♪ good tuesday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan at the new york stock exchange jon fortt's in chicago today at cnbc's at work human capital and finance summit a lot more from jon in just a moment we're obviously going to begin in washington, go back to senate banking and that hearing on facebook's crypto. ylan mui can wrap up some of what we've heard in the last

hour >> the hearing is still going on behind me, but already there have been several fiery moments, including some from senator sherrod brown, the ranking democrat on the committee. in his opening statement, he compared facebook to a toddler playing with matches and said that it would be delusional for anyone to trust facebook with their finances, when the company has already broken so many promises on privacy. he then tried to get david marcus, a facebook executive who's testifying to make his own promise, and that is to receive his salary in libra. >> senator, if your question is whether i would trust all of my assets in libra, the answer is yes. >> do you trust this enough to make your compensation paid fully in your currency >> senator, i would, because it is backed one for one with a reserve. >> you could have said "yes" at the beginning of the question, then >> senator, with respect, i wanted to clarify that we're not

trying to compete with bank deposits >> he has said that statement repeatedly, that facebook is not trying to compete with banks he also compared libra to cash and said that the company would not be receiving any information from users about the libra association. >> getting this right means addressing these concerns in full and ensuring that there's proper regulatory oversight for this project >> carl, you had asked earlier about whether facebook and libra had any champions on capitol hill we did hear senator thom tillis say that he thinks this project is worth doing that. that he thinks the u.s. has the chance to be the gold standard and set the rules of the road internationally here but it's note that believe even the supporters of this project still have a lot of questions and concerns about exactly what it's going to look like moving forward, guys. >> i had the same thought. ylan, thank you very much.

let's bring in laura martin on an important day for the company. good morning, guys so this is going well. what's your take on what we've heard so far is this grandstanding or are we getting to something substantiative >> i think at the core of libra and facebook's involvement in it are questions about its relationship to government, to central banks, to regulators and we're seeing some of these issues come out. we saw senator warner press marcus there on this question of whether facebook was going to -- what information would have, whether it's going to privilege its own products through this all. and so these are super important questions that we haven't had specific answers to. >> laura, a year from now, do you think we're going to be talking about libra as a real, actual, tangible service within the marketplace? >> you know, i think the question wall street is going to have, as marcus just said, their not going to make money from this as a wall street analyst, i want to know why we're spending a lot of money on something that's not going to make money. so either he's not being truthful with congress or they're not going to make money or people like me will yell and

scream at the ceo every single quarter about how we're wasting money on this. >> have we tried to model what this could mean? is there just no way to know >> i think they're not going to let it happen. i think there's no trust in washington, d.c. -- >> they being? >> washington, d.c and you, too, but if the u.s. is saying we should leave, they don't trust facebook giving them financial system to disintermediate, you know, like the federal reserve, like, i don't think that's a better idea >> so you think this is not going to happen? >> so i think the government is going to figure out a way to regular used to it, like a bank or worse and therefore it's going to take a lot longer to happen >> which begs the question, is it going to be -- maybe even if it's not facebook, based on what you just said, is this going to be something that's spearheaded by another tech company or is it going to be financial institutions >> i think it would be more likely that you two could start this company and have it get through the regulators faster than facebook could. >> because we don't have the well of bad will built up? >> exactly >> because you're really smart >> and you're really smart >> which is why --

>> keep it coming! this is going great, this panel. >> -- i ask, where are facebook's partners on this and when do they have to start coming -- backing him up in some way, right visa's voice would count for something. >> probably. but i think actually what the most likely scenario here -- and facebook has said that it wants libra to launch in the first half of next year. i consider it highly unlikely that that happens, given all of the things that the senate, the house, and central banks and regulators around the world are going to have to say about this. so the timing is very unlikely the second thing, which i agree is actually a very likely outcome, is that this is going to be regulated. facebook has said that they would comply with the regulations around anti-terrorism, money laundering, know your rules, that's a pretty significant regulatory thing and it's possible we wind up with something that looks a lot less like bitcoin which is decentralized and anonymous, and

something that's much more centralized and much more regulated. and then the question is like, why bother at all. payp paypal, transfer wise, others that are in the management of managing payments in the vacceif what facebook is talking about has said that block chain is not the most efficient way to do this and centralized infrastructure is a better way to do it >> so laura, you have a hold rating on facebook where does the possibility or maybe the lack of a possibility based on the scrutiny we're getting from d.c. right now fit into that rating >> so we took our earnings estimate down a buck, so we're now a buck below the consensus we're at 62 for the current year a lot of that is spending on things like that, that in theory aren't going to make any money and i think this is a stock that trades in a p\e. so if they're going to continue to spend money on things they're not going to monetize like ok e oculus, that ads risk to the story. and i would want to be somewhere else the last thing on risk, facebook

invented a market that didn't exist. and what they're trying to do now is disrupt or work with existing ecosystem partners that are global like, every single country has an interest in not having the financial system disrupted so that isn't something that the tech companies technically are good at. >> finally, that $5 billion fine, the stock barely blinked on friday night and monday morning. so is there -- how much liability is in even worst-case scenarios right now on the stock? >> and i think a good question is, what can the government do to stop them because the market doesn't care about a $5 billion fine, even though it's a record fine. basically, the market is saying, it's not going to stop them from doing anything so the government has limited teeth to do stuff. it can fine you, but these are companies that are winner-take-all markets. so i don't think they want the company to get their hands on libra, because then what do they do to stop them from bad behavior >> the flip side of that is, you know, i look at some of the articles we've seen over the weekend and this idea that that

ftc fine is just the beginning for facebook do you believe that's the case >> i do. i think that the eu is using google as a profit center to meet its budget shortfalls and i think the u.s. is about to do that with facebook >> laura, thanks good to see you. always a straight shooter. >> my pleasure >> kevin, stick with us. we'll turn to amazon day two of the prime event obviously underway courtney reagan will set us up on that. >> good morning, carl. we're about two-thirds of the way now through the longest prime day event yet. amazon giving us a glimpse into the action from at least the first half so amazon says worldwide sellers predominantly small and medium-sized businesses saw the biggest 24-hour sales day in amazon history now, the company also says it sold, quote, millions of alexa-enabled devices, including the fire tv stick with the alexa voice remote and the echo dot. nerd wallet does verify that prices on those items were lower than amazon prices on black friday other top-selling items again this year include that instapot.

everybody wants one and the lifestyle personal water filter as well as crest 3-d white professional effects whitening strips data from edison trends suggest this year's prime day event might have gotten off to a slower start than the previous two years because it began at 3:00 a.m. eastern time instead of 3:00 p.m. last year and then 9:00 p.m. in 2017. so that makes sense. nobody'sprobably shopping whil they're sleeping now, amazon may have introduced the event, but more than 250 retailers are offering competing deals. adobe an liquidates say that large retailers with at least $1 billion in annual revenues have seen a 64% increase in their sales versus an average july monday that's above last year's lift of 54%. retailers with $5 million or less in annual revenue, the little guys, they are also seeing a 30% lift in online sales. adobe retailers with physical locations might have been the ones with the advantage, because the average order value for prime day, buy online, pick up

in store, up 12% from $115 to $131 price blink says based on page views from 3:00 a.m. monday, at walmart.com, shoppers were looking at the insta sqpot, the google home mini and the apple ipad, the 128 gig. best buy, price blink says the high test page views went to the playstation, the apple ipad, and the tcl 75" 4k tv. we still have a number of hours left to go >> all right, court, thanks very much on that interesting, kevin, people are talking about large categories doing well and you have retail sales, like the number we got today, and people have jobs and salaries and they're spending them >> yeah. no, this is -- this is actually still small compared to the potential prime day. so we've gone to two days now. and when you look at forecasts that are about $6 billion in sales for amazon over these two days, you look at something like alibaba, which has its singles

day, which is a $30 billion single day retail event. and so i think that what we're seeing in terms of the state of the economy now, consumers are actually being pretty optimistic but the second thing is that these kind of ridiculous made-up shopping festivals actually exert incredible behavioral pull over consumers so they get people to take their wallets out no matter what the economic conditions. >> consumers and arguably the broader sector, when you see other retailers getting involved in the game, too i realize that an estimated $6 billion is nothing to scoff out in terms of sales, but the bigger for amazon, specifically, the bigger upshot here is the fact that you get all of those new potential prime members to sign on and it becomes a much stickier, i guess, environment for them to spend more in the future, right? >> yeah, i think this reinforces the idea that everyone needs prime. as bezos has said repeatedly, they want prime to be such a good offering that you would be

an idiot not to actually have it it's $119 a year and data suggests that half of all u.s. households are already prime skrisubscribers so that's a huge annuity for amazon in terms of the cash that that represents. but it also reinforces the habit of actually going -- turning to amazon as opposed to other retailers. and what we'll see is that amazon, it says that it plans to make one-day delivery standard and that i think ups -- raises the bar for a lot of other retailers, just getting into two-day standard delivery has been really logistically challenging -- >> and expensive >> and expensive and if you're retailing, you have to match one-day delivery it's going to be tough >> yeah. even walmart today admitting they've done some things that we would like to try and copy finally, tesla employees telling cnbc that they took shortcuts and worked through the harsh conditions to meet model 3 production goals this news surprisingly not coming via a leaked email.

how are you processing sort of the incremental news out of tesla from the rank and file >> i think that there's no surprise you know, i've long thought that personally, i would not buy a tesla sedan right now, because of the lengths that the company has gone to make these cars. they've got a tent in their parking lot. they've got people doing things designed to be done by robots. and now it seems they sent workers out to walmart to buy electrical tape to fix broken parts in the car before they were shipped so as a consumer, i would think, if i'm going to buy a car, a significant investment, i aspire to hold it for some number of years, why would i buy a tesla car under these conditions >> you're not alleging faulty quality practices or safety practices? >> i'm not alleging it, although the cnbc report does offer specific facts about practices

in the production line that should give consumers pause. it will be interesting to see whether consumer watchdog groups like consum"consumer reports," o have the means to do pretty rigorous liability tests -- >> and have given them great grades in the past >> but with some hiccups along the way. >> also in that report, which was very in depth investigation here, lots of reporting, you do have a tesla spokesperson pushing back on some of these anecdotes from the employees that shared them with cnbc, calling it misleading, do not reflect our manufacturing practices or what it's like to work at tesla and pushing back on some of these reports about tape on parts, et cetera who's right? who figures out who's right? and does it really matter when you look at how, i guess, rapid the tesla fan base is? >> yeah, well, i think there are two things the first thing is, i think there is a role for consumer watchdogs like consumer reports. these cars are going out into the world and it is possible for -- to collect reports from

owners it is possible to actually inspect them so i actually think that -- we're going to see and should continue to watch the reports that are happening the second thing is that it's zero secret and elon musk himself admits this, that the working conditions at tesla, as he's described them, have been similar to hell on the production lines and so i don't think it's beyond the realms of possibilities that workers were working in temperature conditions that weren't great, that they were cutting cancer in terms of trying to meet the production requirements so it's consistent with the broader story that we've heard coming out of tesla, whether these specific facts a allegations themselves are true. >> stock still had a good bounce, up 18% in a month. >> yeah. >> we'll see where that goes >> kevin, thanks good to see you. >> yeah. as we mentioned, jon fortt is in chicago this morning for the cnbc at work human capital and finance summit jon, what's coming up this hour and later today? >> well, the big question here,

morgan, is where do you invest for the future of work, not just for survival, but for growth and we've got ibm's martin schroeder coming up, former cfo, now svp global markets at ibm, responsible for revenue and profit across the world. so we're going to talk to him in just a few minutes also, going to look into this survey monkey happiness survey of course, happiness among workers really important in a market this tough. where do you invest to keep the workers you want to keep, make sure the workforce is doing what you want it to do. lots of talk about artificial intelligence here. lots of talk about workplace conditions and just generally global competitiveness and transformation ibm's also got some cloud customer news we're going to get into with martin schroeder in just a few minutes, morgan >> jon, we're looking forward to it we're going to head back out to chicago after the break for jon's sit-down with ibm's martin

schroeter. in the meantime, dow's up 20 points stay with us we're also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. from the day you're born we never stop taking care of you. ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

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hey, jon >> hey, carl thanks, martin schroeter, ibm svp of global markets, formerly cfo. so you've been watching money in the organization and now getting it in the door you guys just announced a deal this morning with at&t communications, really centered on at&t business and applications explain what that's about. >> yeah, so at&t business is going to bring us on as their primary developer and cloud provider so we'll take the applications that at&t business runs today and we'll move them on to the ibm cloud. we'll move them on to other clouds, as well. but primarily on to the ibm cloud. and then we'll put them into that hybrid cloud environment that almost all of our clients are thinking about as the future you know, we've said for a while now, the future is going to be about hybrid clouds, some things will stay on print, some things will move to clouds, and this essentially is going to do that for at&t move them into hybrid cloud

environment. >> this sounds like it's hybrid clout and multi-cloud. ibm cloud and other clouds why so many clouds >> that's the way most of our clients are working today. when we talk to our clients, they probably already have five or six clouds they're working today. that's just a reality of the where the work can best be done and where the data is going to sit. so that hybrid world is very much here today and we have to be able to offer our clients the ability to manage across all of those environments >> how much of this is new revenue? it's getting really challenging, i think, for investors to figure this out because on the one hand, ibm has been working with companies like at&t for a long time, has been working on their business applications in a way that is a continuation of that relationship is it more a refreshing of it for the cloud era? are you taking some business from somebody else and getting more of at&t's revenue >> so in the case of at&t, there is a -- we have a relationship that i've been working with at&t for a long time, obviously and they've been working for us. so in the case of at&t, we're going to take a lot of the internal applications that they have today that are running

their business and those are new to us, right so we're going to move those -- the work to help move those is new to us. so there is a piece of this that is absolutely new and represents growth >> i know that we're right ahead of ibm earnings, so we've got to be careful here, but in the beginning of the year, there are lots of questions about the enterprise environment i know you talked about this just a month ago maybe some of the concerns were overblown about the appetite, the demand for enterprise spending how would you characterize that earlier period now with the benefit of hindsight >> yeah, look, the two discussions we had with all of our clients all the time, and this was true now, it was true six months ago, it was true ten years ago are about, how do we create some productivity for our enterprise clients and how do they go reinvest that in new technologies and sometimes, you know, that split may be 50/50, maybe 51/49, but it's really the same discussion the environment today is really about drive productivity for our clients. we'll help at&t business do

that, for instance, and then they're going to reinvest, as well that's still the same nature of the discussions we're having today. >> the red hat deal just closed days ago explain to me how one plus one equals three in this how do you get more business than the business ibm was getting already and the business red hat was getting already when you're going on that sales call? >> it's a really interesting question, i think. because what we're seeing with our clients is they've started to move things into the cloud, but they haven't really moved sort of the hearts and lungs, the mission critical apps. and that's what we do for them today. so in order to enable that mission-critical move, they really needed an environment and needed to know they could move into an open environment so they were not locked into a cloud so the red hat combination enables that environment to exist, so now they can be more comfortable in moving mission critical apps. so in chapter two of the cloud, in the next step of the cloud journey for all of our clients will be about taking those

mission critical apps and moving them to the cloud. that's why the combination is so powerful, because it enables a new environment, it enables them to think about now, how do i do my most important work in a cloud environment. >> and we'll be following your progress on these earnings calls to see the numbers as they come in you and i are going to talk in just a few minutes here at at wo @work about some of the ai works you're doing in sports, wimbledon being one of the clients -- and i watched that men's final just a couple of days ago that was insane. i'm sure the ai was working overtime making clips about that martin schroeter, thanks for being with us. >> thank you >> guys, back to you >> jon, great stuff. thank you. you know, exactly 50 years ago today from kennedy space center, the apollo 11 mission launched we talk a lot about the space companies, defense companies that were involved, but ibm was actually one of the contractors that was integral to that program. still to come, tech coming off a record close with the dow posting another record high

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. welcome back to "squawk alley. european markets closing seema mody joins us now with a look at today's action seema? >> a second day of gains from the major averages in europe, despite continued weak indicators out of germany where a key indicator came out much weaker than expected the uk stock market one of the outperformers today, boosted by strong earnings from burberry, a new designer collection and strength in china fueled burberry's revenue growth. pretty commendable given the disruption the luxury retailer saw at its hong kong stores amid the recent protests. burberry stock on pace for its best days in several years lvmh adding yet another fashion brand to its growing portfolio this time stella mccartney

joining gee venchy and dior. it's worth noting the continued pushback from european lawmakers. this time, olaf scholz becoming the latest official to sound the alarm today, saying a currency does not belong in the hands of a private company and that the euro and remains the only legal mains of payment in the euro area it follows marcus furber, arguing that facebook could become a shadow bank even if david marcus makes it through questioning from capitol hill, he'll likely face similar pushback and pressure from the europeans. carl >> that's for sure seema, thank you very much let's get over to rahel solomon and get a news update. >> here's what's happening at this hour. north korea suggesting it might call off its 20-month suspension of nuclear and missile tests because of upcoming u.s. and south korean military drills pyongyang seized those drills in expectation of an invasion iran's top leader is warning

that his country will retaliate of the seizure of an iranian tanker by great britain. ayatollah khomeini called the seizure an act of piracy no charges in the death of eric garner after a years' long investigation into a case that prompted national protest over excessive police force and it comes just one day before the fifth anniversary of garner's death. and on a lighter note, the rolling stones made good on their promise to play a concert in new orleans they were scheduled to play in sunday, but had to postpone the show due to tropical storm barry. they took the stage last night performing 19 songs. their last show in the city was 25 years ago and that is our cnbc news update for this hour. carl, i will send it back to you. and i saw a review of that show, and carl, apparently mick jagger still has it it was a good show >> he looks good he looks really good unbelievable thanks, rahel. when we come back, the latest from facebook's hearing on the hill we'll take you back to d.c. in a moment

in the meantime, major averages still playing cards so close to the vest dow's up seven points. we're back in a minute $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

well, a lot of people are looking for the meaning of life, a lot of people also looking for the meaning of work. so cnbc and survey monkey got together for a workplace happiness survey to see what people are really looking for at work are they happy and our deirdre bosa has some answers.

>> jon, this was the second reading of the survey, and a few things they did remain the same. you just said it, meaning. overall workplace, the meaning they derived from work, not necessarily how much they were actually paid for it nearly half of respondents very satisfied with their jobs. about 85% at least somewhat satisfied. so what was new in this reading? well, tech actually played a bigger role. we asked respondents if they thought that their companies were investing enough in new technologies nearly 60% said "yes" while 34% said "no." here's where it gets interesting, the "no" was a group that includes a disproportionate number of people who are not happy with their jobs overall now, in fact, more than half of unsatisfied workers say their companies are not spending enough on new technology versus less than a third of satisfied workers. now, this could be a lesson to employers on the importance of looking ahead to the future and

investing in new technologies. this is just one of the learnings that finance executives here in chicago at cnbc's @work event are getting and have come to hear about. now, i'm going to sit down later with the heads of microsoft and dell's corporate venture capital arms it's their jobs not to just stay on top of new technologies, but make sure that they're actually investing in them. now, something else that companies might want to think about investing in and that is mentorship here's the stats those with a mentor are more likely to say they're happy at work they're more likely to say that they are well paid, and they're less likely to say that they've thought about quitting so, guys, this is some convincing evidence, jon, if you sort of take the numbers, if you can believe them, think about what companies believe it takes or should be looking at in order to retain employees, which, of course, is a major issue in the workplace. >> i wonder if it's a case of, be careful what you wish for here, though because employees saying, we want them to invest more in technology some companies are going to

invest more in technology so they can get rid of workers. so i guess the sweet spot is, companies investing in technology that make workers more productive in a way that they like. >> that is a very good point and actually, you look at some of the hottest workplace tech companies like slack and zoom, they are not the big tech companies, but they're really important. you hear about the way they change how people work together, increase collaboration zoom makes it a lot easier for people to have video conferencing maybe it's that. and maybe a little bit less automation that could take the jobs away from them. >> there seems to be this question of culture, too, overhanging these results. because you've got people talking about meaning at work on the one hand and also mentorship on the other those are things you don't just, you know, plunk down a payment and all of a sudden, the appear companies sort of have to weave a narrative and put structures in place to make sure those things happen. >> absolutely. and i think they all go hand in hand, right? you get meaning from your work if you're getting paid well for it, if you have a mentorship so i think what we're learning

here at these events is you have to have all of these things in place, but that employees are looking for sort of the full package. >> deirdre, thanks morgan, i'm pretty happy right now, but i just got back from vacation a few days ago. are you happy? >> i am thrilled, but i miss -- we miss you terribly here at the desk we feel like we just got a little taste with you here yesterday and now you're in chicago, jet setting again so come back soon. >> all right >> jon, thank you. and deirdre. facebook on the hill, again. this time it's david marcus, the head of calibra, answering questions from the senate bank keg. tomorrow, he'll appear before a house panel. meanwhile, listen to what treasury secretary steven mnuchin had to say yesterday about libra. >> i didn't say i was comfortable with them launching a currency >> if they launched it in an appropriate and a safe way -- >> yeah, but i'm not comfortable today. so let me just be careful. as i said, they and others have a lot of work to do before they get us comfortable >> joining us now here at post nine is mow zell thompson, a

former adviser to facebook and kristin smith, director of the block chain association. good morning to you both mozel, i'll start with you we've talked to you quite a bit about regulatory risks for facebook and everything they've been dealing with and they're facing we haven't talked to you about libra yet. what do you think of this proposed digital claim >> i think it's really an interesting opportunity. and i hope that what you see on the hill today, that there are some real risks. but considering the risks doesn't overshadow the opportunity to present, not only to provide banking services to the end bank, a large part of which live outside of the united states but also to reduce fees and a whole bunch of other things. it's important that cryptocurrencies are occurring right now, so facebook is a big entry and it's changed the profile of the discussion in a very significant way so this may be exactly what it needs to gain more market

acceptability. >> kristin, to this point, the fact that they have changed the profile of the discussion, it's certainly brought more attention to this nascent industry, but it's also brought an incredible tidal wave of scrutiny is it good or is it bad? >> it's an opportunity we're very excited here at the block chain association, because just a few short weeks ago, we were relatively sort of obscure topic to be talking about on the hill and all of a sudden, we are in prime-time we have the treasury secretary, president of the united states, the chairman of the federal reserve and both committees in congress talking about these issues and so we think it's an opportunity. i think what's been very promising today at the hearings is that most of the animosities that senators have about this are because of legacy facebook issues they do have questions about how libra itself would work, but i think my favorite words of the day were when chairman crapo said the words beneficial and inevitable, describing

currencies and the industry. so we take it as an opportunity. >> there is a discussion about agency turf wars, essentially. who's going to be the cop. >> right >> if you were still at ftc, would you be pushing for it? >> i think it sounds more like banking to me, rather than a pure data issue. now, the question is whether you think our banking institutions are enough to protect those consumer and privacy issues, that's another question entirely you know, i think it's really interesting when you deal with cryptocurrencies there's three elements you have to have. you have to have, essentially, the backstop, which is what libra provides in this pool of whatever second is a regulatory function in which they're bringing some attention to, but the third is market acceptability that's where facebook can do something that no one else can it can bring billions of people into this. and most people don't use any block chain or cryptocurrencies at all so this is very interesting to see. and we're at the beginning

i would tell people, we have a long way to go here. >> but it sounds like you think that there's a difference between politician outrage and consumer outrage >> absolutely. >> you think people would still be willing to trust -- engagement has sort of backed that up, you could argue >> even if you look at facebook and what they do on the -- how they handle what they do now, you have people on either ends of the bell curve who might be outraged, but the majority of people are using it successfully and using it well. and that's shown in how it's reflected in the market place. so i think if you head toward that center of the bell curve, then they have really something to offer that's not to say that there doesn't serve to be oversight, but i do think they're approaching this one the right way by inviting everyone else in >> kristin, certainly we're talking about lobibra right now but they're not the only ones developing digital coins or putting together consortiums to

try to offer similar services or similar tokens how does this compare with what else is happening in the industry more broadly, and do you think facebook will be the first one to mark in a meaningful way >> well, this project is one of just many types of block chain-based projects that are out there. and a lot of these aim at sol solvinsolv solving issues with payments and remittances, but there are other specialized tokens that are being developed that will work within specialized software systems that will improve the way we do operate the internet today. and so we want to just make sure that as we're looking at these, not everything is lumped into the same bucket. they have different considerations and different functions at different times, and that means there's going to be different regulators. you might have the s.e.c. at some level, the sfct at some level, you could even have the ftc if it's a software-type system i think the important thing that we want to get across to lawmakers is that there are a lot of regulators that are actively overseeing this industry today, whether it be

state-level agencies, the sfct and the ftc, and most important fincen, the department of treasury, which for years as secretary mnuchin said yesterday, has been working to have good anti-money laundering regulations in place for the cryptocurrency industry. so, there's a lot of work that's been done at the agency level and this libra project has been a good opportunity to educate members of congress and their staffs about all of the regulations that are in place today. >> finally, a lot of the scrutiny that we have heard, whether it's from the president or the fed chair last week or lawmakers today, has been focused on, you know, this idea that you see these digital coins like libra come out. the worry that it could undermine currencies, it could undermine monetary policy. on the flip side, facebook saying, they're not trying to compete with bank deposits they are not looking to, you know, be in that position. who's right? how does that, i guess, gap get

filled in? >> the way you've described the problem is that you have either side the truth is in the middle, actually because there are a lot of people who are not being served by banking right now or it's not being efficient. to the extent it makes banking more efficient, i think it's great. to the extent it provides an avenue for people who don't have banking services, i think that's great, too so i think there's a lot of room here for coexistence right now, it's a little bit of a jump all they've kind of thrown things in the air and let's see how it shakes out >> we certainly will see and i'm sure we'll be talking about it a lot more. we appreciate you both coming on today and sharing your insights. mozelle and kristin. >> thank you as we go to break, let's get a look at the shares of alphabet the president did tweet his support of peter thil's allegations of treason s&p down abouth four stay with us

i'm brian sullivan in for scott today. today on the "halftime report," are some of the big earnings numbers in the financials really enough to give that sector a longer-term boost? plus, the one part of the otherwise booming tech sector that is still lagging, so is this your chance for a catch-up trade? and why one top firm is going

all-in on facebook we'll talk more about libra. the "halftime report" starts at noon eastern time. otherwise, i'll send it back to morgan brennan morgan >> thank you, brian sullivan after the break, we head back down to capitol hill for lawmakers' q&a to facebook's head of libra. don't go anywhe.er

let's get back to capitol hill with senator menendez now. >> nonidentifiable data to

understand. >> that's the beginning of opening the door let me ask you this. if there is a comingling of data -- purposeful or not, can you commit to this committee and the public that you will notify users and the proper authorities within 48 hours? >> senator, i commit that we'll naturally notify users that would have been affected by this but first and foremost we want to make sure that it never happens. >> i know. but if it happens, i'm saying whether purposeful or not, things happen. will you commit to notify both the users and the public within 48 hours of your findings? >> senator, i commit we will inform users and the public if such thing happened within a reasonable timeframe. >> so that could mean a bunch of things let me ask you this. i have been the author and architect of many of the sanctions regimes we have levelled against rogue regimes, iran, venezuela, cuba to mention

some many of us are concerned about how those countries and how criminals can use libra to evade sanctions. last year the treasury department identified and published digital currency addresses associated with two iranian-based individuals who helped exchange bitcoin for iranian cyber criminals that used ransomware to extort millions of u.s. dollars from over 200 victims if libra was used for a similar transaction, would the lieb i can't association, the group that validates libra transactions freeze the assets of such sanctioned individuals >> senator, first i really want to stress the fact that if we don't lead, others will. as a result, the transactions that you highlighted and listed will happen on a network where we will have no jurisdiction and no reach and no ability to have

any -- exert any control for national security purposes as far as libra is concerned, naturally because libra, despite the fact that it will be headquartered, will collaborate, will have a program and will ensure that off and on ramps are properly regulated as a result those activities should be extremely hard to -- >> but my core question is having that individual identified to you, the type i have just described, would you freeze the assets of such a sanksank -- sanctioned individual. >> the way the system is contemplated, it would be the role of the big custodials to block access for funds for those addresses as well as all of the

off and on ramps that would prevent those addresses to convert to cash. >> let me ask you one other question i have a bunch of them i will submit them for the record this doesn't assuage my concerns as it relates to the sanctions we have worked on a bipartisan basis in the past. so would the libra association -- what would they do if u.s. regulators wanted to enforce sanctions on certain individuals, but other global regulators did not how would the association determine which set of rules to comply with? >> senator, that's a really good question and one that we are in active discussions with a number of regulators including treasury my understanding of this and the way that we are currently thinking about this is that actually the way to properly police and control the network is through, one, the off and on

ramps and, two, all of the -- >> well, i'm going to take your word that you're not going to act before you have all these questions resolved if not, what libra could be is the wild west of crypto currency where countries looking to avoid u.s. sanctions, and we can't have that. >> i agree. >> thank you, mr. chairman welcome. one of the benefits of going last is you get to hear your colleagues' comments i want to make a couple of comments i hadn't planned to make otherwise senator kennedy rightfully pointed out facebook's failings in the face of russian interference in the 2016 elections. i know you are working hard to remedy it. i wish the united states congress was working to remedy as well. we have a bill in this

committee -- bipartisan bill called the deter act that would say to putin or anybody else that wants to interfere in the 2020 elections that they will pay a certain and high price we have to get to the bottom of 2016 we should be working to protect our elections in 2020. >> fiery q&a continues in senate banking. we'll take a short break market not doing a lot in terms ctn.rice aio dow up four. we're back in less than three minutes. (gentle music)

- my degree from snhu has helped me tremendously. the flexible class schedules allow me to go to work full-time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we, at southern new hampshire university, are the ones who succeed. we are the ones who break through.

we are also going to get to very important earnings after the bell csx, the freight railroad and united airlines reporting results. definitely another deeper dive into transports and the read-through on the broader economy today at 3:00 p.m. >> j.b. hunt

we'll see what cxs says. >> hbo, 137 emmy nominations, the most for a network ever. "game of thrones," 32. a record for a single show in one year i guess they're back on top. >> i guess going out with a bang, i guess >> let's get to sully in the half >> carl and morgan, thank you very much. carl, spectacular documentary last night hi, everybody. i'm brian sullivan in for scott today. your top trade, we are tracking the earnings movers. it's all about the earnings season we heard from the banks. now big tech is on deck. >> the earnings parade kicks into high gear with several big name financials reporting. is the sector due to break higher >> one part of the sector is lagging. we're talking about the potential for a chip surge and why one top wall street firm just went all