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good wednesday morning welcome to "squawk alley." a lot to get to today. obviously fed chair jay powell will speak in an hour. investors focused on that as we begin with tech stocks, though nasdaq higher, on pace for a third straight positive session. the tech sector is 13% away from its most recent 52-week high you've got microsoft and apple that continue to battle it out for the title of most valuable company in terms of market cap microsoft briefly crossing that threshold earlier in trading today. joining us is paul meeks and paul holland guys, it's great to have you with us on a big day as this race, paul holland, between microsoft and apple now, the divergence over the past couple of months is striking. what do you think is going on here >> well, i think what's fascinating about that is you could have said this 15 or 20

years ago. these two heavyweights are back in the ring battling it out and i think is news in and of itself but you've got two very different businesses going on. microsoft is almost an entirely software-driven business with xbox and some other parts of it. and apple has done a brilliant job managing hardware. i wouldn't doubt you'd see these guys cross over back and forth for a while. >> paul meeks, you look at microsoft, it's up about 27% over the past 12 months. apple barely up 1.5% i wonder how much of this is just a moment in time where apple is at maximum doubt or much of this is maybe the market shifting toward enterprise giving more valuation to cloud names. what do you think is going on? >> i think that's a very good point. when i take a look at both of those names, obviously on an absolute and relative basis, apple looks more attractive, but i continue to prefer, as most people do, microsoft, because microsoft, as you said, is in

the enterprise, apple is not predominantly. also they have done a wonderful job through azure to build their cloud business apple is essentially a pass-through for apps so i like microsoft's prospects much more. >> paul holland, i know we're talking a lot about microsoft versus apple, but the very fact that that's the conversation in terms of which company here in the u.s. is valued the most, you know, has the biggest market cap really sort of speaks to the fact that it's old tech that has become sort of the leader right now. two companies that have been operating since the 1970s versus some of these newer tech companies that we've talked so much about >> well, if you think about the last time we got together, we spoke about the faangs and when you get an 80-knight tailwind, big ships can sail faster than the small ships.

bigger sails and bigger scaleability i i think we're seeing that now. in that type of environment, large organizations have a chance to flex their muscle, get their sales forces out there i think in the case of microsoft, they have done a pretty good job, as paul just indicated, of moving to the cloud. i think people perhaps underestimated their ability to be able to do that i'd also point out that by now people expected to see much more heavyweight competition coming out of google apps and some of the other competitors and that hasn't materialized in the way people might have thought. >> it's striking, paul meeks, both nadela and cook came in after larger-than-life leaders, with pretty low expectations i wonder what you make of their tactical and strategic decisions over the long term which one has paid off the most, at least so far?

>> i think sasha nadela has brilliant. i think if steve bomber was still in charge that you wouldn't have this transformation of the company, at least not so aggressively to the cloud. so as far as you take a look at microsoft and particultim cook , they're both very important figures in the tech ecosphere, have both done a good job but sacha nadela tactically and long-term view has been more impressive. >> i spent a little time at amazon's reinvent conference right now focusing on the cloud. a lot of people seem to still say amazon not only is in the lead but is working with developers at a clip where they're not necessarily ceding momentum at all. what are you looking at that's

counting on cloud to power growth to see if there's enough there for them to continue to grow if amazon stays dominant? >> the one i look at at least for amazon web services is its peers in the infrastructure as a services space it seems to me, particularly with the fumbles and the forced change of leadership at google, that amazon, followed by microsoft, but microsoft has been gaining market share, but they're still less than half the market share of amazon, that amazon will continue to dominate that space of course you also have platform as a service and software as a service. as you see from the results from the likes of salesforce.com last night, that they have opportunities as well. but infrastructure as a service, i think it's going to continue to be amazon's game with microsoft gaining some share but leagues behind what amazon is doing. >> that gives us another horse race to talk about, guys

paul meeks, paul holland, we'll talk to you guys soon. thanks. >> thank you. >> thank you. >> as we were just saying, there is a lot of competition in the cloud. microsoft, adobe and s.a.p. joined us in september talking about the open data initiative oracle just last month threw some shade in amazon's direction. larry ellison claimed that amazon can't quit oracle's database i asked andy jassey how he responds to ellison. >> pretty soon you know, i think just in general what i would say is that anybody who has spent time looking at the cloud or is using the cloud takes those comments with a grain of salt sometimes facts are useful, because facts are still a good thing. if you look at the facts, by the end of 2018, 88% of the

databases at amazon that were running oracle will be off of oracle and running amazon dynamo db or amazon aurora. 97% of the mission critical databases will be off of oracle and run on dynamo db and aurora. on november 1st, we turned off our oracle data warehouse and moved it to red ship we're virtually done moving away from oracle on the database side and by mid-2019 we'll be done. >> wow, so that soon, before next year is done you'll be off oracle. >> that's our plan on the database side. >> about two months ago i was in orlando with microsoft, adobe and s.a.p. and they were talking about this open data initiative, this idea that they think it should be easy for customers to take data from one cloud and mingle it with data from another cloud and figure out how to run their business based on data that they have got stored with a number of different providers.

philosophically, what do you think of that idea >> i think over time -- my suspicion is over time it will be easier and easier to move data around. people we see all the time in our business that people will move data around from one place to another the complexity of it is not to be underrated. the platforms are in pretty wildly different stages. they do different things there aren't equivalents for a lot of things. you know, in the same way there aren't equivalents for what s.a.p. does. you look at oracle choosing overnight to double the prices of their software on aws or microsoft, or microsoft's customers who buy their own licenses and are able to use

those to run on amazon's relationship database service and microsoft said i don't want to do that anymore, i want them to run on microsoft. if you can't get the basics right on things like that, then when you're talking about much more complicated things, it gets hard so we have some work to do to find out how to cooperate differently if we want to make that easy for people over time. >> when i see that happen, i get the sense this is the way challengers are trying to take on the leader. arguing with amazon, you want to move your data around, come over with us. do you view that as perhaps where some of this is coming from is this open data idea something that you're going to try to become open to conversations about? >> we're open to any conversation the array of topics and ideas that we either explore internally or we talk about with partners and customers is so broad. so we're open to any idea. but i do think you're right. i think often you hear a lot of

this portability conversation from those that are trailing and trying to find ways to get more data into their platform. >> one of the new things you hear from amazon about that at reinvent this year is custom chips for the cloud. i asked him given that, should intel and amd be worried here's what he said. >> as you can imagine, given the size of our business, we have a very close partnership with intel on the x 86 processors that we use. but we have a lot of workloads where customers running these generalized workloads, they want to run them but don't need quite the same specs as what you get in some of those intel chips so we have been like a number of folks looking at how we can help incorporate arm chips into our offerings. we have this thing in israel that we acquired that is focused

on making the network performance of our ec-2 service bertd th better than it was before. we tried to make a chip that would take general workloads and let people save up to 45% from the instances they use today and we expect over time that we will have instances that use lots of different processors we will forever use intel processors, but you saw probably -- >> forever >> forever is a long time, but i would say for the foreseeable future >> so not quitting intel and amd entirely, but yeah, i think they should be worried. remember, intel's purchase of alterra was supposed to head off some of this sort of move, provide more customization amazon, though, taking its own path >> not sure if the trash talking is more fierce in media or in cloud right now, right

>> i think in media. you know, there's a bit more rough type of trash talk coming from the oracle side of things, as you might expect. oracle sort of wrote the book on enterprise trash talk. but andy jassy not backing down on this. right now the numbers and momentum are on his side. >> first of all, i just have to say it's a great interview i'm amazed that you have as much energy as you did because you took the red eye home tonight, so you are like such a trooper it's interesting how much news has come out of this event in the last 24 hours. one of the other things that got my attention and i'm sure you guys talked about this as well is the aws ground station units. this whole idea of a satellite connection service and they're partnering up with some of the satellite companies and operators to rent out space and infrastructure to them as we keep seeing this sbrnintet of things for everything, i imagine that's one more area where amazon is looking very far into the future to dominate. >> not only are they doing that,

they're going into ai for medical records where ai will be able to read a patient diagnosis and take actions based on that that goes to this issue of amazon not wanting to be seen as just infrastructure as a service anymore, they're going deeper into software that customers in very specific verticals will need to run their business if they're successful along those lines, it's going to be really hard for these other names, the microsofts, the s.a.p.s, et cetera, to keep amazon from continuing to grow inside those traditional enterprise areas. >> perhaps not surprisingly, then, the stock is up 2% again today. up next, shares of gm extending their losses the president continuing to weigh in on the automaker's announcement of plant closures the stock coming off its worst daily performance in a month how the ceo should be dealing with the white house that's coming after the break. and later former treasury secretary larry summers is with us we've got a bish hg owere on

"squawk alley. don't go anywhere. this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. welcome back shares of general motors extending yesterday's losses, down about 1.5% right now, coming off its worst day in a month as president trump continues to hammer the company over its decision to halt production and a number of north american plants and slash 14,000 jobs among the president's tweets this morning was this one where he retweeted one user who said, quote, if gm doesn't want to keep their jobs in the united states, they should pay back the

$11.2 billion bailout that was funded by the american taxpayer. joining us now, yale school of management senior associate, dean for leadership studies and cnbc contributor, jeff sonenfeld. great to see you today. >> it's great to see you thanks for the invitation. >> i get that the argument, especially from the gm side when you look at declining auto sales, et cetera, is that perhaps this was necessary for gm to do this to stay ahead of the game given all the disruptive technologies coming to transportation, et cetera but doing it coming into the holiday season with all the focus on trade with g-20, is there a better way this could have been handled? >> no. this is what -- perhaps there's a better way the white house do have engaged with private industry, but mary barra is not a politician she's the ceo of a public company. president trump has never had such a role other than to his

late father he really hasn't been accountable to anybody. of course he's chafing at the bit right now and the checks and balances in our democratic system about being accountable to courts and sometimes to congress, but being accountable is what mary barra has to do to her shareholders and other stakeholders and the future of the company. so she's making difficult decisions. she's certainly not trying to antagonize the president but ceos who have made independent calls sometimes do get caught in the crossfire. she doesn't want to go the way of sears or other troubled companies. she's trying to be up front on this and make some necessary changes. she doesn't want to be kodak these are signals that she put out there way back in july senators rob portman and senator sherrod brown were a part of all of this when she warned at lordstown they wouldn't be able to retrofit. it cost $1800 more because of

the trade frictions, it's a little harder to produce in north america, but the bigger issue has to do with the traumatic shift, a huge transformation in the way people buy cars they're not looking so much at these passenger vehicles and sedans that i drive but more the suvs that my wife and the rest of the world drives. that's where the growth has been and they have to accommodate that. >> jeff, we've seen a number of companies sort of come under fire and catch the ire of president trump over the past year plus, whether it's lockheed martin and boeing, whether it's harley davidson, amazon, and of course now gm. in terms of how we've seen those situations play out, is there a tact that ceos can take or have taken that have proven more successful in terms of being able to execute on their strategies and continue to work well with the white house versus others >> they have tried various strategies i think it's a great question. part of the question should also

be what the white house needs to learn to better engage the u.s. business community it's a two-way street here the u.s. business community for the most part, major big company ceos have great trepidation about the trump administration smaller company ceos were excited about the promise. and then as president trump took over, their skepticism melted away, they were quite excited. in early 2017 there was a great sense of alignment and enthusiasm about reduction of regulatory problems and some other issues on immigration and others they had hopes for. tax reform was a big one that dissipated, of course, in the summer of 2017 when he attacked merck and ken frazier of merck the business community showed remarkable collective action for the first time in american history when the business community quit the president's advisory council, it's the first time the u.s. business community refused a call to action from the president, the commander in chief. we've seen that since.

companies like nike throwing a finger in your eye two months ago with the kaepernick portrait in their ad campaigns and others the deal done with carrier or pfizer and the recent price increases and foxcomm won't be living up to commitments that they have made or others that have been backing away we see that some in the business community might think we have a lame duck here i don't think that's the case that they should be thinking that way and some that being bullied is not going to work anymore. the one-offs of playing pfizer against merck or ford against gm doesn't work anymore with these guys. >> jeff, here's the dynamic that i think is at play that troubles me is this idea that if you cut taxes for businesses or give them bailouts, somehow you automatically get jobs or are owed jobs. we've seen the tax cuts have led to stock buybacks, but there's

not necessarily this correlation between if you make sure businesses have more money, jobs in the u.s. necessarily materialize. and i kind of draw a line between that idea in part that the president has advanced and perhaps this feeling of betrayal toward gm. >> we've had that through the history of the last quarter century of either both tax adjustments as well as job training partnership acts. each time we've seen the money has gone to shareholders, it's gone back for capital reinvestment by the companies but hasn't necessarily led to more jobs. president trump unfortunately was making commitments, as he made in warren, ohio, not a single job will be lost. no plant will be closed and then we have lordstown being closed in michigan. so he was making commitments he couldn't stand by and didn'tse that that equation doesn't follow that way. business leaders have to make judgment calls as they see them at the time. harley davidson repositioning what they had to do. they didn't want to get in a

fight with the president on this, but to sell domestically, they manufacture domestically. to sell into europe and other places, they had to start to manufacture in thailand. that cost some jobs in kansas city but for harley and gm or for president trump to be attacking for that matter, for amazon and great iconic companies, that's no way to be a champion for private enterprise in this company. jack ma of alibaba doesn't need president trump to be his chief salesman and honda doesn't need president trump to be their champion he should be championing u.s. businesses that are making tough decisions to compete globally. that's what's happening here gm has pulled out of india and cut back in very difficult markets around the world they are going through a major restructuring. mary barra i've known all eight of the past general motors ceos. two or three of them i admire.

mary is better than all of them. i never new alfred sloan in the 1920s, but he profoundly reshaped the company and she's the most exciting ceo we've had since then but she's not a mud slinger. the ceos who don't throw mud back and don't humiliate the president, that's the best way to handle it work with facts and not emotion. >> jeff sonnenfeld, thank you for joining us today. and we'll have more from our exclusive interview with amazon's andy jassy coming up in just a few minutes as we head to break, take a look at some of the leaders in the nasdaq 100 so far in today's session. among them, apple, amazon and microsoft, all higher this morning, either close to 1% or a little more. don't go anywhere, a lot more "squawk alley" still ahead so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

a number of fed speakers have mentioned global growth concerns so where exactly in the world are we seeing a slowdown seema mody has that story for

us. >> as we await jerome powell to speak, it's worth noting that global growth estimates have already come down a significant amounti amount the global economy is expected to grow at 3.7% this year and next year, down 0.2 percentage points growth in the u.s. is expected to slow to 2.5% next year and in china growth will likely fall from 6.6% to 6.2%. emerging markets are expected to slow down significantly. the imf downward revisions were notable in argentina, brazil, mexico, iran as well as turkey don't forget about europe where growth is expected to cool down as well due in part to political dynamics at play the imf anticipating 2.8% in 2018 down to 2.3% in 2019. this as the uk government

unveiled a sobering assessment of prime minister theresa may's brexit deal today, projecting the agreement would shave nearly four percentage points off uk gdp over the next 15 years. take a look at european stocks ending mixed today global markets clearly awaiting jerome powell in the next hour guys, back to you. >> thank you very much. let's head over to sue herera and get an update. good morning, everyone here's what's happening at this hour despite russia's seizure of three ukrainian naval ships, the kremlin still expects a meeting between president putin and president trump. this as president trump in an interview with "the washington post" on tuesday said he may cancel that get-together. an explosion outside a chemical plant in northeastern china has killed 22 people and destroyed scores of vehicles it occurred just after midnight at a loading dock next to the plant. 22 more people were injured. nintendo saying its switch console was the best-selling

video game product online for the period between thanksgiving and cyber monday shoppers buying more than $250 million in nintendo products switch sales grew 115% compared to the same period in 2017. pope francis praising the freedom of a hearing-impaired child who climbed onto the stage to play during the pope's weekly speech at the vatican. the pope telling the crowd the child was hearing and linguistically compared. he was applauded, though, after praying for the boy. you are up to date that's the news update this hour back downtown to you, carl. >> thank you very much, sue. we've got about 30 minutes until the fed chair takes the stage at the economic club of new york. we'll be listening closely to those remarks. in the meantime, the dow not far from the session high which was up 209 and the dollar ose clto a session high as well back in a moment we're voya! we stay with you to and through retirement. i get that voya is with me through retirement,

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with the president continuing to ramp up his trade rhetoric, companies like apple and huawei are being caught in the u.s./china crosshairs. deidre is live with more on that story. hi again, deidre >> hey, good morning, carl that's right, it has certainly been a big topic of conversation here earlier on in the day we were able to hear from a huawei executive responding to some of those pressures. >> we believe our partners and

customers all over the world will make their own right choice with their own judgment and based on their experience of working together with huawei >> now, washington, of course, is trying to keep huawei equipment and electronics outside of not just the u.s. but its allied countries as well according to a recent report just this morning new zealand rejected a request from one of its telcos to use huawei's 5g equipment there. it is not just chinese companies, american tech giants are getting caught in the crosshairs as well apple of course after president trump said that he could impose tariffs on the iphones and another one that has a lot at stake here is microsoft, which has been here for 25 years operating within china and only deepening that relationship. earlier today i spoke to the company's head of greater china,

and he said he hasn't worried, though >> i know that, you know, people will sit around the table and intelligent people will find a way to resolve their difference. the only thing i can say, what i can tell you is that, you know, our activity in china has never been as great as it is today >> overall sentiment here, guys, a lot of talk about trade but not a whole lot of worries back over to you >> dreed eidre, thank you. the president set to meet with president xi as trade tensions continue to wrap up deere chairman and ceo sam allen sat down with us earlier last hour to talk about the threat of china on u.s. technology and the president's response take a listen.

>> the issue that he raises is clearly the valid issue that china has through intellectual property theft caused issues for us and we need to remedy that. but the tariff approach i think is doing more damage than good in a lot of respects >> i also thought his comments on the fed and raising rates and the fact that he would be more aligned with president trump and this idea that maybe they're going too fast and should pause for a little bit was very interesting too, because not only are they very exposed to key parts of the economy, but they also do have that financial services unit, so they are actually lending for the purchase of their machines >> very dovish out of allen and also his bit about the chinese buying soy from the brazilians in the long term makes the brazilians better at supply and his biggest worry is that we wind up oversupplied here in the u.s. for the long term

like he mentioned the great embargo in the '80s. >> interesting point on tariffs. if we ending up on a 10% tariff on iphones, does that put more pressure on china or folks on the u.s. who hold apple stock. maybe we'll see, maybe not coming up, what amazon's andy jassy is saying about the open department of defense contract in the cloud, and at the top of the hour keep it here for fed chairman jerome powell's comments on the state of the economy. former treasury secretary larry summers joins us next. more "squawkal alley" after a quick break.

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so, that means no breakfast? voya. helping you to and through retirement. here's what's coming up at the halftime report at the top of the hour. we'll have breaking news at fed chair jay powell speaks at the new york economic club you'll see the speech live, the instant market reaction. will mr. powell ease market jitters over the path of interest rates it is the question of the hour with stocks trying to fight back from the correction. we'll see you at noon. morgan, we'll see you top of the hour. >> it's going to be a big hour, scott, looking forward to it looking at some of the day's laggards on the nbc 100. western digital, seagate, alexion pharma and netease

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in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. welcome back the department of defense has a big jedi cloud contract that many of the giants are bidding on i asked andy jassy about the process. rival oracle had protested the way the contract had been put up for bid. jassy feels much better about it take a listen. >> i think that they have done a very careful and thoughtful job in spec'ing out what that rfp is from the very start they said it's an open competition and i believe them that it's an open competition. i think most big technology

companies save a couple are interested in trying to help our country defend itself. i think that, frankly, their philosophy on having most of the award go to a provider is very consistent with what we see the vast majority of enterprises doing as well and what we think makes sense. you know, when companies think about moving to the cloud, in the initial stages, they'll think a little bit about should we actually split this up evenly across a couple or few of them very, very few choose to go that route. if you do, you have to standardize on the lowest common denominator. in our case we have a lot more capability than anybody else and a much larger ecosystem and more maturity so you don't want to have to tie people's hands behind their back. and it turns out if you're moving from on premises to the cloud, that's a big shift and development teams have to be

fluent in multiple cloud performs makes productivity low. all these cloud providers have discounts so the vast majority of enterprises predominantly choose a provider. some will have a small number of workloads with another just to make sure they know they can go there if something goes sideways with their main provider, but the vast majority predominantly choose one the fact that the department of defense is doing that i think actually is a best practice. so i think they have been very responsible about it and i think it's a very competitive endeavor for what ends up being able to serve them we'd love to have the opportunity. >> now, in context, of course, amazon is the presumptive favorite to win this contract because of its existing cloud relationship with the intelligence community. >> i'm so happy that you asked him about this because i've been following this jedi contract it'slargely expected to be a

dogfight between amazon and microsoft. many expect the winner-take-all nature of this that amazon will probably be the winner because of the contract with the cia and they have the highest security clearances in terms of their cloud abilities at this stage of the game but it's interesting, the reagan national defense forum takes place this weekend i know microsoft is expected to have a presence there. >> as are you? >> as am i. >> i'm sure you'll bring us back great intelligence from what goes on on the ground. >> thank you that's the plan. >> all right we just got about 12 minutes until the fed chair takes the stage. we're going to use that time to talk to larry summers after the break.

got jay powell come up in ten minutes or so. meantime markets have been holding on very closely, the dow was up 209 at the top of the session, following questions over the social network's management of recent data issues former board member sat down with deirdre bosa this morning and called for radical change but defended mark zuckerberg listen

>> i met mark when he was 20, invested when he was not yet 21. i've seen tremendous evolution and we lived through the mobile strategy during the ipo and watching how he handled that but the company itself has mishandled many of these topics over the last 12 months. >> obviously we know about the drip-drip of bad news. economi "the economist" published a piece whether facebook becomes a yahoo!-like story. people can speculate >> yahoo! didn't succumb to bad press and mismanagement. it fell behind in core technology it's an interesting idea facebook mismanaged it but zuckerberg didn't. he's the controlling shareholder. he's the ceo you can't blame everything on sheryl sandberg though she gets the jobs mark zuckerberg doesn't want to do i think it's become a bit muffin

this sandberg pile come on now. mark's in charge there's a product element to solving this issue that they have he can't kind of be a solve himself of all responsibility. not that he's tried to he came forward and defended sandberg maybe he needs to say more. >> yeah, show up in places like the uk he came under fire yesterday for that >> or on cnbc. >> oh, yes also, just worth noting and you brought this up before, the ceo of google is supposed to go and testify before congress next week, ovitz pichai >> gm ex tending losses from yesterday as the press ups his criticism of the automaker's cost cutting plans he re-tweet this had comment today. quote, if gm doesn't want to keep their jobs in the united states they should pay back the bailout funded by the american taxpayer joining us former treasury secretary larry summers who, of course, was key to the '09 auto

bailout during his tenure as president obama's national economic council director. mr. secretary, good to have you back you've talked at length about your role in the managed bankruptcy and what went into it and how it played out over time. this question of the plant idling and so forth, what does gm owe the country now >> gm owes the country doing its best to compete. obviously if gm developed better products and had done a better job, they wouldn't have to do this that's something we can regret if gm ostriches, doesn't contain costs, beand turns into a ge, that's not going to do its shareholders any good, it's not going to do its workers any good, and it's not going to do america any good so, in general, companies that have more capacity than there is demand for their products can't

ostrich with respect to that reality. and i think responsible of the presidents of the united states don't demand that they do that is this the time gm should be giving big executive bonuses no if they are, it's deplorable is it a time gm should be engaging in a big increase in imports? no and if they are, that's problematic as well. at least as this was presented it was in response to very substantial excess capacity relative to what the demand for their products was we can wish that they had better products and so there was more demand we can start making the necessary investments as a country in the kinds of infrastructure, the kinds of educated workforces, the kinds of science that are necessary to help our companies compete but ostriching with respect to

reality i don't see how that serves any national purpose. >> secretary summers, it's interesting to hear you make the comparison to ge, another long-standing american manufacturer it sounds like you have some strong thoughts on what's going on at that company as well >> no, i just know that that's a company that seems to have not recognized reality and not faced up to painful problems for a long time. and then all of a sudden there are a lot of chickens coming home to roost in general i think it's better when companies reck knees their problems and if they have large amounts of capacity and they're not able to sell the product, you have to do something about the situation. if you can't just invest for the sake of continuity indeed, i made a pretty careful

study of what it was that drove gm into bankruptcy in the first place in 2009. a lot of it had to do with the recession and the financial crisis but a lot of it had to do with the fact its management ignored the signals that markets were sending and kept investing and doing the same things in the same way even where there wasn't demand, and built up large quantities of debt while they made investments that were ultimately unproductive. if they faced into that problem earlier, we may not have had that bankruptcy. i don't think we want to take the position as a country that our big companies should be like chinese state enterprises where they're kept afloat independent of economic reality. >> secretary, we expect to hear from fed chair jay powell in just a couple minutes. i wonder what your latest

thoughts are on the situation the fed finds itself in with its independence being challenged by the statements the president has been making about the fed's move to raise interest rates. most notably his recent statement basically that he regrets jay powell being the fed chair and the position he is now. >> it's interesting that the best appointment the president has made is the one ep says he regrets. jay powell's a very good person to be at the fed and is doing a very good job. it reflects very poorly on the president that he regrets one of his wisest acts. but i'm not sure which is more true that the president's statement is irresponsible or that the president's statement is counterproductive from its own point of view. look, i'm someone who supports more dovish policy in general at the fed for a variety of

reasons, but it becomes much more difficult to adjust policy in a dovish direction at the fed when you have a president who is outdoing richard nixon in terms of sh ril demands on the fed and it's hugely important to its long-term credibility that the fed demonstrate its independence that's going to make it harder to adjust in a dovish direction if that's what the fed wants to do so the president's acts here are irresponsible in the sense of a kind of political intrusion. that's a bit of a pattern, frankly, with this president, political intrusion in the justice department, in the military, political intrusion in the -- in the central bank so it's irresponsible. but in this case it's going to be actively counterproductive in

terms of the fact it's harder for the fed to move in a dovish direction if that's the direction they choose to i don't think it's difficult to understand what's going on here. the president has claimed far more credit than he deserves for the strong performance of the economy coming off the foundation that the obama administration lay and he's actively taken credit for the stock market when it's gone up in a way sophisticated observers recognized was foolish. when you take credit when the market goes up, people tend to assign you blame when the market goes down. and the president wants to avoid that so he's looking for a scapegoat. this isn't an exercise in analysis or policy setting it's an exercise in political expedient scapegoat iing. i think it's an unfortunate thing.

we're coming into the g20 meeting -- >> mr. secretary i appreciate the comments. as we get closer and closer to noon, we thank you for your time our special coverage of jay powell's speech with "the halftime" starts right now we do begin with breaking news, carl, what could be the most important speech of jay powell's tenure thus far steve liesman sitting right next to us with the details steve? >> jay powell will say that interest rates are still low by historical standards and rates picking up the language from yesterday are, quote, just below the range of neutral estimates and the rate increases designed to balance risks he talks about that in the past. i still think he means it's a present issue. there's no preset policy path and the fed will pay close attention to data. moving too fast and too slow on the economy.