >> it was? are you willing to change your

business model in the interest of protecting individual privacy? >> congresswoman, we are -- have made and are continuing to make changes to reduce the amount of - >> are you willing to change your business model in the interest of protecting individual privacy >> congresswoman, i'm not sure what that means. >> i'll follow up with you on it when did facebook learn that cambridge analytica's research project was for targeted psychographic political campaign work >> congresswoman, it might be useful to clarify what actually happened here. >> no, i don't have time for a long answer, though. when did facebook learn that and when you learned it, did you contact their ceo immediately? and if not, why not? >> congresswoman, yes, when we learned in 2015 that a cambridge university researcher associated with the academic institution that built an app that people

chose to -- >> i know what happened with them but i'm asking you >> yes, i'm answering your question when we learned about that, we -- >> so in 2015 you learned about it >> yes >> and you spoke to their ceo immediately? >> we shut down the app -- >> did you speak to their ceo immediately? >> we got in touch with them and we asked them to -- we demanded they delete any of the data they had and their chief data officer told us that they had. >> the gentle lady's time is expird the gentleman from illinois, mr. shimkus. >> i want to thank facebook. you streamlined our congressional baseball game last year we got the managers here and i was told that because of that, we raised an additional $100,000 for d.c. literacy and feeding kids and stuff so that's -- the other thing, i usually put my stuff up on the tv

i don't want to do it very much because it's my dad and he'd be mad if he went international like you are and he's been on facebook for a long time. he's 88. been good for connect with kids and grandkids. i just got my mother involved on an ipad. and -- because she can't handle a keyboard and i did this last week in this swirl of activity i still think there is a positive benefit from my parents to be engaged on this platform but there's issues that's being raised today and so i'm going to go into a couple of those. may be may have develop access to user and friend data and your main update was in 2014. so the question is what triggered that update? >> congressman, this is an important question to clarify. so in 2007 we launched the

platform in order to make it so that people could sign into other apps, bring some of their information and some of their friend' information to have a social experience. this created a lot of innovative experiences. new games, companies like zynga. companies that you're familiar with like netflix and spotify had integrations with this that allowed social experiences in their apps but unfortunately, also a number of apps that use this to collect people's data. >> you identified that there was possibly social scraping going on >> yeah, there was abuse and that's why in 2014, we took the step of fundamentally changing how the platform works so now when you sign into an app you can bring your information and if you friend has also signed into the app, then we'll -- then the app can know that you're friends so you can have a social experience but when you sign into an app, it no longer brings information from other people >> let me go to your

announcement of audits who is going to conduct the audit? we're talking about are there other cambridge analyticas out there? >> yes, congressman. good question. so we're going to start by doing an investigation internally of every app that had access to a large amount of information before we locked down the platform if we detect any suspicious activity at all, we are working with third party auditors. i imagine there will have to be a number of them because there are a lot of apps. and they'll conduct the audit for us >> i think we would hope that you'd bring in a third party to help us clarify and have more confidence the last question i have is in yesterday's hearing you talked a little about facebook tracking and different scenarios, including logged off users can you please clarify as to how that works and how this works across different devices >> yes, congressman. thank you for giving me the opportunity to clarify that. so one of the questions is, what

information do we track and why about people who are not signed in to facebook we track certain information for security reasons and for ads reasons. for security, it's to make sure that people are not signed in to facebook, can't scrape people's public information you can -- even when you're not signed in you can look up the information that people have chosen to make public on their page because they wanted to share it with everyone so there's no reason you should have to be logged in but we don't want someone to be able to go through and download every single public piece of information, even if someone chose to make it public. that doesn't mean it's good to allow someone to aggregate it. even if someone isn't logged in, we track certain information like how many pages they'res y accessing as a security measure. we provide an ad network that third party websites and apps can run in order to help them make money and those ads, similar to what google does and what the rest of the industry does, it's not limited to people just on facebook so for the purposes of that, we

may also collect information to make it so those ads are more relevant and work better on those websites there's a control that for that second class of information around ad targeting anyone can turn off has complete control over it for obvious reasons we do not allow people to turn off the measurement we do around security >> the gentleman's time has expired. now to the gentleman from new york, mr. engel, for four minutes. >> thank you, mr. chairman mr. zuckerberg, you have roots in my district, the 16s congressional district of new york i know that you attended ardsley high school and grew up in west chester county you know west chester has a lot to offer i hope that you might commit to returning to west chester county perhaps to do a forum on this and some other things. i hope you would consider that we'll be in touch. but i know that ardsley high school is very proud of you. you mentioned yesterday that facebook was deceived by alexander colgan when he sold

user information to cambridge analytica. does facebook, therefore, plan to sue alexander kocolgan and cambridge analytica for unthr unauthorized access to computer networks or breach of contract and why or why not >> congressman, it's something we're looking into we already took action by banning him from the platform, and we're going to be doing a full audit to make sure he gets rid of all the data that he has as well. to your point about cambridge university, what we found now is that there's a whole program associated with cambridge university where a number of researchers, not just alexander cogan, although he's the only one who sold the data to cambridge analytica. there were a number of other researchers building similar apps so we do need to understand whether there was something bad going on at cambridge university overall that will require a stronger action from us. >> you mentioned before your remarks hate speech. we've seen the scale and reach

of extremism in the last decade partially because of the expansion of social networks. or to ethnic cleansing in berma that resulted in the second largest refugee crisis in the world. are you aware of any foreign or domestic terrorist organizations, hate groups, criminal networks or other extremist networks that have scraped facebook user data and if they have and if they do it in the future, how would you go about getting it back or deleting it? >> congressman, we're not aware of any specific groups like that that have engaged in this. we are, as i've said, conducting a full investigation of any apps that had access to a large amount of data if we find anything suspicious we'll tell anyone affected we do not allow hate groups on facebook overall so if there's a group that their primary purpose or large part of what they do is spreading hate,

we'll ban them from the platform overall. >> you adjust your algorithms to prevent individuals interested in violence or nefarious activities from being connected with other like-minded individuals? >> repeat that >> do you adjust your algorithms to prevent individuals interested in violence or bad activities from being connected with other like-minded individuals? >> congressman, yes, that's an important thing that we need to do. >> finally, let me say this, many of us are very angry about russian influence in the 2016 presidential elections and russian influence over our presidential elections does facebook have the ability to detect when a foreign entity is attempting to buy a political ad and is that process automated? do you have procedures in place to inform key government players when a foreign entity is attempting to buy a political ad or might be taking other steps to interfere in an election?

>> congressman, yes. this is an extremely important area after we were slow to identify the russian information operations in 2016, this has become a top priority for our company to prevent that from ever happening again especially this year in 2018, which is such an important election year with the u.s. midterms but elections in brazil, hungary, pakistan, other places we're doing a number of things that i'm happy to follow up with afterwards around deploying new a.i. tools that can proactively catch fake accounts that russia or others might create to spread misinformation and one thing that i'll end on here just because i know we're running low on time, is since the 2016 election, there have been a number of significant elections including the french presidential election, the german election, and last year the u.s. senate alabama

election in the a.i. tools we deployed were able to proactively take down tens of thousands of fake accounts that may have been trying to do the activity that you're talking about so our tools are getting better. for as long as russia has people who are employed who are trying to perpetrate this kind of inferns, it will be hard for us to guarantee that we're going to fully stop everything, but it's an arm's race and i think that we're making ground and are doing better and better and are confident about how we're going to be able to do that. >> gentleman's time has expired. >> the chair recognizes dr. burgess of texas for four minutes. >> thanks to our witness for being here today mr. chairman, i have a number of articles i ask consent to insert into the record. i know i won't have time to get to them. >> without objection put the slide up you requested. >> i'm going to be submitting questions for the record that are referencing these articles one is having the obama campaign connected with young voters by

michael sher we know how to protect ourselves from facebook. i hope i get this name right and it's time to break up facebook by eric wilson. in the interest of full disclosure, a former staffer i will be referencing those articles in some written questions. i consulted my technology guru scott adams in the form of gilbert going back 21 years ago and when you took shts rink wrap off of a piece of software you bought you were automatically agreeing to be bound by the terms and conditions we've gone a long way from taki taking the shrink wrap off an app. i don't know if things have changed that much. does facebook have a position, a position that you recommend for elements of a company's terms and conditions that you encourage consumers to look at before they click on the acceptance >> congressman, yes.

i think that it's really important for the service that people understand what they're doing and signing up for and how the service works. we have laid out all of what we do in the terms of service because that is what is legally required of us >> let me ask you, we're going to run short on time have you laid out for people what would be indicative of a good actor versus a less than good actor in someone who has developed one of these applications >> congressman, yes, we have a developer terms of service which is separate from the normal terms of service for individuals using the service. >> is the average consumer able to determine what elements would indicate or weak consumer protections just by their evaluation of the terms and conditions do you think that's possible >> congressman, i'm not sure what you mean by that. >> well, can you -- can the average person, the average lay person, look at the terms and conditions and make the evaluation, is this a strong enough protection for me to

enter into this arrangement? look, i'm as bad as anyone else. i see an app, i want it, download it, breeze through the stuff, just take me to the good stuff in the app but if a consumer wanted to know, could they know? >> congressman, i think you're raising an important point, which is that i think if someone wanted to know they could, but i think a lot of people probably just accept terms of service without taking times to read through it i view our responsibility not just as legally complying with laying it out and getting the concept, but actually trying to make sure that people understand what's happening throughout the product. that's why every single time that you share something on facebook or one of our services, right there, is a control in line where you control who you want to share it with. because i don't just think that this is about a terms of service. it's context actual. you want to present people with the information about what they might be doing and give them the controls in line at the time

they're making the decisions, not in the background or up front to make a one-time decision. >> mr. pallone brought up the issue he wanted to see more regulation, we passed a bill through this committee last congress dealing with data breach notecation, not so much for facebook but the credit card breaches a good bill. many voted against it. miss blackburn's bill and one we should consider again. you also signed a consent decree in 2011 and, you know, when i read through that consent decree it's pretty explicit and there is a significant fine of $40,000 per violation per day, and if you have 2 billion users, you can see how the fines would mound up quickly in the course of your audit are you extrapolating data for the people at the federal trade commission so that the terms and conditions of the consent decree

>> that is -- i'm not sure what you mean by extrapolating data. >> you've referenced audits that are ongoing. are you making that information from those audits available to our friends at the agency at the federal trade commission >> congressman, as you know the ftc is investigating this and we're certainly going to be complying with them and working with them on that investigation. >> the gentleman's time has expired. >> the chair recognizes mr. green for four minutes. >> thank you, mr. chairman welcome to our committee i want to follow up on what my friend from north texas talked about on his cartoon next month the general data protection regulation, the gdpr goes into effect in the european union. the gdpr is pretty descriptive on how companies treat consumer data and makes it clear consumers need to be in control of their own data. mr. zuckerberg, facebook has committed to abiding to these

consumer protections in europe and you face large penalties if they don't in recent days you said that facebook intends to make the same settings available to users everywhere, not only in europe did i understand correctly that facebook would not only make the same settings available but that will make the same protections available to americans that they will the europeans >> yes, congressman, all the same controls will be available around the world >> and you commit today that facebook will extend the same protections to americans that european users will receive under the gdpr >> yes, congressman. we believe that everyone around the world deserves good privacy controls we've had a lot of these controls in place for years. the gdpr requires us to do a few more things and we're going to extend that to the world >> there are requirements in the gdpr, so i'm just going to focus on a few of them the gdpr requires that company's request for user consent to be

requested in a clear and concise way using language that is understandable and be clearly distinguishable from other pieces of information, including terms and conditions how will that requirement be implemented in the united states >> congressman, we're going to put at the top of everyone's app when they sign in, a tool that walks people through the settings and gives people the choices and asks them to make decisions on how they want their settings set >> one of the gdpr's requirements is data portability. users must be permitted to request a full copy of their information and be able to share that information with any companies that they want to. i know facebook allows users in the u.s. to download their facebook data. does facebook plan to use the currently existing ability of users to download their facebook data as the means to comply with the gdpr's data portability requirement? >> congressman, i think we may be updating it a little bit.

as you say we've had the ability to download your information for years now. and people have the ability to see everything that they have in facebook, to take that out of their account and move their data anywhere they want. >> does that download file include all the information facebook has collected about any given individual in other words --s. >> mark zuckerberg continuing to answer questions in front of house energy and commerce regarding the differences between potential regulation in europe and the u.s. and acknowledging his own data was sold to third parties. meanwhile, watching the markets taking a dip here down 183, reapproaching session lows, and oil above 67 as reuters runs a headline, sourcing al arabiya there were blasts heard in riyadh, that has oil spiking to the highest levels since 2014. we're going to monitor that. for the time being back to zuckerberg >> advertisers will the same right be