zblierkts your top five at 5:00 begin with a bm shell stunner from jeff bezos. he is blasting the national enquirer, accusing its parent company of trying to blackmail him over indiscreet pictures between him and his girlfriend lauren sanchez the full late-breaking details straight ahead stocks, meantime, under pressure president trump saying he will not meet with china's president before next month's trade deadline think skin kbri in 2019. not, obviously not about your weight. that's the market message from goldman sachs's chief global equity strategist, and he is here sears getting a new lifeline

after a bankruptcy judge giving eddie lampart the go ahead and buy the iconic retailer. somebody get ken on the phone because barbie is back mattel shares soaring this morning after the toymaker reported a big surprise. it is friday, february 8th, and worldwide exchange begins right now. happy friday from wherever in the world you may be watching futures are less hap the dow futures are down 76 points right now you can see s&p and nasdaq similar. all this coming after yesterday's 220 point slide. a little bit of selling momentum yesterday. we'll see if that continues today. well, of course, we are going to have much more on your money very soon. we begin with a story that is rocking both the business and the entertainment world. amazon.com founder jeff bezos blasting the national enquirer,

acougs its publisher of trying to blackmail him frank holland is here now with more on this blockbuster story >> extortion and blackmail bezos claims america media ink or ami threatened publish naked pictures of him unless he agreed to drop an investigation into how the tabloid obtained text messages exposing his extramarital affair. a few weeks ago bezos announced and his wife mckenzie were getting divorced then the national enquirer published an investigation bezos that included intimate text messages bezos said he hired investigators to figure out how those text messages were obtained in response bezos says ami threatened to publish more text messages and photos if bezos did not drop his investigation.

ami declined to comment. a lot of drama here. brian. >> it really is. frank, certainly a lot of drama, and, of course, we're going to have more on the story coming up, including how even the non-business media is covering the story right now. now to trade or perhaps not trade. president trump saying he will pass on meeting with chinese president xi jing ping all before next positive month's major tread deadline whether a new harsher round of tariffs could kick in. let's get to eunice, who is live in beijing with more eunice >> thanks so much. well, you know, next week could be a critical week in the u.s.-china trade talks after next week there are only two weeks to the deadline. much of that is going to be taken up by the trump kim summit president trump has already confirmed that he is not going to be meeting with president xi this month next week will be crunch time, and it's really going to all hinge on whether or not the chinese are willing to make concessions in areas that the

u.s. believe are important so far we know that the chinese haven't been willing to make concessions on certain structural changes, such as state subsidies that lightheizer and steven mnuchin say they want to see also, the chinese haven't been too keen about lightheizer's idea of an enforcement mechanism. where the u.s. would be potentially hanging tariffs over the chinese' heads in order to make sure that they made good on their word that is going to be a really big issue next week, and will really trigger whether or not the u.s. is going to have to at the end of the day make some hard choices because if the u.s. delegation doesn't see the chinese willing to make some concessions, then the u.s. would have to rethink its strategy, and brian, that has created a lot of cocktail chatter. you could argue it's nerdy

cocktail chatter as to what the u.s. would do. for example. some people are saying impose that 25% tariff, and then you would see beijing having to really suffer in in a type of situation. >> there's nothing wrong with nerdy cocktail chatter it gets me through every friday and saturday night here. here's the question. we're talking about trade. at least on cnbc nearly every day how much attention in the chinese media is this getting? is this a daily topic? is it front page or does it only come up when there's a scheduled meeting? >> it is a daily topic there are a lot of article that is come out in the state media these days it's been opt knicks. even though it's been a holiday, a lot of the chatter has at least on state media has been that the officially or at least in the state media it's cautiously optimistic. they're hoping to see some sort of deal. again, you know, in terms of what people are saying more like

privately, people are really worried about whether or not these tariffs are going to be imposed because they understand the ramifications especially if they are in the manufacturing sector >> eunice, you have a great weekend. hope you have lots of nerdy cocktail chatter all weekend long that's our wish to you, eunice thank you. let's dig in on these kind of headlines and why they matter to you joining us now joel, founder of entrepreneur shares. his entrepreneur fund, ticker entr, is trouncing the rest of the markets this year. it is up nearly 15%. 14.93, joel, to be exact almost double the return of the s&p 500. welcome. congratulations. >> thank you very much >> you were bullish a month ago. i gave you the business about it you were right you say there are really five main themes that investors have to focus on. you have interest rate increases. the fed. trade war with china what eunice just hit on. decelerating corporate profits, fund outflows, and political risks. >> yeah. >> five things, five important

topics where does trade rank? >> trade is very high. it's right up there with the china -- the china trade deal is the deal that's going to drive 2019 however the fact that the story you just completely -- how those trade talks go is really going to drive the market. we're already seeing more than two-thirds of the companies who have announced profits have beat expectations, and so last quarter when we saw the markets declining, we generally saw, as you may recall, the prices dropped en masse, and as you -- as many of your viewers know, december was the second worst december we had since 1928 >> yeah. >> well, now we have the second best post-christmas period since 1928 >> it's literally hard to get your head around this kind of whipsaw in the market. i mean, absolute collapse in december everything is going dead recession. now everything is fine understand the turnaround. maybe you do >> i don't know if any of us truly understands. i think what happened is people

anticipated a profit deceleration, and now as earnings came out, we see that the markets overreacted. i think it's nothing more than that prices are off 5% to 8% on most of the large cap indexes they're off around 13% on small cap. we still see opportunity in u.s. small caps internationally, we think the markets have overreacted, and we see good opportunity there >> you know, that was a theme really for the last couple of years. it kind of faded at the end of last year, which is small over big. we're talking every day about brexit we're talking every day about the e.u. slowdown. we're talking every day about china trade. that's why we think more about u.s. small caps that i'm not going to say don't care about a trade deal, but if 100% of their revenue is the united states, they're more exposed to us >> that's why last year the markets soared until the fourth quarter, and they're still down around 15% from their 2018 highs. even so, there are pockets of

opportunity internationally. little entrepreneurial companies in the u.k. and throughout europe and even in asia, they're great opportunities right now that price has been beat down, and we think they're a good value. >> if my mind from fourth grade serves me right, i think there are seven continents >> yeah, sure. >> we don't talk about antiarctica. not a lot of companies based there. i would say second to that in getting the least attention with the exception of all the venezuelan news going on is latin america. we rarely talk about latin america. you think there's opportunity. >> 16 plus percent the only category that's beaten u.s. small caps year-to-date is the latin american market. most of it's in chile, but there's still opportunity throughout that region >> are you changing the makeup to focus more on that? what's the best way to invest around >> we're a closing bell today. i don't know if knew that, but

we're a closing bell today for our new etf, which we actually -- >> you're ringing the closing bell today shame on me for not knowing that the bezos news kind of got my attention. congratulation on that you going to go down and see will fred and sarah? hey, will. >> so it's a nonu.s. small cap etf, and it's based on the same principle that is we look at globally the markets -- there is no market that would speed up more in 2018 than non-u.s. small cap, and so what we've done is found little opportunities, and some of the stocks are up almost 50%, 60% year-to-date >> the venezuela stuff that we've chord, and we've talked about today, it's not scaring you off. you think venezuela, as bad as it is is just its own story. >> well, there are stories like that in that region, but not publicly traded companies that we're buying you have nicaragua next door.

>> stick around. we'll count you down top cities for tech. you're going to be surprised by tethhtnner, and we're back rig afr is

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prevent problems, and to help provide the most reliable service possible. my name is tanya, i work at the network operations center for comcast. we're working to make things simple, easy and awesome. >> things are starting to move in the great city of chicago where it is 4:14 a.m can you see the hard-working men and women of the mta driving the bus already. getting things going in the city of broad shoulders become back. i'm brian sullivan here's how your money and investments are setting up futures look like they could be sort of advancing on yesterday's sell-off we saw the dow fall 220 yesterday. right now the implied open is down 86 as well. still a lot of time to turn things around, but futures are in the red once again. what about overseas and what is a fairly early trade there

we're seeing a mixed bag germany is down. you got france and the u.k. up when i say fractionally, i mean literally they are all almost exactly unchanged. that does not tell the story of what is going on in europe right now. let's find out what does let's bring in peter oppenheimer, chief global equity strategist at goldman sachs. peter, wow i mean, i don't know how you guys are doing your job because between that massive cut in growth expectations a few days ago in the e.u., to 48 or 49 days away from a hard brexit if no deal is reached, it has to be a very difficult time to sort of assess the equity landscape. is it not? >> snoo you are right about that, of course. we have the combination of quite weak fundamentals in europe at the moment as you say, it is biggest economies effectively stalling skpilgts recession at the same time a host of uncertainties relating to politics

brexit coming up as you say. what is the biggest possible risk right now >> well, strange enough right now, i think, a lot of the weakness that we're seeing in europe itself is it partly a function of what's happening outside europe you spoke about the developments in terms of world trade. the conflict on trade between the u.s. and europe -- particularly those countries that are dependent on exports.

germany is an important point in case that's one of the immediate and most important things that is happening. of course, from a domestic perspective, what we see in the u.k. will be crucial if there were a crash-out of the e.u. with no agreement at all, that would be bad news for the economies both in the u.k. and the rest of europe but more systemically, i think also you have the issues of growing pop lichl in europe, and may be reflected in the european licks and also ierkz relating to, for example, the italian budget right now, actually, europe is most focused on from an economic perspective really on global factors, which could have an important bearing on whether we get any recovery in activity over the remainder of the year >> you know, here's i guess the interesting part

there are so many negative headlines, whether it's italy, deutsche bank, trade the growth -- whatever you just talked about them. is now the time to buy because everything looks so bad? thoer quite global in poekszure, and they tend to be a global industry they are impacted by what's happening not just in the dpesic economies, but what's happening worldwide. they tend to be a more cyclical sector in a sense they're more operationally levered. more high beat than most other markets. we should bear in mind european

stock markets have enjoyed a rally over the course of this year-to-date just as most others have as wrshl fundamentally, that said, we do think profit growth is going to be pretty weak this year in europe, but about 4% growth. it's worth noting we expect pretty weak profit growth across all major regions this year. with valuation wez think roughly sustainable at these levels, that heenz we're going to get pretty low returns driven by modest but positive profit growth that's where we get this idea of a sort of skitty and flat market relatively low returns in a reasonably narrow trading range. >> that's why you said and we led the show with it, think skinny have all the gains or most of the gains for the year, and i know it's only february 7th or whatever it is, have all the gains already been made? >> largely, i think, yes beginning of this year, we argued that we felt the markets had overpriced recession

globally valuations have fallen too far we argue thad if the markets began to rally as inflation risks started to moderate, you needed to be invested because if you missed it, you probably missed most of the returns for the year i think, you know, a month and a bit on from that, it's probably pretty true. you know, weave seen a lot of those recessionary risks now priced out of markets. prompted in part by the much more dovish tone from the ecb -- from the fed and others. now backed by relatively modest profit growth, we would see only reasonably small increases in total return -- in price returns from here. in the case of europe, for example, if we take the stock 600, which we focus on as an index, we are looking at 375 for the end of this year that's 3% or 4% from where we are now in price terms remember, there's a reasonable

dividend on top of that, dividend year to 4%. total returns in the sort of, you know, around 7% or so from here would be what we -- >> before we go i want to throw you a curve ball here because i'm sure it's maybe out of your whole house, but i have to ask i'm sure you've been following the political developments here. we're talking about some of the democrats have hit on, and i don't want to make it a political statement. it's about maybe the war on wealth right? we're talking about 70% tax rates. some of the presidential candidates talking about tax rates going up on ten million and plus of net worth. dividends or buy backs being taxed more somehow by chuck schumer, and bernie sanders. is there kind of a -- i don't want to say it's black swan because we're obviously talking about it is there a market risk to some of the political idealism that is going in the united states right now? >> well, i think the comments you make about the united states are not unique to the u.s. we're seeing similar forms of political rhetoric in many parts of the world, including europe generally speaking we're getting politics moving away from the center ground.

reflecting in a sense the rising pop lichl. some people will focus on the fact that, you know, wages vbt moved very much at all since the financial crisis in most regions. financial assets have benefitted generally from years of falling interest rates and qe, and that is sort of feeding in a sense this growing uncertainty, which is voice and reflected in pop lichl. how does that feed into markets? well, most importantly, i think these are things that are difficult to forecast and model, and, therefore, they're reflected in things like risk premium. in other words, or else equal these uncertainties just keep valuations somewhat lower than they might otherwise be or the gap between valuations and equities and bonds needs to be wider. you neat higher dividend yields, lower multiples to reflect these sorts of uncertainties, and that's another reason why we think that although the fundamentals are not as bad as

people feared at the end of last year, we're not likely to see recessions we think the upside for equity markets. now we've seen this rally. it's relatively limited. >> peter, goldman sachs. great insight globally especially for worldwide exchange really appreciate your insight peter, thank you have a great weekend >> all right up next, barbie is back and hot wheels are hot again the one stock to watch as part of that toy turnaround, and we are counting you down. all hour long to the world's hottest cities for technology. boston came in at number five. coming in, according to the u. kfrmt, is number four, amsterdam. that's right on a variety of factors. amsterdam, the fourth hottest city in the world for tech we have three more to go number one might surprise you. worldwide exchange is back right after this

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cascade platinum. zbliefrmt after a tense back and forth matt whitaker will testify before the house judiciary committee this morning whitaker had previously said if he gets subpoenaed, he wouldn't even show up the stand-off started when democrats on the committee voted to authorize but not issue subpoena in case whitaker refused to answer questions about his conversations with president trump. the supreme court blocked louisiana from enforcing a controversial abortion law that could have impacted abortion rights in the country. the law would have left the state with just a single doctor in a single clinic legally authorized perform abortions it's similar to a texas measure

struck down three years ago. justices voted 5 had of 4 with chief justice john roberts as the swing vote siding with the liberals even though his record has been conservative. meanwhile, justice kavanaugh cast his vote, and he wrote the descent. a true giant of the house today, former michigan congressman john dingell has died he was 92. big john was the longest serving member of congress throughout his 630 years in the house, he played a pivotal role in everything from the civil rights act to the passage of obama care brian, we now send it back to you. his twitter feed, if you want to see funny tweets, that guy had a great sense of humor really spectacular stuff here. one of his tweets, the titanic avoided icebergs with a few exceptions >> it's funny and as tall as he was. >> he loved his tigers and hated them at the same time. fran sir, thank you very much. appreciate it. up next, more on the jeff

bezos bombshell. the world's richest man says he is being blackmailed and not hiding he is coming out fighting straight full force. we're going to show you some of the headlines this morning plus, we are getting closer to revealing the world's hottest city for tech. according to u.k. real estate firm out with a new ranking. you had boston at number five and amsterdam at number four, and coming in at number three, a place where, in doubt, many of you are watching right now it is london the home of saddles. we'll reveal the top two when worldwidexan rure chgeetns your brain is an amazing thing.

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>> worldwide exchange rolls on right now. ♪ ♪ we built this city ♪ we built this city on rock 'n roll ♪ ♪ built this city >> you know, concrete, mortar, steel. those are better things to build cities on. rock 'n' roll is great i'm not sure it's got the structural capacity. welcome back, everybody. thank you for being with us here on a friday morning. a very busy friday i'm brian sullivan stock futures are down

about 75 points right now. we're coming off a 220 point loss for the dow jones industrial average the markets are important, but that is not the story that we are going to be talking about today. that is not the story that you are going to be talking about today. that story is a bombshell out of the world's richest man. jeff bezos blasting the national enquirer in a block post last night, accusing its publisher of blackmail. frank holland has the details, and jeff bezos is coming out swinging boom >> this is like one of those dramas on amazon prime playing out in the real life of the founder. he is awe accusing the owner of national enquirer of extortion and blackmail. he claims american media inc or ami -- into how the tabloid obtained text messages exposing his extramarital affair. a few weeks ago he announced he was getting divorced then the national enquirer published an investigation about bezos which included intimate

text messages he exchanged with his new girlfriend, lauren sanchez. you see her right there. bezos said he hired investigators to figure out how the texts were obtained. in response bezos said ami threaterned publish more text messages and photos if he did not drop his investigation in take blog post on the website medium bezos posted emails that he received from ami cnbc has not i wanted pently reviewed these emails. this is a story that is really encompassing a lot of different media, whether it's general news, entertainment news can we walk through some of the headlines, frank >> hold on, where not just media, but also the white house. wleft it out here because we're covering the latest stuff. of course, the national enquirer does have ties to the president and links there, and also jeff bezos privately owns the washington post, which has been critical, to say the least, of the trump administration

jeff bezos the mellow thing on the right column here. bezos makes extortion allegation not too sensational. main story about venezuela let's go to the "wall street journal. >> let's go to it. >> kind of a similar thing in the column on the right-hand side it's in the middle, but kind of underneath similar story about accusing -- >> just to be clear, for people who aren't familiar with the newspaper business, generally a big blockbuster story like this would get a big picture, and it would be right under the title of the newspaper >> it's a good setup wait until my next one >> i just want to -- >> what's the name, frank, of the guy that runs american media? the parent company do you know his name >> i can't remember. >> his name is david pecker.

here's the new york post bezos exposes pecker >> we're talking about neighborhood pictures, of course >> what do you neen? >> the jeff bezos naked pictures >> what does that have to do david pecker big headlines. there you go slightly differently >> slightly. pun intended >> yeah. turning back to your markets, stock futures are down about 75 points right now maybe one of the top five for a paper known. let's focus on the stock market. if you had to write a headline for the equity market look and setup right now, what would it be >> well, it would be basically that the key fundamentals are starting to slow down further, and, therefore, the rally that we've seen over the last month

or so just petered out one day yesterday, but i think it's going to continue to pull back, and we're going on have to reassess how the rest of the year is going to go. >> how do you think the rest of the year is going to go, matt? >> well, i know you are talking earlier about how goldman sachs was saying that most of the gains for the year have been -- had already been seen. i think that's probably a pretty good call. we do have the fed being much less hawkish than they had been, but they haven't started cutting rates, and they're not having involvement in a qe program. we have all these -- from around the globe we have lowering of estimates for economic growth. i mean, i think a lot of people are hoping that the slowdown we saw in china and europe last year would start to peter out, but it seems like it's -- if anything, it's getting slightly worse, and then, of course, we're seeing a little bit of a slowdown in the u.s. the same thing in earnings

without that kind of pickup in fundamentals, i think it's going to be hard for the market to rally much further after that big. >> i want to ask you this then what's our leader then who is going to be sort of the sector or the stocks that step up obviously the fang stocks were the market leaders for a long time then you had some saying that switched over to the semiconductors our friend and colleague jim cramer argues if you want to know where the market is going, you got to watch oil is there one thing, one group, one sector, matt, that you think will be the leader here? i do believe both will be very, very important we see the correlation with crude oil has been incredibly strong over the last year or more sometimes that kind of goes in and out. fades in and out usually once if gets a strong correlation that lasts for a while, and then, of course, the semiconductor -- the thing about the tech area, i definitely

think we're going to move away from that big thrust back into the fang stocks. we saw that last year when we had the correction in february, when the market bounced out of it, the fang stocks led the way. this time they're not. they're not underperforming, but they're not outperforming. i think it will be more broadly based, which is positive, but we have to see how these semiconductor stocks do. they've seen a strong bounce, but it's starting to get a little bit tough on a technical side of things it might need to pull back a little bit. you think that would be a net negative would you agree with jim >> yes, i would. because it does -- oil usually is -- a lot of people talking about supply and demand.

it's -- for most of our lives the real issue with crude oil is economic growth. oil tends to go up when growth is strong. it comes down when it is not we're seeing interest rates coming back down again we see it getting down towards 2.6% on the ten-year bond showing the growth is slowing there too. on the fundamental side, i'm not calling, oh, jeez, we're going to have a major recession or major bear market, but with things slowing down a little bit around the globe, it will be hard for the market to get another big leg higher >> yeah. really is. oil, listen, down again today. keep watching it because we're going to talk about it in a couple of minutes. the need to continue to pump oil in america is high for one big reason it starts with d it's called debt we'll get into it, but right now we're going to say good-bye to matt and have a great weekend. thank you. >> you too, brian. thank you. >> all right meantime, in corporate news, the sears saga soars on. the iconic retailer getting another lifeline after a bankruptcy judge approved eddie lampart's bid to buy the company. he offered to pay $5.2 billion

that allow sears to keep about 425 stores open and preserve, hopefully, about 45,000 jobs well, things are back up and running at wells fargo after a major outage knocked out service to some of its atm's and on-line banking apps the issues were due to a power shutdown at one of the bank's facilities it is not clear how many wells fargo customers were impacted. toys, tennis shoes, and travel the three t's. all topping your other big stocks to watch today. let's get back to frank with more on the stories. frank. >> we're going to start off with toys mattel with a fourth quarter profit as a makeover of barney helped to lift sales you see barbie right here. barbie sales rose by 12% hot wheels by 9% both easily beating analyst forecasts. the iconic barbie dream house, which retails for about $2200, was among the best selling toys in america last year shares of sketchers are surging today. the shoe company swung to a profit in the fourth quarter topping estimates, although revenue fell just short. sketchers also issuing guidance

that is above analyst forecasts, and expedia's adjusted fourth quarter profit beat forecasts. revenue rising 10% as the owner of travel sites such as expedia, hot wire, and travelocity sold more hotel rooms and airline tickets about two-thirds of the company's revenue coming from booking rooms and vacation rentals. brian, back to you >> all right good stuff there thank you very much. coming up, we just talked about it we're going to dive in a little more on oil. fears of a global slowdown weighing on oil prices again, but it's not supply-demand as matt said. it may have to do more with debt we'll explain. we continue to count you down to the world's top cities for technology according to saddles the newest ranking coming out. now, number five was boston. number four, amsterdam number three london. two more to go, and number two is, what else, san francisco the big surprise here, it is not number one so what is the number one best city all around for technology in the world? we're going to surprise you and

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r. whatever you want to call it, the big apple. manhattan. it's a good city for tech because all show long we have been revealing the top global cities for technology. according to a new report from global real estate firm. they ranked 30 major cities, all around the world on metrics like

venture capital investment, real estate costs, and access to human talent recapping the top five, boston, number five. number four, amsterdam three? london two, which you would think would be number one, i guess, is san francisco. who is the top city for tech in the world? it is right here it is new york city. it is what we just showed you. new york, taking the top spot. let's bring in paul, associate director at world research the publisher of that article. paul, learn, i know new york is hot, and i know there's growth in tech. i was shocked that it came in at number one were you surprised what pushed new york to the top spot the city of san francisco last year the other key thing is talent. the fact that new york has access to international talent, it's on the east coast of the u.s., can tap into europe, and when you are looking at major tech occupiers, where they're

looking to base themselves, they need access to a deep and resilient talent pool, and i think new york really offers that. have there been trends to show this will go this way? >> you see it across the u.s. and across the world, and what our program really picked out is cities that tha are rising on a global stage, small cities in particular, so if you look at europe, cities like coppenhagen, stockho stockholm, over to tel aviv, for example, that are actually seeing loss of investment and rising on the global stage in that search for international talent

we know about some of the tech hubs what else is surprising about china, and more importantly, paul, where is the money going there? china now takes a hire share than the u.s where is that money going? there are a number of key cit s cities each city has its own advantages and, you know, it's really sort of excelling in the digital age. a lot of our talent to talent. a huge domestic work force and rising numbers of stem graduates as well, for example latin america had two. i was surprised see sydney australia not on the list. melbourne as well. it really appears that globally

we're clustering we have north america. we've got the u.k. some small parts of europe. it's really the u.k. and then, of course, we have china are we starting to see three major sort of regional tech hubs not just cities, but sort of country-wide >> yeah. yeah i mean, clusters aside, we are seeing, i guess, it's english language that's the common denominator here if you look at where the tech hubs are in europe, it is cities or countries where english is also widely spoken it's where young tech talent is looking to live and work and build their careers. >> i was thinking cost of living is high, but then when i look through your list, i realize the cost of living is probably high in all of the top ten. they balanced out. new york city taking the top spot fun stuff. thank you very much.

all right, on deck, why a four-letter word may drive the future of oil prices speaking of oil, could opec become an illegal organization a new shn ngssayitpu icore ss might. we'll tell you about it.

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before starting tremfya® tell your doctor if you plan to or have recently received a vaccine. ask your doctor about tremfya®. tremfya®. because you deserve to stay clearer. janssen wants to help you explore cost support options. >> if you want to know where the stock market is going, you probably use oil, i'm guess, most of you, have heard of gasoline maybe petroleum products otherwise, oil matters to not just driving, but to a lot of the market, including the stock market because there are so many energy companies out there and so much debt out there, and debt may be the four-letter word that determines where the price of oil ultimately goes. kevin, chief investment officer at consulting research group and joins us now that's really the story, and that's why we've been digging in and dragging our butts because oil is an interesting story, and there's a lot of jobs there. there's a lot of debt there.

you think because of those debt levels we may not be able to see production decline even if prices continue to drop. >> my economics professor was wrong. supply and demand, you think prices come down supply comes down. it does eventually, but if you have so much debt, let's say you have two oil companies one has no debt. one has a lot of debt. oil prices come down the one with no debt can reduce production the one with debt has to increase production. if oil goes from 100, a barrel to 50, a heightly leveraged firm has to produce more oil. even if they're losing money, they need the cash flow. >> they have to pump and pray. they have to get the cash. got to pay the debt. interestingly, in 2014, 2015, oil was down production up over 25. same thing now oil is down one-third. production is up

you think the production is coming down. >> i have a terrifying number. are you ready? >> that's the amount of energy that is maturing in the next five years around the world. it's not just american shale companies. saudi arabia needs $88 air barrel to break even on their budget they're not going to get it, are they >> we have text technical fields that are profitable at $35, $35 a barrel >> they have to keep the production going i don't know you think we're going to get back to 80 i can't see higher prices any time soon? >> we have 70 for later this year >> even that seems optimistic. >> i think it is optimistic, and i think overall we're optimist being on the economy, and we think -- we're seeing it in soybean prices and copper prices, and we think that's a good sign for oil. >> the pro sign for oil is that a lot of the detd has been refinanced it's been stretched out. a lot of it is coming due, and most of that is back-end loaded.

2022, 2023 if we can get through the next couple of years, you think the markets will balance themselves out? reduce some of the debt? make it less likely we need to keep producing oil even if prices go down >> i think it depends a lot on storage if we increase storage and increase distribution pipelines. then i think oil could stay lower. a cheap oil here gets -- if there are bottlenecks in producing that distribution system, then i think oil stays higher, and the debt becomes a little less of an issue. >> who is more powerful, do you think? opec or the u.s. shale revolution we're the biggest oil producer in the world now, but opec plus russia is bigger than us >> opec and russia are 0-1 they tried to bankrupt us in 2014, 2015.

it has to be the only story where -- private equity -- it's built on rock 'n' roll no, it's built on debt the u.s. shale revolution, i mean 12 million barrels a day. it may be where we're at the next time we get a number. how big do you think that this can be >> i think it's huge we're really constrained by distribution and a number of truck drivers. they can't find the workers really >> and skpand water. by the way, even diesel fuel they need to run the generators, and they're running out of diesel to power the trucks to get the sand and water in. >> there's much more supply there to extract that supply >> great stuff on the debt and oil story. one that is close to my heart and airplane seat. have a good weekend. >> thanks. >> time for morning's rbi. in the most random and interesting thing today, you are going to hear has to do with what we just talked about.

oil. kind of. because if you think that opec is trying to fix oil prices and leads to unfair competition in the global markets, you are not alone. some members of congress agree there is a bill advancing through congress called the no oil producing and export carterly act, or nopec it would try to make opec illegal if it passes any country who violates it could have their american assets seized remember, saudi arabia owns the largest gasoline refinery in the united states. now, ten years ago a similar bill went through congress, but it failed because president bush said he would veto it. given trump's tweets about opec over the last year, it could be a very different outcome this time the dnopec bill, we're following it it's random and interesting and important. the jeff bezos story is your top story. i thought i would leave you with the new york post headline, bezos exposes pecker, calling out david pecker, who is the chairman of ami, the parent

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zbloinchts bezos blackmail bombshell. the amazon ceo blasting the national enquirer accusing the parent company of blackmailing him using nude photos. we'll tell you what the tabloid wanted in return stock futures under pressure on fears about the lack of progress in trade talks with china. we'll get a live report from washington ahead of this weekend's negotiating season mattel shares soaring after the company posted a surprise profit we have the numbers straight ahead. it is friday, february 8th, 2019, and "squawk box" begins right now.

♪ >> live from new york where business never sleeps. this is "squawk box. >> good morning. a very warm welcome to "squawk box" here on cnbc live from the nasdaq market site and in times square i'll will fred frost >> how are you nice to see you. what's going on today? >> it's a privilege to media your lines >> they say that air time is oxygen in the tv business. i want -- i was pleased that i could bekwooet you the oxygen. >> not only that i'm in becky's chair today you know what that means i have the usa flag behind me, which is an even greater privilege. >> that is praif biggest they have there coming up at t, pro-am including the ceos of waste management, chevron, cisco, and at&t. >> we'll be joining them on vacation in just a littl