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good wednesday morning welcome to "squawk alley." i'm carl quintanilla with john for fortt. and elon mufblg sk is tweeting take his stock privately questions over the legality of the tweet are still being asked today, but the board released a statement this morning saying that elon opened a discussion into the matter last week. mike, we talked with you about this quite a bit yesterday, but steven, we have not taken your temperature. safe to say, we have not seen anything really like this. >> no, we haven't, but we have been building up to it our tweeter-in-chief proved that this service started out with little blips to say where you are can do international policy. and now it can move markets in a very big way and elon musk is right behind

the president in using twitter to cause a lot of trouble. >> right is it trouble? what he did yesterday, is that trouble? >> i think so it is. i think it is trouble when you post hundreds of words about your worth that's not a great sthipg. >> i often wonder what it would be like if steve jobs was on twitter during the scandal or his rants against adobe, surpassing market cap, that kind of thing what do you think elon musk's mindset is here? is he thinking about the impact perhaps on the doubters? or is he just venting? >> i think -- i can't imagine that steve jobs would ever do that kind of tweet i remember him during the option days and what he did was, he had very careful discussions off the record with a few reporters to get his point of view across

and no big public statements there. everything was very carefully choreographed. twitter exposes your personality. so if you have a big personality that likes to make a lot of big waves, twitter is a big amplifier of that. elon has really ramped up his twitter activity and it has gotten him into trouble in a lot of cases i think there's a lawsuit about something he said about the thai rescue there and i think this is a piece with that, he's sort of using that to express his mind though i i can't imagine that he didn't have some sort of what would happen when he posted this tweet. >> you're right about that in terms of the words funding security, the board today, the discussion with elon addressed the funding for this to occur. what could that possibly mean?

letter of intent in handshake? >> you would have thought it would be detailed in the blog post that musk followed up with. i think that's where you're left with that it looks like a little bit of an impulsive statement. a little bit of overpromising. and certainly up for interpretation by regulators and others as to whether it crossed the line but in the old days in the '80s, they had a highly confident letter from one banker to say, we think we can raise the money, go right ahead and that served as the coin of the realm. we have nothing like that here so it's really an odd story. because on the one hand, you have to go down the track that says this is the ceo of a public company making a public statement with all the regulations around that. maybe it's a real process that's underway maybe we have to consider how it might happen structure-wise and in terms of billions being raised on the other hand, it could have just been a gut level other way of stating his intent to not be in the public eye. and to essentially not be at the

mercy of some level of the psychological short sellers. >> overpromised has been used to describe elon musk before. but this is also a man reinventing rocket science, right and he's just built really the first pure play electric car company, reimagining energy storage, is there really a scenario in which he would be so flippant as to essentially, i don't know what the word is, break the law on twitter >> well, you're right in tying in his accomplishments and his companies to this behavior what he's able to do in the companies to revolutionize space travel, change the way we think of transportation, it means that he picks a non-traditional view toward the tools at hand and i think he's doing that with twitter. >> to some degree, some of these inventors, the visionaries can get the sense that the rules don't apply to them, right that was the criticism of bill gates during the microsoft

anti-trust trial that he really should have thought about, maybe you don't need to fight this all the way through. there are laws of gravity that apply to microsoft on through steve jobs, so many others who have then thought they were in over their skis because they have been so right about the actual technical things. >> well, right now we're arguing whether the rules do apply he's helping us redefine it. there was that ruling that allowed tweets to be part of the normal process there so maybe he's just ahead of the game in defining what is the new game. >> if tweets are okay as a public disclosure for a corporate executive, that also mean that is the threshhold for it being true is there, too. when you're making a material statement. i do think that's one way interestingly where there are more con up strants on a ceo than there are on the president in this respect. so, john, to your point about the other entrepreneurs, no doubt about it, you can probably list five more who felt like,

look, why don't people buy in to my long-term vision, go along with the ride for me the difference here is that he is to some degree at the mercy of the capital markets and he needs more capital. and he will for a while as far as anybody can tell. so that is different, right? jobs, apple never raised money after the ipo, you know? gates, microsoft, never needed any more capital that's where it gets tricky for him. >> it is interesting to watch the cell side basically be flailing today jpmorgan, surprising as these developments are, they are, nevertheless, decorative statements from the ceo of a public company therefore, we are incorporating into our evaluation the real possibility of equity. >> i think you have to do that you have to assign some product that he puts this together to make it work through a strategic long-term investors. something like that, at least a sign of probability. but the other thing about how the stock has traded, let's keep in mind, this stock more than a year ago traded above 380 with

no talk of this based on the ebb and flow of sentiment and expectations for what production's going to be in a couple years. >> you mentioned the short sellers, can you imagine him not having a little bit of satisfaction today to think of the impact this had on his foes? >> i think 20% since the shorts were delivered >> it's interesting because you would think he could declare victory on some level. it's not a ceo looking at a company to say, wow, my company's too cheap. nobody is appreciating this asset, i'm going to buy it for myself it's strictly the shorts if you believe the street's expectations for cash flow for 2019, it's at 22 times cash flow it's really expensive. so it's all about being outside of this pressure, perceived pressure from the shorts >> as chano said, elon is better for that than mercedes and moving on to disney,

continuing to see some losses on espn, but boasting a sales jump from parks investors are looking ahead to the incoming streaming service the details of what were interesting late '19, steven, holding out the possibility of maybe you buy a bundle of hulu, this disney product, espn plus, is this coming together for you? >> well, disney is in a unique position here. really, the ground has changed underneath all the content providers, right so broadcasters and broadcast, cable isn't cable, it's all the internet so you look at netflix and say this is really not the future, this is the present. so where does disney fit in on this they can come up with a service that reaches a different audience than netflix if you have a kid how could you not subscribe to disney-flix? it's going to stream all the properties that your kids want to see again and again and they have "star wars." and espn so they are in a unique position

there to create something that takes the best of streaming as we know it and cable and make a viable play. >> and in terms of investors, it enables disney to change that conversation to monitor our progress in this big growth area where it's going to be addtive to our consumer efforts as opposed to, let's track the shrinkage of the big cash cow business in cable networks by the way, we're buying this huge chunk of 21st century which you ary fox that's going to make the cable businesses even smaller as a piece of the whole. so it's the overall iger strategy, but faster paced to an enth degree, because he was bet all and cross everything else and do as little of me too as possible while shrinking the distribution stuff, that he's done at abc for 20 years. >> speaking of the fox assets, how does this play out with skye >> pardon me >> how do you think this plays out with the skye assets

>> disney is unique. so skye, comcast, the companies are all in a tough position if streaming giants take over this content world. >> mike, it seems like this miss from disney almost like doesn't count, right studios were strong, parks were strong, and then when it comes to the other stuff, tv is not tv we're waiting on that streaming play, that there are some pretty high probably justified expectations for, because of the enormous content library i mean, should we be looking at this as a miss or is it more kind of a setup? >> it's a little bit of a miss the numbers for the quarter were just kind of soft around the edges, but keep in mind, disney doesn't provide guidance, so all they miss is the street's view of this, not their own forecast. and i do think that the stuff that matters in the quarter when you're trying to close the fox deal, a lot else is going on you can get a little bit of a pass the stock ran up nicely into this. >> and it's given a lot of that back. >> it's given back a couple

weeks' worth at the upside. >> interesting to hear, i wouldn't call them chinks in the star wars, but solo is the lowest grossing "star wars" film just over $200 million. >> the right director, and they've got a good one coming up for the big $100 million series there, we have seen that franchises get turned around like that. so i'm not going to declare an end to "star wars. >> it's true, though, you'll have the issue can comic book fatigue, is there "star wars" fatigue? and maybe the fox deal comes along at a time to pick and choose different dealers. >> steven, great to see you. thank you for coming by. and mike santoli coming up, the nasdaq looking for its seventh positive session in a row our july's earnings stumbles in the rear-view mirror and snap pop and drop upped

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shares of snap tumbling big down 6% as snapchat's user bas declined for the first time. evan spiegel attributing that to the redesign of the app. the company did, however, post a smaller second quarter loss and the revenue beat bret is from jeffreys and aaron

is here as well. aaron, what is happening with the big picture here with facebook, we saw the core app, disappointing user growth, twitter, there's user concerns there, now in snap, we see this issue, is social media peaking from a user perspective perhaps? i know we have instagram and others, but what is going on >> yeah, i think it is market by market clearly in the more developed markets, north america, you have seen more maturity in the court facebook site and twitter to some extent and clearly in snap. we think snap is taking users spent with sites like instagram really taking off. but instagram is growing really quickly. yeah, if you look at the north american market, you have more maturity evident in the stocks performance we have seen recently across the board. >> so bret, what is going to happen to the businesses behind these? one way of looking at it is the revenue is going to have to be ill pacted some quarters down

the line, once the growth isn't there as much, but maybe another way of looking at it is, hey, they've got this mature user base now, now they can really monotize that. twitter stocks certainly seem to be reflective of that. >> yeah, to aaron's point, facebook is taking share, instagram's timeshare is going up snap is in a difficult position. you have pricing down 52% year of yeefr you are losing users my kids are playing way more at night than spending time on snap they use it as a messaging tool to understand where friends are and send messages. they are not influenced by the ads. they are more influenced on what is happening on instagram. we just think there are better stocks to own like match and a handful of mid-caps we're recommending so we're on the sidelines on snap >> so aaron, the bear case for snap that owns instagram has

been rolling out at many times copied versions of its tools and the worry has been they are going to take the users away what you're saying right now, what both of you are saying right now, that is actually happening. where do you stand on the stock? >> yeah, so remain cautious on the stock. fair value today is closer to $9 per hair right now we are on ten times revenues for a company, it's not growing users. revenue growth is about 30% next year huge losses to over a billion dollars for the company. it is too rich for the company you could still say there's a buyer in there holding up up as well as high short interests, but we think fair value is still about 20% lower from here. >> hey, bret, how could you spend bullish narrative if you had to >> for snap, you know, i think the bullish narrative is they brought a two-decade veteran from amazon in tim stone to be the cfo. he got many aspects of am zop's

business so the first silver lining is tim. the second is this is the first quarter they provided quarterly guidance and we have been writing notes for almost a year saying they need to provide guidance there's one company we cover in internet, it's googlele. and snap is not google so we think there are a couple steps in the right direction and it comes in with adult leadership and we think that is great so clearly for tim to leave amazon to go to snap, it suggests he believes there's something there. and i think, you know, the mistake many of us made in the past was writing twitter off i don't think we're entirely writing snap off, but they've got a lot of work to do. >> although, aaron, that raises an interesting question, from the beginning, even pre-ipo, snap was insistent that we're camera first, don't judge us on the network effects the way you judge twitter with closed circles of friends the silver lining brent is

referring to, can that be addressed tactically or are there strategic errors made long ago? >> to brent's point, it is largely viewed as a messaging company like more of a chat app. we have seen with facebook, it's tough to really monotize chat apps in the landscape. and they don't have the news field like a facebook. so they have a discover side of the content but that is not viewed as much if it is just chatting among teenagers, that's tough to monotize and is a structure problem of how to fix it and may need a revamp of the platform in longer term as well. >> here's the thing about snap they still don't get before the ipo, they were talking about themselves as being a premium app. they were really focused on developed economies, on ios, they didn't so much care what was going on in the developing market, didn't care so much about android. now they are talking, boy, we neglected android and are all-in on android we are into programmatic advertising, not such the premium stuff, how has the story

changed? and is it clear to you exactly where the sweet spot for snap is, audience and revenue-wise? >> they're going to get this android problem fixed, it's a majority of the phones and they are going through a big revamp on the android. that's key for them to get back on track they have not put a timetable on when they're going to launch the android version, the new revamped version we would anticipate this year. they have been working for it quite some time. speaking to them offline last night, they want to nail this before they release it so the asia pacific region is almost bigger than the european region so they're seeing good growth outside of the u.s but android is going to be the key in our opinion to get them out and to get better traction i think the other thing, too, is just it has to go beyond messaging. advertisers aren't going to pay

for this there are big brands that want instantly shopable commerce. and they're going to instagram and i can go through the list of conversations we have had that has been overwhelming. so again, i think our view is just there's massive share gains that are happening on the instagram side no one in social is doing well, right? all these companies are not doing well right now in terms of losing users so i think there's a little bit of fatigue, but we think ultimately this will favor facebook as it comes back over the next year. >> well, if snap pulls off the android thing, it could be equivalent to facebook's big mobile pivot brent, aaron, thanks >> thank you. >> great, thank you. when we come back, reaction to elon musk's message on tesla. why he's considering taking the company private and what it means for shareholder. former chrysler's ceo robert nardelli is with us. we'll talk to bob after the break. the s&p is green

welcome back we continue to watch shares of tes tesla. elon musk tweeted, quote, am considering taking tesla private. this sent off a surge before being halted we heard from six out of the nine board members that have spoken to mufblg abosk about thn recent weeks we are talking to robert nardelli who is on the phone and currently the founder and ceo of investment and advisory firm xlr8 bob, thank you for joining us today. >> thank you, good to join you >> so recently jim chenos, very well-known short seller in tesla, said the short position is the best thing the stock has going for it musk versus the shorts is a far better narrative than tesla

versus mercedes, audi and porsche. what do you think? >> yeah, i read the article, where if i'm relating to your article, where at least the short side, they know there's a cap at 420, but tesla is down about $5.77. so i'm not so sure yesterday's tweet other than the sensationalism of it is having maybe the effect that he may have hoped for secondly, look, i'm not the expert, but i would think if the street or if there was investments out there of $70 billion behind this comment about being secured, there would have had to have been whisper on the street i hadn't heard it. i don't think anyone in the media had heard it so it kind of caught everybody by surprise. >> you have been on the side of

public versus private, which one is better? and would it be a bigger bull case for tesla if it were to go private? >> yeah. i have been on both sides, and it's interesting, depending on what side of the fence you grew up on, you know, you might think one side is easier than the other. believe me, in private equity, there's still the same expectation that there's going to be profitability, that the business has solid performance, predictable and quality of earnings i did find on the private equity side at chrysler that we were able to make decisions much more quickly. we were less consumed in the 90-day satellite cycle where you would spend an amount of time preparing and appropriately so for the investor call. i found the ability to sell non-earning assets for cash, which certainly tesla is in need

of without the angst affecting earnings per share, even though it was a book industry, it was still earnings per share and took a considerable amount of time to explain that to the street so there were clearly advantages i saw on the private side with chrysler not that there was any less pressure on performance, getting production out, quality of the product, new product introduction, dealer network, all the things that elon will continue to have to deal with. it sounds like on the last earning call, this is the gentleman that's -- look, he's brilliant, right, but certainly under stress probably a little tired from everything he's got his hands in and it just manifested itself in some comments that he backed up on >> so, bob, tell me, look at tesla's stock, it's not exactly undervalued, at least by traditional standards.

elon musk hasn't had too much trouble raising capital or debt, do you understand why he's upset about the short sellers in this type of situation? >> well, i think anybody in that position, you know, isn't comfortable or would prefer not to have people betting against your stock, betting against the performance of your company and betting against the employees that are working diligently every day. so i think it's a general sense of anybody in a publicly traded company would prefer not to have the shorts in there betting against you. now, there may be some appropriateness in certain cases, you know, maybe the shorts feel that he's not been able to get the new model out at the rate that he's committed to, hasn't been able to develop quite the dealer network that he's come after the with trying to build this brand and this

company. i think people are saying great technology, brilliant individual, but has found that building cars is a little more complex. you know, heavy capital commitments, very long supply chain, a lot of labor involved and so forth so i think the difficulty there is in the execution of building the car, maybe not so much in the technology, which he seems to have his hands around, not only there, but with face spacex and hyperloop. the guy is clearly a brilliant individual >> bob, always great to get your thoughts robert nardelli, thank you >> thank you bottom of the hour, let's get a news update with sue herrera at hq. good morning, sue. >> good morning, carl and everyone here's what is happening at this hour the republican representative chris collins has been indicted on charges he used inside information about a biotech company to make elicit stock trades the indictment charges him and two others including his son collins has denied any

wrongdoing, as did his son an apparent murder-suicide has locked down westchester medical center in new york as gun fired erupted on the fourth floor of the hospital. an official with knowledge of the case telling wnbc, that's the nbc affiliate in new york, that the situation is under control. and some 14,000 firefighters continue to battle raging wildfires in california. the so-called holy fire has burned some 3,400 acres in the cleveland national forest. nearby campgrounds were placed under mandatory evacuation orders the fire is only 5% contained. and embattled university of southern california president cl max nikias has agreed to resign after being accused of sexual assault. you're up-to-date. that's the news update at this hour back downtown to "squawk alley."

john, back to you. thank you, sue we'll go to seema moody for the european close the markets just closed a couple minutes ago. how are they looking, seema? here's the story, the european markets are off their highs and trading in negative territory as the u.s. trade escalates. there's a bright spot posting the fourth straight day of gains and the highest close in two-and-a-half months boosted by a weaker pound 1.28 against the u.s. dollar we'll pivot to stocks, one notable lagger, denmark nordisk warning of intense competition and pricing pressures going forward. that stock seeing the worst day since early february meanwhile, the russian ruble sinking to the lowest level since december 2016 amid the u.s. sanctions they published the text of what they're calling a draft of the u.s. law outlining possible penalties against russia

the documents suggest that some of the big russian lenders could be banned from operating in the u.s. under the proposed sanctions. that news hitting russia as major lenders, their shares of spurbank, one of the most widely held stocks, falling 7%. vtb bank under pressure falling by 4.5%. and they have not familiarized themselves with the contents of the letter but something we'll continue to follow thank you, seema why the ceo of twitter is receiving some criticism this morning. and next, is elon musk's tweet yesterday the most valuable er? 'lte y aer quick break. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done.

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elon musk's tweet yesterday on potentially taking the stock private is hitting his wealth. we're watching that from hq. let's go to robert frank from hq hey, robert. >> he added $91 million per word the stock is also up now in the world of social media, it is hard to find any other post ever that has generated nearly that much wealth if you remember back in 2012, reed hastings posted on facebook

that netflix viewers reached 1 billion hours for the first time the gain to hastings' wealth was only a few million in 2011, the rapper 50 cent toll his 3.8 million followers they would earn big money if they bought shares in h&h in which he has a 13% stock. it increased and then crashed. some tweets can be costly, at least initially. kylie jenner criticizing snapchat cost them in $1 billion in just that day and after jeff bezos was criticized by the president last summer, that took $16 billion from bezos' net worth, but that was short lived. his net worth is now over $150 billion. and musk can be his own worst enemy on twitter his net worth fell by around

$300 million in a day in june after he criticized one of the thailand cave rescuers but as we know, it quickly recovered. guys, back to you. all right, robert, thank you. and speaking of twitter, jack dorsey receiving backlash this morning over twitter's decision not to ban conspiracy theorist alex jones or his content on its platform dorsey sending several tweets in support of the decision including, quote, if we succumb to outside pressure rather than straight-forward principles we enforce and evolve impartially, regardless of political viewpoints, we become a service constructed by our own personal views that can swing in any direction. that's not us. dorsey also saying it's the job of journalists to validate and refute information so people can form their own opinions. he followed that up by also tweeting, one of the most important constituencies we serve as our journalist population, they have to build tools to help journalists do our jobs this is a sticky one

the idea that you can sort of have impartial technology that reflects real life to me, doesn't seem quite right. >> it's always been twitter's view that bad behavior in whatever form will be self-correcting on twitter because of the response from fellow users but i do think they have a point, that there's no algo for now that can correct these or set standards that you can work at scale and that's what the twitter safety account later tweeted out in that post >> i think he brings up some interesting points i think some valid points. it goes back to the conversation yesterday that private companies are private. they have their sort of own internal rules of governance and are basically drafting their own legal systems to decide what kind of content's allowed and what is appropriate based on the rules that they set out. and he's saying that, you know, this is -- this fits the rules on the flip side, and i brought this up yesterday as well, they

have done things like taken the blue mark away from folks that have engaged in things like hate speech on twitter, like louis farrakhan back in june so they do enforce the rules they have on the books and their rules are just different than facebook and apple, at least from what we can see here. >> something in common between many of these platforms, facebook and twitter, in particular, seems to be the idea they reflect on what is going on in the real world. and to me, it's not quite right, especial twitter because in the real world, we don't have anonymous people trading information and sending it viral in quite the same way this is unique to technology >> it is not anonymous, though >> well, he's not. the reason he's popular is because it gets spread by people who aren't necessarily accountable for the type of information. so i feel like silicon valley is grappling with that. they have the idea they are creating this utopia, this

utopian technology experience over real life and it is not quite as utopian as they would have hoped >> the other point to make shhee is that alex jones has not been on the platforms arguably following the rules, but he's the one taken down so you have the other side emerged with the idea of new conspiracy theories. the fact that twitter is not acting on this, they are not engaging in the quote new conspiracy theories. >> yeah. >> just saying more "squawk alley" coming up after this break but first to rick santelli what are you watching today? >> you know, i'm watching treasury rates and the yield curve in front of two days where we see inflation news. alan greenspan had his conundrum. i think this has the yield curve. we'll talk about that after the break.

i'm scott walker here's what is coming up in the "halftime report." tony saginaki is live following the big bombshell news and the major move just made in the stock and the march to the new highs as the s&p closes in on a new record the big call one technician is making today on the market and where it could go next that's all at noon morgan, see you in 15. looking forward to it, scott, thanks. let's go to cme now for rick santelli in the exchange

rick >> never in my opinion has inflation data been more important or from the fed's perspective, i believe they are so praying for a big dose of inflation. think about it, okay, alan greenspan also had issues with inflation. the fed never is able to time their policy and inflation moves perfectly. i actually don't think it's possible to do that. between the delays and how policy is implemented filters through the economy and the notion of how inflation is a very difficult metric to measure and trying to hope for more with countries like japan, maybe an exercise in futility, but there is little doubt that the flat yield curve is the fed of this age's conundrum. think about it, their policy, in essence, has created a condition they wish would disappear. the flat curve or the fact that it could inverge, especially with tightens priced in down the

road, could be enough of an impetus. we have had sevens and tens within 3.5 basis points. we have seen other parts of the curve, even seven to tens widen as of flat, but inflation is the curve tie breaker. think about it, if inflation hits, the fed, even if theydra their feet, the long end will outpace the short end and the curve will steepen there will be no problems about worrying about the inverted curve or flat curve if a bit of inflation comes. and it really doesn't matter what shows up first. wage or price, because obviously they're very related, they're cousins. we have seen and read many articles many analysts have put out wonderful pieces about how there's such a tight labor market and maybe the divining factor of that tight labor market is if we can pull some of those able to be employed but now not counted as unemployed, comeback in the workforce. we have had a taste of that, but really not enough. so finally, what should

investors hope for well, you've often heard the that higher rates is a good thing. the ideal yield curve for investors if you want to profit from a strong economy, obviously, would be a steeper curve, but there are many ways the curve can steepen. the ideal way for investors, looking for bullish economy in their strategy would be for all rates to go up but the long end will outpace will the next two days be the impetus for that i can't tell you but one thing i can tell you is the flat curve offers a lot more problems for a fed that wants to raise rates, the one that steepens with the boogieman of inflation. john fortt, back to you. >> rick santelli, thank you. and when we return, the new york city council is set to vote on a series of ri-sngdehari companies. we'll be joined be a ceo for his perspective. stay with us clear, actionable alerts about potential investment opportunities in real time.

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welcome back the new york city council is expected to vote on ride-sharing a similar proposal failed three years ago, but it is expected to pass today companies like uber and lyft have come out against the proposal, but other ride-sharing companies have a different take. daniel, thanks for being here today. >> it's a pleasure. the goal here to increase earnings for the drivers

why wouldn't this do that? >> i think that part of the bill is great there's several bills going through the council presumably today. we believe at via that several are quite good there's a piece of it that talks about driver pay if you look at a recent report that came out, itshows that th vast majority of drivers on the via plat much are already earning that wage, so we are -- we've already been doing it, and we're totally on board what we are concerned about is the cap. >> why are you concerned about the cap? when i hear that, i think limited supply, you probably have the demands and you can raise prices. >> first of all, we don't want to raise prices where our whole goal is to keep it extremely artable so people can use it essential as a mass transit, a shared ride. most rides in manhattan are $5 that's sort of been our motto, so we don't want to raise

prices we don't think it's going for drivers. as we discussed, drivers on the via platform of making those earnings, so we have multiple passengers paying and the drivers can make a great wage. the problem with the cap is that it creates an artificial limit on supply. we don't really know what that's going to do, one two, there are 100,000 vehicles in the city, but very few are high-capacity vehicles for our model, we are dependent on the larger cap. >> congestion as more ride-hailing services are in existence. is there no cap you would be happy with would you be satisfied with a say? >> one, i know it's popular to blame the ride-like services for the congestion the city said it in 2015 then it paid mckenzie about $2

million to study it. the stud,showed that the ride-hailing companies were not in fact responsible for the congestion when you get to the end of a jam, it's construction or delivery trucks. >> also traffic cops >> we know ride-hailing is popular. >> the city would point to, and i know it sounds like a local story, but it could be happening in other cities later. subway traffic is weak, people are not traveling underground like they used to, for whatever reasons. >> i think that is more complex than it sounds the mta itself is saying the ridership is the far out boroughs, and late at night. where the declines are happening, it has nothing do with congestion. the question of congestion and the cap really don't go together i don't think that's the issue what we would be happy with, by the way, the exemption to the cap. at least allow us to bring on

the higher-capacity vehicles, so we can reduce congestion by putting more people into a vehicle. >> at what point do they get too cheap? when this first came out uber cars were beautiful, so were the lyfts now a lot of them are just as rundown as the most rundown cabs the drivers say, hey, we're having trouble making a living they used to make $70,000 a year, the story said not so anymore i guess it's nice to hail a car quick, but people are suffering and the service isn't always that great. >> those are very good points. that's where you have to find the right balance. i think there are pieces of this city council bill or set of bills that are very good the parts that have dost to do with utilization standards the way i would argue that via does it, that drivers earn a fair wage. i don't think we want situations

where drivers are making best low-minimum wage all of those are great i think the piece where we are confusing that with creating severalally going back to a medallion system -- if you have here in new york with taxis, that was not a great situation i don't know that that's what we want to go back to. >> it's a decision we'll watch closely this afternoon, not just from a new york city standpoint, but whether it sets a precedent in other markets the s&p has gone slightly red again. the dow is down, you may recall yesterday's intrarange was the narrowest of the year. "squawk alley" is back in a moment only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,

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