good morning, it is 8:00 a.m. at youtube headquarters in san bruno, california it's 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ ♪ good wednesday morning, welcome to "squawk alley," i'm carl quintanilla, with morgan brennan. watching the markets here, dow's up, but google is going to start us off, the ftc announcing this $170 million settlement with youtube earlier this morning, about to hold a press conference on that in just a moment we're going to take you there live for

the start of it as we continue to watch alphabet shares essentially unchanged today, jon. >> yeah and our ylan mui is there in washington who joins us with more. 170 million now in the context of facebook maybe doesn't sound like a lot, but that's a lot for the ftc right? >> the ftc is quick to point out this is the largest penalty ever collected under this privacy law that protects children when they are surfing the web and when they're online the settlement was actually split between the ftc and the new york state attorney general's office $136 million will be going to the ftc, about $34 million going to the new york a.g. and during the press conference i would be on the lookout for some very tough rhetoric from regulators we've heard from new york's a.g. saying she felt that youtube put children at risk and abused their power. we already had a statement from the ftc chairman saying there's no excuse for the violations

that youtube is alleged to have committed. so i think that you're hearing a very strong tone out of regulators here in washington, but of course the critics are going to say, you know, where's the bite where's the actual teeth in this settlement will youtube actually have to change its business practices in a meaningful way >> and to implement strong conduct relief in settlement of an action brought by the ftc and the new york state attorney general's office for the alleged violation of the children's online privacy protection act, commonly known as coppa coppa requires that certain websites and apps get parents' consent before collecting personal information from children the definition of personal information includes cookies used in behavioral advertising the coppa rule applies

differently to third-parties serving behavioral ads versus creators of child directed content. while the content creators are strictly liable for coppa compliance, third-parties are subject to coppa's requirements only where they have actual knowledge that the website or service they're serving the ads to is child directed to put it in context for today's case, youtube as a general audience platform is not directly strictly liable under coppa for the content of the videos uploaded by others to its platform unless it has actual knowledge that the content is child directed our complaint alleges numerous instances in which youtube and google had actual knowledge of the child-directed nature of channels and videos on the the youtube platform this is the basis for the ftc to find that google and youtube

violated coppa our order accomplishes three important purposes first, it imposes a substantial monetary judgment of $170 million with 136 million going to the federal trade commission as a civil penalty and 34 million going to the state of new york. the $170 million judgment is 30 times larger than the largest coppa civil penalty the ftc has ever previously obtained it is three times larger than any privacy penalty assessed against google anywhere else in the world, and it is ten times larger than the civil penalties we have obtained in all of our 31 prior coppa cases combined. a penalty of this magnitude sends a strong signal about the importance of children's priv y

privacy. second, the order requires the companies to refrain from using or benefitting from the data that they previously collected from child directed videos or channels third the order imposes additional obligations on google and youtube that go beyond the requirements of coppa. the order requires youtube and google to notify channel owners about their potential coppa obligations. it also requires youtube to develop a system or a mechanism through which channel owners must identify their child directed content on the youtube platform so that such content can be treated in a coppa compliant manner this is particularly significant because coppa does not require platforms such as youtube to determine whether the videos posted by others are directed to kids or not. going forward, youtube and google will automatically have

knowledge of and coppa liability for all child directed content directed through this mechanism. in this way the order prevents youtube anding gastr google frog a blind eye to the existence of kids' content on the youtube platform finally, youtube must provide annual training about compliance with coppa for employees that deal with the channel owners none of this is required by law. no other company in america is subject to these types of requirements, and they will impose significant costs on youtube. this case sends strong messages to third-parties like youtube, channel owners, and the business community as a whole for youtube and other third-parties like it that serve ads, they can't market their ability to get child viewers on the one hand and disavow

knowledge that children are using their service on the other. they can't rate videos as kid directed for one purpose and then say they have no coppa liability when they collect information from kids watching those videos for those who create child directed content to upload on youtube, the message from today's case is that the ftc considers these videos and channels to be websites or online services directed to children under the rule and thus strictly liable for compliance with coppa once our order has been effective for a period of time, the commission will conduct a sweep of the youtube platform, determine whether child-directed content is being properly designated as such in order to ensure that the channels themselves are complying with coppa. >> and that is ftc chair owe

recei joseph simons detailing the action, the settlement that requires al phabet's youtube to pay this $170 million settlement lets bring back in our ylan mui. ylan it strikes me how the chair is talking about how this only requires youtube to follow these rules. it raises the question, what about instagram? what about tick tock what about so many of these platforms that are popular with kids regulation isn't legislation, where does this leave the rules? >> yeah, so i think that the hope of the ftc at least is that this settlement could serve as a deterrent and perhaps a model for other companies in the space. you heard him talk about ensuring that youtube does remain accountable for the provisions of this children's privacy law. he said that he doesn't want youtube to turn a blind eye to the content that is on its site,

and it set up this system that requires the content creators, the users of the site, to sort of self-designate and to identify the content directed at kids that's important for two reasons, one because there's been criticism already so far about the size of this fine. simons said that cost to the business of setting up that system, that should be considered as a significant cost of doing business and added to that dollar amount of the civil penalty of $170 million, and in addition, it ensures that youtube and perhaps others will not be able to escape the very clear provisions and protections of this privacy law. however, there's a lot of debate amongst the commissioners about whether this provision actually creates a sort of back door system within youtube that if youtube can just point to the content creators and say, hey, it was their job to determine whether or not this content was directed at kids, their job to follow the rules, not ours, perhaps youtube could escape

some culpability there but here you hear simons very adamantly arguing that they want to ensure that youtube is aware and is designating and does not turn a blind eye to what's being posted on its site. >> yeah, ylan, definitely right out of the gate simons there stressing the size of this coppa fine compared to all the other ones before. ten times larger than all of those cases combined, just to put that number in perspective thanks for joining us and breaking down this conference as it continues julia boorstin has more from los angeles as well. youtube itself has been coming out and outlining the changes it's going to make due to this situation with the ft clrks as well >> reporter: that's right, the ceo of youtube posted a blog post talking about how they're going to be working with lawmakers, and they are going to be taking additional steps to comply with coppa, and to make sure they're doing what they can to protect children making big

changes about the way they collect data from kids using their service, the way they target ads, also saying that in addition to asking content creators to self-identify, they're also going to be using machine learning, using technology to try to identify any content targeting kids making a lot of changes there. one thing they're really trying to do is move kids away from their regular youtube platform and onto youtube kids, which is a separate place with content just for kids, which will be much easier to make sure they're complying with the rules analysts told us they do not think this is going to have any impact on the financial performance of the company because the fine is so small in comparison with alphabet, google and youtube's revenue, the company is so large that it just will be a drop in the bucket for them the real question is whether this could dissuade content creators from wanting to create content for kids because their simply not going to be able to make as much money from

advertising. youtube is creating $100 million fund to create original content for kids we'll see whether if you're a mom creating content with your kids and have been making a pretty penny from youtube, you're not going to be seeing as much revenue from youtube. we'll see how that shifts things. >> certainly the fine itself, as you said, 1/100 of 1% of their 2020 revenues. julia boorstin, ylan mui, thank you for that we'll turn to the rally. stocks in the green led by the tech sector. chips on pace for their best day since about the middle of august our next guest advising to stay long in tech joining us this morning, wedbush head of tech, and ubs global equity strategist keith parker good to see you both. >> good to be here. >> what's your general take? >> obviously some positive headlines overnight for the global market. august was an exhausting month i think we saw 60% of the days in the month had 1% plus moves,

and that shows were in a defensive mode that's carrying oifr into early parts of september as well i think main strategy at least amongst the tech and dedicated investors i speak to is to avoid the blowouts the cloud sass complex, valuations got extremely stretched to the upside, and i think the pain that was witnessed last year in q4 of 2018, that's fresh on a lot of guys' minds. so really year-to-date, protection has been at the forefront of the majority of conversations and guys are looking for more value pockets in the sector, whether it's in the memory complex or payment side even comcast and the cable side, activision within the video game space guys are scared of the more kind of crowded trades. >> keith, what's your take on this if you're searching for growth, especially as interest rates continue to move lower here, that tech continues to look attractive would you be taking a more

broad-based approach here, or would you be doing more individual stock picking >> yeah, i think at this phase of the market where the amounts we saw yesterday, factor in falling below 50, you start to see some cracks typically in leadership, and i think we saw some signs of that last year in the fourth quarter where some of high flyer tech names had sold off pretty hard. i think you're much more in the phase of being selective within the tech sector, and the to the point about value, though, and thinking in terms of aggregates, tech dividend yield plus buyback yield is really only second to financials, so you have that high yield plus growth, so there is definitely pockets of value plus growth where you can potentially ride out some of the market volatility amidst the backdrop of slowing growth and another round of tariffs coming on board in september. >> joel, talk to me about the

macro picture impacts tech we see this brexit drama, the plot thickening every day. that -- is the risk increasing, or is it decreasing in a way because now a no-deal brexit perhaps more unlikely. ask then when you see what's happening in hong kong, is it good that now they've pulled that extradition bill entirely, or you know, the fact that the protesters now say, no, we wanted more than that, does that mean increased risk for tech overall? >> i mean, to some degree. the pulling of the extradition bill one more overhang removed, and guys don't have to wake up and have discussions on what the next policy move out of that region is going to be. brexit's approaching we'll see what kind of happens there. again, the big, the gorilla in the room remains the state of china/u.s. trade, and obviously now we've been pushed out to mid-december on another round of tariffs that should be implemented. but end of the day, it just seems like china and u.s. are going to be in kind of this tug

of war for the foreseeable future and knowing trump and his track record, he'll probably see some sort of big humongous deal prior to the election, but again, sectors like the semiconductors, high conviction buying is going to be nonexiste nonexistent. when there's policy by tweet, you're at risk on any given day of getting blown up or caught offsides on a trade. you're going to see guys a little bit more nimble, priced sized smaller than historically until this overhang is removed. >> is the u.s. on track to be making investments right now giving the macro backdrop here, or are there other opportunities to be had looking globally >> i think u.s. remains a acccoe holding in a portfolio giving its total yield of buybacks plus dividends is high, if not the highest across the world, and growth remains above many parts of the world, and the defensive characteristics, whether it's

staples, health care, and dechb defensive growth remains high across the region. u.s. tends to outperform significantly. until we start seeing credible signs of that turning point in markets, u.s. remains a core holding, but we do see pockets of value starting to open up we've seen some risk repriced. you mentioned brexit, also italy, italian politics, europe amongst top performing regional indices over the past one month, and i think part of that narrative is some reduction in very elevated uncertainty. >> certainly september is going to give us a lot to juggle from the central banks to a lot more. guys, thanks, good to see you. >> keith. hurricane dorian continues its slow trek up the southeastern coast of the united states and contessa brewer is back at hq with the latest >> in the daylight after the storjs the video coming in from the bahamas is really stunning the prime minister says some areas have been decimated.

the red cross estimates nearly half of the homes on grand bahama and abaco island are gone the official death toll stands at seven, but listen, so many people are unaccounted for at this point, and we're learning even shelters were destroyed during the storm unbelievable video infrastructure, which is critical to recovery is crippled bridges are gone the grand bahama international airport in freeport is under water. the western air terminal there serving regional flights and private planes crumpled. the port in freeport is a critical hub buckeye partners has a 26 million barrel petroleum storage terminal there, and the company says its first task is to account for its employees and their families it has pledged to bring in needed supplies to the island as soon as it's safe. right now dorian's path is still slighting up the coast just offshore orlando's theme parks have reopened the airport there is still closed for a few more hours. it looks like orlando's airport is planning to reopen in about

45 minutes seaports in jacksonville, savannah, charleston are closed. charleston's airport plans to close at 3:00 today. jetblue mentioned in a filing it expects to see a slight negative impact on its third-quarter revenues because of dorian's impact hurricane warnings are now in place for charleston, myrtle beach, wilmington with an expectation of extreme coastal flooding and storm surge through the end of the week, and i just want to remind you, next week marks the anniversary of florence, which of course inundated wilmington in the surrounding regions with water, cause aed a lot of damage there now this one is making a beeline toward wilmington. jon. >> yes, indeed, that is rough. thank you. we are getting a market flash as well, dom chu has that at hq. >> it has to do with oil crude has been climbing steadily throughout the course of the session for wti and brent. here's some news that could affect it further.

the treasury department has designated a large iranian petroleum shipping network as one that supports and finances terrorism. this is through the islamic revolutionary guard corp. and through hezbollah, the militant group in lebanon iranian officials are kreegzingly seeking to deceive customers into buying iranian oil and warning the maritime community against dealing with sanctioned individuals and groups so a new issue from the treasury department coming out. it could have an effect on oil prices we'll find out later on today as this develops. back over to you thanks, dom chu. and when we return, more than 30 u.s. state attorneys general preparing an antitrust investigation into google. we will ask dan rosensweig his thoughts on that and the youtube settlement next. stay with us fights cancer, repairs shattered bones, relieves depression,

restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

. the tech lash out of washington is ramping up 38 u.s. state attorneys general putting an antitrust case together against google. this follows the youtube ftc settlement we just saw moments ago and we saw the senator of oregon suggesting that executives in another era might have faced jail time joining us former yahoo chief operating officer, dan rosensweig. >> that yahoo thing was a long time how are you? >> good. let's talk about the outlook on

google in silicon valley right now. it seems to me i was just looking at this tweet from the base camp ceo talking about how google is ranking its ads higher than basecamp, you know, there's discontent it seems. is this kind of like the microsoft situation from 15, 20 years ago but now directed at silicon valley companies >> it may very well be look, these companies have huge power, and huge influence. microsoft did in the day people forget, they control the operating system apple had 3% market share. so if microsoft wanted to stop a competitor, they could do it today people are concerned because everybody's going direct everybody wants to go direct to the consumer, so there's only a few pathways to do that, right we know it's amazon. we know it's google, we know it's apple, and we know it's facebook so yeah, you're getting a lot of smaller companies who are feeling like they're being disadvantaged by price hikes or on the mobile device the way google displays search ads there's four paid ads above your

own brand name we're beginning to see customers desperate for access to consumers. because it's social media they can push back visibly. >> can they hunker down and kind of wait this out >> google? >> kbogoogle, facebook, et cete, or can they restructure, you know, maneuver their way out of this type of scrutiny and kind of ongoing fines >> those aren't mutually exclusive. they probably could wait it out because the attention span of washington is not very high. it's a tweet away from talking about something else on the other hand, they should pay attention to it because it actually does matter you want these things to be fair, right? you want open access the whole point of the internet was open access. that's why we all fought for low prices of broadband. that's why we all fought for putting it in rural homes. that's why we wanted to bring the price of phone plans down. it actually does matter. it matters to our economy. it matters to businesses it matters to individuals, and

so i do think that they should follow the regulations and i do think the regulations probably need to be updated and if they were being truthful they would probably acknowledge it. they have -- too much stuff is in secret so you don't know. the algorithms change all the time, and that's unfortunate. >> curious why you think the floodgates seem to be opening now. obviously you've got this ftc coppa settlement this morning with google. then you also have the news, the reports yesterday that more than half of the state attorney generals in the u.s. are investigating goog >> europe. >> you've got europe, federal scrutiny here across a number of different platforms. the timing of it, some of these complaints have been out here for a while. why do you think it's happening now? >> you guys talk about it regularly, the tech lash there's a lot of wealth being created. there's a lot of people with a lot of power there's a lot of people that people feel are taking advantage of them. i honestly believe it goes back to the election, and it goes back to the belief that tech was used to advantage one side over the other in the election.

and i think, you know, when people get their credit cards and their i.d.s taken and when you find out there's all these fees or when you're subscribing to things that never end, i think there's been so much being levied against the consumer thepgs themselves, i think they're exhausted from it. i really do think it goes back to the election where people felt that they were used against their wishes and then not told the full truth >> but if anger is so acute, then why is this fine such a pittance relative to their revenue? >> now you're asking me about why government makes decisions they make. i couldn't even begin to dream youtube probably does that in an hour of advertising. so to me these are always for people to tax companies other than using the tax system. europe doesn't have any significant growth companies in the internet or the tech space, so what do they do they tax the u.s. companies. there's goodthings, fair things, right things to do, and then there's things that i think just are done for headlines and

money and you know, it's up for investors to discern the difference between the two i don't even think -- i mean, the ceo gets more than that a year >> let's talk some news out of your company announcing the acquisition of the peter thiel, thinkful and online skills training company thinkful does a lot of coding training, touts median salary of i think around 65,000 a year for people who go through their training this a big shift for you, though normally you've done support for students who are in school somewhere else thinkful is doing their own training, right? >> yeah, it's a great point. we look at it as a logical tam expansion. we've got one in every two college students is registered with us. if you believe analysts, we'll have nearly 6 million paying customers this year. we're growing at 30% a year. we are the largest direct to consumer company, and what we've done is we've lowered the cost of education, improved the quality of it, made it more accessible, and supported students from diverse

backgrounds all over the place by helping them learn the material they need to learn in the academic world academics is not enough. we have a global economy, we have a tech-based economy. we were just talking about what technology can do good and bad, and so we want to create really high quality, high integrity, low cost direct to student online learning around career skills and job skills. logically, every student in school that's interested in getting higher paid jobs is going to want something. we have the largest reach to them, so customer acquisition will be low. we've also built online chat-based tutoring, and we've built the largest database of expert q & a what we're going to be able to do is lower the price of it. make it more accessible, make it better bulk up the qualityin, bulk up h content. we think this is going to be one of the fastest growing assets we've ever bought, and i think in a few years this may be our second largest asset because if

you think about 80% of college kids go to college for one purpose, to get a better job the institutions are not training them to do so they are training them in academics. it's all available, bvaluable this is the part they need to learn in order to be employable, if we can make it low price. >> how much? >> right now it's about $6,000 we think we could bring it down lower. this company also offers income sharing agreementin s our view is to offer them interest free so the students take very little risk if they want to take it at all start paying us after you get a job and with no interest on that our goal is to make it more accessible, more democratized, opening the diversity to groups that would never get access of this it's the benefit of going direct online it's much more comprehensive it can respond to the consumers' needs much faster than anybody else this has been a business, by the way, that has been growing faster than tech

for us, we think this is an incredible acquisition and one that's going to expand our value to both students that we have, add new students and clearly to investors. >> dan rosensweig, ceo of chegg. the dow is up 207 points right now, here are the names that are leading that averages fwans so far in today's session. intel, united tech, and walgreens. we're back after a quick break se behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.

it's how we bring hope to our patients- like viola. her team treated her cancer and strengthened her spirit. so viola could focus on their future. cancer treatment centers of america. appointments available now. cancer treatment centers of america. - [spokesman] if you've tried colleg(group cheering)shed, snhu lets you transfer up to 90 credits toward you bachelor's degree. - [woman] it doesn't matter how old you are, you can do it, you can finish. - [spokesman] finish your degree at snhu.edu

should always be working harder. that's why, your cash automatically goes into a money market fund when you open a new account. and fidelity's rate is higher than e-trade's, td ameritrade's, even 10 times more than schwab's. plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. just another reminder of the value you'll only find at fidelity. open an account today.

european markets closing overseas, getting a boost in today's action every sector was in the green as u.k. lawmakers inched closer to blocking this no-deal brexit scenario daimler, bmw, volkswagen up more than a percent top of mind for investors obviously it's brexit. the u.k. parliament moving to seize control of the process as the situation there continues to spiral willem marx has the latest from london. >> last night we saw boris johnson expel more than 20

members of his own conservative party because they refused to vote alongside his government. that was to take control of the parliamentary schedule today, and because opposition lawmakers together with those conservative rebels have now taken control of the parliamentary schedule, that means in a few hours' time they'll be voting on a fresh piece of legislation designed to block that possibility of a no-deal brexit at the end of october. boris johnson has insisted he wanted to hold onto that scenario as a negotiating threat as he meets with his european counter parts next month he says without that threat he won't be able to force a better concession from the europeans, something that would potentially pass through parliament after theresa may's attempt three times failed to get through the lower chamber here in the u.k. in terms of the opposition lawmakers they said they'd be prepared to go for an election, something that boris johnson is now demanding to try and resolve this situation they're only prepared to do that once he has allowed them to pass

through this legislation blocking off that possibility of a no deal at the end of next month. as you can imagine, we've seen some action on the currency markets as a consequence of this but the uncertainty of a no-deal brexit might be postponed several months later on this evening. >> an election to resolve the situation, where have we heard that before. willem marx in london, thank you. now let's get to sue herera for a news update. >> good morning, jon, good morning everyone hong kong's chief executive carrie lam announcing the government will formally withdrawal an extradition bill that has sparked months of protest. in a prerecorded television message, lam said the government will not accept other demands from the protesters. iran ratcheting up the pressure ahead of a nuclear deadline for european solution for iran to sell oil abroad.

here at home, supreme court justice ruth bader ginsburg says she is feeling good following three weeks of radiation treatment for a malignant tumor on her pancreas. she spoke to a packed house on tuesday at an arkansas event hosted by the clinton foundation >> i think my work is what saved me because instead of dwelling on my physical discomforts, if i have an opinion to write or i have a brief to read, i know it's -- i've just got to get it done >> you are up to date. that's the news update on this hour, back downtown to you guys. >> when we come back, respective fed nominee judy shelton is going to sit down with santelli in a few moments. nice little run here close to session highs, dow's up 212 and we're above 2930 back in a minute

welcome back to "squawk alley. let's get over to the cme now and rick santelli for a special santelli exchange. >> thank you, morgan i'd like to welcome, yes, a very special guest, prospective fed board nominee dr. judy shelton let's get right into it. last time you were on, you said something that really resounded, gots lots of e-mails it would be nice to be virts you in a vacuum, but i don't think we have that luxury, and i really love that quote, but it also has a dark side

is it a starting gun for a new round, a bigger round of market manipulation by central banks? >> well, in a way, i guess we're in a position of having to fight fire with fire, rick, because it's been a comfortable position for fed officials to just say we're pursuing our domestic economic objectives, but you can't put on blinders with regard to what other major central banks around the world are doing, and it's one thing to say our statutory mandate says we should achieve full employment and stable prices it turns out there's a third pillar that comes out of the federal reserve act of 1977, and it's that the fed should be acting to promote moderate long-term interest rates, and i think that goes to the heart of the inverted yield curve that we're now confronting. >> you know, the dynamic of what's going on in interest rates, especially longer maturities is that we have

$17 trillion of negative securities and just this year alone we've gone from only 20 billion negative corporates to over a trillion, so you think the answer is to create more of that because that's exactly what will happen if we take that course of action >> well, i think that is such a prominent symptom of what happens when you decide not to go with market signals and the price mechanism, but to empower a small group of officials to establish the interest rate because this perverse situation of negative yielding debt has been engineered by central banks. and i think one could argue, it's not stimulus per se i don't think it stimulates economic activity, at least productive activity. i don't even think that it raises the inflation rate, which is what central banks purportedly are trying to do, it really has its strongest impact on shifting currencies

so that's what's happening with these differential interest rate policies among central banks. >> now, if the u.s. central bank holds the line and doesn't get involved in this kind of al al capone sort of situation where they're providing something that really isn't on the up and up because it's deemed necessary or economies need it, like alcohol during prohibiti prohibition. if we hold the line, can't we do better in the big picture because the country's doing what you've just described they're not doing better their economies are deteriorating, doesn't that side of the ledger also deem some introspection? >> it's tempting to think so, but we do live in an interdependent world, especially with regard to currencies, financial flows, investment activity, and the problem is if the u.s. maintains its virtue and says we're not going that

way, first you're going to make it harder for u.s. exporters because the dollar's already at a high level relative to other currencies secondly, i think you're going to exacerbate that inverted yield curve issue, and it's just bizarre to have short-term rates higher than long-term rates. and finally, there's the global financial stability aspect of it if dollar denominated debt becomes out of sync, then i think you're into real problems in terms of financial stability. >> well, isn't there another road you know, this president likes tariffs and certain situations tariffs do get born, in my opinion by john q. public, but if countries are cheating by manipulating their currency, would that be a perfect situation to apply a level of tariffs? if the germans, for example,

want the euro weaker to help their auto exports, can't we come up with an equation that says should you manipulate your currency, that would be the united states's recourse can't we take the high road here >> i think we are taking the moral high road by identifying currency manipulation as an unfair trade practice. it really undermines the principles of free trade, and it's a natural response to say if you're going to effectively apply a tariff against american goods through currency manipulation making them more expensive in your own country, then our only recourse is to -- is to say then we're going to have to do something as well unless we call them on it, we can't begin to seek these broader remedies that i think would start to bring about a level, international monetary playing field, and that's fundamental to authentically free trade. >> but you know what's really fundamental? that people trade markets and

investme invest in markets for their retirement because there's a price discovery and a real value there. what you're describing if you take it a couple of degrees farther, are markets where why should we get up and trade the dow jones industrial average why should we purchase securities that have yields when all of it is manufactured? why don't we just create government utilities to dole out certain percentages after you give them your money doesn't this make the whole system ridiculous? >> i think it does go against the virtue of saving i think it violates what i would call the american spirit of believing in a better future and greater prosperity if you just -- if you just believe in opportunity, and if you see financial capital as a seed corn that facilitates entrepreneurial endeavor that brings about a higher standard of living for everyone it goes against all of that to have negative rates, and i think the managed approach to providing decent returns on investment has proven to be

somewhat of a failure, so i think we do have to look more toward money providing that clarity on price signals and believing in free markets as the best way for people to make judgments about risk and return and what they would reasonably invest in, and that will be the beginning of getting back on the road to productive economic activity >> judy shelton, thank you for your time, and should you pass all the requirements to be a fed board nominee and go to a governor, you're going to certainly have your work cut out for you. thank you for joining me today. >> pleasure. >> morgan back to you. >> good discussion, rick, thanks for bringing it to us. when we return, high risk, high reward. a behind the scenes look at the big business of pot and cnbc's documentary cannabis inc. premiering tonight at 6:00 p.m. eastn. wee ckft a quick break dow's up 206

but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. i felt completely helpless. trashed online. my entire career and business were in jeopardy. i called reputation defender. they were able to restore my good name. if you are under attack, i recommend calling reputation defender. vo: there's more negativity online than ever. reputation defender ensures that when people check you out, they'll find more of the truth, not trash. if you have search results that are wrong or unfair, visit reputationdefender.com or call 1-877-866-8555.

here's a look at what's coming up at the "halftime report." we're going to kick around how to navigate what feels like a directionless market as wall street remains split on what investors should expect from stocks plus, another bump for roku's price target. is that stock now too rich or too good to pass up? and al michaels joins us ahead of a new nfl season. we'll talk some ball, some stocks carl, about ten away look to seeing you then. >> al knows the market we know that can't wait see you in a bit

meantime, melissa lee is investigating the cannabis industry marijuana's new reputation as an all-natural cure for illness, boredom and anything in between. "the high risk, high reward cannabis inc" premieres tonight on cnbc. what's left to be said about this space >> a lot of unknowns investors make a lot of assumptions but a lot of questions still, particularly surrounding the promise of medical marijuana. it's perhaps one of the most intoxicating factors attracting consumers and investors into the cannabis space some medical experts say it's not the all-natural miracle drug so many are betting on >> i was diagnosed with my cancer in july of 2013 i was just gutted. we're talking staying up at night to write birthday cards to my daughter for every year i wouldn't bealive talking to my wife about who she

should marry when i'm gone >> what did you do what was the decision? the decision was to go with the cannabis >> as an investigative journalist, ethan stewart is a natural skeptic. >> i didn't think it could help me >> really? >> oh, yeah. >> when faced with few options to treat his cancer, he made a bold decision. >> so, yeah, i dove off a deep end and went into, you know, doing full extract cannabis oil. and that's when i got scan results that were pretty wild. i had no evidence of disease in my body. >> no evidence of disease? >> no evidence of disease in my body >> incredible as it is, stories like ethan's aren't unique cannabis, a drug vilified for so long -- >> the most dangerous drug that is in use in our country today >> -- is now being touted as a serious medical breakthrough >> the notion of being able to treat a vet with ptsd, with

cannabis as opposed to a host o farmt suitical cocktails is really exciting. >> my uncle has parkinson's. he tried cbd and said this is the greatest thing that's ever happened to me >> that's the beautiful thing about that drug we're talking about. there are a number of things where even now the fda says cannabis works cannabis is medicine >> except for one thing. >> well, it's not medicine this is a very dangerous national experiment we're conducting >> former fda commissioner dr. scott gottlieb >> no evidence to support the claims made in the state dispensaries that would rise to the satisfaction of the food and drug administration. >> because cannabis is a schedule 1 drug alongside heroin and lsd it's hard to run clinical trials. in fact, there's only one fda-approved cannabis-based drug epadilex which treats a rare

type of seizure disorder beyond that, nothing which raises the question, is cannabis the miracle drug that consumers and investors are banking on or simply the product of misleading marketing by the industry itself? that is just one of the fascinating debates between cannabis bulls and bears you'll hear during our new cnbc original documentary "high risk, high reward: cannabis inc. >> congratulations i know you've been working on this for quite some time excited to tune in to it tonight. the fact that there hasn't been more research and in particular at the federal level is it because of the classification of cannabis as that type of drug or what came first here i'm surprised to hear that >> it's because of the classification it's nearly impossible to secure medical grade cannabis specifically for research. when you do, you have to have a federal license. you have to secure the cannabis usually in safes

we talked to one doctor who is the chairman of the medical advisory board for one of the biggest canadian cannabis companies and he said at the hospital that he worked at, he had to reinforce the floors and get a huge safe to put that medical grade cannabis into in order to conduct the research. and he is one of the pioneers. one of the few people throughout who had the ability to do the research >> the space is huge the doc is timely. not just medical but also all of the people trying to get in on this business. i just spoke to rapper jim jones who is teaming up with alex todd on a brand saucy farms and extracts who is talking about how huge this space is take a listen to what he had to say. >> so if you get the right person for my culture that's known for smoking weed, like a jim jones, like a snoop dogg, khalifa, naturally they're going to judge it when it comes to a brand they see us backing up about what they're going to

smoke. alex is showing me all about the business from the farmers aspect all the way to where we at now, side of wall street. so the money of it has been proven you've got these big companies that don't know too much about weed and farming but they know there's billions of dollars being made so they're doubling down and investing in it i think this is probably the biggest thing since dotcom hit >> he's not really concerned about the medicinal properties so much. >> i'm sure. >> but very much focused on the business >> there's a land grab amongst the stars. everyone wants to create this new brand. ultimately, the idea is to create the next apple of cannabis there are limitations without it being federally legal. you have to have redundant operations in every state. it's not easy to create a nationwide brand just because of the way the states are operating. you have to licenses in every state you operate in it's seen as sort of the golden

raer era. and when federal legalization happens, if it ever does, then you got it unroll it. >> that's big. we'll see you on tv tonight after yourown show see you at 6:00 p.m. squawk alley is backn ia few minutes. dow is up 208. - when i see adversity, i find a way. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. (cheering) - so when i face barriers, i can break through. - [announcer] breakthrough at snhu.edu. that's for sure...hange and when those changes might help more people, especially those in retirement, i think it's worth talking about! so, aag is introducing a new jumbo reverse mortgage loan

so you can now access as much as $4 million dollars in cash, tax free, from your home's equity. aag's new jumbo reverse mortgage loan can give you more tax-free cash than ever before find out more in your free aag jumbo guide. call the new aag advantage jumbo gives you another way to effectively manage your retirement income sources. tell me something, what other asset can give you that kind of tax-free cash right now? and the sooner you call, the sooner you'll know if a jumbo reverse mortgage loan can improve your retirement portfolio's performance. get your info kit now! the good news is, many of us are living much longer, but you know what that means our retirement savings are being stretched over more time. that's where your home's equity can help... don't wait start learning more today.

it could be the financial option you're looking for and give you the cash to supplement your other retirement assets. if you've had your home for a while, it's probably worth a lot more today. so why not use that appreciation for anything you need maybe it's some home repairs, or updates to make it more comfortable so you can stay in the place you love, your home. get started today while home values remain high. if you're looking for extra cash now, accessing your home's equity could be the right financial solution for you. the new aag advantage jumbo is changing the way people use reverse mortgages, and another way aag is working to make your retirement... better. call

stocks just off session highs. still above 2930 critical levels there on the s&p. and beige book in a couple of hours. let's get to the judge carl, thanks i'm scott wapner the great debate on the direction of your money. stocks higher today but wall street seemingly split on where the markets are heading next it's 12 noon this is the "halftime report." up, down or sideways wall street all over the map on where stocks are headed. where to look for leadership forget the fed and the trade war. the most critical factor many are underestimating when it comes to fears about a recession. the roku rally the stock surging more than