snapchat's redesign cost the company millions of users, then they did get a vote of confidence from the saudi prince to the tune of $250 million. it's wednesday august 8, 2018. i love this new schedule i have. i work every other day now "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. i'm andrew ross sorkin along with joe kernen. michelle caruso-cabrera is with us today becky is is off right now. a look at u.s. equity futures. the dow looks like it would open higher, 9 points nasdaq up 4 points

ca in asia, the hang seng up. shanghai composite was off by 1% we'll talk about that in a bit the nikkei off marginally. european equities at this hour, a bit of a mixed picture >> i know you want to skip this. >> skip what >> all this and get to tesla >> i can't wait. hold on. finish finish >> you're barely mailing this in not even pretending you care ten-year treasury at this hour, 2.971. now to the main event -- >> to the story that's making august interesting yesterday was going to be so boring and then right around noon tesla's elon musk speculated in a string of tweets he could take the company private for $420 a share leslie picker has more hello, leslie. >> there was a take private proposal and a price, but was it

all hypothetical that's the key question for investors as they digest yesterday's tweet and memo from elon musk. he tweeted that he was considering taking tesla private at $420. funding secured. that came after a report that saudi arabia's sovereign wealth fund took a stake. as the stock surged the questions swirled a traditional leveraged buyout would be difficult for tesla because the company has negative free cash flow a full equity backstop another option where the buyers acquire tesla without debt is another possibility but these are typically limited to smaller deals, not a0 bia 7$70 billion l like tesla would be. it would require tesla's thousands of individual shareholders to roll into the private company giving away their liquidity rights

musk said to employees no final decision was made but he believes tesla would operate better as a private company because it wouldn't be subjected to price swings in the quarterly earnings cycle nor face criticism from short sellers >> can i explain something leveraged buyout the company wants to go buy another company, they borrow a lot of money to do it. >> right >> and then they buy this company, and the cash flow is what pays back all the debt that the private equity firm borrowed in the first place >> it helps. that's why you can't do this with tesla you would bore lrow a lot of moy to buy tesla before you there's no cash flow to finance the debt >> it makes it more difficult. in order to acquire a company in a leveraged buyout, they want to see predictability of the cash flow, and they like companies with a low price to earnings ratio.

tesla doesn't have that part of the equation either. >> couple things joseph, i spent the last how ever many hours trying to make sense of this on the phone >> i knew you would. >> how come you're just talking to joseph? >> i asked him because before i -- >> i like to think i'm able to find people in the upper echelons of these companies, banks, other places, sources who would know about this, who may be able to provide information >> what did you get? >> very, very, very little i got very little because there is no contact. so here's the part that makes no sense about this the idea when he says funding secured. unless we're all calling the wrong people, the traditional places you would go for funding, the big banks in america, softbank, which has nothing to do with this, this natural place

where there's lots of money, warren buffett even, my understanding is that he's not had those conversations. so the question is where the funding comes from there's a couple other things to think about. one is we talk about it as a $7 billion takeover >> also debt >> it's closer to 50, because he owns 20% of the company already. he talks about shareholder support. you call some of the biggest shareholders, they have not been brought over the so-called wall. how would he knows there shareholder support if there was shareholder support because he would have had to broach this with them in which case they would have become insiders there's a cynical take on all of this >> that's my immediate thing we have this guy -- the last tweet, it was talking about some pedophile or something, remember the last one then you got a flame thrower that he introduces you see how pissy he gets about

criticism on those conference calls. remember the conference calls? there's been erratic behavior. to me it didn't look like anything other than throwing it out there. >> when it first came out, i thought his account was hacked i was waiting -- when the market was halted, i was waiting for a note from the company to say the account was hacked >> i thought it was almost a joke >> i want to suggest there's a cynical issue here >> short squeeze >> that, too but 9$920 million in debt that' convertible, comes up february 27, 2019 at $360 it's like $359 the question is if you can keep the stock -- >> that's not cynical, that's a brilliant move >> if you keep it over that price and stay there for a while. i don't know if you would want -- there's a question about how a debt holder would deal

with this. i don't know if they would that's another piece there's about 100 pieces to how this could or could not work his intent of taking it private does make sense. the short sellers who believe this is a fraud will tell you this is what you do when you're in trouble there's so many questions. basically no answers >> erratic is a nice word for his personal life. this guy is like whacko. you're a fan boy >> i'm not i never wanted it bet against him. betting against elon musk is like betting against humanity. he's done stuff that's pushed things forward i believe that having said that, this component of it doesn't make much sense. >> i'm a huge fan of musk. think about how boring life would be without elon musk in the world. what would we talk about all day long andrew raises all of these

concerns, totally justified. elon musk talked about it could be like spacex what he did with spacex was fidelity, for example, took a piece of spacex, a minority position in spacex, now you can buy a fund at fidelity which has some spacex in it. so that structure does exist >> exactly >> could you make tesla like that >> what he's talking about would be the opposite of what's going on with spacex spacex was a start up, a private company, it received venture funding at a certain valuation each time it reaches a new round, shares are revalued at that level that the investors agree to pay this would be doing something in the reverse, if possible, which is way more complicated. for one, you are taking away the liquidity rights of people used to having it once people get used to having liquidity rights --

>> the ability to sell whenever they want. >> right he said these investors would be locked up every six months that's difficult also in private companies you have a cap table, which essentially explains how different owners have stakes in a company, at what price they bought in. that gets complicated with a company like tesla because you have 10,000 plus vindividual shareholders in order to take a company like tesla that's been public for a while, take it back private but allow individual investors to still have a stake, it's very, very difficult >> the other question i have, if you're an institutional investor that is in tesla and there's some that don't want to touch this because they think it's too messy if this deal doesn't happen, all of this manufactured uncertainty

developed -- there was uncertainty before, now this is almost manufactured to some degree in terms of how it was rolled out do you say i can't involve myself with this life is too short. i will invest in something else? for those who spend all the time talking about fiduciary duty, these events, putting aside the analyst calls, if it doesn't come to pass, meaning at all, not -- he just never shows up on the scene with a real bid, does everyone say this is not for me? >> i don't think so. he's got such a huge cult-like following. >> of course i think the retail investors would be happy to go along for the ride or some would on this public stub idea i think the bigger question is how institutions feel about this >> i spoke with an analyst who kind of watches the flows of

short seller data yesterday. he called tesla the teflon short. meaning, you know, nothing can go higher with the stock it can't go high enough for people to cover their short and get out of it. mathematically that's not true the same could be true on the long side, too there's such fervent believers in this company that it's a teflon long as well. so you have these two sides kind of battling it out of the belief they're right. and you see things like tweets -- this is not the first time he tweeted something that would give a traditional long only investor pause. >> the thailand stuff was bizarre. >> this one, you brought up the point earlier about funding secured. you have all these short serl s who lost about 1$1.3 billion, yu

better believe they'll have their attorneys looking in those words. >> i have to play my ring tone again. >> you want me to call you >> i will play it from the video i have >> >> boring questions are not answered >> in davos they announced a compensation plan. if this proposal were to go through, he would not make more money. that's actually -- to those out there that do say this is some kind of strange kind of play -- >> he's tired of boring, bone-headed questions. he doesn't want to be public he hates it. that's it. >> i get it. >> i'm not saying he's thin-skinned, i'm saying he's sick of addressing a public company question and concerns.

>> the market treats him incredibly well. >> if you really wanted to have a takeover of your own company, you would have tanked the last quarter. >> buy it back cheaper he did all these crazy things in the last quarter to try to make the numbers. why make the numbers why wouldn't you say we couldn't make the numbers, we still have cash on hand we can still operate i would buy it back for much less they tried so hard to make the numbers. >> remember when michael dell decided to buy >> yeah. >> didn't know if it was an ongoing concern. it was like $12 or something he made it look so bad when it was still a great company. >> i don't know. >> would make sense if it's not a serious proposal >> that's the question >> and the flame thrower i come back to that.

what's that? >> i like flame throwers >> i'm with you on that. >> you like surfboards there's now a tesla surfboard you can buy. >> sold out like that. with room for a dog? that was the championship yesterday, dog surfing >> really? >> yes >> i missed it >> those dogs love it. they do. and the guys bring their dogs out. they race. >> cue the video >> thank you very much, leslie this is a longer conversation. we have three hours. >> it's been 14 minutes we spent on that. fantastic. >> i think they have a natural advantage on a surfboard four legs. >> that's true >> do they sit or stand? >> they're standing. >> really? >> with four legs, you have a lot more leverage. >> disney reported third quarter earnings and revenue after the bell that missed analysts expectations joining us now is steven cahill

a lot going on on this phone call last night. let's walk through it. your headline for you was what >> was everything direct to consumer it's interesting that the company missed a bit on eps. they missed a bit on income. that wasn't the focus. it wasn't espn subscribers it wasn't advertising it wasn't the one-off write downs of the studio everyone is focused on the future >> you didn't care about the numbers themselves >> i think there's a small trade off in the market after hours. but the stock is up more than 15% since the m&a lows everyone is looking to the future and saying what will this thing be worth what is this thing going to be worth? >> 30 billion to 40 billion up front. that's looking at a discount to now nix etflix is valued you take that and add it to the core part of disney, that's still cheaper than most things >> does the netflix valuation

hold up? that's the other component of this you either believe that disney is going to capture some kind of netflix valuation, or that netflix one day will capture the disney valuation >> when i look and compare and contrast, the great thing about netflix is that it's global and the great thing about disney is that its global. there's no debate about the global nature of disney brands their ability to scale at that level, i think investors are willing to take the bet now. >> reading the tea leaves on ott and what happens to hulu in a post-fox, 21st century fox world, what do you think happens? they run them separately independently? >> i think they run them sort of separate but interlaced. the way i would describe that is there are clearly disney fans that will have a disney-only product. then there's sort of the general household, which hue will ylu i

more appealing >> do you have a buy on disney >> i do. it's my top pick >> for how long? >> just over a year. >> i remember 2015 that it was just guaranteed to be $150 stock. >> right i'm looking at it. the high end of the range, but it got to 120 or so in 2015. >> yeah. >> it goes down. trades down in the mid 90s goes back up it's been the deadest money of any media stock. i'm hearing the same thing again, rupert wants disney, he wants that stock because it's $150 stock how do you know? it was supposed to be $150 stock five years ago, it's not why do we think there's not an old media problem here, they're spinning their wheels as quickly as they can, but they're facing the same things that all media

is facing? >> if i could rephrase that, espn is an achilles looeheel he. >> that's self-inflicted i can't watch it, unless it's pure sports. >> one thing that makes me more constructive is the espn trends are improving. subscriber declines have improved comcast talked about losing subscribers at less than 1%, a rate of less than 1% advertising as strong as it has been and the new over the top bundles give the consumers so much more access and choice, that whole thing -- >> what did you make of iger's vague attempts to touch on the issue of what will happen to sky this thursday. deadline is upon us. battle over sky with comcast >> i think it was a disappointment that they kicked the can. in the end i think they'll step away >> why wouldn't he just say that >> it's technically up to fox. >> will you be wrong about that, too? >> some news from the uk

takeover panel came out 20 minutes ago. >> we'll do that story after the break. >> another time that joe kernen was right, another time i was wrong. >> is that going to happen again? i'm scratching it on the wall. >> who told you they wouldn't step away? who told you that they weren't going to step away >> people saying different things >> maybe they still will i'm hoping for it. >> i'm not hoping for it. >> i'm hoping you're right it's frustrating for both of us. >> frustrating that i'm wrong. thank you. >> thank you yesterday was good >> you weren't here. >> the day before. >> it was great. >> the trade issues. the market would be much higher if it -- so it's not up 40% since the election, it's the counter factual that we don't know the market has not sold off on the trade stuff, but it might be at 30,000 if it were not for -- and gdp mighbet 6%, not 4%.

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and snapchat's daily user base declined for the first time which the ceo attributed to the redesign of the app. the saudi prince disclosed he had a deal to buy a stake in snap we just throw that in there. he's not hanging by his toes anymore upside down, now he's buying snap. that's all over? that's all over with he's not in prison >> he wasn't in prison >> i know, but -- it's weird >> they were released on the misunderstanding >> he said there was a misunderstanding >> how much did it cost him? >> that's the -- the real question is there is clearly some kind of -- he's come out and said there's a confidential agreement he's made. so there's almost like a lien of some sort. something against something that

he's doing the question is what that will do in terms of his ability to transact with others who may say because you have a third party arrangement that you don't know what -- >> that is not transparent or clear. >> does that make it harder for him to do business he's trying. >> what about the ritz carlton are the leg irons gone from the luxury suites? >> i don't know. i may be going, by the way, later this fall. >> in some kind of sick s & m thing? because it's back to normal? >> it might be back to normal. there's a lot of business being transact transacted >> was that in yellow? am i in yellow territory >> there's a yellow card >> there's a new sensitivity thing. >> right >> stay in the green >> stay in the green >> don't go to yellow. >> yellow can lead to red. red could be a problem >> what happens in yellow?

>> you're not sure if you're not sure, it might be yellow have i got this right? you signed up? >> yes >> i signed up i couldn't make the -- >> you couldn't make it. i'm rescheduling to go to the meeting. >> okay. >> stay in the green >> i'm trying to stay in the green. >> the green zone. >> you have the reddest dress or is that orange. there are several interested parties in sky who have lodged appeals against a recent ruling that any offering for sky needs to be 14 pounds per share. disney will acquire fox's current stake in sky as part of its purchase of fox's assets, and it will be required to make an offer for sky if that purchase is completed before fo or comcast buy sky

now that it's filed, a formal bid, fox has until september 22nd to raise its offer. >> september 22nd. >> let's talk the equity and fixed income markets joining us is david bianco and kevin giddis guys, good to have you here. can we finally stop talking about trade when it comes to the u.s. market? every single day on this network we wring our hands, my gosh, here we go there was new news yesterday in the middle of the day about the higher round of tariffs, the market finished higher in the meantime shanghai gets clobbered every day. they had a bit of a rebound yesterday. doesn't the market tell us that ultimately this so-called trade war is not that meaningful, at least on the broad level to the u.s. market? >> the u.s. market in particular is trying to look through the

trade conflict but this trade conflict is heating up we try to remind people to keep this in the context of a healthy u.s. economy great earnings, which we were expecting out of the s&p 500 during the second quarter. i think it's too early for the s&p and the u.s. market to look through the trade conflict i think it's true that the s&p would be higher if there's no trade conflict of investor concerns >> what would be the multiple? >> solid 18, maybe ehigher the market has priced in some of this risk, but this risk is escalating it's not a systemic threat it's not good for global growth. it's bad policy in my view but it presents scattered, lumpy risk to many industrial, auto, retail >> company-specific issues he brought up interest rates isn't that the bigger interest for the markets? where are interest rates going

is probably far more important, what that ten-year yield will be compared to this other stuff >> the short end is the function of the fed you see short rates go up. you see the fed raising rates, they imply they will raise rates again next month the long end is that the story about -- continues to be the story about inflation. we've seen inflation rise over the last two years but not so much. if you look back to the core pc, which the fed looks at in 2016 we were 1.7, 1.8, 1.9 now. we're up from 1.6. at least from the last year inflation has gone up it has not gone up two years. the average hourly earnings, it's a wage thing. >> can i infer the following everybody grows very concerned about why long-term interest rates are not growing, your argument is don't worry about that because there's little

inflation. >> the other factor is -- >> it's not a sign that the economy will fall off a cliff or we're heading towards inversion. >> that's why we're maintaining the 30 basis point spread betweentwos and tens as the dollar gets stronger, this gets better, you compare the u.s. ten-year against other sovereign debt you even factor in the currency hedge, it's still one of the best bargains out there. i know you don't like the yields being so low, against any other sovereign debt of its maturity and as the dollar gets stronger -- >> i'm sitting in germany, i think to myself, wow, the dollar will get stronger. and i can still get close to 3% as opposed to the small stuff in germany, so other people buy it. >> you're right. >> right >> that's why we share your view our view is that the curve is flattening and will continue to flatten, but it's not a sign of a looming recession, the market is saying to the fed you are

getting close to neutral, slew probably not go above 3% unless inflation rises, and it hasn't >> gentlemen, thank you very much >> thank you. when we return, a closely contested election in ohio still too close to call. we will get an update from eamon javers in washington about what it all means and what it may mean for november. also a news nall vanalysis frome allen. as we head to break, a look at the s&p 500 winners and losers ♪

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. welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back among the stories front and center, probably the biggest story we'll talk about elon musk saying he's considering taking tesla private. he said the decision is not final. that gives him an out there. it's contingent on a shouldhow r vote shares took a wild ride yesterday. questions galore about how all this could or could not happen we'll talk more about this throughout the program shares of disney are moving lower after the media giant

reported weaker than expected quarterly results. the company missing on the top and bottom lines as programming costs surged, but the studio revenue jumped 20% year over year thanks to strong box office performances then president trump hostin a dinner with several prominent business leaders the attendees included michael manley, dennis muilenburg and alex gorski, and the outgoing pepsi ceo. looking at futures at this hour. dow up about 19 points s&p up 2 points, and nasdaq up 7 points match group's second quarte results beat forecasts the company is raising its

full-year guidance match says tinder signed up nearly 300,000 paying users. ♪ >> wow >> also launching a new dating app. that will be only for college students, called tinder-u. you know matt, our guy, he's on bumbler. >> what's that >> i don't know. it's for bumblers. is it -- it's called bumble? bumble i'm sorry. >> is it a dating app? >> i like bumbler. don't you think that's better? the kids in college -- ♪ >> tinder is geographic based. what do you need help meeting somebody else in the dorm already. you know what ei'm feeling agai? >> what's that >> yellow.

caution. caution. caution. moving on. why even try no upside if you -- >> try what? >> try anything? if you diverge from the green. no upside. >> life would be boring if we were only in the green >> not nearly as boring as what we've seen happening lately. >> right >> that's exciting not so exciting if you're running a network or something the closely watched ohio special congressional election still too close to call. eamon javers joins us now. talk about staying in the green. >> he's a green guy for sure >> story of my life, man i play it safe >> let's both. >> we will stay right in between the navigational beauries. what buoys i need this job. take a look at these results

last night in ohio's 12th district this is an election to replace a retiring republican representative we have troy balderson at 50.2%, and danny o'connor at 49.3%. that's too close to call the difference is 1,754 votes. that's very, very tight. the networks, the associated press and others are won't call this race. there will be a series of procedures that take place now including looking at provisional ballots. if you remember that difference, just over 1,000 votes, provisional ballots, there's more than 3,400 provisional ballots that are still to be counted over the next ten days that could swing things. the vote won't be certified ultimately until august 24th if the candidates are still within 0.5% of each other, rules in ohio require a mandatory

recount. all of that goes to waste really by november when these two candidates will run against each other again in the general election so whoever wins here and republicans are already claiming victory because they're ahead a little in the vote count whoever wins here will have to run against the same guy in the fall in just a couple months time what are the takeaways this is a district that donald trump won overwhelmingly it's a district that republicans carried for decades. john kasich used to represent this district in ohio. there's about 70 districts according to politico nationwide that have a less overwhelming republican majority. there's about 7 0 districts according to politico that have less republican dominance in them that means despite the massive spending that republicans made here, mror th shgmore than $3 mt on this race, they will have to

defend districts that are as bad or worse than this one this is another election, if it goes the way it looks like it's trending, they have not won. so ultimately democrats have to put up or shut up and start winning some of these republican seats if they're going to take over the house of representatives in the fall. they have not done it here yet, but they're looking at a lot of other districts in the fall and saying we might be able to take some of these. >> let's bring in axios co-founder and executive editor, mike allen i had no idea eamon would say politico he threw that in there let's forget that he even -- we'll bleep that out next time >> that was his effort to venture into the yellow, trying to keep us out of red. >> mike, if you win three months before the big one, does that

give you possession is nine-te s ti tenths of the law. if you're in there, does it make it easier to stay? >> there are advantages to being an incumbent picking up on those trends eamon was mentioning, all the news for republicans over the special elections last night is bad. you look at what have we learned since the president's election every single time republicans vastly underperform how they did in the states and districts in trump versus clinton so all the numbers there depressed. second, and this is the one that's really worrisome to the president's strategists, there's been a real move in the suburbs away from republicans. that was a key part of the trump coalition, this ohio district last night really crystalized

this our third takeaway from these series of special elections and now we go on to the real deal 90 days from today, every election now is a trump election. both sides think this works for them the president for sure wants to dabble in every race that is going to set the tone for all these races in the 90 days ahead >> and i agree with a lot of what you just said but i'm back to the 23 which would be a good showing, if it was only 23 given historically how the party fairs for the incumbent party. 23, it's almost a no-brainer the one thing i would say, i still think that there's something to the notion that trump entering into this brouhaha towards the end probably did put balderson over. i'm not sure you look at it as a negative i still think he can do -- i don't think that was a negative that trump came to the rescue

here i think that had something to do with it. i don't know what he can do in november if it was 22, that would be the -- if they only lost 22, that would be the victory of all time >> the point is this is a district where he was able to help we saw the president taking his victory lap on twitter here's the problem a lot of places where he can't help, where he can hurt. we know the president will be antsy to go out into all those districts. any time the staff proposes a rally to him, he's like fire up air force one, let's do it right now. he'll want to play so what they may do is have him go to some rallies, that's what he loves and feeds off of. >> you couldn't possibly do as badly as prmt esident obama in e midterms, could you? that would be devastating if there was that type of loss of republican seats >> two ealearnings there.

obama pointed to the problem because you were an obama voter, you were not necessarily a democratic voter for a random house candidate. same thing, that's why the president is ramping everything up at these rallies. he's trying to get trump voters to be republican voters again. as we know, president obama did not love the campaigning part, didn't love the retail this president loves it, and he watches tivo highlights of his former rally performances. the president is watching these highlights and he'll say wait for it, before a great line. you see what i'm doing there >> i didn't see that axios piece, because i'm taking a break. i've talked to you about, you know, the way it is skewed i counted like 48 out of 50 were sort of negative so i'm taking a break. i'll come back if you tell me you'll -- >> yellow.

>> am i in the yellow again? >> it's like "squawk box." >> i'm trying to give you the benefit. don't turn into politico i said it again. >> axios is like "squawk box." it's part of a good breakfast. >> nice. coming up, shares of papa john's plunging after the leadership and the ousted founder blamed each other for a 10% dip in sales that story next. and what could elon musk gain personally by taking tesla private? stay tuned you're watching "squawk box" on cnbc

papa john's is blaming papa john for a 10% dip in sales in july the outfit founder says the company is trying to deflect attention from the real source of the problem the stock is down more than 10%. kate rogers joining us now with more that's the guy, we call him papa john >> he is papa john good morning the pizza chain reporting a disappointing second quarter with misses on the top and

bottom lines and a drop in north american same-store sales of 6.1% this comes as founder and former ceo john schnotter resigned from the board. while this quarter ended before the drama began, the negative publicity has affected sales in a meaningful way sales are down 10.5% in north america. guidance was also lowered significantly for the full-year. schnatter weighed in after the report crossed aing in a statement as i communicated to the board as early as december 2016 and several times in 2017 i'm concerned about the company's declining sales, financial performance and most importantly the direction the company is headed under the stewardship of steve richie and the current board of directors the company said in a statement,

john schantter's comments are an attempt to distract from his own actions. we remain focused on the important work under way to move the company forward that we can move forward i also spoke to a source close to the company saying the board's actions over the past six months show how it feels about john's behavior in the general sentiment is that the company's doing the right thing in continuing to distance themselves but this drama is just crazy every day. >> if he really wants, he could take the company private >> i guess he could. >> right just get rid of all the board members he doesn't like. >> his whole thing in his statement yesterday is steve ritchie who he helped to hand pick for that role started unofficially acting as ceo a year prior to when he officially assumed the role so schnatter said he came in at peak comp sales and they declined since but since the comments, they

went negative. something new every day. >> thank you, kate kate rogers. coming up, a lot more to talk about on "squawk" this morning. the new party school rankings are out, and there's a new number one that story next. we'll tell you who's at the top of that list and later, saudi prince taking a stake in snap at a discount. could suggest the company is eager to shore up its depleted cash reserves. we'll do that after the break. but as we head to that break, a look at the big dow jones winners and losers in the premarket. at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem

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the princeton review is out with its new list of college rankings there's a new number one party school the university of delaware taking that honor moving up from number six last year the ranking is based on the consumption of beer, liquor, and drugs. it says here as well as hours spent outside of the classroom also the popularity of fraternities and sororities. rounding out the top five, west

virginia, tulane, syracuse, and bucknell university. >> wellesly never made that list >> where were you lacking? >> nobody took to parties. they took amphetamines to stay up and study cornell a famous you need to do something >> i wasn't invited to the party then i don't know. >> no. coming up, why does elon musk want to take tesla private? we're going to talk to kelley blue book about the tweets that changed the game yesterday plus robert frank is going to tell us how much musk could cash in following the michael dell model. "squawk box" will be right back.

a developing story e long musk says he wants to take tesla private but what's really behind this move and who will fund it? new this morning, california wildfires exploding in size. a live report from the ground straight ahead plus closing the gap women in hard hats have hit the jackpot. a program that's educating, training, and putting females to work in the construction field as the second hour of "squawk box" begins right now. ♪ live from the beating hard of business, new york, this is "squawk box. >> welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square becky is off today

our guest host richard bernstein. richard bernstein, adviser, ceo, and chief investment officer should i say richard f-ing bernstein? >> it narrows it down a little of who you are >> takes the randomness out. >> there's a lot of richard bernsteins >> there are >> one of them's got to be a murderer, i would think. >> take a look at u.s. equity futures at this hour. >> where'd that come from in. >> i don't know. >> yellow. >> seinfeld, remember the -- >> dow up about 19 points higher s&p looking to open 2.5 points higher the white house has completed preparations to impose new tariffs on chinese imports they're scheduled to go into effect on august 23rd. that would bring the total products to $50 billion. also shares of michael kors are higher in the premarket this morning. they reported quarterly profit of $1.32 per share well above

the consensus of 95 cents. er share revenue also topping estimates cigna responding to carl icahn's assertion that it's vastly overpaying to buy express scripts. you might recall icahn called it a folly in a letter to cigna shareholders yesterday saying he would vote against the deal. the insurer now says he does not have the best interest of shareholders in mind that they call the deal tremendous shareholder value following a major developing story out of california. the biggest wildfire ever recorded in that state still growing. ai dditi roy is live we the latt >> good morning to you, joe. we are at the staging area for the mendocino complex fire as you mentioned, it's the largest in the state's history the good news here from just 12 hours ago when we were standing out here is that the winds seem to have died down a bit. hopefully that's going to help

the firefight. this is nearly as big as the city of los angeles, this fire it's a combination of two fires. the ranch and river fires. both of them combined have engulfed more than 292,000 acres. it's 34% contained 10,300 structures are threatened 75 homes and businesses destroyed. 13,000 people have been ordered to evacuate. an additional 8,000 have been advised to do so fire officials tell us the weather conditions combined with the remote location of the flames may get especially tough for them >> it's been a challenge for us to get our crews in there. because it's, like, in a mountain range and a ridge top we're still currently trying to get good, active containment line in those areas. >> right now there are 4,000 firefighters at the scene. they have dumped more than 100 million gallons of retardant on

the flames guys, hopefully that'll help things out today >> all right aditi roy, thank you so much live in california for us. let's get you back to the markets at this hour joing us now is john lynch from lpl financial. jim key is president of south texas money management what if i live in north texas? will you manage my money or do i have to live in south texas? >> absolutely. >> okay good and our guest host for the rest of the morning, rich bernstein rich, on the markets positive or negative >> positive. >> why >> i think -- look fundamentals, we take away the tweet of the day and everything else, fundamentals in the united states are still good. they're improving. i mean, profits number one are still kbroimproving. one could hardly say people are over enthusiastic. the things you see in a bear market aren't here >> what about you, jim what are you telling people in south texas? >> same thing. we continue to see the same

thing. strong profits, strong economy typically you'd see a downturn about a year after the last series of fed rate hikes which seems to be the story of the day. we don't really see anything threatening now through 2019 >> john, are you positive or negative are we going to hit a triple >> i think we're going to hit a triple we have to be careful of that. we don't want consensus to be too optimistic when you look at capex plans, profits lead to capex. we're looking to lead productivity we believe this thing has further room to run. >> nobody has raised any big concerns about trade >> let's not get drunk on this it's not march of '09. we're nine years in. and you're not seeing -- people forget it's not just the stock market it's the corporations that do stupid things too. you really haven't seen that through this whole cycle you're starting to see capex pick up. that's healthy

eventu eventually they'll get drunk on their own press releases as well then we'll have a lopt to worry about. you can see the problems beginning. >> not one of you seem to be wringing your hands over trade >> trade is the obvious issue. i think that's more of a trump deal elections in ohio, elections in midterms weren't really influencing that too much. you know, and trade, you know, wealth is created by production and exchange to the extent you limit exchange, it can be a big deal right now the markets are kind of at that point where they think it's going to go forward with a big trade war or that it's mostly using a bearish threat to bring about a bullish result and right now we're still in that area. >> rich, where are we on the efficient hypothesis i go back and forth. >> on the efficient market hypothesis >> is it all knowing

because i can argue either way i could say that it knows that it's not -- that something will be -- especially before the midterms it's not going to turn into a huge deal. but on the other hand, when someone really bad -- by definition, when you go down a big amount a thousand points or something, whatever causes that, it hadn't anticipated it things can't happen to throw the market for a loop. if the market were efficient -- but it partly is there are times it discounts good news. >> we constantly show the u.s. market is up sharply while china is down sharply in this process which suggests to us the u.s. shouldn't be that concerned about a trade war whereas china should. >> i think people like to read that in. the reality is that u.s. fundamentals are actually quite strong corporate profits are quite strong in the united states. you can't say that in china right now. we have trouble with that around the world. that's not a trade issue

i guess people want to make it into one if you worry about trade, you got to worry about inflation right? that's the key point >> because tariffs drive prices higher it won't slow down the economy and take the foot off the pedal? >> it could. if we slow down the economy, sure but right now the economy's kind of hitting on all eight cylinders in the short-term. i think the odds are for more inflation than less. >> john, you get the last word here. >> we also have about $750 or $800 billion going through 2019. so that can dwarf any tariff worst case scenarios we're seeing by three, four, or five times. ultimately there will be a comeuppance. >> got it. gentlemen, thanks so much. say hello to everybody in south texas. thank you. rich is sticking around. >> you went with ebullient the second pronouncement for

ebullient. why? >> i'm not an english major. i don't know andrew's much better he went to cornell >> if you're effing, you say that >> why didn't your parents give you a middle name? >> nobody in my family has a middle name. remember the lion and the scare crow i gave that to you. >> latins have second names and first names. >> it's like giving you the heart or a medal for courage >> or a brain. >> i wasn't going to say that. but that's my tease. >> i know. i'm trying to get you to do it >> you're a fill-in anchor >> because timing matters. >> maybe on your show. anyway, elon musk says he wants to take tesla private. what's behind this move? we're going to talk more about tesla. and who's going to fund it that story when "squawk box" comes right back what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals?

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welcome back to "squawk box. cvs reported quarterly profit of $1.69 per share. that was 8 cents above estimates. revenues also above estimates.

same store sales rising 5.9% that stock higher by 1.3%. we've been talking about it all morning, tesla's elon musk speculating -- more declaring in a string of tweets that he could take the company private putting a price tag on it of $420 a share leslie picker joins us now with more >> hey it's no secret that elon musk would rather tesla be private, but his twitter storm yesterday describing a take private scenario at $420 per share with funding secured sent tesla shares soaring he then proceeded to talk about what the deal would entail for shareholders and employees before finally conceding in a memo that, quote, a final decision has not yet been made he went on to say in that memo that tesla would operate better as a private company because they would not be subjected to the volatility of the stock price nor the quarterly earnings cycle. musk said as the most shorted stock in the history of the

stock market being public means that there are large numbers of people who have the incentive to attack the company tesla ended the day 11% higher the stock also got a boost from the saudi arabia fund took a multi-billion-dollar stake tesla's stock has been painful for short sellers. yesterday's amounted to $1.3 billion. and if the stock does indeed reach the $420 level, short sellers would be looking at $4.45 billion in paper losses. perhaps that would be the level in which they would finally cover their shorts i don't know i don't know >> if it goes private, they'd be forced to, wouldn't that i in. >> presumably. >> okay. go ahead, joseph >> thank you thanks, leslie joining the conversation,

jed dorsheimer and rebecca lindeland from kelley bluebook do you have answers for us what do you think, rebecca was that just -- i mean, we know he's a little bit -- i don't know whether erratic is the right word but he certainly says what's on his mind occasionally. is this a serious proposal >> well, i think one of the questions that comes to mind both listening to the show and reading his tweets is whether he has bumbled this announcement or not. and i wonder is it more of a yellow flag, if you will when we think about what's really going on, has he -- is this an s.e.c. issue has he manipulated the stock is this the proper way to go about making such an enormous announcement when so much money is on the line i don't think it's a bad idea. i actually really like the idea of elon musk going private it's sort of like giving an

8-year-old a billion dollars and saying go play and figure out something. so there's excitement to it. but it's just whether this was the right way to do it >> baby with a hammer, maybe >> exactly. >> that always scares me jed, your thoughts >> yeah, so, you know, i had the same initial first reaction. and we've recently picked up coverage of tesla. although i've known the company for quite some time. the more i thought about it last night, i think it's a brilliant strategy and so if we take the emotions out of the unconventional nature of how we went about announcing it and recognize that this is pretty common for him to announce things on twitter, we're not the ones used to that. and it was one of the reasons we came out with a hold because of the unpredictable nature of elon however, if you look at the challenges that the company

faces. one, they have a capital markets issue. and the fact that he was able to boost the shares puts him in the money of some converts that come due in this fall as well as in the springtime and so if the stock can remain at these levels, it takes a huge risk off the table for them. >> jed, jed, jed i want to stop you because there's two major questions i have i'm not -- i don't know that many people who are discounting strategically the idea of going private. i'm not sure that is the issue on the table here. you just said that, you know, shareholders have to get used to him saying things on twitter i think the question is what he said on twitter and whether it is ultimately accurate meaning when he says funding secured, that would suggest more than suggest -- that would state unequivocally that he has secured funding. if you've been watching the show, you'd know that i've made phone calls, leslie's made phone

calls. reporters, journalists, everyone's been making calls nobody in funding land, all the big sources of capital in the world seem to know nothing about this maybe we'll all get surprised and maybe there are funding sources nobody's thought of. but it is not clear that is the case the question is whether there's a problem here with the truth and whether that as an investor you have a problem with that >> yeah. and frankly, so i don't disagree with what you're saying. and that is the -- if you read our report in terms of our initiation and just to remind those that didn't, that was the reason that -- because we believe in the tesla story as well as their market position, their product as well. elon really put a huge risk in there. i agree with you on that >> can i ask a question, please. if the market believed this story, where would tesla be

trading right now. >> $420. >> separate question i want to talk about the market manipulation for a second. you talked about the convertible bonds here and the price tag here there are people -- cynics out there that say this is an effort to push instead of having to pay cash, he can effectively pay with shares. is that a problem for you? >> if from a delusion perspective? >> no, from a legal perspective. from a moral perspective from a, like, real life perspective. >> market manipulation perspective. >> so i'm going to stay -- one, i'm not a lawyer i'll let the legality of this play out with the s.e.c. you know, assuming that -- and also removing the moral perspective of this. and again, i think that's where we get hung up and have the most

trouble stomaching how he's going about this from a steej strategic perspecti he was able to move them up, it does produce a big risk. that's all i was acknowledging what's that? >> this idea you don't care about any of these other issues, it's all strategy. most people only like to do business with people that do business on the other side are you saying you believe all this hook line and sinker? >> no. >> you don't >> i don't and i think that was the point that your colleague just raised. >> this happened when elon gave some money to republicans and you turned on him. >> no. >> you love -- i can't believe i'm seeing this! you are the ultimate fan boy you have turned on him. >> no, i haven't i would like to see tesla succeed. >> in terms of republican -- >> i think the approach that has been taken raises so many questions and creates -- there was uncertainty around this

beforehand >> that suggested that he implied he would do business with people who don't tell the truth. i don't think he said anything there. >> i think the whole conversation was somehow about everything but whether all of this is actually real or not which is crazy town to me. >> and i think that's the point that -- >> remember, this is an operationally stressed company where the ceo and owner has just told you he wants to become more levered and that that's a good strategy i don't see how anybody who's a shareholder could say this is good going on. this is a stressed company that now wants to raise their fixed cost further if mr. musk thinks that short sellers are bad -- >> so you're assuming it's -- >> if he thinks short sellers are bad, try dealing with debt holders. they're going to seize the assets this is crazy that one would say this is a good operational move. i don't get it at all. i don't get it at all. >> gave it to the gop.

>> jim and rebecca, thank you. we appreciate it >> thank you >> we'll tell everybody on the other side of the break what you found there, joe coming up, snap shares went on a wild ride we'll talk more when "squawk" returns. broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com.

♪ you're look at the ceo of snap meeting with saudi prince that stock popping on the news but gave back some of the gains.

showed snapchat's first-ever user decline jo help us understand what's going on here with snap. >> good morning. thank you for having me. hopefully this will be a less controversial topic. >> doubtful. >> we heard about the numbers. they did great in terms of the revenues and eps if we were digging deeper, there's some concerns i have one, the user growth obviously that decreased sequentially they said they steered away users. this is a fickle group millennials don't like something, they'll quickly switch to something else instagram is a good fallback pricing is a continuing trend of down 52% year over year. they're reusing pricing to

attract advertisers. okay well, yeah you build share, you get business rather than no business you fill up the slots. you get them used to thundershowyour platform once you start raising prices, they're not going to be liking that facebook even with its issues, privacy issues and all that stuff has been raising prices. >> so what's snap really worth >> the valuation of that is super rich it's above -- >> you're saying the current valuation is super rich? >> yes. >> so what's the version you have in your mind? >> my price target is $10. and that's being very generous in terms of the growth potential. because it has such a lock on the millennial audience. >> that's a vote of confidence and certainly boosted the stock

price. it's been averaging $230 million of cash burn every quarter they only had $1.5 billion in cash and marketable securities they'll go through that 250 from the prince in a little bit more than a quarter at current rates. it's a vote of confidence. optically, it's great. but still they have a long way of turning around the business. >> is it optically great i think of how long he stuck with stocks in the past. you could argue it's not necessarily a -- >> that's true they've actually had discussions before they never reach agreement i think they've compromised. spiegel has taken back in terms of some of his demands, an

apprentice stepped in. it's a headline rabber and it boosted stock >> you think snap could ever be a takeover target? >> or going private. there certainly have been discussion before about it i think spiegel wants to keep it under his own control for as long as possible i'm sure even he has a price >> okay. thank you. >> thank you >> appreciate it little less controversial. making headlines this morning, mortgage applications hit their lowest level in two and a half years last week applications fell 3% last week with both new purchase applications and refinancing activity falling the average 30-year mortgage rate was 4.84% that was unchanged from a week

earlier. amazon has launched a curbside pickup program at its whole foods grocery stores the program is being launched in just two cities. but will be expanded to other cities later this year no, your iphone is not eavesdropping on you that's what apple is telling lawmakers in response to a congressional request about the collection of audio data apple says iphones do not listen to users without their consent and do not allow third party apps to do so either >> all right let's get back to the markets. time for what we call a trading block. i'm just interested in talking about currency glob and bob hebercorn to talk more about gold but mark, just -- i could pick individuals -- i could talk about iran that's unbelievable what's happening. that's not what you're here to talk about necessarily, but

there's -- i don't know whether it's regime change, but it's not death to america anymore it's death to the dictator because of the currency. >> i hate to quote one of your former colleagues, but dollar's still king a combination of fed tightening, this is a great policy mix any company that pursues this it's a question of time and how you want to play it. >> other than the major currencies, what's most notable. >> china's been falling almost every day. china lifted in fixes it higher the last couple of days. here's what's really going on. three month -- it's continuing to fall. i want to say they're letting rates fall >> when do we get scared about emerging market currencies an the systemic risk to the whole

financial system >> i think it's low kalized. most people are out of turkey already. there are some hot spots in the emerging markets that are doing well mexican peso is among the strongest of the emerging market currencies. >> because of a deal with mexico >> i think that people are surprised that the new is not as anti-business as people originally thought >> all right mark mentioned the rates and your view on gold is it's going to be tough to sustain any rally as long as the fed is hiking >> you know, you have a fed meeting coming up in less than a month. i think the chances are above 97% right now. if you're going long gold right now, keep in mind you're going to be fighting that for the next month. the fact that a rate hike is mostly coming in september

look to december gold does not earn interest. and if you're buying gold right now, most of the safe haven assets will go in. the dollar, i think you got to stay with the dollar right now for upside and with gold, if you see look to short them. >> do you see these stores of what's of iran the iranians are hording gold. they are absolutely -- for them it's a safe haven. >> it is >> what else other choice d.o. they have rig -- do they have right now >> there are other commodities priced in dollars that aren't getting weaker like oil. oil still pretty firm. we're looking for the new numbers today and the draw down in inventories

>> and oil is higher just on the risk premium with the news out of iran coupled with tighter supply concer concerns, yeah degrees the trade talks. and it is, right now it's the fed. other commodities are doing other things grains are trading lower when it comes to gold right now, at the end of the day, all these stories will come and go end of the day, it's always going to be the fed. >> gentlemen, thanks andrew, i was going to say bitcoin i forgot to tell you. >> what happened >> on vacation -- >> you got a bitcoin >> i was going to buy some >> really? >> yes >> what happened >> i went into coinbase. i signed my life away. still couldn't figure it out >> credit card or bank account >> i was going to use credit card and it wouldn't work. a debit card and it wouldn't work i was going to buy one because it was going up. it was $8,000. it was like $8,300

>> you told me not to buy lottery tickets. you told me that was a tax on the stupid >> i called the exact top. but it was -- thank god coinbase didn't honor my -- i did not buy. i didn't get it. >> my wife wants to buy bitcoin too. >> if it's worth a million dollars, i want one of them. but not everybody can get paid off. it's not going to happen coming up, elon musk could become even richer if he takes be fnkmpany private. rortra joins us with a look at the ceo's wealth next ♪

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>> he got even wealthier yesterday. after tweeting that he was considering taking tesla private, e long musk's net worth jumped $820 million just from that tweet for the whole day, gained $1.2 billion. and his fortune could grow if he completes this deal. musk owns about 20% of tesla shares with a value of about $13 billion. he also owns a controlling interest in spacex that company valued at about $20

billion. so his total net worth right now is around $2$25 billion. they peg him as the 31st richest man in the world if he takes tesla private, he would roll all of his new shares so there would be no tax bill. dell rolled $4 billion of his own stock and $750 billion with silver lake. he invested more to make some acquisitions but now his stake is worth nearly $30 billion with his original basis of rnd $8 billion. that's a good model for musk musk could forfeit some of his compensation it's unclear how they would meet their goals especially the market cap part if the company goes private but going private has one other

benefit. his net worth will be a little less public. >> you know, there's a lot of people yesterday who thought this was a pump and dump scheme or he became richer yesterday. this guy is about as all in -- now, you thought i was being negative on elon before. this guy has been as all in on tesla as just about any ceo in the world. i mean, his entire wealth is tied directly to this. doesn't even cash the check. >> that's right. that's right i'm not saying he's in it -- >> if you talk about skin in the game, this is about as skin in the game you're going to get >> i'm not saying he's in it for the money or to get rich he wants to change the world like they all do the money is a measure and i think clearly because he owns so much stock, there's a lot at stake. >> i don't think any of this is motivated by his personal wealth >> no. since robert is our wealth reporter, he's doing that.

>> i'm saying this could be good for him. >> if it works. >> if it works okay coming up, "squawk box" going back to school former education secretary arnie duncan is going to stop by the set, talk about fixing the nation's school system when we return

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♪ welcome back to "squawk box" this morning joining us now, arnie duncan is here he is the author of a new book titled "how schools work" arguing that our national security and economy is in danger >> good morning. thanks for having me >> you start out saying the entire world of education is built on lies. >> it is a provocative statement. i mean it very seriously i'll give you a couple examples. we all say we care about education, that it matters how many people actually vote on education? how many of us hold politicians accountable for education results? almost nobody. we say we care about teachers, but we don't pay teachers as a professionals. we don't train them as

professionals. we don't have career ladders third, we say we care about children but we fail to keep them safe. we don't give them the ability to go to high quality pre-k programs >> i thought the line you were going to talk about when i saw the notes in the book was when we lie to students and pass them when actually they don't deserve to pass. >> that's a huge win as well where we say students are on track to be successful and they're not even close that makes us comfortable as adults to say it's okay. keep going but that's insidious when they're playing by all the rules. >> why does that happen? >> i think it's easier for adults and i talk about adult dysfunction 37 -- great military is our best defense. but a great education system is our nation's best offense. >> if you could wave a magic

wand, what are the one, two, and three things you would do right this second? >> number one, again, education should be the ultimate bipartisan nonpartisan issue i would love everyone to vote -- >> you want people to vote -- you want that to be the issue. not health care, not the economy, not these other issues. >> or at least a critical issue going to the voting booth. and if we did that, things would change overnight we had to make kplcollege more accessible our country would be great. >> do you believe in charter schools? >> i believe in great schools. >> come on don't -- >> let me answer your question the name charter doesn't say it's great i went to the national charter school convention. i said we should learn from the great ones bad charter schools we should close down >> they can close down, right?

they fail when people don't go to them. but public schools always fail >> again, it's not that black and white. more and more there's more accountability some are phasing out but others need to phase out. >> accountable for public schools, how do we get there >> how do we get there we demand not just for our own children but for every child to have a world class education >> where do you land on teacher unions >> i work with amazing union leaders. i also had challenges with unions >> do you think that they're holding back education in certain areas? >> i don't and what you're seeing across the country recently is teachers fighting for better pay and fighting to be respected as professionals. and you've seen in some republican-led states, people starving public education. thang does no one any good >> what would you have done? you saw -- i mean, "the washington post," not exactly an

t antithetical to your side of things the idea more money, more federal government, more big government, throw money at the schools. it's going to work most of the schools you tried to help actually went backwards -- >> again, that's not quite accura accurate those schools in ohio -- this is very current -- those schools showed significant improvement the most important thing we can do is when schools aren't succeeding, we have to not give up on those children. >> did you need more than $7 billion? if he doubled that to $14 billion, would the results have been different or is your approach wrong >> i see education as the ultimate investment not as an expense but we have to be held -- >> but if you don't return on your money, it's ridiculous to keep doing the same thing again. that's the definition of insanity to keep doing the same thing over and over again with no results. >> james heckman, the economist, talked about investing in early

childhood education. you understand what that means better than anyone else. i would challenge you any other place where you spend one tax dollar where you're getting back $7 this is the best investment we could make we need to be held accountable for results and a higher standard >> it seems so daunting and intractable. we're all trying to come up with answers on how to do it. i think it must be a combination of things. charter, public schools, family life, neighborhoods, so many different -- >> parent accountability >> all of the above. but great schools transform lives. they offer upward mobility bring jobs and keep them in america. i'm hopeful. i traveled the nation, saw amazing schools everywhere i went >> you didn't say trump is such an authoritarian because he wanted stupid people voting him in every four years? did you really say that?

>> i did say when you have authoritarian tendencies, when you call dhe press the enemy -- >> you don't think he wants to help with education of our children >> can i finish my statement when you want to become the source of truth, the source of facts, i don't think you want people who can think critically. i don't think you want people who are independent thinkers and can make their own decisions and so i -- you never hear him talking about we should lead the world in college completion. you never hear him talking about getting high school graduation rates up to 90%. you never hear him say we should give every child high quality pre-k. those are nation building goals. >> okay. we're going to leave the conversation there secretary, we appreciate it. thank you. congratulations on the new book. it is called "how schools work: an inside account of failures and success from one of the longest serving secretaries of education. coming up, closing the gap

contessa joins us with that story. >> hey there, michelle i'm at the encore boston harbor where there's been a lot of questions about the gaming license following the me too scandal. but one of the first requirements for this license had to do with wom ihaenn rd hats i'll explain coming up on "squawk box." build and run apps anywhere you like, while keeping your competitors at bay. the ibm cloud. the cloud for smarter business. the ibm cloud. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

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thanks, janet. it's welcomemy happy place. store. you can learn how to switch to xfinity mobile, a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet. and over here i'm having my birthday party. dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today. welcome back to "squawk box. a new installment this morning in our closing the gap series.

about 6,000 construction jobs are tied to two casino projects in massachusetts and the casinos have teamed up with the state's gaming commission to employ more women in those well-paid union jobs. contessa brewer joins us with that story >> michelle, the encore boston harbor is still a year from completion, but the casino is really taking shape. you can see the chandeliers behind me hanging over what would become the gaming for. all of this including a crew of skilled trades women working alongside thousands of guy. last month making up 7% of the construction workers on the job. that beats the 6.9% goal set by the massachusetts gaming commission for a gambling license. issued by the legislature in gaming law now, in springfield, mgm's casino resort opens later this month. its construction teams employed

7.5% women including an all-female demolition crew. but to meet these goals, the government, union, and non-profit advocates all had to work together to recruit women into this training pipeline. take, for instance, savi she couldn't find a way into the trade. today she's a skilled pipe fitter earned 42 bucks an hour and the face of the niche finite to encourage women to pursue a career in construction zblild let them know it's a great opportunity. it's great benefits. it's not hard as people view it as the women, we're just as hard workers as men on the job site as well. we lace our boots and tie them just the same way they do. >> nationally women make up only 3% of the skilled trades in construction so this massachusetts initiative really could serve as a model for other industries at a time

when skilled trades are in such high demand and the supply is so low, guys. >> contessa, how do they enforce the diversity requirements >> interesting that you ask that the casinos go contractor by contractor and even down to the subcontractor levels to see how many women they're hiring. they say if you hire ten people last week, how many of them were women. you don't meet your goals. and they reward their incentives for people who do extremely well then at the gaming commission level, they're also checking in on these projects to see how many women and tracking the performance of the casinos in making sure that women are represented and not just women but people of color and also veterans on the job as well. >> contessa brewer in everett, mass >> it's everett. summerville. >> yeah. my grandpa lived there i lived in malden. >> everett

revere >> i'm from revere we're going to get the clams coming up, today's top stories including elon musk comments about taking tesla private dpp he break any regulatory rules by first tweeting his plan? we're going to ask former s.e.c. chairman harvey pitt

the tweets leaving investors with more questions than answers. elon musk says he's considering taking tesla private harvey pitt weighs in straight ahead. inside the house of mouse. disney shares on the move after a disappointing quarter to the street plus absorbing the shock >> we're going to trust that the president will have at least some success in negotiating a trade deal >> we'll tell you why some farmers are sticking with president trump despite bearing the brunt of the impact. "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box.

>> oh, that's me good morning and welcome back to "squawk box" here on cnbc. i'm joe kernen along with michelle caruso-cabrera and andrew ross sorkin richard bernstein -- check out the phone book there's probably 18,000 in manhattan alone. >> but we get the special one. >> how would we know it's just -- his name is richard bernstein. >> i tried >> richard bernstein, if you need to know, this richard bernstein is the ceo of richard bernstein advisers >> and there is only one richard bernstein advisers there are not 18 million. >> and you're also a cnbc contributor, more importantly. >> there are 18 million of them. >> don't say that. the futures right now indicated a little bit weaker this morning. actually now they've turned around that was a fair value i was looking at on the other side

the futures changed. that's all red but based on where fair value is, one point higher on the s&p. the dow has -- is indicated up seven, nasdaq indicated up one similar to other mornings where it takes off as the day goes on. then we're close to 26,000 again on the dow i think the nasdaq, isn't it up 50% now since the election >> probably. something like that, yeah. the market's up a lot, yeah. >> treasury yields 2.98% right now. still below 3% i would think most people would have said we'd be at 3.25% at least by now and we're not. let's get you caught up on a few earnings right now cvs revenues above estimates with same store sales rising 5.9% stock higher by 3.5% in the premarket. michael kors reported quarterly profits of $1.32 a share

that's better than consensus and revenue also topped estimates. kors also raised the full year outlook. that stock is higher and we are approaching a 52-week high also making headlines, salesforce has pr moted keith block to co-ceo. block who joined in 2013 is largely focused on the company's operations >> you know, the only ceo who tweets more than elon musk is marc benioff yeah once did a journal analysis. >> interesting less controversial tweeting though now to the story that still has investors talking this morning. tesla ceo elon musk saying he's considering taking the company private. he confirmed his wish for a private tesla. and joining us right now, a look at the regulatory side, harvey pitt former s.e.c.

we say hello to him this morning. harvey, good morning >> good morning. >> help us with this there's always the question of can you announce these things by twitter or not i'm not going there. what i want to know is when he said in the tweet itself that financing is secured, from a legal perspective, if you're at the s.e.c., what does that actually have to mean? >> it has to mean that he already has secured a line of credit that the contingencies with respect to any line of credit are not such to make it questionable whether or not he can actually obtain the financing that he has promised the world he already has secured. >> and separately, when he says in one of the other tweets that he has shareholder support or support confirmed i think was his phrase, investor support

confirmed, what does that have to mean? >> that's very strange because there are firm rules that the s.e.c. adopted many decades ago that govern going private transactions and shareholders cannot support a proposal that hasn't yet been made or exist. he may mean that he has talked to investors who say they would be in favor of a transaction that would take the company out of its public status but that's just a very problematic tweet on his part. >> if you were running the s.e.c. right now, would you be investigating him right now based on these tweets? do you think they are? are they compelled to go to him right now and say you said financing is secured, is it? >> i think if i were there i would, of course, defer to the

people in our enforcement division but my view is that there's enough here for people to ask questio questions. whether or not he's done anything illegal are far from certain. but there are enough questions that i would think that we would need answers before we could decide whether we were going to pursue it or not >> and in terms of how that would happen, meaning, just walk us through the permutations. you're inside the s.e.c. you see these tweets come across you see the announcement there's a meeting, i imagine happened yesterday today? do you send a letter immediately to tesla saying please send us who you have financing commitments from is that how this works or is this going to take weeks and months before the s.e.c. would even reach out to a tesla. >> no, i don't think it has to take months. the s.e.c. has the power under

the securities exchange act to compel a statement under oath from any person with respect to the public trading of securities what is required would be that there would need to have been opened a formal order of investigation which the enforcement staff can do on its own. once that order is in place, the s.e.c. has subpoena power. they have the ability to call people up on the phone and if tesla is well advised, it wouldn't wait for a call like that it would be supplying information to the s.e.c. before they even asked any questions. >> if the s.e.c. were to determine that funding was not secured, what are the penalties for elon musk? >> well, the penalties are both civil and criminal

if you make a false statement in connection with the trading of securities, you run the risk both of having to pay for the damages you caused and also you run the risk of a criminal prosecution. >> but in terms of his own trading, at least my understanding, he's not selling his shares you're talking about everybody else's trading. >> yes. >> how would you determine what the damage caused here right now the damage is with the short sellers, right >> well, the damage is to the short sellers, yes and it may be to people who were sell i selling before this announcement hit the public airwaves. he took the unusual step of announcing this during the middle of a trading day which is highly unusual >> there have been questions

around the idea of market manipulation, whether this is a, quote, short squeeze to manipulate the shorts out of the stock. or whether -- and perhaps more provocatively there's this convertible bond that's worth $920 million he can get the shares to stay over $360 for some period of time before the deadline, those bonds rather than have to pay out in cash can get converted intoshares how would yes s.e.c. look at that particular issue? >> for there to be market manipulation, the law requires that the s.e.c. prove intent that is, musk would have had to have had an intent to artificially influence the price of his securities. one of the difficulties in that regard is that in 2017 he previously said in print interviews that he contemplated

going private at some point in the future but if his comments were directed solely to influencing the market price, then it could be manipulation. the s.e.c. would go about that by seeking all of his e-mails, seeking records of his telephone conversations to whom he spoke, and the like to see be there's any indication of intent >> elon musk hates dealing with the public markets which is funny considering what they give his multiple but his complaint about the market speaks to a larger issue which is there are many fewer -- there are fewer companies in the world that are public in the united states. they have gone down dramatically a lot of entrepreneurs don't want to go public. they don't like dealing with the public markets has the regulation, has something happened that's led to

that does something need to change so we have more publicly traded companies? >> something has to change and i think the current s.e.c. chairman jay clayton is doing a marvelous job of focusing on s.e.c. on improving the environment for companies to want to go public without sacrificing investor protection. but the regulation and the requirements that companies must go through has become quite onerous. and that is a part of the issue that companies think they may be better off by remaining private. >> when you saw this all play out, what did your spidey sense say? >> what do i think about >> all of this as these tweets came out, as this statement came out. if you had to handicap where all of this goes >> what was your initial reaction were you aghast? >> on a personal level

i imagine people e-mailed you. maybe you were on the phone. i don't know i'm just curious what you thought. >> on a personal level i found this quite problematic i really don't understand the notion of -- doing it by a tweet and then dribbling out various kinds of statements. to me what he has done -- is very harmful to shareholders and company and from his perspective to himself. >> harvey, we're going to leave the conversation there but thank you very much this morning. appreciate it. >> thank you following a major developing story out of california, the biggest wildfire ever recorded in that state and still growing. aditi roy is live on the ground with the latest. >> hi there, michelle. that's right we are just a couple of hours away from the latest numbers

coming out on how much this fire has grown. on the face of it we can tell you that compared to several hours ago, the winds have died down considerably. hopefully that will help in the fire fight the mendocino complex fire is a combination of two fires the ranch fire and river fire. 10,300 structures are threatened 75 homes and businesses destroyed. 13,000 people have been ordered to evacuate. close to 4,000 firefighters are attacking this blaze they've already dumped a staggering 100 million gallons of fire retardant on it. the thing that makes this blaze so challenging for firefighters is that the bulk of it is in a remote location in the middle of a forest there are many flames on top of

a mountain ridge top it's hard enough to get firefighters there let alone apparatus like bulldozers. >> difficult logistics thank you, aditi coming up, why disney is thanking two sets of superheroes in its latest quarter. i haven't heard of spidey sense in awhile. you know, you asked -- harvey had no idea what you were talking about. >> you know, it's a real thing >> if someone comes up behind him, he can sort of feel it. out of all the things he can do, that's not the coolest thing flying with the webs also what ceo bob iger said about taking on the likes of netflix and its acquisition of 21st century fox assets. we will talk to -- >> the implication is harvey pitt is a superhero, too, by the way. how'd that go? he kept spelling my name with an 'i' but it's bryan with a 'y.' yeah, since birth. that drives me crazy. yes. it's on all your email. yes.

they should know this? yeah. the guy was my brother-in-law. that's ridiculous. well, i happen to know some people. do they listen? what? they're amazing listeners. nice. guidance from professionals who take their time to get to know you. i was on the fence about changing from a manual to an electric toothbrush. but my hygienist said going electric could lead to way cleaner teeth. she said, get the one inspired by dentists, with a round brush head. go pro with oral-b. oral-b's gentle rounded brush head removes more plaque along the gum line. for cleaner teeth and healthier gums. and unlike sonicare, oral-b is the first electric toothbrush brand accepted by the ada for its effectiveness and safety. what an amazing clean! i'll only use an oral-b! oral-b. brush like a pro. (music) maybe i run marathons. maybe i run a startup. maybe what i do doesn't matter. maybe all that matters...is what i do next. peloton. stars perform their newest hits.

carrie underwood, blake shelton, keith urban, chris stapleton, jason aldean, luke bryan and one of a kind rocking duets thomas rhett and kelsea ballerini host... let's get this started! cma fest tonight 8/7 central on abc. xfinity gives you more of the cma fest with an encore performance from old dominion right after the show. only with xfinity on demand. and watch it live on abc tonight 8/7 central. a news alert china's commerce ministry says it will match u.s. tariffs on $16 billion in chinese goods china had announced it would match any new u.s. tariffs disney shares are slightly lower this morning after the company reported earnings that fell short of expectations

julia boorstin joins us now with more >> good morning to you, joe. after disney's revenue and earnings growth fell shy of expectations, the stock first dipped but then they shot into the green during the earnings call after bob iger reassured that cord cutting was slowing thanks to the tv bundles. saying they've seen improvement. right now you see disney shares trading down just about half a percent. iger outlined how disney would benefit from the fox acquisition particularly from the international assets hulu of which it will own 60% and the disney branded app which is launching next year >> our incredible portfolio of high quality, in-demand branded content uniquely pushes us to successfully and a half gate

th - navigate this marketplace. we always believed we have the brands and content to be competitive and thrive alongside netflix, amazon, and anyone in the market >> disney's digital efforts were in focus throughout the call iger saying that the initial performs the espn plus service which launched in april is encouraging conversions from free trials to paid subscriptions being exceeding e far. >> all right just to drill down on a couple of bigger themes, programming costs was mentioned as one of the things that caused the numbers to be below expectations. >> right. >> is that going to be increasingly an issue for all these? it's something i've thought about. so many people are trying for those eyeballs

and talent is getting bigger and now non-legacy companies are in there with amazon throwing at writers and producers. isn't it going to get more and more expensive >> no doubt. you have people that can step up and spend and companies that can't keep up. netflix could spend $12 1$12 bi in cash this year. >> how is that going to change >> it doesn't change it's going to separate the winners and the losers based on the ability to keep spending >> enough losers will die. and bidders will go away, i would think. >> amc networks, they were great in the beginning "walking dead," "mad men." they can't get another hit in the time you're seeing the separation we call the haves and have nots. >> will it final lly filter down

to cable business anchors. sorkin, do you think -- >> i'm wondering talent is more and more valuable. the other issue long running with disney, it's still espn isn't it >> yeah. still espn wrote a note about it this morning. it's been three years since espn warned of slowing growth. >> this is my own problem. i understand that. have they connected the political angle that i see on espn to the loss of viewership yet or are they in denial? are they, like, ostriches? >> you know, i think that's an issue that's up for debate >> i'll watch sports i will not watch these guys sit around, you know, opining on politics and they do. only from one side i mean, it's staggering when i turn espn -- do they care about that or do they just think, you know, everybody's doing it, we might as well too. >> espn had a change of

leadership >> yeah. that guy had his own issues. >> skipper left. biggest focus right now is trying to deliver a digital product that's going to entice you. they have a new over the top app. so they're looking into basically to take advantage of technology to get people connected to espn. but you're right there's a segment of the public that thinks it's too political, that's -- i've heard that before >> well, people don't think they earned an aisle about whether it's a factor. i can tell you it's a factor >> you think it's a factor for the nfl? >> i think it's a factor for the nfl as well, yeah. >> bottom line with disney and whether or not you're going to own it, right? when they announced they're going to try to go head-to-head with netflix, you knew they were going to have to spend a ton of money and it was going to be bumpy. the decision whether or not you buy this company now is can you live through this period where it's going to be uncertain whether they're going to be successful i think everybody thinks it's a done deal, but i'm not convinced they can create a whole new over the top product.

>> yeah. but at this point in time, there's no valuation at all for the idea of going over the top there's no supporting that stock in terms of valuation. >> if they get it right, it's a big upside >> to my argument, they are two movers this quarter. incredibles did one billion global box doesn't that prove that this content has global appeal? isn't there proof there is a cohort of people out there that want to watch disney's content i think they have the ability to be successful. we're waiting to see the proof a couple years from now as they build this product but disney of all the companies we cover, has the building blocks to be successful. >> so they're letting comcast get sky? >> we hope they do that. we'll know more today. >> all right >> thanks, michael >> thanks. >> s >>. coming up in the next half an hour, a big vote happening in new york city that could change the way you get a ride we will explain.

details straight ahead

coming up, fallout from the trade war and why some farmers are still standing by president trump despite bearing the brunt of the tariff impact that story coming after the break. check out the futures at do hr. w would open higher by one point. you always pay your insurance on time.

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good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square among our stocks to watch this morning, bwendy's 2 cents shy of estimates. however, revenue topped forecasts and same store sales rose 1.9%. wolverine worldwide beat estimates by 8 cents with 54 cents a share. the maker of hush puppies and other brands expected a better full year outlook. and avis budget matched street forecasts. quarterly profits of 57 cents a share. the car rental company gave full year revenue guidance that fell below consensus. okay the trump administration readying a new set of tariffs t go into effect in china.

as the trade war lingers on, how is president trump's support holding up amongst farmers kayla tausche joins us now with that story >> good morning. farmers have been trying to absorb the shocks from the uncertainty but they're not renouncing their support for the white house. at least not yesterday in 19 farm states, 10 states saw the rural approval rating improve between may and the end of july. seven saw it stay the same in that period. and just one, idaho, saw it decline. in iowa, trump's rural approval has risen by three points in may. farmer eric nelson says he doesn't agree with the entire approach but he thinks the end goal is the right one. >> i'm a big believer if you're in a bad deal, be it a lease, be it an agreement with a business partner. you owe it to yourself to step up and try to make it better for both parties and negotiate it. but for sure, it needs to be

better for yourself. i think simply that's what this administration is attempting to do >> that support level has provided something of a safety net as the white house pursues its aggressive trade stance. sonny perdue says harvest season could be an inflection point once business owners see the impact of price swings one farmer says he'll forego buying machinery but he's giving the white house the benefit of the doubt. >> we're going to trust that the president will have at least some success in negotiating a trade deal that will support corn, soybeans, and actually everything that the u.s. exports. >> one thing is clear, guys. of all the farmers we spoke to, yes, their business is going to feel the impact from these trade disputes but if the 2020 election were

tomorrow, they would vote for president trump again. >> telling all right. thank you. let's bring in max baucus former ambassador to china during the obama administration and derek scissors let me start with you ambassador baucus what did you think about that? that farmers are sticking with the president despite bearing the brunt of the tariffs >> that does not surprise me the jury is still out, frankly we don't know the degree to which the larger potential tariffs up to $500 billion will go into effect i think a lot of farmers are thinking, heck we'll see china is taking advantage of us. they're right about that but my problem is this i don't think this approach by president trump is going to work china's not going to give in very much. china is just going to keep proceeding to build up its so-called 2025 plan.

that's the reality to them and so-called tariffs that the president wants to put on them won't work that way china cannot divide and conquer. if we work in concert together, we could put more pressure on china. but these tariffs aren't going to work. they go into effect. >> you wrote a piece titled, should the u.s. and china give up on a deal consensus is they should come to a deal so anybody who's proposing that means maybe there's no reason to come together for a deal am i right what are you thinking? >> i think you're right and i think senator baucus just hinted at it. tariffs may well not work because chinese won't abandon their approach to economics, their love of the state sector their theft of intellectual property

working with allies is a good idea we don't have the same interests as our allies. so i'm coming to the conclusion that some other people are as well which is we just need to disentangle economically from china. we're not going to get a good relationship with a malice dictator which is what shwe jxig jingping is. >> what do you think about that ambassador baucus? xi jingping has moved backwards. we thought it was inevitable that they were going to get to a market economy and be like us. but it's becoming increasingly clear that maybe that is not president xi's plan. what do we do if that's the case >> well, i think that's not president xi's plan. i think the analysis is right. china is very different from the united states. frankly i think we have to work with them. in many respects, this is -- >> why do we have to work with them if they -- to derek's point, what you said no matter what they're not going

to back down >> well, they will back down they'll back down with the right u.s. approach. we have to work with them because we're the largest economy in the world they're the second largest in a few years from now, they're going to be larger than the united states. we have to work with china in the u.n. we're joined together at the hip, united states and china we have to work this out i know it's tough. it's true that china has a long-term vision it's true they'll keep moving ahead. >> a question from richard bernstein. >> two seconds ago one of you said something about disentangling the u.s. economy from china and my question is, how in the world can we do that in shorter than 20 or 25 years? >> derek >> what happens to the u.s. economy in the meantime? >> look, i mean, there are going to be costs here but as we all agree, we're already paying costs from our relationship with china as it is we got ourselves into the

situation in considerably less than 20 years. from china's wto entry and it accelerated in 2004, 2005 it's going to take five or ten years, but the alternative is we still have china stealing american technology, we don't get access to the market because they will not face it under xi jingping i'm not saying it's better or quick. i'm saying it's better than the alternative. >> both of you, thank you for joining us >> okay. this a good -- >> good to have you. >> you bet thank you. >> thank you news just in from mylan. it says it formed a strategic review committee to evaluate alternatives because it believes that the u.s. public markets underappreciate the strength of mylan's business that announcement came at the same time mylan released quarterly numbers. missing estimates by 15 cents. revenue also came in below forecast sorkin

>> yes. >> did you talk about carl icahn yesterday? >> we did. and cigna. >> i didn't hear your -- >> a folly is what he said >> i know. but it's a lot of money. >> it's too much money >> amazon. there's a threat to express scripts, isn't there can he do it can he actually succeed? >> he can. >> he scuttle this deal. he's done it before. >> or he can do it -- or -- >> were you interested in this >> i was >> but then tesla happened >> and basically, that's exactly what happened. tesla happened. >> were you watching yesterday it was fantastic we spent hours talking about tesla. >> but on the cigna question -- we got to go, but on the cigna question, if he can't scuttle the deal, the question is what is the other -- is there a plan "b" end goal can he get something for it? >> he always gets something. >> exactly >> remember king

pharmaceuticals? he said he was shaving and he heard they were going to get that and he totally succeeded in scuttling that deal. he's an interesting guy. he's not awake >> he might be coming up, big changes could be coming to the way you travel around new york city voting today on a new rule that could cap the number of uber and lyft cars on the road. >> boo >> we'll talk about what this means for the ride sharing industry with uber's former new eark general managerft t aerhe aerhe brk.imagine traveling hassle-fre with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.

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♪ it is a great song welcome back to "squawk box. road block could be coming to ride sharing companies like uber and lyft in new york city. our eric chemi joins us with more >> new york city council set to meet this morning on a first in the country package, regulations for uber and lyft. that could include a one-year cap on new for hire licenses in addition to setting a minimum wage for drivers all this following increasing congestion around the city and an outcry from taxi drivers over the plummeting value of taxi medallio medallions uber and lyft says it will reduce service to those without access to mass transit and increase wait times for everyone they've also launched a massive lobbying effort and called on users to reach out to the city

council to delay the vote. the company even called for a hardship fund to help the taxi medallions they've even shown support for congestion pricing similar legislation was proposed three years ago, but that failed today it does seem more likely to actually pass given uber's regulatory run-ins in bulgaria, it will i, france, and the uk, today's vote is surely to be watched around the world and in those pre-ipo markets for the valuation of the market >> thanks. joining us to talk more about this is josh moore he was at the helm of uber's new york operations when they attempted to rein in ride sharing. now he's part of moving capital. founded by other former uber employees. welcome back >> good to be back >> so make the case. >> so the city council is proposing an array of different ideas. some of them are great i'm going to focus on the cap.

which the stated purpose of that is to limit congestion in the central business district of manhattan. most of uber's trips are happening in the burroughs it will reduce supply. i read that lyft said 25% of their drivers turn out every year so we're actually going to be reducing supply while hundreds of thousands of people are likely to sign up and take their first trip on services like lyft, uber, via. what we're going to have are reduced levels in the suburbs. >> there clearly is a congestion problem in manhattan >> yes >> at the minimum if not by the way some of the other boroughs >> yes. >> it's real >> yes. >> at the same time, we should mention taxi drivers who thought they had a compact with the city over the medallion and what that meant have been left in the lurch. what do you do about those two issues >> well, i think if congestion in the cpd is a concern, they should address that specifically we have technology that could

just hypothetically limit the number of cars during those problem times. i don't think anyone is saying we have a congestion problem in bushwick at 10:00 p.m. on a saturday night but this law which is the stated pump of which is to prevent congestion in manhattan is going to more so impact those places places where typically subway problems are -- >> you'd be okay with a cap in a surgical approach that is based on timing and other maybe even technology >> so i neither work for uber nor serve on the council i'm also not the mayor so it doesn't really matter what i think. but as a -- >> as someone interested in this through a policy perspective, i think the technology and know-how is there to have an approach -- 2.7 million cars are coming into new york city every day. there are a lot of ubers unlike taxis, they're only on the road 30 hours a week this is like the conversation three years ago. there's been a lot of time to discuss that after that law didn't go into

effect, they did a study and found while every incremental car increases congestion, there's not an -- >> what about the tax see driver who -- >> that's a myth there are medallion owners they're working for min numb wage >> it's never got a thing when asset values go down the big ascension in values has been in the last 15 years. i think if you were to do a discounted cash flow analysis on what a medallion is worth, pricing at a million dollars is insane i don't want to get too crazy about this there are obviously taxi drivers hurting. i read that there is a proposal for a relief fund that was flatly denied by the council and the mayor. i don't know that it's about that it might be. i can't speak to the intention but if the intention is to reduce the traffic that we all know is problematic, it's not clear to me that not allowing people to get new licenses citywide for systems that are

predominantly for the majority of these trips in the boroughs, that's not right to me >> those taxi owners were basically living on the idea they were always going to have protection from the government >> yes >> that's a bad trade. i'm sorry if you made a bad investment and you were disrupted by technology that outperformed you and your service became so bad because you were so protected. >> i'm going to defend the medallions a little bit. there's no better way to get a car on 43rd than a taxi. i think the right a medallion gives you which is the exclusive right to street hails in the city, they only really serve manhattan 90%-plus trips happen here that intact. >> we'll leave the conversation there. it's a longer one though >> it is but today's the day. >> today is the day. what do you think is going to happen >> i don't know. but i'd love to tell you about moving capital in the uber alumni syndicate which is how we got you on here.

>> this is true. >> we believe -- i know we're time pressured but we believe those who build transformative companies like uber are going to do other interesting things there's a lot of precedent for that we're hoping to participate in that >> what does that mean explain. >> we want to be supportive of companies founded by uber alumni, and help companies that are uber adjacent or could benefit from the unique experience. >> what's that >> cargo, a company doing vending in the backs of ubers and lyfts. line bike which is obviously an on-demand scooter and bike share company. >> what do you think of that >> i think it's the future uber gets that and they're on top of this and i think -- you know, city of the future is going to be momodality >> where are you on helicopters or evs, as they say? >> well, i think helicopters are pretty loud. i'm told that the vertical takeoff and landing ones are quieter. i don't know if that's a mass

market thing, but it's cool. >> okay. we'll get you a city bike, take you home >> i use it every day. >> i heat those bike lanes they're awful. only men use those bike lanes, right? have you seen the numbers? >> i don't have the data >> there is data >> yellow. yellow yellow caution flag. gender blindness is here at this "squawk box" desk. on the "squawk" set we are gender blind >> we're not there's two men and one woman. >> i didn't know that because i'm gender blind when we return, jim cramer joins us live from the new york stock exchange here are the futures right now president not a whole lot of action today but we're all red now. down 23 now on the dow we'll be rht bk thigacwi jimbo you always pay your insurance on time. tap one little bumper and up go your rates.

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is part of a bigger picture. that bigger picture is statewide mutual aid. california years ago realized the need to work together. teamwork is important to protect the community, but we have to do it the right way. we have a working knowledge and we can reduce the impacts of a small disaster, but we need the help of experts. pg&e is an integral part of our emergency response team. they are the industry expert with utilities. whether it is a gas leak or a wire down, just having someone there that deals with this every day is pretty comforting. we each bring something to the table that is unique and that is a specialty.

with all of us working together we can keep all these emergencies small. and the fact that we can bring it together and effectively work together is pretty special. they bring their knowledge, their tools and equipment and the proficiency to get the job done. and the whole time i have been in the fire service, pg&e's been there, too. whatever we need whenever we need it. i do count on pg&e to keep our firefighters safe. that's why we ask for their help. let's get down to the new york stock exchange jim cramer joins us now. you have to have thoughts on the crazy tweet, right, jim? where are you on this? i haven't seen your tweets. >> i think it's entirely possible he gets the 3 to 5% stake from the saudi sovereign wealth fund. look, if you want to go private, we'll certainly fund that because we put a couple in and

buy the whole thing. they want to be in electric cars that's a major focus of the saudis what happens is that i think he just says, hey, listen i'll beat that out and he and the president are free form when it comes to tweeting it's a great example what the heck, it's a method of desemination what matters does the current fcc care if they cared, they would have issued something today. >> and it couldn't to be to force a conversion the debt would be turned -- >> i think the debt holders have the option to take the stock or cash. >> yes there's a debt clause. >> yeah. >> they got to go to par look, the bonds traded up yesterday. they're trading back down now. this is a guy who doesn't play

by, i mean, you look at his board. i mean, his board has a couple of guys what i would regard as real. >> how about benny the guy that tweet the more than elon. >> yeah. i got one last night he said look congratulations keith text me and said mark is here to stay then it's 11:30 and that's about it but obviously keith has been around for a long time i've known keith i think it's a -- keith has been mr. sell in the actual product and what can i say mark has become an evangelist. it's a great combination one two punch has been going on for a long time. >> all right, jim. thank you. >> thank you. >> you have good garden news coming out, too. i see it all the time. >> it's coming together but not as fast as it should people keep eating tomatoes. save some for me

>> i love tomatoes. >> mine are like apples. >> did you stay near the restaurant sometimes where that was from? >> i was coming in this morning. i like to post -- you know, the nig they do a lot of sunset. i do sunrise. >> i like that more optimistic. thank you, jim coming up on "squawk on the street," don't miss an excluive int -- exclusive interview with, , sigma. that's at 9:30 a.m. eastern time ouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish.

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so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. tech jumped 12% this through july after similar moves, it continues. we want to show you the russian ruble at this hour the currency along with the stock market in russia -- some of russia's top lenders are getting hit hard after t-- so the chart you see t the bottom is the dollar strengthening dramatically against the russian ruble. a gain of 2% of the dollar against the ruble. the documents suggest some of the big russian lenders could be

banned from operating in the u.s. under the proposed sanctions of legislation vtb is off by nearly 3%. >> we'll get back to the desk. we just talked about the ruble we talked about currencies see nidis locations anywhere that make you think that it's a caution? >> i don't think the big risk is equity market bonds. i think it's inflation and the duration. >> you mean higher inflation. >> much higher inflation than people make. >> the economy is hitting on all eight cylinders. we have public policy that is pro inflation. whether it's tax cuts, sanctions on iran, tariffs. it's not how portfolios are structured >> the russian ruble, at one point in history, set off concerns about systemic risk

we have inflation coming you're not worried about that? >> i don't think you're going to get, like, a worldwide systemic problem. >> okay. >> and if inflation goes up, the cost of elon musk -- >> correct something to think about. >> some inflation is okay. >> all right make sure you join us tomorrow michelle, thank you for being here "squawk on the street" begins now. good wednesday morning welcome to "squawk on the street." coming up this hour cigna david cordani responds to carl icahn wh