"squawk box" begins right now. ♪ >> announcer: live from new york, where business never sleeps, this is "squawk box. good morning, welcome back to "squawk box" this morning on a monday morning here on cnbc live at the nasdaq market site in times square. becky is off today take a look at u.s. equity futures at this hour let's show you how things will open up and set themselves up. dow off 66 points right now about now. have three and a half hours to go nasdaq would open down 35 points let's quickly show you treasury yields as we speak, show you the ten-year note right now at 1.696 the two-year at 1.671. and the big corporate story that

has had a lot of people chattering over the weekend, here's what's going on new developments over the weekend on wework and its leader adam newman. the bell ringing on this vintage of the ipos and what that means. here's what's happening. board members and large investors are privately discussing whether they could replace ceo adam newman and how they would do it among those now in favor of ousting newman is softbank the startup's largest investor these discussions come as some major money managers said they won't invest in we work or wework ipo unless an experienced operator is brought in and he is ousted a la travis callienick of uber they postponed its plans for an pirks o over weak demand and the way the company has been run since filing to go public. newman agreed to several

corporate governance changes several investors have now -- because there's very little leverage they have in terms of the board, adam still has a major controlling share are floating the idea of pressuring him of threatening newman with legal action potentially over self dealing and in addition to that they want use of his corporate money and whether he engaged in drug use on the job i even heard of people suggesting they could refer some of this in it to a criminal complaint. all of this by the way you might imagine some of them should have known about this stuff before. but nonetheless, that is -- if there's a pressure campaign going on, this is how at least our understanding is that they would try to do it beyond the rational act of saying, hey,

adam, we can't get any investors. you need cash if you want your shares to have any value that is not working at the moment so they are talking about how you ratchet that up. last week we should say talking about drug use on the job, "wall street journal" reported that newman transported marijuana stuffed in a cereal box on a private plane over international borders. the pilots and other airplane staff found it in israel that is illegal, by the way. and it was apparently on a unclear whether it was a company trip or not. for the moment, the talks about newman's role are informal but could lead to a public insurrection within wework we're told the boards will meet this week if not today and at time when it's fundamental business in the way its ceo has managed the company are in question, wework and softbank are at it. there's a couple other pressure points saudis big investors in

softbank, they are unhappy why masa is unhappy. for softbank, this is a complicated situation because they have tried to say, i'm a founder first venture capitalist because he has to go to founders and say i want to invest in you. the last thing you want is in the first five questions to be, well, if i take your money, are you going to turn on me? it's a very interesting dill legal ma you have other founders who think that adam newman brought complete and utter dishonor to this whole group there's a lot going on inside all this i any the markets is this sort of -- you look for that one story that sort of breaks -- is this -- >> you said is the bell ringing. i think you should have said is the bell tolling. >> is the bell tolling. >> for ipos? >> is this one of these stories that we'll look at a decade from

now and say -- >> yes, absolutely i mean, all these investors -- you reap what you sew. they were there for the ride they kept putting money into this thing as they knew they should have known at least some of this behavior. >> marijuana, is that all we're talking about? >> i don't know. i don't know i had never heard this term not about pot but in terms of the way the wailuation continued to rise because they would buy one stake and up the valuation on its own. you ever heard of you're smoking your own supply? >> they use that in reference. >> now they dwluz in reference to this. smoking you're on supply because you keep ratcheting up your own valuation and then the question is are the valuations unto themselves manipulated >> marijuana is quasi legal.

>> if there's drug use and one thing and drug use and another. >> lots of reports of drinking on the job. >> the beer and tequila culture. >> i'm not suggesting they're on to something here. i don't think they know what's going on they also have a view that has he misspent corporate proceed on other things he's been buying -- buys a building on one side and leases it back. >> there's a lot of things which we already know but there's a few among some of the investors there's probably some we don't if they could suggest to mr. newman they would go down that road >> nobody will touch an ipo if they ever go public if they do that think about the discovery process for that trial think of what comes to light. >> think about the fact that if -- i think if you're an investor and adam -- adam could just say, look, no

no i'm going to take this thing down to the ground with me he could go find an investor that buys him six months but that's what we're talking about here we're talking about an executive, a leader who is now completely and utterly cornered by a group of people who don't want him in that role except that he has control. what does he do about it any operator that comes into wework is going to effectively dismantle so much of the things. you'll get all these other things so for somebody like adam who thinks this is his baby, and it is, you know, he's -- >> willing to kill it before he gives it away. >> i'm saying at the moment he's still defending it maybe that will change. >> you said it with a straight face the saudis have a strict code of conduct. they raised an eye at what this

guy is doing >> i don't know they're raising an eyebrow at what he's doing. they think they're investing. >> if that's what they're saying i feel better. other than -- >> moral stance on this. look, to understand why masa moved on this you have to understand who is behind masa and softbank has always been, at least last vision fund, has largely been a saudi production. >> right and he's trying to raise another fund the timing of this is horrend s horrendous this next story, you must have dealt with thomas cook at some point because as an international -- >> an international man of mystery back in the day when there was -- >> have you or have you not? >> back when credit cards had big fees, i would go to a thomas

cook. >> a thomas cook, to this particular one you probably use american express. >> ibeen to thomas cook. >> it collapsed. >> i heard about that. >> which is weird. another story developing overnight the world's oldest travel company thomas cook announced its collapsed after weeks of debt and negotiations its liquidation biggest peace team repatriation in uk history. has 600,000 customers abroad forcing governments and insurance companies to coordinate efforts to get these people home. incredible the uk civil aviation authority prepared a fleet of planes to bring home 150,000 of these british customers. >> there's 50,000 british nationals in greece alone. stranded there not a bad place to be stranded

if you had to choose. >> which island i would like to be stranded on the worst one is great coming up, incoming ecb president christine lagarde sounds off on the trade war. the hang seng finished lower by .8% after violent protests over the weekend down a percent overseas in europe taking a check as it is early morning tlours we have the dax down by 1.1% the cac down almost 1% take a look at the biggest winners and losers in the dow. it's not "pretty good or nothing."

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what concerns me at the moment that trade instead of being that big window of opportunities for those economies that want to compete with each other, it weighs like a big dark cloud on the global economy. and based on the latest calculation of the imf, if the tariffs that are either here already are threatened to be applied were to apply, we're talking about reducing global

growth by .8%. that's a massive number. >> that was former imf director and incoming ecb president christine lagarde talking about trade. you can hear the full conversation on "squawk on the street" and the closing bell joining us now to talk about the week ahead and the markets, michelle mckinnen and jay jacobs head of research and strategy at global x funds good to see you both jay, where are we in the markets? i'll start off with you. friday we certainly were a little volatile based on these headlines that the chinese cancelled the trip to visit farms in montana it is fragile. >> that's because there's a lack of other things happening in the markets right now. there isn't a ton of other information coming out so people are really grabbing on to the da and the headlines they can they will actually play a big impact on the markets because

that's hard data showing that global growth is, in fact, slowing. i definitely agree with jay there's not a lot to kind of stir the markets, however, i think when you think about the selloff we had on friday which was 100 points and 50 points that's not that large compared to a few months ago or a year ago when we would have gotten a trade headline until we get an actually cease fire deal we're not going to really move much and in all honesty look at all the other factors, i think markets are poised to go higher here you get a cease fire or back down or partial deal, markets are going to explode to the upside. >> so moving higher is predicated on trade, on some sort of breakthrough, some sort of positive development here >> some sort of breakthrough, but also i think earnings. obviously earnings don't look

great coming into this quarter however, just like last quarter where we're expecting a negative earning season, we had a slightly positive season, so i wouldn't be surprised if we do get another slightly positive season to push markets further here. >> the timing of everything is very interesting because we have the higher level trade talks happening right now october 10th is what's scheduled then third quarter earning season should probably kick off around the same time or a week later. it seems like we're prime for a very rough sort of october, middle of october. >> i think that's probably true. i think the bigger mover in the markets is going to be the fed and what happens in december and just general kind of discussions around the global central banks about how much easing they're going to do to support this market what we have seen over and over again is the trade war discussions led to nothing but the fed has been the biggest driver of stock. >> isn't that driven by what happens with third quarter earnings season? that's what we saw a year ago. when the fed started to change its mindset, it was -- it seemed

like precipitated by what companies were saying in third quarter guidance >> that's definitely true. we're expecting negative earnings again for the third quarter in a row and yet if you look at 2020 they're expecting 10% earnings growth. it's very pivotal quarter to see are we on an upward trajectory or downward trajectory to a lower guidance period again. >> what sectors do you like? >> yeah. i think obviously without question there's a lot of negative headlines i think markets will go higher particularly when you think about the alternative, right, bonds. bonds, the ten-year is sub 1.7, earning yields on the s&p of 4.5. how can you not not be in the market i like values. a lot of investors sit here and say that i particularly like health care. very serious headlines health care isn't going anywhere. 73 million baby boomers in the

country, only getting older and by 2027 the u.s. government is estimated to spend 6 trillion on health care expenses so i think you can have confidence going into the health care sector even with these negative headlines. >> you could have made the argument about stocks and bonds five months ago, six months ago, eight months ago what changes is the bond rally over >> i mean, good question i certainly think that the bond rally could be over. however, i certainly don't think you'll see 4% yield any time soon because we're in such low inflation here. >> do you agree it's time to move away from bonds or that equities should take first place over bonds >> i agree if you look at after taxes and after inflation, the negative. investors in bonds are losing value. you look at the current yield and back out inflation number. so investors have to be in stocks to see a positive return right now.

>> year to date if you invested in bond, you did quite well. >> yes but if you look at the current yield on the bar clay zag and take away taxes and inflation that's negative 20 basis points territory. >> that compares to what on the s&p 500 then >> the earnings yield is just shy of 6%. so if you take one over -- >> what's apples to apples >> we're looking at better valuations. >> thank you appreciate it. coming up, what cooling trade tensions between the u.s. and india in this case would mean for the markets and your money. "squawk box" coming right back "squawk box" coming right back snoom

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♪ welcome back to "squawk box. this morning, president trump met with leaders of america's ninth largest trading partner over the weekend the two leaders appeared together at a howdy modi event in houston our own seema-mody joins us. >> it was quite the spectacle. roughly 50,000 people gathered at the nfl stadium in houston on sunday the largest rally ever held in the u.s. for a foreign leader. appearing alongside prime minister modi on stage was president trump. both leaders exchanged warm words and talked about the

strength of the u.s./india relationship but stopped short of referencing the brewing trade dispute. instead, trump's speech included tough talk on border security, terrorism and hopes to win votes from one of the fastest growing ethnic groups in the u.s >> both india, the united states also understand that to keep our community safe we must protect our borders. border security is vital to the united states. border security is vital to india. we understand that >> the question now if the two leaders can use the fruitful discussions in houston to secure a trade deal trump repeatedly criticized india for unfair trade practices. sources say indians are pushing for a limited trade deal ahead of a bilateral meeting between trump and modi this week in new

york guys >> do you think everybody knew who he was >> yeah, i think so. this event has been planned for months now a lot of indians from across the nation came to hear him speak. >> do you think the rest of the country does >> i think so. i think he has -- >> he's -- >> they ask you who the vice president is they don't know. >> so it doesn't matter if more broadly people know who he is. it matters if indian americans know who he is. >> he has more twitter followers than trump and he's very savvy. >> wow is he as aggressive on twitter >> very aggressive. >> what do you mean by aggressive >> big twitter campaign, social media campaign he uses to spread his message across the country more indians get online.

>> is he tweeting everyday >> he is tweeting everyday. >> he has a full team behind him helping him. it's not him like trump on his phone tweeting he has a team there. >> he has a team also to vet the tweets. >> i believe so. >> presumably. >> very curious. thank you. we have a lot more coming up on "squawk box" this morning the latest on the attacks on saudi aramco and a new report that says it may take longer than expected to repair damage to the facilities. first, it will be done in a week then three months. we'll talk about all of it head to a break, look at yesterday's s&p winners and losers through the at&t network, edge-to-edge intelligence

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♪ >> announcer: welcome back you're watching "squawk box. live from the nasdaq market site

in times square. ♪ good morning, u.s. equity futures at this hour are getting back a little ground at 55 points after a slow sort of a selloff on friday which saw the dow lose about 160 points. down 53 on the dow jones and nasdaq indicated down 6 and change, s&p just under 5 here is your squawk planner for the busy week ahead. it's september in case you haven't noticed. things should be getting back to full force in terms of who is around and then i think we have like the end of the quarter, isn't it >> earning season is starting on tuesday, in fact. >> oh, man and on tuesday, we're going to get nike results along with the s&p case schiller home prices on thursday we'll get the final read on second quarter gdp and on friday the latest data on

durable goods and personal income and spending. saudi aramco is an emergency talks with contractors as it tries to speed up the recovery from the attacks on its largest oil facilities "the wall street journal" reporting it may take months to fully restore operations rather than the maximum ten weeks company executives have promised one saudi official says costs could run into the hundreds of millions of dollars. aramco is still pushing ahead with its ipo plans they added ubs and deutsche bank as book runners for this deal. and it was another weekend of high tensions in hong kong as pro-democracy protests stretch into their fourth month. demonstrators flooding a shopping mall yesterday and trampling a chinese flag in the process and setting it on fire they chanted hong kong people strive on. the clashes in the mall followed street battles that took place on saturday where protesters threw molotov dock tames at police

they cancelled plans for the celebrations on october 1st. but there was this view that when school got back in session in september -- people would be busy and back to work. >> it seems to only be increasing in its intensity. >> yeah. bad timing of course with that anniversary. coming up, bitcoin up big so far this year but could regulation be on the horizon we'll talk to ceo of block staff about crypto currency and what may lie ahead. at 7, our guest host of the hour is florida senator rick scott. we'll talk trade, tech, taxes and much more. stay tuned you're watching "squawk box" on cnbc plants capture co2. what if other kinds of plants captured it too?

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the new york stock exchange owner launched its bitcoin futures contract the futures are physically deliverable. they pay out in bitcoin upon settlement bitcoin is down a percent, 99.15 is your latest trade okay speaking of bitcoin this morning, at last week's delivery alpha summit, i asked s.e.c. chairman about what has happened and what has to happen to see

bitcoin and other crypto currencies on exchanges. here is what he had to say. >> people see the price of bitcoin trading on whatever report it is if they think that there's the same rigor around that price discoveriry on the nasdaq and new york stock exchange and protections, they're sorely mistaken. so we have to get to a place, in my view, this is just speaking for myself, we have to get to a place where we can be confident that that trading is -- better regulated. >> joining us right now to talk krip kcrypto currency good morn you. we should probably explain to investors and our audience what that even means, but before we get there, i want to ask you this, my take on the chairman's comments throughout has been that he is reluctant really to

get too -- to go too far down either the bitcoin road or frankly any of the crypto road that he, you know -- he is less -- not only evangelist has true and genuine concerns about it do you think that's the right way to read him? >> well, i think so, but at the same time i remain cautiously optimistic about the work that the s.e.c. is doing. this is actually reminding me of an interview you were doing with the chairman clayton i was in the audience and we were talking about regulations. >> a year ago, six months ago. >> six months ago. i was so confident that our s.e.c. offering is going to get qualified, but i couldn't say anything about it, right at that time i think we were in a similar situation where there are a lot of exchanges that are trying to get their appropriate licenses from fenra and s.e.c. does a passive approval right now we can't say in a very confident way that, yes, they will get their appropriate licenses. >> explain so the audience

understands what you just did and what the s.e.c. did approve. >> sure. so basically think about the wild west time of 2017 the quote unquote icos it was basically unregulated, so much hype and speculation happening in the market andin the u.s., the stance was pretty much like the s.e.c. is just waiting and they're not really issuing any -- >> just to be clear for the audience what an ico is, these are effectively coins which were developed -- you could found a company or finance a company using these coins. they would be instead really having any kind of offering in the future. >> yes instead of selling equity in a company, they would just sell these tokens sometimes to the general public. which, like when we looked at the models, we're a company that has been building a decent outlook for five years now and there's a real need for such crypto assets o our network.

we decided to work with the regulators mj that the s.e.c. has never approved a crypto asset ever before in fact, the security regulations has been around since 1933 and they rarely if ever -- >> you can sell coins yourself. >> our offering is closed. we raised around $23 million in the token offerings, but that p process of working with the s.e.c. took around a year, nine months. >> we talk about bitcoin, the future of bitcoin, the future of all these coins and whether they need to get on exchanges whether they need different types of regulatory approval to get to whatever the next place is, the promised land of all of this, how much does it really rest on people like jay clayton and the s.e.c. and the work that you've now done with them? >> i think a lot the work we have done is half of the picture. meaning that any new company that wants to issue these assets now has a framework for how to

issue them right? the second half of the picture is where are these assets going to trade in the u.s. and that's a comment i made earlier about these regulated exchanges. most of the big players in our industry are trying to get these appropriate licenses i think that would complete the picture where not only you can issue these assets but you can also trade them in a fully regulated way. >> how has your token traded since you had this offering. and do you care? because for the future of other icos they should care because if the tokens are traded and really a liquid or the pricing is erratic and the value goes lower, i would think the investors are less likely. you're not getting a piece of the company. >> currently in the u.s., there are no regulated exchanges where it can trade internationally the regulations are different. depending on the jurisdiction you're in, it's treated as what's call adieu tillty token

meaning that the securities regulations don't apply in those jurisdictions. interesting we're a u.s. company and it's entirely possible that the token trades internationally first. the u.s. can't participate until these regulated exchanges exist in the u.s. >> if i had invested in your ico, and i have x number of tokens, what are they worth? >> that depends on the market price. >> okay. >> and so initially that would be international, meaning that you can see the taker but you can't participate -- >> this is still very difficult. for investors, you sort of broken the ground in terms of getting the first s.e.c. approval for this ico, but at the same time, there's still a lot of snags in this whole process in terms of the actual liquidity of this trading. there are things that need to be ironed out still. >> i think the biggest step is when the coin races of the world get their licenses for these

regulated exchanges. i remain very confident. >> he's very bullish on bitcoin. what about you >> i'm long-term bullish on bitcoin. i think the clips you played from chairman clayton, he's talking about price discovery that in bitcoin there's so much fake olume i think there was a report by a 95% of the volume for bitcoin is fake that's the thing that concerns the s.e.c. a lot there has been a lot of effort to educate them about how you can actually separate out the fake volume from more trusted sources. >> you remember that my feels were engendered by libra so to say i'm very bullish and then this is what happens. we have a technical analyst on katie stockton she looks at charts. so, i jokingly said on the

bitcoin chart, do you see an objective of 55,000. the next halving in may, sfok the flow of golds. stock the flow of 60 or so, that's what it implies now i'm supposedly -- i'm like the tom lee. i don't make forecasts i have no idea i understand the math boater i don't understand it completely i see it ha does have value. and unforgeable value or scarcity or whatever to just say i'm bullish, i'm uncomfortable for you saying that. >> what would you say you are? >> i don't know where i am i'm very mixed place. >> that's what i need to say, too. >> where are you on ripple or any of these currencies? >> i think -- >> or libra for that matter. >> interesting experiment. they're always very experimental in the sense that they would try out risky things and it's good

have a project like that that is covering that space. and obviously any comments i make about atirium we directly aprovide an alternative to the things they're trying to do. >> thank you >> i didn't hear what you said about bitcoin. >> i think any one who talks to me about price or any model -- >> yes don't buy where it trades on any given day. is it digital gold >> absolutely. i absolutely believe in that i think -- so i'm a computer scientist. and i think in the last decade the single biggest technical breakthrough that has happened in different areas, bitcoin is probably at the top of the list. >> right electricity. the internet and then the internet of money. andrew. >> wow. >> think about amazon in 1998 where people didn't understand anything about it. >> save this video for 50 years from now >> i'm hanging it all on

coming up, we'll tell you which company bob iger said that disney was considering purchasing before deciding against it, saying the nastiness is extraordinary it scares me there's times you see when there's some type of tragedy the way americans respond and you think what kind of country has people like this and then you look at the people on twitter and say i'm taking it all back this people has the worst people in the world that story next. quick check on what's happening in the european markets right now as we head to break. ♪ when it comes to your customers' expectations, there's one thing you can be sure of. they're changing by the nanosecond. that's why cognizant created a unique engineering approach to design and build new digital products. learn how cognizant softvision designs experiences

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♪ several big corporate stores in the world of tech and media to and media to talk about today. "new york times" corporate media reporter and joe ann lipman from the prirnceton institute both cnbc contributors ceo adam newman, we went back and forth earlier. i don't know if you were watching earlier. >> i was in the car on the way over so i missed part of it. >> oh, yeah. i didn't hear your earlier conversation. >> andrew was mansplaining. >> whoa. >> what does it mean he was just explaining a lot. >> mansplaining. >> you thought you were explaining it to a woman.

>> like i didn't know -- >> whoa. >> talking down. because you know a lot about it. >> but -- >> i take it back. i apologize. >> can we talk -- the elephant in the room about wework, why is it an internet company this drivers me nut drives me nuts it's a timeshare company which your mother has been telling you to stay away from, so why in the world do we consider this an internet company with a $47 billion valuation? >> so we can get a $47 billion valuation. >> right >> real estate company would not get that valuation. >> right you compare it to other co-working spaces. even at 15 or $10 billion valuation, compare that to like the female equivalent, speaking of man sls splaining, the wing, which is valued at way under $1 million. it just doesn't make sense that -- i mean, it's been smoke

and mirrors. >> also, the other thing is is it something that all of a sudden the investors found out that adam newmann has some issues in how he runs a company or bringing that to light in -- >> isn't the issue that everybody looked the other way -- >> yes. >> this is what i'm saying. >> this was not a revelation to them. >> when the valuation was going up the second the valuation was going down, oh, my god -- >> liability. >> throw in the share structure. everything is okay until it's not okay >> also if they're serious about this, even if they pull him out as chief executive, he still controls the company they're not taking his votes away i don't know how -- in effect he still controls the business. if you're concerned about his antics and how he thinks about these things, that's the thing to really go after that's what happened to the travis palanick, some faction of the board decided he can't be in

control of the board i don't see this happen on this side of it it's not as if these investors didn't know about his antics before. >> if you step back really, actually what i think this is is such an indictment of the bro culture of vcs and the tech industry think about it, you've got a guy in neumann. >> the what culture? >> bro culture. >> you're doing it again i need explanations. >> silicon valley is dominated by the bro culture. >> you have a 6'5" guy in adam neumann, he goes in and tells his story to the vcs who are all men. 98% go to companies run by men even though the companies run by women have a better chance of success.

he goes and snows them he comes out with a board that's all men. he's surrounded by the sort of enabling culture and you've got to believe -- i mean, this should actually be a harvard business school case study in fact, every business school case study of what happens this is like the best case i've ever seen for why you need diversity in your decision making. >> totally different from elon musk no similarities? >> i'll tell you the difference. elon musk is buying planes with his own money. you can say his own money is loans against his margin on this and that, but this guy is buying planes with company money. this guy is buying buildings and then leasing them back and forth. by the way, there was views that elon musk was taking, you know, solar city at one point and mixing it up with tesla, which he did, so it's a -- >> crazy use reportedly. we saw some of it, but then others -- >> there's also a bigger

constituency of investors. >> buying 420 whatever -- >> so buyer beware on that point, right but in terms of wework going ipo, all of a sudden it was the scrutiny of the public markets brought this stuff to light. i think the vc community around it, you have to wonder, how much were you aware, not aware. >> elon musk did all of that the company had been public for ten years already and he had been ceo the whole time. meanwhile, disney ceo -- >> i have one question for you guys do you think this is going to make it significantly harder for massasan to go and buy businesses in the future do you believe that a founder is going to say, i saw what you did, i saw the beheading of adam neumann d-- >> it's almost there. >> benchmark.

>> took travis kalanick out. >> if you're a bad guy -- >> softbank -- >> i agree with your point it could hurt him going forward. i think it depends on what happens right now, right so with benchmark, they redeemed themselves because they pushed out. they were successful in pushing out travis before uber was -- went public. >> right. >> so if you have the sort of -- >> also, at wework they took softbank's money, over $10 billion. if they can't have some kind of say over how this is going to go forward, that's what you're weighing it against. >> all right iger was thinking about buying -- i'm trying to figure out why disney, how they worked that. >> why would they want to buy twitter? >> yeah. he said he didn't want it because it's extraordinarily nasty. >> you're on it? >> yeah. >> i think the con see the was bob iger was smart in analyzing

that they are losing or they were losing a distribution channel, right disney relies on that infrastructure to get its stuff out there. by some analysis, you know, twitter is another distribution mechanism. >> when i see something -- >> but you do have to wonder if disney had bought twitter, would twitter have turned into the cesspool that it is today? would disney have been able to prevent, stop, change direction of how that organization works which would be really interesting concept. i don't know if anybody at this point can turn twitter around in terms of just the toxicity of it >> it keeps getting worse and worse. the other thing i thought we talked about last week, in his book that, you know, he said that if apple -- if steve jobs was still alive he thinks there would be fairly positive that apple would make a play for disney >> right. >> it's been out there in some

form or another. the timing of him saying this is fairly interesting apple is ultimately in some ways a distribution company as well that's it. >> thank you ed lee, we'll see if -- >> coming up rick scott is in the house you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley.

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we want out. some of wework's board wants to say good-bye to adam neumann >> searching for a way out we'll hear from rick scott of florida. the battle for your living room heating up. who's winning the streaming war. we'll discuss with rich greenfield the second hour of "squawk box" begins right now live from the beating heart of business, new york. this is "squawk box. good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with melissa lee and andrew ross sorkin at 6 you said welcome back and i think that was correct welcoming people back who were watching on friday. >> absolutely. >> who were also watching on thursday and wednesday. >> community >> it's an episodic --

>> program. >> yes >> not like they're watching for the first time. >> even you are here so much because we -- you know, that it's episodic. >> i think so, too it's almost seamless. >> u.s. equity futures unlike this intro that i just -- anyway, anything but seamless. down 48 -- changing. the dow, those are some big swings must be a dow component that's fairly high priced moving around this morning anyway, the nasdaq, these are weird. is this weird? did you see that, 10, 4, 10, 4 on the nasdaq. that makes me think there's something -- >> maybe. >> the s&p indicated down -- that looks a littlescrewy. usually don't see moves like that possible i guess depending which stock it is, i guess. >> we have a special guest for the hour this morning. florida senator and former florida governor rick scott is here we're going to hear from him in just a couple of minutes we've got a lot to get to him

about given all of what's been taking place in the news, but we want to bring you a couple of headlines right now making news this hour. about half a million travelers around the world, this after the collapse of thomas cook, the world's oldest travel firm after the british government turned down $187 million bail out request the company effectively going under. new york stock exchange international exchange has launched its by the coin futu s futures. they're hoping to draw business from rival cme group which launched its own bitcoin futures. bitcoin under 10,000, 9,999 now. idx group has abandoned the stock listing after it listed one company, interactive brokers group jumped ship. remember when we broke that news on this show close to a year ago. iex has tried to lure companies

by offering big discounts on listing fees iex founded by brad kutiammo who was the star character in michael lewis's book flash boys and really was suggesting that the exchange system itself was a conflicted mess and unfair and they were trying to develop a new version of this. >> shows you how difficult it is. >> it shows you how difficult it is, how entrenched the players are and how the regulators make it difficult there's a whole group around that. >> rick scott is here. let's discuss u.s./china trade and much more with our guest host for the hour. florida senator, former florida governor i think you're pretty hawkish on china. >> it's not just about trade, let's remember this. they're militarizing the south china sea. they're spending a fortune on the military they have a committed policy to try to defeat us it's not just about the trade.

none of us like a trade war but what leverage do we have they're stealing, 100 to $200 billion worth of technology, they have no human rights so now they're trying to take over and not comply with hong kong. they agreed hong kong would be two ways of governing. they're horrible on dealing with taiwan so our only choice is a war. >> senator, sheldon davison said the president needs to start thinking how it's eventually going to hurt the economy and his re-election prospects. if staying tough with china resulted in a democratic administration being elected in 2020, would you think that's still a good idea to remain so strident. >> i think somebody has to stand up to china. >> i don't think the democrats are going to have any other position talk to chuck schumer. every time i'm -- >> the guy sitting there now is the one who would get blamed for

a -- >> so what's interesting is you have people like elizabeth warren who are trying to move right to the president on some of these issues. that's what's so complicated about this. >> right what does right mean >> she's more hawkish -- >> she's moved to a harder line. >> staying tough on china, is that right or left >> are you using right or are you spelling it -- >> how else would i spell it >> i don't mean the wright brothers. >> we have to stand up to china. they've killed our jobs. they're killing people with the fentanyl they're stealing technology. they're not a good player. >> most republicans are more free market than antiprotectionism. >> except that the whole world seems to have moved in a different way over the past two or three years. >> this is a populus -- >> we have to stand up to china. what's our choice? if you're not doing the tariffs, what are you going to do

>> we've been doing fine not standing up to them. >> there's a fair question -- >> you lost all of those jobs. >> economically -- >> think about the jobs we've lost. >> critics of the administration would say even those who support standing up to china might say let's stand up to china but maybe there's a different way to do it. this is all in the nuance, this goes back to tpp, trying to bring in others. there are other options beyond just saying we want to stand up to china >> this is having a legitimate conversation we tried to bring europe along you can't do it. america has to leave lig lighthizer is doing it. >> no separation from security deals, nothing >> i can't imagine why

they can't -- i mean, we're doing the right thing. we're standing up to china so you can't piece this out. >> isn't it easy to say we're standing up to china and doing the right thing when the consumer hasn't paid the brunt of the tariffs yet because of the carve out. once that happens and they say, hey, senator, we're paying much more for x, y and z at our walmart, sthant when it hits >> china's devalued the currency in essence they're paying for it there. if we collect any tariffs we ought to give it back to the american consumer in tax cuts as soon as we can. >> this will sound political but i think it relates to china and the strength of the trump administration in these negotiations the ukraine story. i think right now if you're in china you are -- you are doing this because there's conversations about impeachment and you're having people say all sorts of things. this is mitt romney on twitter if the president asked or pressured ukraine's president to investigate his political rival

either directly or through his attorney, there would be trouble for the facts to come out. do you agree >> i think we have to get the facts out. we have to get the facts out both on what he did, what trump said and also what biden said. let's remember what biden said we're going to hold back that money unless -- >> billion dollars i've seen the videos i told them a billion dollars. he said, you're not the president. ask president obama and he'll back me. it started with a promise. suddenly no one's talking about the promise because the washington post reported there was no quid pro quo. >> i don't know whether it plays and i think it does wrap biden into it. >> suddenly we're all talking about biden. >> i don't know if there's a false equivalency. >> no, i think it's better if we -- >> no, no, false equivalency in terms of who's in that role at the time that the phone calls were made.

>> i understand. >> by the way, i don't think any of it's very good either side frankly. >> nothing surprises me about president trump anymore, especially something like this really you should look into this with biden i would like to -- i'm also now wanting to know exactly what went on. everything else. >> let me say this, if you don't like what biden did, and i don't like what biden did. >> we don't know it might even be spicier than you know. >> then my question is you also i think have to fairly say i don't like what the president has done. >> let's find out the facts. we can decide what we like and don't like. >> if there's no quid pro quo -- >> there may have been a quid pro quo with a billion dollars he keeps saying it's been looked at. >> i think the larger picture from an economic perspective, given the china negotiations, given where we stand in the world, rather, does this make it more difficult >> don't quote mitt romney

anymore. you might want to -- >> his colleague. >> it's irrelevant. >> what did jeff flake say send sas how about bill crystal has he weighed in on this? >> one's a sitting senator -- >> we know about mitt. >> if you've talked about lig lighthiz lighthizer, i talked to him last week china is not negotiating with us. >> is it part of their calculus around the election? can they play this out long enough >> the problem is the democrats are now going as far as -- even farther than trump what are they going to do? everybody is in that position now. >> senator rick scott, we're going to come back and continue this conversation. coming up, a lot more on "squawk box" this morning. the big corporate story of the weekend and today, it's wework wework ceo is in the hot seat on his way -- is he going to be

kalanicked is he going to be ousted are they considering plans to replace him? we have a lot more after the break with the details, the gory details. then later, who will win the streaming wars shares of roku getting rocked, netflix getting hit and hbo eryoing more emmys than amazon whe u should be playing the money. stay tuned you're watching "squawk" on cnbc ♪ i can shine, i can shine, ♪ ♪ i can shine. ♪ i'mma do what i'm made to do. ♪

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someone floating the idea of legal action against him others want to pursue investigation of use of corporate money and whether he enghajed in use of drug money on the job. he was caught on a plane traveling over international borders with marijuana joining us right now to discuss the questions surrounding

wework, charles ellison is here. he's from the university of delaware also is cameron -- i'm sorry, good morning to both of you. the question this morning, i'll go straight to you on is, didn't the board know all of this already? how could this be a surprise to everybody? >> i think what is surprising is that no investors would bite >> they were looking the other way on all of these issues until effectively when the money dried up, that's when this -- >> they gave him complete control. the issue really here is dual class stock. the ability of someone's economic interests separated from their voting control, they do what they wish. they allowed it to happen. they are now responsible for it. that's the whole issue the issue isn't what he has done with it. there are a lot of companies that have it and a lot of these potential issues will come up. it's ultimately bad news. >> here's the question, cameron. he can say, no, i don't --

>> yeah. >> i'm not giving up the company. >> i think it was in the article you wrote it is unclear how they will be able to do it given that he has control of the company. >> that's the issue. if you can't persuade him on the rational basis of the economics, which is to say it looks like after, what, 18 months, 24 months they don't have cash to keep running the company as they are and, therefore, the value of your shares will be even less, does the legal argument make sense to you what do you do if you are a major investor in this company at this point, if you're massasan, if he called you and said, how should i handle this, what do you tell him? >> i think you have to have a negotiated agreement i think you have to put him in a chairman's seat. >> unless you want to go totally nuclear, at uber it was a year or two before they were thinking of going public. this is on the eve of going public. >> let's be straight, there is

no chance of this company going public, i would argue, this year and possibly next year. >> which is an even bigger problem for the company. >> what i would suspect is going to have to happen, based on some reporting, is you're going to have to bring in an operator you're going to have to try to find a third party investor with a name brand who's never invested in the company before to effectively credentialize this plan, probably need 2 or $3 billion, buy yourself an extra two or three years and then pray to god the economy hasn't gone south in the meantime and then do your ipo. >> i can't see another path with which somehow this all happens in the next three months. >> who's going to put in $2 billion at this point? at this point $2 billion for $15 billion valuation company if not less with all the dead lins. >> i don't understand -- >> by the way, i think you have to go to adam and say, we have this operator, we have this outside investor >> it's a package deal you have to bring it together. >> you have to bring all of it at one shot.

there's not like a multi-part -- >> charles, have we seen this play out before? are there any other recourses that you can think of? >> no. legally what are you going to do i mean, again, ultimately he has the vote that's the biggest issue of them all. you can't take his vote away you can try, but you're not going to get anywhere. >> you see how it played out to its irrational end and that's how it's seen. >> is there any legal path beyond the pressure tactics we're talking about here unless there's a criminal activity involved of some such. but is there any other legal path. >> you saw a little bit. it's played out a little bit with conrad black. many years ago there was the same kind of dispute. he had the dual class. he had control there were all kinds of allegations. ultimately the government stepped in and that was a whole other story. it's a really tough path

the point is what happens to the company in the meantime. that's the danger of the structure. you know, all of these people who work there, everyone who's invested in it, it's a tough one. >> we have to go will massasan, will it make it easier to invest in companies given his entrepreneur first strategy or do founders say you're an honorable guy, adam neumann is, we thinkyou did th right thing. how does it play >> it is going to affect their ability to work with some founders in the future, for sure no question about it. >> are you going to turn on me >> there are venture funds that will tell you up front, we will never replace you. there are firms that live by that motto and they win deals that way look, these guys are with me through thick and thin. >> you're an investor in that same fund, you'd be disheartened if you heard that. that means they don't have their investor's interests first. >> they're trying to win the best deal. some founders are adamant, look, you're going to stick by me. >> thank you appreciate the conversation. coming up, senator rick

scott is here. really oh, that's right on trade, taxes, the 2020 election later, do you know about this, sorkin >> which one >> getting a divorce could pay off if elizabeth warren is elected president. a part of her tax plan, it hits married couples -- >> i'm so in love with my wife i never think about the word. >> you're a godless party. >> why would i have to contemplate that >> right i thinshk e's -- that story coming up. "squawk box" will be right back.

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christine lagarde on the challenges facing world economies and investments. a cnbc first "squawk on the street" today welcome back to "squawk box" s&p down by 3. ten-year yields at 1.69% and if you keep in mind that the high on friday was 1.79, that's an extraordinary move over the course of a couple of days here. >> saudi aramco is in talks offering to pay premium rates for parts and repairs as it

tries to speed up its recovery from the attack on the largest oil facilities wall street journal saying it may take months to fully restore operations rather than the maximum ten weeks the company executives have promised costs could run into the hundreds of millions of dollars. aramco still appearing to try to push ahead with that ipo plan. reuters reporting they have added ubs and deutsch bank the pressure is on to get back up and running they said last week 50% of their facilities were now -- or 50% of the oil was pumping. that was the good news that could pose more challenges. >> it was another weekend of high tensions in hong kong as pro democracy protests stretch into their fourth month. demonstrators flooding a shopping mall and setting a flag on fire. they chanted hong kong people strive on. the clashes follow street battles where they threw molotov

cocktails. they have canceled fireworks for the founding of the people's republic of china on october 1st. in the battle for streaming supremacy, hbo nabbed nine emmys last night more than amazon and netflix we break down -- yeah, break down the streaming war find out if netflix is no longer king of the streaming hill as we head to break, take a look at u.s. equity futures i'm worried. this is screwy i think we fixed them. they were messed up. they look okay now we'll be right back. you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated. their app makes trading quick and simple so you can strike when the time is right.

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time now for the latest on china trade talks. kayla tausche joins us kayla. >> reporter: good morning, melissa. last week's talks broke with a brief statement. the talks were productive and u.s. and chinese principles were set. the media fanfare led to the

cancellation of a foreign visit this week. china's vice president of agriculture said those visits will happen when the chinese are invited separately tariffs will not escalate as planned ahead of the talks "the wall street journal" reporting that's because the hotel will call about the escalating tensions. wall street analysts aren't terribly optimistic. they say they're not expecting a deal before the 2020 election but there's greater chance that they will go into effect there will be little shift in the content of the talks we'll see whether the shift around the principles takes place. andrew >> i want to get back to our guest hosts this morning, senator rick scott

>> nothing is changing >> nothing is changing. >> i talked to bob lighthizer. they're working to get something done think about it, they're not going to stop stealing our technology that's a non-starter they're not going to open up like the wto requires. if you're doing trade they're not going to do that stuff how can you get a deal done. on top of that, they're not dealing with that selling fentanyl in the country. >> i think that would be a politically popular approach >> that would be great china won't do it. >> they won't do it? >> they agreed to buy soy beans in january and they couldn't do that there's nothing they do they can't comply with. they can't comply with hong kong. >> let's go back last time i saw you if they're unwilling to do it, what do we have to change about how we're approaching this >> i think -- >> clearly it's not working. >> the only leverage we have is

the tariffs, right that's it. i think we ought to spend all of our time how do we buy american products, stop buying dmiens ch products they don't feel the pressure yet to change. >> don't buy chinese products? >> absolutely. stop stop buying their products buy american products. build american jobs. think what they're doing with their military their goal is to defeat us that's their goal. we have to come to our senses. we have to be clear eyed about this. >> what do you make of the argument over the last 20 or 30 years that the american consumer has been a beneficiary of cheaper and lower prices for all sorts of goods. >> absolutely. >> are you willing to effectively raise prices on the american consumer -- >> there's other countries to do business with. there are other countries that are not trying to annihilate us.

their goal is to dominate the worlds that's their stated goal >> isn't that a goal in the u.s./china trade talks >> we look at things as a win-win. we want someone to do well china's view is for them to do well, we have to do badly. good people say it has to be a win-win. you don't get a deal done unless it's a win-win do we want brazil to do well sure we want israel to do well. we want europe to do well. >> governor rick scott senator rick scott i'm out of the state so -- what did you tell me the protocol was. >> he's a current senator. >> call me rick. >> if you ever become a former. >> which title do you get? >> we want to keep dominating the world. >> yes >> yes >> but not controlling it. >> but not controlling it. >> we want -- >> we are a force for good at least. i don't know if you can say to everyone else. >> what has china done to help

another country? name it. he's killing little kids in venezuela. it's disgusting what they're doing. >> when you're still a developing country there's only so much you can do for other countries. i'm not trying to be defending anybody. we are high on the scale. >> there's not very much development. >> we'll have much in the next half hour. still to come, we discuss netflix, roku and the streaming industry with rich greenfield. if you are rich and you are married, you may want to hear about elizabeth warren's tax plan because it could have major implications. should adam neumann be removed as ceo of werkwo we'll discuss that in the next hour "squawk box" will be right back.

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welcome back to "squawk box. the streaming wars are heating up dom chu looks at us with the impact on the streaming stocks dom? >> a lot of competition, andrew. last night's emmy award ceremony highlighted the heating up

battle between the likes of the megacap companies out to the streaming giants we'll put netflix up in that category, at&t because of hbo and amazon and disney with its upcoming streaming service as well those ones all in excess of $100 billion. the streaming giants, roku we're putting in here. it has been synonymous with streaming devices and stock volatility in that trade so far. if you look at netflix in particular, let's show you a two-year chart it will show you the record highs. back in september. you go all the way back up here. at that point the market value of netflix was just around $181 billion. fast forward to today we're down about 35 or so percent and the market value currently sitting here for netflix is about $118 billion. that highlights a little bit of that market value move since record highs down to where we are right now. roku as well, a more volatile

stock in the last few weeks. from its record highs that we just saw back on september 9th all the way down here. we're talking about a 38% plunge in that stock taking that market value, guys, melissa, from just near $20 billion to around $12.5 billion today. the streaming wars and competition taking a toll especially when it comes to the market value of some of the big names. back to you. >> thanks, dom. the hoards are coming for netflix. a trailer featuring some of the high profile properties that will be exclusive to the new streaming service. included a link to when it will be available including a link to pre-order. rich greenfield, co-founder of light shed partners. when you take a look at some of these declines you might think this is a manifestation of investors being concerned about the competition coming is that what's happening here? >> we're living in a world where consumers have to actually want something, you know, in the

traditional media universe, whether it was espn or abc or food network, you didn't really have a choice. you signed up for a big bundle whether you signed up for comcast xfinity or you signed up for directv, you all basically got the same channels. you didn't have a lot of choice and you took what you took and you got what you got now you have to want -- you have to want one of these streaming services netflix has 151 streaming subscribers. there's no one who wants it. the challenge for all of these companies is you actually have to go in, acquire subscribers and most importantly keep those subscribers. >> do you think there will be a price war? do you think that netflix's last price increase may have been its last for a while i ask you this because all of these players are out there. apple is basically giving the service away for free on apple devices for the first year at&t is under even more pressure now to prove that the twx merger is going to pay off so is this

going to result in better prices for consumers and maybe lower margins for these guys >> everything is about price value. people are spending 100 dd$100 a month. when you watch the emmys, none of the shows that you're paying $100 a month for broadcast tv, cable networks, couple on fx there was not much coming out of that broadcast tv universe and you're paying a lot of money for it the answer to your question, melissa, is if these stream carriers create the shows you want, they're creating a price value. the reality is the streaming services have the shows you want if you want to watch "stranger things" you don't have a choice but subscribing to netflix the reality is i think you're going to pay for the content you want to see rather than being stuck in a bundle of channels that you don't want. >> here's the question about the model. don't you think you're going to get to a point where there will

be serious churn on a monthly basis that once we get to a point in the technology where i can go netflix on now, hulu, i love "handmaden's tale" that's over and i'm going to turn that off and i'm going to move to hbo and turn that off. >> that happens now. >> no, i know. it doesn't happen en masse yet. >> well, look. i remember when "house of cards" came out, 2012, february there were all of these articles that you could read back then. how dumb is netflix. that sort of was what you were talking about when you were talking about hbo. of thrones and you cancel. you need to create content for our kids and spouses and keep

somebody subscribing every single day i think that's what's going to make the battle for content so big. >> where does roku fit in? >> you need to get content to the consumer it's one thing to stream how do you get it? most people want to watch tv, longer form tv they want to watch on a tv yes, there's lots of youtube viewer ship. the reality is 75, 85% of time spent is in front of the television. >> right roku is one of the leading ways you do that. >> the stock is getting killed. >> it's starting the year at 30. >> out of every media company, growth is one of the best companies hands down. >> hands down. >> it's down a lot if i would have told you two years ago that apple tv plus is going to have an app on roku, you would have told me to have my head examined you would never have expected apple to be on roku. they'll have an app on a roku device. >> comcast has better

viewership. >> really? >> which media stock -- >> how much is comcast up this year >> why, is roku up >> gone from 30 to 110. >> what are you talking about? >> comcast -- >> actually, one of the interesting things comcast has done is comcast plus the market is not focusing enough on what brian did in announcing flex is free. he wants to compete with roku. brian and comcast is tired of people walking into best buy and have a roku. >> what's your estimate on what peacock does the new tv service nbc will offer. >> every single person that has comcast service, we don't know whether it will be video service, every comcast subscriber is going to have peacock for free that's a lot of people that's over 20 million households it gets into our discussion of apple tv plus that we started talking about on the show last week is, you know, you end up with this big install base that can access it at no incremental cost people are going to use it it's free.

now will the content be killer you look at something like amazon it put a lot of money in doesn't cost anyone extra. you need shows to drive people to watch i think "fleabag" is awesome but they're relative amazon hasn't had the massive breakout hit yet that's the same thing nbc will be looking for that would make it a tough acquisition. it's' going to outperform. twitter is not an easy company regulatory wise.

where do you go. and they owned that. >> that's the type of platform. >> disney doesn't have an app that you use every single day. even disney plus, we're not sure that that's actually going to be something you use every single day. this would have been an app you opened up on everyone's home screen that everyone would have used religiously every day that would have been a power full asset for disney. i understand the difficulty of something that's outside the core competencies but the brand risk to the disney brand. >> we're going to leave it there. >> rich greenfield, light shed partners. >> coming up, another detail coming to light in senator warren's tax plan. i think this comes through here's a hint, you may want to consider a divorce details after the break. check out the futures at this hour we're down but not out

down 54. on the dow, 5 on the s&p the nasdaq indicated about 7 coming back.

couples with 100 million or less can save the tax. that will put each taxpayer below the 50 million threshold if they are worth $1 million they would pay the tax if they divorce they would each be worth 50. as greg manc usaid the warren proposal entails a $1 million a year marriage penalty. billionaires if they're worth $2 billion they could save $10 million a year in taxes since they wouldn't pay the extra 1% billionaire premium. families could give part of their fortune to their children. it would have to be less than the $11 million estate tax exemption. one of the economists advising warren on the tax told me that

single taxpayers may get taxed over $25 million so the exemption would be less. the split actually wouldn't work on wealth over 50 million, quote, unless you marry a pauper they haven't focused on this issue. >> interesting but doesn't it -- so how many people would this remedy, i don't know if it's a remedy -- >> there are 75,000 families that would be taxed under the wealth tax. >> 75 families. >> 75,000. >> 75,000. >> not 75. >> wish it were only 75. working on that. >> that is one of the issues how do you get $200 billion from 75,000 families. now the other issue is that i'm told by accountants that the irs -- you could actually divorce on paper, continue living in the same house, live your life as normal and the irs doesn't investigate -- as long as it's a legal divorce the irs doesn't investigate divorces for tax reasons. >> right. >> so my point is not so much

that this would force couples to split up but you could divorce on paper and avoid the tax. >> question for the senator very quickly. do you think if elizabeth warren were to win the presidency that this plan would ever get enacted? >> they're going to do everything they can to get a wealth tax they started the wealthy and they keep moving down. they started an income tax it was on the rich >> thank you >> for more on that, let's bring in our guest, joining us now, former u.s. senator and cnbc contributor heidi heitkamp are you happily married, senator? >> i am. i am. >> that could change. >> i'm not in the lucky -- i'm not in the lucky 75,000 group of people. >> but you wish -- >> i think -- >> you still have time and also senator scott is still with us >> he is >> there are 75,000 people that

are. are you -- let me just ask you outright, do you want to do a wealth tax of some kind, senator? >> look, the reality let's just deal with the first issue. 75,000 people, people love the tax that somebody else pays. we know that this tax is very high i don't think you're going to see a lot of people saying, oh, my goodness, this is going to lead to divorce. look, if you are so small that you'll want to divorce for a few million dollars, then shame on you. and so i don't think it's going to change. i think the big problem with the wealth tax is every other country in the world who has tried it, it has failed because of exemptions, because of compliance problems and so i think there's other ways to address this huge income disparity we have in the country through the tax code without doing what i call a property tax, which is what this is states across the country used to impose personal property taxes. they have pretty much gone the

way of levies although tariffs are back when you look at what -- how difficult this would be to administer, it's what collapsed this tax globally. so i think there's a whole lot of reasons to talk about why this won't get enacted, why if it does it will fail and the marriage penalty is the least of it. >> senator, would you just do -- we've got some wages growing at the bottom here. is that your answer? would you do any redistribution? >> you know, i -- >> no, i'm talking to senator scott. >> cut taxes. >> cut taxes >> yeah. our tax structure is way too -- we have way too much in taxes, way too much in fees i cut about 100 taxes in fees as governor and our revenue is skyrocketing everyone else has moved to florida. >> here's the question about florida and the dark secret emerging in florida is the property taxes in the villages, which is in

sumter county, there's a 26% increase in taxes because the population growth there has not paid for itself. they need fire stations, they need deputies, they need roads the population growth isn't paying for it. the secret is that, yes, they have no income tax in florida, but the property tax is going up 26%. >> they're not doing that around the state. they're not doing it where -- >> they're going up in miami, they're going up in palm beach. >> they need to spend the money better the revenues have skyrocketed in the state. my revenues went up $20 billion at the state level not -- a lot of that was property tax price values have gone up and there's an unbelievable amount of construction. we need to focus on how do you grow the economy and get jobs. in florida, we get more tourists we had a 50% increase in tourism. all of this idea of raising taxes to pay for all of these grand ideas, all it will do is kill the economy the green new deal, medicare for all, all of this killed this economy. >> senator heitkamp, you've seen

the wage growth at the lower end. i'm wondering, do you think the tax reform was a total bust at this point >> yeah, i do. let me tell you about the wage growth when you index the last 30 months of obama's wage growth and the first 30 months of this president, this president actually does poorer than the last 30 months of obama's. so let's just calibrate the fact that people at the bottom don't pay a lot of income tax, they pay a lot of fica, they pay a lot of payroll tax, they pay sales tax and they're getting -- falling further and further behind to suggest that somehow we're on the path to cure this income inequality is i think not understanding the numbers that are in front of you. there's a whole lot of things that we can do to make the tax system much more equitable to everyone and a lot of it -- >> by doing something other than bringing down the -- that's all i ever hear is bringing down

people who make too much money what are you going to do to help everyone else make more? >> i think first off when you look at payroll taxes, it's pretty regressive. you can fix a lot of that stuff. you can take a look at basis skipping when you're looking at wealth retention among very wealthy families wherein come is never taxed. there's a whole lot of strategies to understand the tax code you can fix. >> i want to create opportunities for people i grew up in public housing. i got ahead because i had the opportunity in this country. fees, taxes, everything is ridiculous in the country. it's too high. >> senators, senator scott, former senator heitkamp, thank you. robert >> thank you >> y'voue got to stay married. >> absolutely. >> we're coming right back every single day. and if you run a business, that means a lot. we create financing options for your customers. to help them get the things they love instantly. our data provides insights

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this is "squawk box. >> the nasdaq market site, i'm joe kernen along with andrew ross sorkin and melissa lee. becky is off today can we do it can we get a screen behind us and pretend we're here >> has that ever been done. >> maybe we are in florida now. >> we could be in florida right now. we could be. >> you don't know. >> this way we could get carl icahn on the set >> yeah. >> that's right. >> and tuper >> that's right. the futures right now are

indicated down about -- we're in times square i can tell you we are because elmo groped me on the way in futures are down -- >> i thought -- >> huh >> i thought you were going to say because we're paying the taxes. wow. >> and he was naked on top of -- >> stop talking. elmo's always naked. >> way too much information. >> dow jones is down 65. the s&p's down 5 1/2 and the nasdaq is down about three points. >> i can't continue. >> imagining elmo. >> i can prove we're in times square. >> elmo. >> that's horrifying for the viewer. >> that's horrifying for the viewer. >> treasury yield's 1 69d on the ten year. >> really not a laughing matter. >> no, it's not. >> he got in trouble >> very serious. >> he did. >> that elmo has been removed from the premises. >> do you know there are several elmos. >> how many elmo -- >> there's more than one elmo in

times square. >> how many of them have been -- >> don't do that. >> here are some of the stories that we should be talking about today. half a million travelers are making new arrangements after the collapse of thomas cook. that comes after the british government turned down a $187 million bailout request. competitors are sharing details of that hard ball tactics with the federal trade commission as it investigates the social media giant for potential antitrust violations one competitor that's talked to investors is snap which they kept a does sssier called voldet they talked about snap on their instagram accounts. it was a big night for amazon at the emmy award the show "fleabag" scored awards for best acting, directing and best series.

hbo's "game of thrones" won for best drama and acting. amazon, at&t and netflix off the back of these wins netflix is down almost a percent. new developments this morning about wework and its leader, adam neumann is the talk of the town. some board members and large investors privately discussing whether and how they would replace neumann. among those in favor of ousting the ceo is softbank's largest investor we have walter isaacson, bedrock capitol founder jeff lewis is here and we are thrilled to see both of them i'm going to start with walter this morning great to see you, walter >> you're in new york city times square. >> i'm sorry we're not seeing you in person. >> careful. >> i understand what this story means in the larger context of public offerings, of corporate

governance and what this says about maybe we we are maybe in the ipo process. >> well, first of all, i'd put it in the context of founders who start companies, who tend to be like steve jobs and travis kalanick or now adam neumann, they have a pretty strong vision and adam neumann, who i happen to know, my wife and i and he and rebecca have been social friends, he understands the major transformations happening in the way we work, in the way people move to cities, in the way we need communities and even the gig economy. the problem for corporations and corporate boards is people who have strong visions like that often aren't the ones, and this is why steve jobs got ousted in 1985 by the apple board, by travis kalaniyk got ousted, they are not the ones with the most conventional governance and you have to balance that

how much strong passionate vision do you want and how much plain corporate governance, traditionalism >> walter, given you know adam as well as you do, straight up and down, is he the right person to take this company forward or not? >> yeah, he's the right person right now to launch a company that's going to be transformative he does need, as a lot of people did whether they were founding google or apple or facebook sort of what they used to call adult supervision on wall street and he's probably not the person to be the long-term ceo but if you're going to create a whole new industry based not just on real estate sharing but on a notion of how we're going to co-work together and co-learn and do other things together in the future, i don't think you can build it without a visionary. >> jeff, you live in the venture world. you've seen these situations before it appears that whatever trust

had been placed in adam neumann no longer exists what would you do about it what would you tell massasan today? >> you know, i haven't seen a situation quite like this before i think i would probably have advice more for adam than for masa what we're seeing is walter and his back on steve jobs wrote about the reality distortion field. you mentioned that 34 times. i think we have two inheritors of a very powerful distortion field here in both masa and adam he knows what these companies are worth. adam's reality distortion field is what could potentially be a phenomenal real estate business is actually a tech business. so one of those reality distortion fields has to cave and i think that they probably both will. adam ought to recap the company

in the private markets and masa out to stop trying to oust adam. that's what i think they both should do. >> geoff, here's the issue it appears nobody -- no outside investor seems willing, at least thus far, to pony up new money to this company with adam in place. that seems to be the message that the company has gotten over the past week and in part the reason why masa and others are now seeking his ouster. >> yeah, you know, i think you always sort of wonder what the incentives are of the folks that are getting these messages out i would bet that at the right price with the right plan in place there's a lot of capital sloshing around in the private markets. i think at the right price at a reasonable price it would be a recap, it would be a down route. i believe the company could get the 2 to 3 billion capital that they need to keep going. >> walter, have you been in touch with adam over this at all? >> i've been in touch with adam in a couple of months now, but

we haven't talked about recapitalization what we've talked about is the future of ork. i mean, he's almost, you know, tunnel vision in trying to figure out what the future is going to bring and how people moving back into cities and how they need the sense of community and they need the reskilling he wants to make it wework, welive, reskilling. >> i've got to tell you, walter, the investors are saying we don't want you doing weeducation and we this and that we want you to do wework and stop all of the other stuff. what would you tell adam this morning? and i know he is i imagine feeling under distress at this moment would you tell him to defend his turf and tell everybody, you know, talk to the hand would you tell him the rational move is to step down, that that's the better thing to do?

what's the right advice if adam is watching? >> well, i think that he should keep to the vision but he is burning through a whole lot of money and doing a whole lot of things in an unfocused way i'd do, like you bring in the sheryl sandberg, you bring in erick smith if you're facebook and google, i'd bring in somebody to keep the spending and the revenues more in line. >> right >> geof geoff, the other piece of this, investors feel that they have very little leverage in this scenario given the voting shares that adam controls and real firm control of the company and that the only way they're going to pressure him out of this company isn't the rational economic arguments but maybe even suggest, as we reported this morning, that they could try to bring legal action, make claims about self-dealing, push for investigations of how corporate money has been used or

potentially misused, try to investigate further these issues about drug use, whether that was taking place on the job. i mean, if they were to go down that path, what kind of danger do pe thut out to neumann in and the company? is that a successful argument? >> i think it's a sad arg guume. any private markets investor that is doing the work on the business would have uncovered these issues these issues are now being floated in the press now by the investors as they try to make adam the scapegoat, the fall person for what's just been an over valued company and quite honestly the investors made the mistake of investing in the business at too high a valuation. yeah, he is very exposed adam is very exposed he's handcuffed because the company can't really tell its side of the story given the sec restrictions they really ought to pull the

ipo off the table and start telling their side of the story. but i do not like how this founder is being made the scapegoat for the mistakes of the investors. >> okay. geoff lewis, appreciate you getting up early on the west coast. walter isaacson, always terrific to see you. coming up, what the markets could be watching as world leaders get set to meet here in new york for the u.n. general assembly u.s., iran, saudi arabia, tensions will be just one of the issues taking center stage all the market risks and drivers that you need to know about are just ahead "squawk box" is returning in just a couple of minutes we'll be right back. orlando isn't just the theme park capital of the world, it also has the highest growth in manufacturing jobs in the us. it's a competition for the talent. employees need more than just a paycheck. you definitely want to take advantage of all the benefits you can get. 2/3 of employees said that the workplace is an important source for personal savings and protection solutions. the workplace should be a source of financial security.

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welcome back to "squawk box. futures, the dow would open off 70 points. nasdaq looking to open off 11 points and the s&p 500 down we'll call it 6 points for now big week for president trump and other world leaders as they get set to meet here in new york for the u.n. general assembly. eamon javers fresh off the

weekend joins us now with the biggest issues facing the organization hey, i saw you, dude i saw you asking those questions. >> that was friday the president had a press conference i got to ask him a question in the east room. >> you were everywhere >>yeah. >> you were -- you were on tv! >> every now and then they let me on tv, joe. that's how it works. >> does this count you're on in the morning i don't understand my kids, you were on john oliver i have my own show thanks. >> nice to break things up from time to time the president broke things up a little bit yesterday he was on his way to the u.n. general assembly in new york he took a side trip to houston, texas, to meade with ind bean president modi this was a unity event for the two leaders in houston yesterday. while the president was traveling he was asked whether or not he would meet with the iranians during this week's u.n. general assembly in new york here's what the president said >> i would meet if they wanted but i have absolutely no plans

to meet. we're doing well they're not doing well they are having a hard time. i would like to see it be a great country. i would like to see it be a great and wealthy country. it has tremendous people, frankly, and tremendous potential so we'll see what happens. certainly the united nations week is going to be very interesting. >> the president arrived in new york city last night for the u.n. general assembly. he'll be there through wednesday this week. he's got a slate of meetings with foreign leaders on his schedule and of course that iranian issue is going to be looming over the entire week the question of whether or not the united states will take military action in response to those attacks on saudi arabia. there you see some of the foreign leaders the president will be meeting with during the course of this week. some of whom are facing a political crises of their own at home all of that against the back drop, joe, of this unfolding political dilemma for the president here in the united states after admitting over the weekend that he did, in fact,

speak with the president of the ukraine about joe biden and his son. that is causing democrats to call for the impeachment of the president. the president said he did nothing wrong in the phone calls. a lot of drama in new york city. >> right it's a lot of drama every week seems like, eamon. that's the latest. today's drama due your. >> thank you, emon. for a look at the u.n. agenda and potential market impacts, let's welcome -- >> the one and only -- >> cnbc contributor. >> loud and proud. >> michelle caruso-cabrera and mike santoli. >> good morning. always an honor to be here. >> nice to have you here what's the biggest thing that is happening? is it iran >> yeah. by definition because trump is delivering a speech that's going to be the biggest thing, right you want to hear what he has to say. it's not nearly as interesting as it was two years ago when it

was his first speech we didn't know what he was going to do, how bomb bass stick he was going to be. that was the little rocket man speech two years later, less interesting. you're looking now for tone at, what he says about various issues what does he say about north korea. what does he say about iran. i think he'll be very tough on iran at the same point, the question of what we're hearing, are we going to see retaliation we heard loud and clear from secretary of state michael pompeo when he was on all of the networks, the president is looking for a diplomatic solution. >> is there any shot the u.n. security council gets involved >> i doubt it when it comes to the chinese. you have to get the chinese and russians on board so i don't think that's actually going to happen it's also important, the president has wiggle room here because, you know, 10, 15 years ago if you had shut down 50% of saudi oil capacity, oil would have shot up not over 100 but maybe by $100 per barrel you could get the iranians a t-shirt that said we blew up half of saudi oil capacity and

all we got was a lousy 8 bucks it's an astounding thing what freedom fracking has given us in this country when it comes to diplomacy. >> so, mike, if we're looking for -- you're here you're our senior markets consultant you have to talk markets if oil isn't what we're paying attention to, what is? >> it's mostly oil to michelle's point, the market has a pretty high threshold for when it really vividly cares about either the geopolitical story in the middle east or even oil prices there's been a gravitational pull honestly, i think the market has not yet proven that it has built up callouss against trade headlines. i don't think we expect anything in this direction, but if there were some kind of hard line on what's going on in hong kong, anything where the body language seems like it interrupts the idea that the u.s. and china are working towards something constructive on trade, that's probably the big market relevant

issue right now. now i don't think anything goes on at the u.n. is going to revive german manufacturing or get bond yields higher those are the two things today that seem like they may be softening up to u.s. markets. >> you've been thinking about other things, haven't you? >> like what >> i don't know. >> i'm sure she thinks about many things, joe. >> we haven't seen you -- when was the last time you were on. >> with you guys about a month. i've been on other times. >> bring us more -- i mean, you are our international person. >> yeah. >> so internationally there's a lot happening. what else? >> there is a lot happening. >> what do you make of not going interim deal, how bad is that and how does this finally -- i'm talking about china now. how does this finally play out >> so i have been convinced for a long time it will be incredibly difficult to get a deal with china because what the administration wants is for china to be different than what it is so that's very, very hard to do. do we get some kind of interim deal maybe. i don't -- ultimately i'm not

sure -- i was never convinced it was going to be that meaningful because, remember, we are a country driven by private industry so trump can't up and say -- >> for now. >> for now trump can't up and say, okay, we have a deal, now it's safe to go back into china and order u.s. companies to go back into china. u.s. companies are going to wait and see even if there is a deal. do they respect our intellectual property how do they -- what do they do on the ground there that makes foreign capital willing to return in a way that is meaningful and we the united states cannot do that for them we cannot do that through a deal they have to do it themselves. >> paris may still be used as an enforcement mechanism. that doesn't remove that threat. >> sure. that will hang out there -- >> forever. >> -- for as long as president trump is president whether that's two years or four >> between now and the election what happens with china? >> oh, meaningful? i don't think much.

>> but something we could put it on the back burner >> yeah. i'm not sure that it works for him to get a deal with china, i really don't. >> don't even get one. >> being tough on china works for him. >> that's assuming we don't see a significant impact on the economy. >> right >> really? >> one thing to keep in mind is we talk about these volumes of u.s. imports from china, right tariffs on 500 -- but that's not a static number. it's going down. the imports are going down they're being reallocated in other places that means the tariff revenue is going down it's disengagement, partial disengagement. there's a huge pot of trade that we're fighting over. it's a dynamic number. interestingly, unless you're talking about the longer term issues, there's not a lot to be fought over. >> i think disengagement was going to happen no matter what because a lot of american corporations were getting to the point where they were tired about all of the issues that were being talked about out loud in a very pointed way. >> by the way, from the chinese

side, they wanted to diem if a size export led growth both sides >> all right michelle, thanks >> great to see you. >> thanks for having me. >> you're here all the time. >> so nice to see you. >> i like seeing mike santoli. coming up, a lot more on "squawk box" this morning. the race to master autonomous vehicles one meal at a time. we'll tell you about the on demand delivery business, now it's about which robot can get your sandwich or your burrito the fastest. joe, you love a burrito. you don't want to miss this. stay tuned, you're watching "squawk" on cnbc. >> i love everything

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or so. maybe. >> hold on i'll tell you. >> it has the high. >> 48. >> close to 50 bucks. >> wow. >> 47, 48 bucks. july 2015. yeah, look at that look at that. >> hardware, that's the problem. hardware is a bad and tough business. >> there's no ecosystem. there's nothing else beyond the thing you put on your watch. >> the question is, do they get a subscription >> there's a new device out the whoop. it's like a fitbit they charge monthly. >> that's interesting. >> they give you the device for free. >> i'm not wearing my ring, the aura ring. >> it looks like you're at a construction site and you're wearing it. >> i'm telling you -- >> it does it's the worst looking thing. >> it's the greatest pieces of hardware. >> friday you were out i figured you would come out with one of the iwatches. >> i have not --

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♪ ♪ welcome back to "squawk box" this morning we are right here on cnbc live from the nasdaq market site in times square a couple of big stories that investors are going to be talking about today. repairs to saudi aramco's damaged facility could take months according to officials and contractors who spoke to the wall street journal for them to get everything back on track the company executives have been saying it would take a maximum of ten weeks to fully restore operations following the attacks on the facilities. perhaps that time line is going to creep out

separately, california utility pg&e has formalized an $11 billion settlement, this over the claims related to wildfires back in 2017 and 2018. utility once again denounced an alternative bankruptcy plan put forward by bond holders that says that the plan would cost customers billions of dollars. then viacom has bought the excludsive tv rights to "seinfeld" from sony picture the hit sitcom will air on via viacom's various networks. worth mentioning that one of our guests last week, who you might not think about, has a huge stake in the back end of "stein felled" and that is steve bannon steve bannon because of some various dealings, many

decades -- probably a decade or two ago ended up acquiring part of the company that owned part of "seinfeld" so he is a beneficiary of this transaction. >> we have breaking news steve liesman. >> been reporting every day since a week ago monday, the interventions, the liquidity offerings on the federal reserve and new york fed we have the results this morning. 65.7 billion or point 8 billion was submitted and 65.8 billion was accepted and the fed is making available up to $75 billion for overnight repo operations the stock, the lowest rate 180 and the gap the low and the high, 184. looks like things are getting a little more normal fed officials said in interviews with cnbc, they're continuing to watch and study the repo market. they're understanding why the market is trading outside of the fed funds rate without fed intervention the instability does not give

any kind of credit concerns or underlying problems like it did with the financial crisis. they're trying to figure out why a rate that should trade closer to 2% traded above 7% last week and required the fed to step in with what are now daily injections of up to $75 billion worldwide lending. they're pointing to one particular area of interest. why aren't the banks stepping in officials say they've heightened their monitoring on friday the 13th because of tax payments the following monday it's not like they weren't aware things were going to get weird what they expected but what did not happen, the banks did not step forward raising questions about where the money is and why it's not getting into the repo market last week the new york fed announced daily $75 billion repo operations until october 10th. and then three two-week operations take place this week. they hope this will tide the market over to the end of the quarter which is coming up that can get a little bit weird. they're still trying to figure out. they put 65. the markets needed 65.

thankfully we have a really good guest here who might answer all of these questions >> you do, indeed. >> that's you. >> i know. more of this now, global treasurer at goldman sachs and the chair woman of the treasury borrowing advisory committee, guys off camera were talking about the latest repo thing. >> wahoo. >> we like viewers, therefore, we try to do as much on repos as much as we can because they're clamoring. >> for more. >> it is important how was it today and would you say that there's anything analogous to what happened ten years ago or not? >> no. this is definitely not a credit crisis there's plenty of liquidity available in the system. it's a matter of getting the cash and collateral to exchange places the fed has done the right thing by stepping in here. >> just coincidental that it's happening as we hear of all of the streams in terms of negative yields and things that -- we're

easing at 2% it seems a little bit strange, doesn't it pushing on a stream of worry what's the real concern? >> no, the real concern -- this is something that steve has said that the fed has known what's going to happen. they've been watching the market very early the amount of excess reserves in the system has been declining. they knew they were going to hit a point where they would have to start growing their balance sheet again in line with currency growth and in line with broader needs. it feels like we've just hit that point we knew it was going to happen somewhere between 1 trillion and 1.5 trillion and on monday because of the corporate tax payments, because of the bill settlements that happened in the marketplace, we hit 1.35 trillion and that's what drove the repo rate higher. >> were there technical aspects involved with this in terms of yield steepener trades funded by the repo market? with the fed stepping in are we funding a popular hedge fund trade? >> there is a part of the story that hedge funds have been more

levered. they've been buying the treasuries with leverage by borrowing the funds. that's part of what's driving this need for the cash versus the collateral i think what you're finding is the size of issuance, the marginal buyer of treasuries is a levered buyer not a cash buyer. >> take a step back and explain the situation. we're sort of living through an important piece of history, right? the fed has this new massive balance sheet. that's on one side in terms of how much is out there. also have the new dodd-frank regulations which require banks to keep a certain amount of what's available over here sequestered away and to use to make regulations nobody knows what the right level of any of this is. the fet doesn't know what the right level of reserves is in the system of the brave new world and nobody knows what the right level of regulations are for the bank so when you think about ways, how do we fix this is the fed going to need to keep

coming in or can we adjust regulations. are there things we can do so i don't have to say at 8:31 every morning and tell people, you have to worry about this or you don't have to worry about this when it comes to the repo options. >> i don't think the fed wants you talking about this at 8:31 in the morning they have to put in place a couple of permanent solutions. they could grow their balance sheet as they've talked about doing, either by buying bills or other types of treasuries. the other is what the fmoc has been looking at is putting in place a standing repo facility it would be available for the primary dealers or banks to take advantage of like you saw with today's operation, when it's there and you know it's available at all times, you tend not to need it as much. you have a sense of calm in the system what you saw is 65 billion being accepted but 75 billion offered, the announcement that they were going to keep being in the market through the middle of october and in those operations for the rest of the week it would be at least 75 billion gave the market confidence that

it didn't need to use it. >> joe is right. nobody wants to talk about repo until they have to know about it, right? it was the -- it was bigger than a canary, right? it was like a massive animal in the comb mine. >> the muscle memory, right? >> it was the thing that blew out and everybody has this natural reaction of, well, wait a second this thing is blowing out. so -- >> but importantly in 2008 the things that were being repoed were not u.s. treasuries what the concerns were -- >> the quality. >> underlying collateral that's being pledged. no one is worrying about u.s. treasury. >> why wouldn't the fed create a standing facility. >> it's operationally complex. what they're looking at is an interday facility. they have to get the pipes working and that takes time. >> address what's going to being on twitter is, ah, it's qe again. is it quantitative easing? they're growing the balance sheet, buying bonds, why isn't it quantitative easing

>> the fed's balance sheet has always grown then as you got into qe coming out of the crisis they grew it much more significantly. they used to operate in a different system preprices they operated in what they call corridor system. they want to operate in a floor system which means they have to have an abundance of excess reserves. >> did the fed get it wrong? did they get it too tight? >> i don't think they got it wrong. they knew they were going to hit a moment i think they did everything right in this instance. >> you would say that central bankers around the world have a good handle on the situation, on everything, right? no one's losing control? no one's pushing on a string everything is right? >> i think we are in a good place. >> that makes me feel better. >> i think you're asking a different question, joe. i know we probably have to go. you're asking about monetary policy. >> no, i know. i'm trying to bring -- broaden it to a bigger conversation. >> yeah, that's a good question. >> this is the new normal as mohamed would say.

muhammad ali this is weird, is it not >> i think the repo market is -- >> not repo, 16 trillion negative, headed lower. >> that's not a u.s. problem that's a foreign central bank problem. >> whoever's problem, it could event be actually be everybody's problem. >> is goldman preparing for a day when u.s. rates can be negative. >> we prepare for all event two alzheimer's. >> how about zero? >> we've been to zero before we're prepared for zero. >> really? >> we don't like zero, but we're prepared for zero. >> beth, thank you steve liesman -- >> i'm going to bring you more reap poe until -- >> can we talk later i want to -- this should be not just on "squawk. i want to talk at home if you have time. >> maybe we can get it on network. maybe network will take it let's call andy lack over there, see if he wants a repo story. >> we have to switch stories and talk about a new front in the battle of autonomous vehicles.

this can affect how you get your breakfast soon listen up. phil lebeau joins us with more on that story. phil. >> reporter: andrew, this is a deal that's been announced between postmates and the delivery of phantom auto here's what's going on postmates is partnering with phantom auto as postmates continues to test what are known as autonomous delivery bots, vehicles, whatever term you want to use this is some video of those postmates bots they're already testing this in los angeles. here's the deal between postmates and phantom auto it basically works like this tele operation is where you have drivers or pie 4r09s who can remotely monitor and control these delivery vehicles, these autonomous delivery vehicles if they run into a problem with traffic on a sidewalk, whatever it might be, they can take control. they can be thousands of miles

away from the delivery vehicles. we first profiled it when it started up in 2017 early in 2018 this is a company that is working with logistic firms, trucking firms, autonomous vehicle companies there is a driver, a pilot, whatever term you want to use whose at a cockpit basically they have a 360 degree view of the vehicle so that they can uniquely step in and be engaged. the reason this is porch, andrew, as we see more delivery firms, whether it's post mates or other firms looking to get into autonomous vehicles and regulators are going to say we need to know there's some way for it's stuck or there's some kind of collision with a pe december stree an. they want to know if that put

them to work. >> i have a separate question. there has to be a lot of value on the big trucks. >> on the big trucks, yeah. >> we were just showing an image of a big truck. >> the little -- >> the little deliveries, the big ones with the over -- i just think there would be a risk that there would be like pirates, trucking pirates. >> hijack. >> to hack into these trucks. >> well, let's talk this through, andrew. theoretically if you have a way of monitoring that vehicle at all times, let's say there is a trucking pirate, at some point in the future with an autonomous semi who takes control of it on i-70 in kansas, you know immediately so you can notify the local sheriffs, the highway patrol, whoever it might be. hey, these guys took control of this semi. >> do you remember the movie speed? do you remember the movie "speed?" >> i remember what you're talking about, yes are you saying somebody would have nefarious ideas about what they're going to do with these vehicles >> yes.

>> that could be with anything that could be with an autonomous car. so then you get to the question of should we even allow autonomous vehicles al all the train has left the station >> always good to see you, phil. coming up, stocks you need to hear about making moves ahead of the opening bell on wall street we'll talk trading the dow and s&p 500 less than 2% in the all time highs. stay tuned, you're watching "squawk box" on cnbc this is the family who wanted to connect... and find inspiration in new places. leading them to discover: we're woven together by the moments we share. everything you need, all in one place. expedia. tell him we're flexible. don't worry. my dutch is ok. just ok? (in dutch) tell him we need this merger. (in dutch)

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dom chu is joining us as he does dom, good morning. >> reporter: good morning, sir let's start off with shares of amazon which are lower to the tune of around half a percent premarket on roughly 25,000 shares of volume despite a strong showing from amazon's original content slated at last night's primetime emmy awards, we got not helping matters this morning a price target cut by analysts at morgan stanley they go to 2200 from $2300 a share. they keep the over weight rating one day shipping for customers will bring faster growth and higher costs and lower merchandise margins. those shares moving around next up is shares of chewy it's up 3 plus percent on 35,000 shares of premarket volume analysts at nomura have upgraded that the target price goes from 36 to 32 they like the pullback in shares after reporting of earnings last week with a company with

competitive advantage and customer fulfillment and optimism the shares up 3% and we'll end on shares of lululemon which are up fractionally. the athletic apparel maker getting started with coverage of piper javaheri with an overweight rating. they think there is growing opportunity for men's apparel and international sales and more traction among younger customers, especially those in gen z and joe kernen's continued use of their abc pants >> someone was telling me this weekend i have to wear the pants. >> i will say this, i own every pair of them and i love them. >> the abcs? >> the abc pants you know about the pants >> i don't. >> well, john -- we'll talk about this in a second joining us for a broader look at the market as wall street gets under way for its new week is john kudunis what i love, i think, about this

conversation, we have a bull over here, are you back to being bullish? and defense over here, correct >> i'm cautiously optimistic i'm still bullish. i think we have a decent amount of run left in this market but i think we also have to protect ourselves from the downside at some point -- >> putting his chips in over here. >> 3,000 at the end of the year is 8 points from where we are. so, i mean -- >> we have been in the trading range for four months. rates have gone up, rates have gone down. et cetera. the most interesting thing to us about the month of september is that, you know, we actually think that the bond bubble burst in the month of september. and what you see for first time in quite some months are inflows into equities and to us, that's the recipe for higher prices >> does the fed cut again? >> no. not this year at all >> no. >> i don't think they should, i

don't think they will. >> what is that -- hold on that's been the basis of a lot of this run. and that's why i'm curious why you think both of you if you're cautiously optimistic, the run will continue. >> why would the fed cut -- if they think they need to spur the economy, they're going to cut, right? if they don't cut, they think things are well. they're going well i don't think they should have cut last time either. >> you don't >> where do you think we would be >> i think it would be negative for a bit, but you got to look at what has that done to europe? negative rates never helps the economy. at the end of the day, you might get a little bit of a boost, but it is not going to help the economy. so i don't think it was necessary. but there is a lot of pressure and given the spreads, versus the other parts of the world, thought it was necessary to ease the market, but i don't see another cut. >> optimistic plan of yours what does it entail >> if you look at it, the fed raised their economic projections for next year.

above their long run potential growth level and at the same time, inflation is actually bumping up towards ten-year highs from our point of view, what you're going it see is the fed, they're going to worry about the repo, we talked about that >> what are you buying >> financials, absolutely financials higher rates are great for financials. >> the value rotation continues. >> we think so. >> mr. cautiously optimistic but on defensive buys, what? >> i think that you need to look at the different sectors that can take this volatility so i think what we have, that's been doing really well, market neutral, you hedge on the downside, but you have a lot of the upside convertibles do that a lot as well. >> would you touch financials? >> i think financials are okay we like healthcare still we like technology mostly in the software products. and i think some of the consumers, especially -- >> you're defensive.

you want to play defense and invest also in software, the highest multiples in this market. >> it is the way you invest in it, right? it is the type of products you put it into. we're not talking just going long the equity markets. we're talking about a hedge equity product, a market neutral, a long/short type of strategy so look at something else we have done really, really well with in last few years we're one of the top three in the world and we have the biggest in the world in the last month. what that does is gives you consistent return whether rates are going up or whether rates are going down, so the fed can be doing anything they want, but you get a good return and invested in the market and that's something that we think is very important. and people shy away when they're scared, but we think you need to be in it, but need to be in the proper stuff. >> okay. john, thank you. got to leave it there. appreciate your time come on back let's get down to new york stock exchange

jim cramer joins us now. you were up early, jim i don't remember -- i think oh, yeah, now i remember, thursday night, thursday night, yeah. that's what we were -- yeah. we watched these things, don't we >> my god, bengals, huh? >> listen, i had -- i took -- my home week, i took bengals, jets and giants and won all three didn't win the game. they all covered how about the giants that was fun. >> i actually kind of felt, wow, i hadn't liked their coach, lives in summit, nice man, about time they have a pulse. it is good to have a pulse one of these teams has to have a pulse. otherwise it is just like -- when the jet plays, it is like playing, like, how would they do versus alabama would they beat alabama? >> i can't believe that, you know, they were down 35-0 and then it was a -- a bungled punt and interception, pick six that's the only reason that i won that one. >> that's great.

look, you have a lot of teams that -- gambling is now -- everyone is talking about gambling because it is legal it is, like, wow, okay, the jets won. the jets won >> i know. >> that's the way a look at it. >> what else >> they won but they lost more important now whether they cover than -- >> yeah, well, we're not asking for miracles i just want them to cover. >> the dolphins, i don't know, would the dolphins beat, say, university of florida? >> i did well with -- >> that would be a close game, right? >> yes >> what else -- what is on your radar today, we got nike this week we got earnings coming, like, in a couple of weeks. >> this is the lull. and then it is just going to, like, start up and why don't we -- joe, here's what we have to say the earnings are bad trump's bad. so therefore it is bad how about that isn't that what people say how about elizabeth warren, what does she want to do? end buybacks no more buybacks for gm.

that money has to go to the workers. how would gm do with that? maybe cut the dividend to pay the workers. do you think gm covers this weekend? >> gm hasn't covered in a while. >> they haven't covered. they have been a bad bet thursday night too against green bay. >> do i take the eagles thursday >> i don't like to -- thursday night games, they're tough they're tough. yes, take the eagles. >> i'll take them. thanks, jim. we'll see you in a couple of minutes. later, don't miss the first on cnbc interview with incoming ecb president christine lagarde, "squawk on the street" and "closing bell.

that's it for us today join us tomorrow "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. dow futures down 80 as a busy newsweek unfolds little bit of improvement here wework drama, lots of central bank speak, global pmi, no good in europe. germany, 414 crisis era low, ten year yield back below 17, oil unchanged on conflicting reports about aramco's recovery. road map begins with wework's