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 woes

softbank's masason in favor of unseating. >> first lady melania trump coming to the nyse, set to ring the opening bell to help highlight her be best campaign >> we start this morning with this ongoing drama, increase drama at wework. the company we followed closely in weeks past because of the expectation it would soon go public that's no longer the focus at least of the current stories involving the company. more so the future of its founder and ceo and controlling shareholder adam newman. this morning we can tell you much remains in flux at the company in terms of the future of its senior leadership with a number of significant board members and shareholders moving to oust mr. newman as the company's ceo, move him into

some sort of other more ceremonial position, nonexecutive chairman or something along those likes. as of early this morning, it was unclear what mr. newman's future would be there is some division on the board, i'm told, by people familiar with the situation where representatives of softbank and benchmark both may be in favor of him moving on however, other board members including lou frankfurt, former ceo of coach, and representatives as well from rome may be in favor of his staying as would mr. newman, though frankly it is chaos there was a moment this morning where i thought that i was confident in fact he was ready to move on but that is not the case, i'm

told at this moment. however, if you had tochoose here, i suppose based on everything i heard, seems more likely than not that in some way he's going to decide to instead of replacing the entire board, which he could do, take a different role in some fashion, but nothing has been decided at this point. >> i understand there is definitive pushback by the bankers. they want him out. they're working to get rid of him. they think -- the bankers want this man to -- if he leaves they can get the deal done. >> so many things to follow. one is softbank's decision making in part because let's face it, a week go i was reporting on the billion dollars that they were willing to do in a private placement to support mr. newman as it was about to try to go public

i heard mr. newman was a no show in meetings that masa had and that may have upset him. it was clear ron fisher is on the board, he hasn't returned calls, softbank -- how they feel about things more broadly as who runs the vision fund, but that is a quick reversal for softbank. one wonders about the future of the company without its founder and visionary. >> travis calnick, what happened there. >> uber was -- actually, calnick was more involved on -- in the execution of every day -- of everything at uber however, there are those who believe uber, though, you can imagine existing on its own as an entity that would be in -- have incredible growth given the market opportunity here so much of the vision of wework is wrapped up in mr.

neumann's own ability. >> here, take my wallet, please. you mentioned ron fisher 71-year-old investor david, why -- why is he not talking about this as important as it really is? here is the guy who really guided valuation and he stuck it to the banks and apparently, we don't know what his view is, we know that he can determine a lot more. he's there every day >> apparently softbank is not -- no longer in favor of mr. neumann, which is shocking he's got his own decisions to make it may come down to a chinese pe firm called money capital and their representative on the board who has yet to decide. >> chinese capital. >> it is not clear that is actually expired so, again, we have the reports from yesterday from others, we can add it is just further in

flux frankly and while early this morning mr. neuman was trying to figure out his own future and make his own decisions -- >> lou frankfurt, he's a man of great -- i would say a steady man when he was at tapestries last coach he can't be rolled >> in favor of keeping mr. neuman. >> that's important. when you read articles in the journal about tequila and marijuana, others read those and say, what -- >> we think those who want him out want him out >> those stories are leaked. >> a long -- a big wall street journal story earlier last week about marijuana use on the plane. >> would you dismiss that? >> it is not illegal. >> no, but the implication is that the guy is high when he's doing this stuff >> the implication is there is more there >> right >> that's not yet known and therefore that -- that they have -- >> what are you implying what are you implying there is

more there >> i don't know. i don't know >> by the way this is -- >> that story -- that was a suboptimal story about his leadership style. >> it was not. >> he's a blast. and he represents -- there is this wework army, but what is happening is the more that he's marginalized, the more we start thinking, it is a real estate company. >> that's what you wonder. >> there is a part that wonders why softbank didn't just come and say, let's buy the rest. >> ron fisher -- >> need approval i think from the saudis if they go above a certain number for any investment so maybe that gives them pause but if masa believes in the business model with or without mr. neuman, perhaps you want full control. >> is there a company without neuman, you listen to neuman, he's a visionary he's got -- he wants a trillion dollars -- wants to live forever. spent more than ted williams the guy is just really

personable, you like to say, yeah, wow. without him, it is, like, you know, not as good as cbre. it is simon properties without steady, you know, anchor tenants. neuman is not just charismatic, he's a -- i saw him with david blaine in the same room. two magicians. >> well, listen to walter isaacson this morning on "squawk" argues you need a visionary, like you needed a jobs and it is not -- you can bring in a ceo, a operate, you need someone -- >> when i first heard as well about the possibility of softbank turning against mr. w neuman, the thought was they would bring in a strong figure above. >> who tony west? he's a lawyer for -- tony west >> moving to try to oust mr. neuman as we move on here, this is a

dynamic situation and perhaps within the next 45 minutes we'll have more for you. >> serious >> it is possible. >> 45 minutes. i'm going to be gone can you do that in 40? at least he doesn't tweet. >> right he's been largely silent on twitter. >> isn't that something? he's not a -- he doesn't tweet he's kind of more in check than some others. >> haven't heard from elon musk in a long time >> he made the game fun. >> yeah. and that is -- neuman is the great problematic figure i met neuman in his office i was spellbound like everybody else he is -- he's svengali he's svengali of real estate i started thinking, holy cow, i want to get in real estate, even at the top then he has, like, an army -- i saw an army of weworkers at the hilton they ran over me, like, you know, they were like the wizard of oz, you know, when those guys were -- they were like --

they're, like, crazy they're not going to -- the monkeys, they're not going to -- they're not going to follow a new guy, they're about neuman. >> you think that's how the real estate transactions have been decided on his personality, not on balance sheets. >> the only thing he's using don julio, 1942, there are better class azuelle is a better tequila, for the record. >> that's the one in the beautiful bottle >> yes if he wants to step up, 1942 tastes like turpentine versus azuelle. there is a big flaw in the story other than that the guy is a crazy lunatic. there is a podcast and where you can't make -- >> takes one to know one. >> well, you bet it does believe me, i got his act together and one time he was all sweaty and stuff, worked out, gave me a hug, i liked it. yeah yeah, i got -- whoa, i got

neuman's sweat all over my body. >> this board wants you to stay. >> i got neuman's sweat. >> they bottle that. >> haven't you heard of old spice. >> neuman's sweat, that's a great name for -- get international flavors of fragrances on the phone. neuman's sweat, that's good for like hanukkah. >> how about futures moving lower after breaking the three-week win streak after concerns of a global slowdown. flash pmi shows contraction and sinking to a seven year low this month. the dow and the s&p within 1% of their all time highs jim, as we said, germany, 41 these pmis are hard to look at. >> oh, my god. did you see the south korean numbers? everything is down, like, 20%. not like down 4%, 5% there is a genuine sense that commerce is stopped. we haven't talked about -- i was a little boy, my first trip,

little boy, like 16, my father said, you got to get thomas cook travel checks. there is good as the full faith and credit of the u.s. government thomas cook collapsed. brexit >> forced liquidation and tens -- no, hundreds of thousands of travelers stranded around the world. >> plus, i don't know whether to fear the repo man or repo madness. there is a lot of stuff going on that is really underneath. >> the repo markets -- >> i had somebody come up to me yesterday and ask about repo i really don't -- >> i had it at the football game we were down >> is it technical >> is it about a bank that may be failing, that we don't know about. none of us want to talk about that there is something wrong. >> it is new we went ten years without it now we're having to -- >> so liquid i want jamie dimon to tell us. we have not been able to pin any banks down >> i'll tell you what, we went into september thinking, so volatile, worst month of the

year we have had two 1% moves all month versus a dozen in august. >> i know. it really calmed down. one reason why is that the ipos haven't been aprhappening. >> by the way, just to -- let's not talk neuman for a long time, the idea of an ipo for this company -- >> how about peloton do we want shares of peloton we think uber is a platform, then we think it is a cab company. now peloton, they're saying it is eight ways platform, can i tell you what peloton is it is a way to hang your towels up it is. it is like my wife has a sport braz bra on the peloton at least make it look like a platform it is a platform for her dirty clothes. >> you're not buying it on friday, right? >> it will come and will be all

exciting, like the best workout known to man and the guy is really charismatic. charismatic. charismatic. i don't give a darn about -- i want earnings per share. do you see chewy they didn't -- suddenly it is not enough that all of the boxes that you see on amazon are chewy. suddenly someone is talking about earnings what the hell? >> you're referring to this nomu nomu nomura takes it to buy. >> that's fighting the tide. we want earnings earnings playoffs this doesn't even merit -- peloton is a bike. okay it is a bike it has screens and you got ally and she's -- go fast, go faster. there, that's what we're dealing with. >> our parent company is an investor, by the way. >> i love that that's why it is such a great company and i'm going to buy two more pelotons. we'll have a peloton in every house i have 12 pell tons

get me more pelotons principle investor is fisher involved with that oh, my god. can i just say it is other worldly. we got a repo issue. we got a guy that does nothing but drink tequila. and marijuana cereal box we have a cab company cut in half give me something that works >> we're going to look for one when we get cramer's mad dash in a moment look at the opening bell in about 15 minutes don't go away. more "squawk on the street" from the nyse in a moment we trust usaa more than any other company out there. they give us excellent customer service, every time. our 18 year old was in an accident. usaa took care of her car rental, and getting her car towed. all i had to take care of was making sure that my daughter was ok. if i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. we're the gomez family... we're the rivera family...

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mad dash now, get back to talking stocks this morning that do trade publicly. target, of course, is one of them makes money too. >> yes, it does. every day there is a confirmation of watch, walmart, amazon, target, costco, and home depot. it is almost as if these analysts say no one said anything lately about target credit suisse meets the target, margins expansion, competitor store closings this is a play on the collapse of bed, bath and beyond. that's really fabulous brian cornell has more targets -- they're the most adjacent to bed, bath, and i also think the $5 billion buyback, this is the stock for

the era, good dividend, good growth, buyback. that's the opposite of a lot of the stocks that are coming public this is what people want the public wants other than pin rest and zoom video, no one cares. >> it hasn't given up anything from that enormous gain it had after that last quarter that surprised investors, given how positive it was. >> brian cornell is managing five different formats his inner city is stellar. i will be his pr agent here, puts up soccer fields in inner city, hires local. this guy is saving -- he's like the dan gilbert. we haven't heard from him. i hope he's okay this guy is national, dan gilbert, placing targets in places where no one had a store in ages and it is working. i think he should be nominated for something. i don't know what. i don't know but i love the guy he's from whitestone a regular guy.

my wife is from flushing so there is some sort of weird bond between the nut jobs -- the people from queens. >> piper initiates lulu to overweight today. >> great piece men's, children, and no one ever talks about the fact that lulu will put anyone in bankruptcy who buys the stuff it is incredible how positive that piece is. that stock goes much higher on that recommendation. even though it has been a winner, matt boss got in on that early. >> target 227 out of piper for lulu >> few moments from now, first lady melania trump is going to ring the opening bell at the nyse "squawk on the street" will be right back geico makes it easy to get help when i need it.

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♪♪ ♪♪ ♪♪ incoming ecb president christine lagarde on the challenges facing world economies and investors, a cnbc first, "squawk on the street" today.

big morning at the nyse, first lady melania trump will ring the opening bell with some students from the u.n. international school as part of her be best campaign you probably heard about it. one year anniversary back in may, helping kids overall well-being with an emphasis online safety. all of this taking place amid the backdrop of u.n. week as we look for some news, jim, out of the president, maybe doesn't look like a meeting with iran will happen. but we'll look for headlines. >> and, by the way, online -- my daughter was a counselor for youth. i underestimated online safety, how necessary. there is a linkage between suicide and cyber. and it is a kind of a strange bullying thing strange in that you're bullied by people who look more beautiful than they are. she said her biggest obstacle was this, online and i think it is not talked about enough we kind of gloss over it not much you can do.

all the companies involved are horrified themselves, but at great cost and good to have awareness. >> there is stacy cunningham of the nyse with the first lady you mentioned online, this interview, we'll get to iger's interview with maureen dowd. one thing he said is why he didn't go after twitter, saying that so many liabilities with the content versus the disney brand, even talks about you go on his own notifications and you ask yourself, why am i on this platform >> bringing up a lot of the witt ro vitriol that finds its way into twitter and that is something he did not want to be part of. >> spent a lot of time with bob. he said, look, a disney brand and the twitter -- good versus evil but, you know what, both he and benioff were interested in buying -- has anyone seen where twitter stock is doing better than other people. >> 50% this year. >> maybe it wouldn't have been -- they all now say, yeah in retrospect, wow, thank you.

no, in retrospect, maybe they should have. doing better than -- disney stock has been good. mark, his stock is kind of stuck. >> yeah, a bit of a conundrum, the performance this year. even its underlying -- fairly strong. >> you don't like benioff. >> that is not true. i have great respect for marc benioff. he doesn't like me >> i'll check. >> first lady will ring the opening bell in five minutes don't go away. the new sporty glc.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in two minutes on this busy monday. it is going to be a packed week, whether we're watching the u.n. or these pmis. the fed speak, it is going to come not just from our guys, but draghi, kuroda, all speaking this week. >> so painful. i think a lot of people need germany to start spending some money. they need brexit to happen >> you want fiscal. >> i want fiscal these countries, they just refuse to try to get their own economies -- i don't want to underestimate this thomas cook thing. i know they were in trouble for a long time.

i know that they were part of expedia, people say expedia is a winner, it is possible you're having these things that are happening, boris johnson talking about how this is just -- you really wanted it to fail because of a moral hazard it is, like, they can't just overlook these collapses thomas cook is a giant collapse. >> there is a story on the tape this morning about some of the hedge funds who were in cds, make a quarter billion dollars on thomas cook's liquidation >> well, that's -- the other side of the trade. but i just worry, repo, i keep thinking about -- i would love to ignore that it is such a boring story. it is not boring reality, either the new york fed keeps missing, they don't know what they're doing or there is a problem. there is a lot of banks that are much more problematic than our banks. it is a country club over there. they'll bail them out. >> yes >> let's get the opening bell, s&p 500 at the bottom part of the screen this morning at the

big board, it is the first lady of the united states, melania trump, highlighting her be best platform aimed at children's well-being online safety and fighting the opioid epidemic. at the nasdaq, advertising week, bench platform to the advertising entertainment and marketing industry oil is going to be a conundrum today because we got conflicting reports out of the journal in reuters, some say contractors are saying it is going to a lot longer than we think they're going to -- full volume by next week. >> i got rusty brazil from rbn, the foremost oil expert, i have him on tonight to answer the questions. we have michelle caruso-cabrera on today, she was saying, just a decade ago, oil would have spiked 100 bucks got to find out. meanwhile, tulurian wins a big

contract they talk about how korea, europe, china, needs our natural gas. and there is a lot of stories that say we cannot -- it is all these projects are not going to be able to have buyers, but the chinese are short natural gas. they don't have enough korea doesn't have enough. and then the biggest market is india. they got an india contract let's understand the greatest growth story in our country is export of natural gas and how many people it takes to just build all of those facilities. those are the most -- biggest contracts in the world, maybe -- and we don't talk about it enough just happening right now >> they require many billions of dollars. they're enormous infrastructure project. speaking of infrastructure, though saudi aramco, the journal reporting that reconstruction of these facilities that were hit by the drones and cruise missiles could take longer than aramco is saying, according to

outside contractors. >> why do we want that deal? >> made me wonder how long -- they're moving full speed ahead with the ipo. >> a crimintrillion dollar -- >> occidental feels like the love canal they were involved with -- no one wants those stocks nobody wants any of the independents now we're supposed to want saudi aramco, taken out by ten drones that probably cost like $200,000 come on, how is this happening why does someone throw up a flag and say, this is just -- it is an illegal block in the back, these trades no one wants saudi aramco to become public. they have nine bankers and you think there is nine bankers, they want that fee so badly, they'll do anything >> it will be a significant fee when you take a company public that size. they come public in their own home market of saudi arabia before another listing

not here they talked about a number of different bomb mapotential mark. >> do we want that deal to happen if you're a bull, you do not want that deal to happen it will suck up more capital we're going to start seeing a lot of the lockups expire for some of the earlier deals. no one wants those either. they don't other than roku, that stock was down -- >> speaking of the earlier deals, uber does come to mind, $32.25 at this point that stock is down, what, over 27, really -- since its open. >> there used to be a lot of people thought it would be $100 billion worth of work there. >> $54 billion this goes back to the larger discussion we have been having for weeks now about the vision fund and vision fund two, the plan from softbank to raise another potentially $100 billion fund at least the marks on the uber investment and wework investment

are significantly lower. and where they had them. and where they last invested. >> i think this is an underlying story, i talked about how it is going to happen, we're going to get -- from all the deals. we're in the midst of that now there is going to be a rebellion against the deals. you'll see deals that -- like smile direct, remember that? >> that was a horrible first -- >> that was a punch in the teeth. >> another jpmorgan deal. >> you make it sound like a bad thing, this sort of reset on expectations for these moon shots, unprofitable, companies >> we're just deluged with them. we have some very profitable companies like facebook and alphabet that time has forgotten. facebook is doing incredibly well >> it is we had a senator calling for facebook to be broken up into instagram, facebook, what -- >> whatsapp. mounting pressure on them, the journal reporting about the ftc. this is what you do, go to competitors, so snap has a -- a

dossier of all of the things they feel like facebook did to them to prevent growth of snapchat. >> step up to the plate. >> not allowing it on the instagram platform in a robust way and things of that nature. >> netflix at 269, back to flat for the year >> isn't that something? >> in july, the stock was up 42%. >> trades on emmies. >> that's the other thing. not a single major broadcast network won a major emmy last night, went to amazon, hbo snl did win one. i'm talking major categories >> supporting actor and blah, blah, blah never, like friends and stuff. >> tv is better than it has ever been, it is not the old tv >> why didn't netflix -- >> nothing in the movies you want to watch everything that is available on netflix see the movies that are coming on netflix

>> disney dropped their frozen 2 trailer this morning that's going to be a billion dollar picture. >> the book. the book tomorrow, iger >> on show. >> on "mad money." >> yes it is the most expansive interview. i'm not allowed to talk about. it is too hot to talk about. >> had an expansive -- more expansive than my interview? when they rolled out streaming. >> i called it the expansive interview. i said, this has to be expansive. one minute longer than david faber's interview he mentioned you in the book. >> not in a good way. >> no, he did. i worked it in i worked it in right at the end. i feel lukeike i want you to lie me more. >> i couldn't like you any more. you know that. >> throw david a bone, maybe he'll like me more >> jim, some people are stepping out in front of micron's print

this week. >> how about that piece, morgan stanley and it stell seill sellt eight times earning. in the end, if they call the bottom and d-ram, bottom in flash, the stock will have another quick ten. that whole quietly the low multiple stocks are doing well, the higher -- the xilinx are doing worse. look at texas instruments, that's an unbelievabling to during this period that's low multiple. anything that is low multiple is the antidote to wework and peloton and, of course, some of the really fabulous ipos they have brought us this year. how about chinese ipos >> they haven't done particularly well. to be fair, as we look at first lady there, exiting the floor of the new york stock exchange, we had a number of very strong ipos this year. >> we have >> that have been growth companies that people have -- >> they have been very strong and continue to be strong.

>> very strong. >> i'm talking beyond beyond meat not just beyond -- >> we got new fortress energy, that was good. we got avedro. we're talking about deals like mayville engineering, that's a killer. >> a classic. >> mayville is -- this is like maybury rft, this thing is so big. grocery outlet has been good they have a whole list i found four deals that really stand out. what do you think, david >> i like it i like it a lot. >> then i got about 100 deals underwater so badly, but then i have turning point therapeutics. i thought that turning point, i thought that was a wine. then there is palomar holdings. >> not malomar. >> that goes out a certain time of the year. that would go up like tate's cookies. >> tate's. yeah >> this is a market that

loves -- >> kimberly-clark had a big spill as the momentum shift happened today barclays takes it to overweight >> clorox, all about the bags. all about the generic threat to clorox existential. a lot of the products are being knocked off. you go to -- you go to costco, they're gunning for clorox i put the -- i buy burt's bees stuff. i think it is a good brand david thought they overpaid for that, but it's done well what >> did i feel that way >> yes i learned this morning -- >> i think i did >> you know who is stealing your seltzer thesis is guggenheim taking boston beer to 462 from 449. >> spiked seltzer is the biggest thing. i went to my beach house, i opened a refrigerator, filled with spiked seltz, i thought it was club soda, these are good. don't get behind the wheel after spiked seltzer i have canopy on tonight

i was talking to some doctors, what is the level that you're drunk with cannabis? what is the level? they don't know. each person is different one of the big problemsin america is that the state troopers do not know when to pull you over. they're trying to come up with a breathalyzer vaping has just brought a halt to a lot of cannabis we don't know. apparently if it is dark, david, and it is tar-like, you don't want -- >> you don't want to vap it. >> you don't want to vap it. >> which appears to be the culprit as far as we know behind the illnesses and deaths >> yes. >> cannabis-related. >> yes juul is -- which is worse, the $19 billion juul investment or -- the valuation of juul. altria -- >> they put it in 12.3 for 35%. >> they did that valuation pretty high. or some of these -- the -- some of the things that ron fisher did.

juul, i think you can argue, had a rough couple of weeks. >> the chinese -- they put it -- they allowed it. >> yeah. >> how many days before they took it down >> i saw some favorability polls on juul. down 20 points in a matter of months >> i saw so much vaping at the outside the stadium at lincoln financial, i just wanted to congratulate juul for getting so many -- they didn't have anything to do with it have so many younger people -- they had nothing to do with it they had nothing to do with it, funny flavors. and i really want to exonerate them, they had nothing to do with the vaping -- the epidemic of underage smoking. do you know they had nothing to do with it. >> that's what i understand. >> that's so great. >> they had a fairly strong and continued the effort in washington once they started to get pushback from the fda. scott gottlieb -- >> he should have done much more your document ran again. i caught some of it. it is just a constant reminder

that it wrecks families. it is very successful. i don't want to stant d in the y of juul, it has been a whole new form of a public health disgrace the fda, we have the fda, s.e.c., everyone looks the other way. >> the only way it is smoking mitigation mechanism -- >> you want to -- >> i think juul people are really nice people and when you sit down with them, they're willing to sacrifice all the problems and make it a prescription they seem like they're not merchants of death, they're merchants of life. prescription, i'm being facetious. i don't like this haircut. >> we had walmart continue on friday if a convenience store like waw suit, it is serious. >> how do they live with themselves at walgreens after what larry measuurlo did

>> i haven't asked. >> they don't come on tv they don't want to answer the question, why they continue to do tobacco people can say why do i harp on tobacco? it is most preventable form of death and the answer is because it is the most preventable form of death and maybe we should all do -- maybe we should all be a little less objective about companies that are merchants of death. >> are we going to go down the long list? >> that's the other rap, why do you focus on that when you could have focused on roundup? okay and guns what is that why don't you focus on guns and cyberbullying? okay, i'll focus on all those too. >> opioids >> very bad. >> a difficult world we're in. hanging in right below 3k. to bob pisani. >> all happy monday. it is a rough opening overseas and most of this has to do with the rather rotten pmi numbers that we got over in europe let's look at the s&p futures. can you figure out this is when it happened. this is our futures. should have seen europe this is

3:00 in not the morning. industrials here, cyclical sectors, that are weaker banks weak over in europe. industrials, materials, banks, communications, consumer staples, defensive group slightly on the upside over in europe, it is pretty ugly over there. dax is down, ftse is down. italy. shanghai is down here. and we also see hang seng. that's -- hang seng is down six days in a row now. pretty rough for them overall here other european stocks, big names that are out there, seeman's, glenco glencore, daimler, most of the autos are weak as well on the news of the week pmi numbers. we'll get them here in a few moments here ipos trading this week, interesting ones, i think. some of your european banks as you see on the weak side let's talk about some of the ipos another big unicorn, peloton is coming we'll see how that does on

thursday at the nasdaq deborah group, one of the big global entertainment groups, they do representation for talent, they'll be over at the -- here at the nyse on friday 19 million shares at 30 to 32. the ipo parade continues finally, the first lady was here as you saw she was talking about be best, an anti-cyberbullying group, walking by here. pleasant, of course, woman, talking by us. and asked her how she was doing. she said we're here to promote the be best organization and they're, of course, with fourth grade students at the united nations. she was here with a group of them earlier today nice to see her down here on the floor. guys, back to you. >> to the bond pits as well, check in with rick santelli at the cme group in chicago good morning, rick. >> good morning, carl. friday was such an important day as was thursday with regard to treasury yields. after having a huge drop in yields in august, and a comeback in september, many maturities

failed some simple technical tests closing underneath important midpoints. look at a chart starting on fed day with regard to two year note yields trading below those yields if you look at ten-year, a little bit different scenario, but maybe the most important thing here with ten-year note yields is that from an intraday basis, we're trading at the lowest levels since the 12th of september. open the chart up to what is going on a bigger frame, to july you can see what i'm talking about with regard to ten-year. all the way up to 190 after hitting 146 and not holding 176 the midway point of the august move on the weekly close now, on a closing basis, should we close here, right under 170, we have the lowest yield close since the 12th, the 9th, exactly two weeks. finally, the dollar index from an intraday perspective, same comps, best levels since september 12th you see on this chart, there is

a lot of dynamics going on globally, whether it is funding issues being a concern in the u.s. or the fact that all of the charts of long dated maturities, sovereign bonds across the globe, pretty much all have the same pattern, which shows us we're all basically sharing many of the same nervous tendencies regarding who is going to hold these bonds, what happens with negative rates, how does mario draghi's final handoff to christine lagarde turn out we have more central banks meeting and we'll continue to monitor, of course, in the future, how they all seem to evolve away from policies that don't seem to be helping many of the large developed economies. carl, jim, david, back to you. >> all right, rick we're going to hear from la guard when s garde. the des moines registrar says elizabeth warren is leading its iowa poll for first time with 22% of likelycaucusgoers

saying she's their first choice. last week at delivering alpha, leon cooperman weighed in on the race, expressing concerns about warren and what he sees as a leftward tilt in this country. take a listen. >> there is unquestionably a shift to the left in this country. they won't open the stock market if elizabeth warren is the next president, okay. and i'm not -- you know, i take the quote of winston churchill, i'm committed to capitalism and all its flaws. you don't make poor people rich by making rich people poor, he also said the main vice of capitalism is the uneven distribution of prosperity the main vice of socialism is the equal distribution of misery okay the democratic party seems to be leaning towards leftist policies, which i think is very harmful for the economy. >> he made big headlines upon

that speech there. >> very tough. because, you know elizabeth warren at one point was a republican and was very identified with the issues, things that reagan said, so i don't want to decide that it is over for capitalism with her i think she is strident. but i think there are people in the house and the senate that would be pushback. >> also in a primary season, jim. things always change in the general. >> it is very early. i think some of her comments at the gm picket line were tough. there will not be buybacks will she outlaw buybacks i don't know can she do that? >> i don't think so. >> i don't either. >> change tax laws that make them -- >> the rich have to pay more in. >> you can change laws that would make a buyback not as good, capital allocation for a corporation. >> i love lee. i'm not as concerned that she is -- as he is

i think there are things that are actually she can be reasoned with and i think it is wrong to think the world is going to come to an end. >> you know her well >> yeah. >> don't like it when you talk quietly. >> i don't like what is being said i think there ways -- she's striving on some issues, but she's a very smart person. >> let me get to some breaking news >> john williams hearing fed president speaking about recent action in the repo market says that moves in the funding market were, quote, outside of recent experience kind of another way of the fed president saying they were a little surprised by what happens. they were prepared to supply liquidity. we happen to know they were in a sti state of heightened monitoring on the market on friday. the trouble was markets were not distributing liquidity effectively. there was enough stuff around. it just wasn't getting to where it needed to go. the fed came in and he says the

repo operation did reduce the market strings we're not out of the woods yet there are potentially strains in the funding market coming at the end of the quarter that's why the fed will do three two-week operations that will tie it over the market over the quarter end and the fed will continue to monitor and analyze the markets closely and assess whether among other things to resume growth in reserves. from our own reporting, new york fed officials also saiss one of the areas they're looking at is why didn't the bank step up? they knew there was a potential cash squeeze coming on that monday they expected -- they saw that the levels of reserves in the system, the level of liquidity was ample, but the banks didn't step in as they expected, so that's one of the things they're analyzing to understand why they had this crunch where a rate that should trade around 2% for a while there traded above 7%. carl >> steve, rates are fairly well behaved this morning. >> yes. >> are we back -- is it fair to say we are back to normal for

now? >> iwouldn't give an all clear just yet they offered up to 75 today. the banking system took down just 65. that is a good sign. we put a couple of these together the question becomes why is there so far a continued need for liquidity. why the fed has to keep injecting this money by the way, the money is not cumulative, carl it's not 65, 65, 65, or 75 it rolls over. it ends up being just a net of 75 but we don't quite understand why this money is continuously needed a lot of talk and this insurance that this is not a credit crunch like the financial cries time. this is something different. more technical. >> all right, steve. we're not done talking about it, not by a long shot thank you for that when we come back, sara's interview with christine lagarde. s&p goes positive here and dow is down 21 don't go away. it was sophie's big day.

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trading. >> sometimes they're doing things that don't improve profitability. a lot of this is a great note by morgan stanley about how one day shipping impact amazon's poor profitability. people love this one day shipping so much, but it hurts the margins for amazon i think that jeff bezos is very smart to put people where they should be and maybe you can raise the price, but wow they're doing so many things right. that's the one to watch, by the way, if elizabeth warren really goes far not alphabet these guys are -- they're just putting everybody to shame they may be too powerful >> we've got a lot of big silos. what's tonight >> some of the most important, canopy we have my friend rusty braziel to talk about oil and nutanix has been going down and down and down we're going to find out what the heck is going on there. >> big week. >> oh, this week is so

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good monday morning. welcome back to "squawk on the street." i'm carl can ta nilla, sara eisen. take a look at the markets here. busy week setting up the pmis in the u.s. aren't as bad as some of the awful numbers. >> our road map starts with christi christine la garde joining us here following her exit from the imf. >> fears of a global slowdown as mav markets in september try to brush off the reputation for the worst month of the year in stocks. >> and the largest investor along with others in favor of ousting the ceo adam newman. we're going to bring you up to speed on a dynamic situation. >> christine lagarde wrapping up

a tenure heading to the central bank we had a chance to sit down on friday i asked her about the biggest challenge right now facing the global economy >> the threat against trade at the moment is the biggest hurdle for the global economy yes, indeed. i think we see the u.s. economy continue to grow above potential and, you know, it's the longest period of growth in the history of our country the unemployment numbers are at bottom unemployment rate so it's in a very good place >> on the dynamic of the u.s. outgrowing the world, we're going to have a lot more from our interview first on cnbc with christine lagarde coming up this hour we talk the weak data and the closing bell on the trade

situation and where she thinks this is all going. >> can we tease at all whether or not her tool box will differ? >> i asked her and you'll hear her answer it's sense tip because she's not in the ecb until december 1th. we talked about it and talked about the tool box, so stay tuned. >> you'll see that later this afternoon as well on "closing bell". david, what a weekend of headlines for wework and your weekend fills it out today. >> a little bit. not as much as you'd hoped for this is a dynamic situation. we're talking about the wework founder adam newman and the rising force that was not long ago expected to be on the road right now trying to get irn v investors in an initial public offering that's not where things stand right now. instead there is a lot of discussion amongst the board and its large investors about the future of that man mr. neumann and whether he will stay on as

ceo. he does control the company, of course let's not forget that. he has the votes and therefore could actually toss this very board that is talking about him no longer being the ceo, but that apparently according to people close to neumann is not what he is currently thinking about. he is trying to ponder where he stands and whether, in fact, he will step down as ceo and take some other role with the company in terms of a non-executive chairman role perhaps and of course continue to be the controlling shareholder. so at this moment not much to share beyond what we saw yesterday from various reports and what i can confirm as well a number of significant investor whose have board representation do appear poised to want him out. that does seem perhaps the more likely option at this point. but again, still remains somewhat unclear, especially because other board members in frankfort, representatives from rome capital, another inn vevesr

and perhaps a chinese equity firm may feel differently about it so right now they're just sort of left with a lot of questions, but this could be something that's resolved and likelywill be one way or the other in the near term. >> what strikes me is how -- is the gap in perception here between the private markets and the public markets it's not like a lot of new disclosures has come about what's changed, they started shopping in the public markets it makes you wonder why soft bank and some of these other companies that poured so much money into this company, had it raised questions about corporate governments, about adam neumann, about his personality and all these things coming out, this was all there. >> a lot of it was there and some of it did end up in disclosure there was some pushback on mr. neumann and i think this goes back to where there is -- you can say this all happened

recently, but it has been building there was requests to clean up the governing back in may so the s-1 would look better than it ended up doing instead of this piecemeal approach where they filed an s-1, they got -- talking about his voting control, not allowing his wife choose his successor should he become incapacitated it may be having to do with mr. neumann not going out to california to a conference that was going on amongst many of his companies. no neumann didn't show. a week ago they were willing to put millions of dollars into what could have been -- it's a bit of an about face for them as well. >> it seems like the impetus was

the lack of love from the public market. >> yes if they would have gone public if they could have gone public, without a doubt. >> crazy story we continue to watch it with david's help markets in the red losing a little of the bounce we got in the early part of the session. dow down 75 points we're back to 2,986. big question for a month like september when we thought was going to be scary. can candace be trusted mike has more on that. >> last week i think the calm was the story in face of the several excuses for the market to back off. it did not do that and you have to chalk that up to the resilience of this tape. the rebound from the august lows was very low typically this precedes an index high although we've softened up in the last couple days. i think the rebound has brought valuation and sentiment back into a neutral state, not really overheated valuation by one metric. we're trading at the same forward price earnings multiple

on the s&p as we did one year ago during that september peak period however, corporate bond yields were above 4%. they're now about 3% valuation looks a little bit better fed and trade are intertwined and maybe it required a bad trade surprise that's i guess open for debate, but right now i do think the market has earned the benefit of the doubt for the moment and then you mentioned september, if you get through september without having much damage to the overall indexes, that's usually pretty good information. if the market does not suffer when seasonals say that it should, guys. >> good set up mike santoli at the cube the portfolio manager and chief investment, international and global equities, good to see you both is seasonality saved here with a

psa calm september. >> this is a market that likes loo lo to look about 30 seconds ahead. >> like life. >> exactly we had a fed cut last week i read it as being a little bit hawkish. trade is kind of simmering no longer boiling over which i think gives the market some confidence to the point mike just made, what the stock market wants is an easy fed, a deal on trade and growth to remain moderate and that's somewhat of an impossible trinity. i'm not sure all those will come to fruition which probably means we're looking at volatility. >> so more down side risk than unside risk? >> i think there's more down side risk. >> i concur. i think there is a big rotation going on from growth to value and from momentum to contrarian. i think that's a setup for the market it's very reminiscent of the late 1990s, 1999 to be specific when i was managing money back then nobody thought the growth gravy

train would come to an end and it came to a crashing halt the next year. the valuation spread is so large, it's the same as existed in 1999. i would say that watch out for that turn and frankly, position your portfolios for that turn. >> what's different this time than some of the other fakouts when value started showing strength against growth? >> the banking sector was a head fake within -- they have underperformed and they were the weakest link in the chain. the things that remain in the value index are truly undervalued. the flip side is growth as exaggerated its move up and there's always a price to pay for something. i think growth will end up disappointing and value will end up surprising. >> do you have examples of value, sectors that you can pick out where you're seeing it the most >> absolutely. i think it also fits the fact that you want to avoid the momentum trade, the fang you want to buy the known product trades which is things

like mi like mit-- it trades like a discretionary. you take stocks like whole foods, the old amazon threat never played out but the stocks have sold off as if they are vulnerable to the retailers. every exception to the rule is a value opportunity. >> that's a really interesting point because when we look at the market, we're kind of taking a similar approach we're looking for businesses that have, you know, understandable cash flows, healthy stream of income getting spent off but aren't overly expensive. the growth stocks, the other things like utilities and consumer staples, it's almost this look for cyclical value with a shade of income that i think will help people navigate through what i think will be a choppy market. >> to the point about banks, i remember when we said banks have to take the leadership and we waited and it never happened, is that an indictment of the overall rally that we've had

year >> i think it's a sign i think one of the things that's giving the banks a little bit of trouble is if you look at what's going on from an economic growth standpoint, the softening on the manufacturing side has been offset by strength and services and consumption. now we have manufacturing which is kind of still muddling through, but a consumer which is coming back down-to-earth and so this broad based softening and final demand gives people a little bit of pause about the performance of the financial sector going forward and the ability of banks to do what they do in an economy which is moving back below trend growth. >> why do you say the consumer is coming back down-to-earth >> the pace at which we saw consumption in the second and what we think is going to shake out in the third quarter is north of 30% in real terms that's not sustainable given the slowdown in employment growth and the softening in confidence. we saw the same thing in '15 and '16 but you only get so much legs out of the consumer before things need to slide the other way. >> the flip side ripple to the sort of negative case, i get the fact that it's going to be hard to make a trade deal and we

can't grow forever but the fed is engaged the fed is now an easy policy mode, cutting interest rates, watching the data, watching the trade tensions, and ready to step in if needed. it's a powerful call to say fight the fed. >> well, i've been covering japan and the global equity markets for 20 years and qe was first read in japan and it failed ultimately corporate balance sheets have to improve and i think this is going to be a journey for american investors this is not the first time it's happening in the world if qe is the way to succeed, why did japan fail they tried it in bigger form, faster, earlier than anybody else and that sort of goes back to why value has been a head fake in terms of its exposure is because banks are extremely sensitive to this qe syndrome that investors face for the first time as a value investor, i don'ten any banks in my portfolio of any size and that's the reason why it's a head fake

the business of banking has fundamentally changed for the worse and i think the value is found elsewhere. a lot of value investors are overreliant on banks to lead them out that was a mistake. >> even though the relative performance of u.s. banks over european banks doesn't attract you? >> well, this is going to be a case where u.s. lags the rest of the world in terms of its banking sector falling and falling and falling because rates are reversing course the whole expectation of the u.s. banking sector was rates would rise we know that's not happening it's the opposite. i think the unthinkable is now thinkable that we could actually move towards falling rates and that will be an enormous head wind for the banking sector. >> if you look at total shareholder yield you are getting the most bang for your buck for people who feel like maybe this market is lacking catalyst to take another step higher, banks in the short to medium term i would argue could be an okay place to hang out, wait and see, clip a healthy coupon and

get that buyback as a tail wind. >> interesting to think about given the comments about zero rates of this country in the last couple of weeks that was good. thank you very much. we should note that the new book nonconsensus investing, being right when everyone else is wrong is now out congratulations. >> thank you. when we come back, christine lagarde, the next president of the ecb stepping into a huge role at a precarious moment for the global economy more from our sitdown after our break. don't go anywhere. dow is down 81

wrapping up an eventful eight years leaving the imf and stepping into the breach in what may be the hardest jobs in the world, an 8-year term as president of the european central bank with europe facing a mounting list of economic and political challenges i had a chance to speak to her about her tenure and her future. we started where it all began with another big moment of worry about europe >> referee: i remember thinking to myself it's going to be easier than what i had to do as finance minister for france, because the crisis is really over because we didn't have the european debt crisis yet it came about a month later. so when i walked into this building on july the 4th, i

thought this is going to be more pleasant, less pressure, less tension. >> and then what >> and then the european sovereign debt crisis came about and it was, you know, one crisis after the other, one country after the other, and a lot of tension, a lot of work, and a fantastic staff on the imf, but i think there was a leadership issue, obviously and we all came together and i think did a fantastic job in those eight years. >> there's still a feeling i think among economists and on wall street that this problem could creep back up again. a lot of people look at italy as a ticking time bomb. debt problems, political problems is that something that you're concerned about? >> you know, the situation his changed massively since those days when you look at the financing costs, they're much, much lower now than they were in those

days if you look at the strength of the financial players and the strength of the supervision, completely different much stronger, much more capitalized, much better supervision, better equipped as well on that front, it's a lot, lot better and i think there is that, you know, risk, apprehension which also comes into play what is not as good as it was in those days, it's the fiscal and the monetary space that the policymakers have. because in those days, many, you know, finance ministers had space, had room within which to inject stimulus. in the same vein, central bank governors had some leeway and some space in terms of interest rates or in terms of quantity division which was yet to be invented at the time different situation and we're

probably better equipped on financial markets, but risks will come from somewhere where we don't anticipate them. >> i guess i'm just wondering do you think it's possible for another european sovereign debt crisis to help >> if the euro area can strengthen and there are indications that this could be on the short term horizon with a real banking union, with a better capital market which has euro area dimension and good depth and there is more joint effort to stir the economy of europe, i think that region of the world will be in good shape. >> do you think there's political will for all of that >> it looks like it. it's often the case with europe that you despair of europe and you think when are they going to get their act together things happen at a different pace in europe, because you

simply have for the eurozone only 19 governments that have to come together. >> the imf has been very supportive of central bank action that we've seen from the crisis, coming out of the crisis and now this new period of easing i wonder if you worry at all that central banks are running low on bullets >> central banks have been able to invent new tools when nobody expected they would. whether you look at quantity division, in the different incarnations, whether you look at forward guidance, whether you look at macro credential measures, it's incredible how much has been designed, invented and created in order to adjust i'm sure that they're going to continue doing so. my hope is that it's not just about monetary it's also about fiscal it's also about structural reforms. to unleash the potential, in order to help enterprises, in order to help households to

develop, to hire, to invest, to employ, yeah. >> did you ever think you would be a central banker? >> no. but did i ever think i would be head of the imf? no the only thing i was certain of is that i would be a lawyer. >> do you think the head of the ecb is going to be a tougher job than the head of the imf >> i wouldn't bet on anything now. i thought when joining the imf it would be easier than being finance minister and i don't think it was. >> i think you're walking into a very difficult job and i think that is what most people think europe is on the brink of recession. it's gone all in in terms of monetary tools i don't you don't want to talk too much about the ecb but i'm wondering how you're feeling and whether it's a daunting task being one of the most powerful central bankers in the world at a critical time. >> i like daunting tasks and i'll do the best i can and we'll see from there >> what do you think is going to

be your biggest challenge? >> what i want to bring is my capacity to develop team work. to instill team spirit to speak with one voice. and to inspire confidence in whatever we do so i'll do that the best i can >> do you think that there will be policy continuity before you? >> to be seen. >> to be seen. hint, hint not going to talk about ecb policy going pretty deep into i think what is her vision for europe and how she is going to manage the ecb. sparking some optimism about more fiscal unity, more fiscal stimulus, and a banking union. i think things she feels she's in a position to push for as someone coming from the political space going into the economic space as far as ecb policy tools, your question, she said central bankers have always managed to

be creative and create new tools. qe was not a thing until it was. so she doesn't seem particularly worried about that and i think feels that her work at the imf especially through the european debt chris irisis, raising min, building consensus is going to prepare her. it is going to be hard i don't know if you saw the latest data out of europe. >> we've been talking about it all morning long the euro exchange rate is not especially weak which you can imagine will raise some eyebrows in washington, but she's a known quantity which maybe does help her form some consensus in europe, but that's been their challenge, their main challenge for decades. >> yeah. i think the trick is going to be convincing members like germany. she's moving to frankfurt to think about fiscal stimulus, for instance, a view that's pretty pervasive in the marketplace right now and try to turn their economy around with these low manufacturing numbers.

and also to build consensus within the ecb for any stimulus they may have to do. they're not in recession yet as you know mario already have exhausted a lot of tools qe, boosting bank lending, cutting interest rates all the way to negative. in the past she has been a supporter, a believer in negative interest rates as head of the imf i think the big question is as ecb president can you go deep or negative, and she won't go there right now. she's still in the building. >> wait until she has her desk that's great stuff of course, a lot more to come. >> a lot more coming on "closing bell" including her thoughts on trade. she's had a seat to a lot of these conversations between the u.s. and china, between the su.. and nations, how trade is going to affect the global economy i also asked her whether china cheats which you'll see she has an interesting answer.

very diplomatic as always but different as incoming president of the ecb than head of the imf which they really brute china in in the big way she's a big believer bring them in instead of push them out to make them play fair. >> some people will have a bone to pick about that as well good stuff. when we come back, marriage tax. we'll tell you about a hidden feature in presidential hopeful elizabeth warren's tax plan. as we go to go, shares of fedex down again today to more than a three year low after taking a big hit last week as you know on p dn gs s&isow3. we're back after this. you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you kwt bler be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation?

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time for our atf spot like taking a look at the financial sector bank stocks do take a hit this morning as the yeield on the 10 year falls for a sixth consecutive session. that will be the strongest streak so far this year. jpm goldman among the names leading the sector lower financials are up 17% for the year elsewhere the spider s&p bank etf ticker kbe is lower this

morning for its fifth negative session and down almost 3% since the beginning of last week let's get to sue herera and get a news update. >> good morning, everyone. here's what's happening at this hour emergency workers in kenya are sifting through rubble right now after a school collapsed in the capital of nairobi today at least seven students were killed and almost 60 others were taken to the hospital. a government spokesman says it's not immediately clear why the building of metal and wood collapsed. the huge british tour company thomas cook has shut down after failing to secure rescue funding and its planes are grounded 150,000 british tourists are stranded abroad as a result. viacom has bought the tv rights to "seinfeld" this comes shortly after netflix landed the global streaming rights to the hit sitcom. "downton abbey" won for

ticket sales marking the best first weekend ever in the 17 year history i saw it it's a beautifully shot movie. that's the news update this hour david, i'll send it back downtown to you. loved it. >> sue herera getting in the movies there you go. up next, roger altman is going to be with us. what a world of negative rate means. "squawk on the street" will be back after this break.

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yields across the curve continuing to slide. this after they posted their biggest weekly drop in a month 30% of sovereign debt now trades with negative yield. richard clarida spoke with sara about this issue. >> those negative rates and low

rates are a symptom of very, very slow growth the european is growing about half the pace of the u.s. economy. in japan they've been fighting off deflation for two decades. i think the u.s. economy is in a much better position even though our rates aren't negative. that's a symptom of strength, not weakness. >> joining us is roger altman, former assistant secretary of the u.s. treasury. lots to talk to you about. let's start with the negative rates which today getting a bit wor worse in germany given the pmis. does it concern you? >> it does concern me because i think we're finally negative you now have roughly 25% of the sovereign debt around the world carrying negative yields and what does that signify it signifies risk aversion it signifies deflation concerns.

it signifies lack of investment opportunity. it encourages excessive risk taking by the way, it's terrible for consumers. i saw a statistic which really caught my eye. 82% of household savings in europe are in savings accounts obviously negative yield, therefore depressed consumer spending no matter how you slice it, i think this is negative over the weekend i asked someone who's a fixture on this network and probably one of the smartest two or three people i know about markets, i said if i'd asked you this three years ago, could you imagine a scenario where a quarter of the world's sovereign debt was carrying negative yields he said not only would i have said it was unlikely, i would have saz it wid it was impossibe so what's the likelihood this is going to end well? and the answer is very low. >> so how does it understand >> well, the one way out of this is resumption of growth, but

look at the latest european data, germany in recession, italy in recession and so forth, pmi data very negative the way out would be growth. there is a lot of stimulus occurring around the world obviously the fed here cutting rates again and so forth, but absent a resumption of global growth, i don't think we do get out of it. >> roger, while you're here, a brief interruption we're getting breaking news on carlos gohn. >> the s.e.c. has filed a case in federal court against carlos gohn and exnissan director greg kelly. the charges largely echo what we have seen coming out of japan. according to the s.e.c. he did not disclose more than $94 million in compensation between 2009, 2017, an additional $50 million in pension benefits was not disclosed as well bringing the total to more than $140 million. we have reached out to attorneys

for carlos as well as for mr. kelly. at this point the s.e.c. is at a minimum saying they can no longer be officers in a public corporation. they're in jail in japan and they'll also be seeking some type of financial remedy in the future how much is undisclosed. back to you. >> i think this is a really big deal because the family's whole case has been that the japanese justice system is unfair that they have no evidence, that they're targeting him. that may be true as far as the treatment i guess, but the fact that the s.e.c. has jumped on board is something pretty new and pretty big. >> absolutely. and this is based on documentation that the s.e.c. says that it has taken a look at documentation that no doubt came from nissan. look, sara, there are two parts of this. one, and you know this from talking with his wife, they don't like the fact that he's basically in confinement, nobody can talk to him.

he has limited access to his lawyers. that's it. it's not like his family can go over and see him that's the bulk of a lot of their concerns that they have been complaining about for several months separate from that is this question about compensation which according to the s.e.c. it's very clear in their eyes that ghosn and kelly were working together to indisclose or keep hidden more than $140 million in compensation, compensation at the time as well as compensation that would come during retirement. >> that's big news a longstanding story we've been following. thanks for your help back to roger and your discussion about negative rates. so what trades that have happened in light of this trend make sense is it gold going past 1,500 or are you buying gold at home? what are you doing >> well, if i was a good investment strategist we could have this conversation from my very big yacht and since i'm not and i don't have a yacht, i mean i personally think it's a basis

for defensiveness, substantial defensiveness from an investing point of view. i can't see any scenario where the spread of negative yields, at least having gotten this wide, is a positive. i mean, i've heard a few people say that sometimes yields are at their lowest point just before the slowdown ends. that's pretty far fetched in this case. i just see it as an unmitigated negative. >> the president actually has been on twitter saying they get to borrow for nothing or at least get paid what does that mean for the incoming ecb president in terms of what she's got left to do to stimulate europe if they do enter a recession? >> i have a lot of respect for christine l -- lagarde, but she's taking this job at a difficult time at one level europe is

weakening, not strengthening at another level they fired most of their monetary bullets. so very tough spot she's in. obviously as he went out and came forthwith another round of monetary stimulus reflecting his concern. she's very, very good, but she's taking this job at a tough moment. >> roger, you mentioned you might not be a particularly good trader, but you have proved pretty good at building a large global investment bank i'm curious in terms of your dealings with corporate decision makers right now, given where rates are, one would expect perhaps it's a time to take risk it's a time to make investment yet we continue to see business investment coming down what are you seeing, what are you hearing in terms of the willingness of corporations to make decisions, whether they be the big deal or something else that is substantial in terms of capital allocation >> one quick point on capex, there's an interesting theory and i don't know, i don't have enough data on it, but that the united states economy, for

example, just focusing on this country, is fundamentally less capital intensive because of the rise of software and other technology than it used to be and that this weakness in business investment isn't as negative a sign as historically we would have thought. i'm not smart enough to know precisely how right that is, but i think it's a very provocative theory in terms of confidence levels, they remain fine are they extraordinary no but look at the broad environment. you have very high stock price, just a smidge from an all-time high here. you have record low interest rates. you have robust credit availability leverage finance levels in terms of transactions have returned to the 2007 level, which is surprising and you have reasonably good business confidence. those four factors always spell expansionism in terms of the way ceos and boards of directors think. so i think the confidence levels are fine we are headed into an election season it's probably going to be a very

turbulent election season. weather confidence levels persist at good levels during what will be a very complex period i don't know you have the overlay of impeachment, the single payer debate >> you have the rise of elizabeth warren which seems to be scaring people. i've spoken to people, some of your peers were saying, if you're a corporation and you want to get something done, think about getting it done sooner rather than later the prospect of a warren presidency could be a break on those kinds of things. do you agree >> i've heard that kind of thinking many, many times over the election cycles. it's usually not correct meaning if you don't do it now you'll miss the opportunity it may make sense from simply a conservative point of view, but i don't think historically that would have been correct. i also have the overlay of course of amazing lis of geopolitical risks >> not to mention trade which we haven't even talked about. >> are you still optimistic on a deal >> i still think that president trump will not get too close to

the election without the appearance, that's an important word, appearance of progress in this i just don't think -- you know, i'm the world's greatest deal maker, i'm going to change the relationship i don't think he's going to go into the election saying i couldn't do it i think there will be a resumption of full blown negotiation, suspension of tariffs, perhaps both, but there will be some appearance of progress now, what have we really learned here have we seen any evidence that china is going to reform what i would call its brand of economic nationalism? its treatment of intellectual property, its approach to technology transfer, its surveillance and hacking the answer is no. >> why would they want to give him that cover >> because i don't think it will cost them anything if it's as simple as resumption of full blown negotiations or some mutual roll back of

tariffs, it doesn't cost china anything >> and it's a hedge on his victory if, in fact, he wins. >> exactly. >> what about warren as a long time democrat and somebody who has been on wall street for a long time, does she concern you in terms of her rhetoric >> the most interesting issue to me is the phone. can a democratic nominee who favors single payer, decriminalizing the southern border, and banning fracking, to pick three get elected president on that basis? or can she tack to the center if she's a nominee and take a more moderate stance? i don't know the answer to question number one. we're in such an unusual political environment, really unprecedented in this country in terms of polarization, that the answer to number one could actually be yes even though the conventional wisdom is that it's no i'm just not sure the answer to that, but i think that is the central question obviously will trump be reelected or not

by the way, there is a long way to go before iowa, four months if you looked at who was ahead at this point in 2008, it was hillary clinton, not obama 2004, it was howard dean, not john carey we don't know what's going to happen on february 3rd and beyond that, but she's running quite a brilliant campaign and she's obviously a very good political athlete. >> roger, we appreciate you joining us we'll have more time to talk about this in the future. >> thank you, guys always a pleasure. speaking of warren, if you are wealthy and you are married, listen up. we're going to tell you about a andden feature in the tax pl that could have major implications for your money. we're back after a break

trade keeping investors on their toes, but one bull says we could be on the cusp of a major breakout find out on trading nations on cnbc.com more "squawk on the street" coming up.

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the street." rick santelli live on the floor with our first guess of the week ira, how does the fed get money back in the system in almost $300 billion in funding last week you're a primary dealer. i need to buy some securities. i get you some cash. seems like a good deal except for maybe it isn't because while we're buying on one hand, we need to be issuing with all the debt in the other. how is this going to work out? >> it's a very difficult situation. it is many prong there is a shortage of funds because of course of tax payment which i knew about and i think chris has really dealt with this very well with the regs with the change in the regs. >> banks can't have inventories. they're not a shock absorber anymore. >> that's right. banks aren't lending so why is it the issue that's what needs to be worked out here it's a good thing that they need to go to these permanent wrinkle operations, they need to sustain that and the fact that they went to two weeks now, to a two week

duration so they'll get time to work through it, but we must remember this is not 2008. this is not lehman it's not a solvency issue. it is a liquidity issue. >> basically the funding market is smaller than the amount smale gears are much bigger. >> right i'm the second smartest person in my family to talk about it, but, yes, that's exactly right. >> let's get to another issue. christine lagarde is going to be taking over the reins, but at the end of the day there's a lot of monetary policy in europe. >> again, this deals with the exit strategy which the fed doesn't have from their balance sheet. in europe it's much more complicated. christine lagarde in my opinion and former opinion, she was brought in for two reasons, number one, she's going to push for a fiscal stimulus, and they

believe she has the heft to do that, which is what her prominence is. number two, the bcb needs an expect strategy. this was in mario drago's plan the whole time, which is why i say he's the most dangerous man in the world he needs to create a euro bond christine lagarde has the political heft and intelligence and willpower do this because there's no other exit strategy for the ecb. >> that makes perfect sense, but at the end of the day, balance sheets are difficult b ben bernanke thought he was going to have runoff your final thoughts. >> that's exactly right. the ecb has a serious problem,

but drago again, they don't want to disappoint markets. so why did draghi add more fire? >> especially a hand-off to christine lagarde. >> exactly and go out with a possible ten per tan rum. >> iyra harris, thank you very much. let's go back. what does it tell us about the future of the streaming wars, the future of the advertising wars when it comes to this kind of premium content. >> we're going to dig in with michael wolff and simon gallagher, two industry experts. that's coming up next on "squawk alley.

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a hidden feature is coming to light, senator elizabeth warren's tax plan. robert frank has more. >> it welfare tax is 2% telt on wealth, if you have $50 million or less, you don't pay any tax the couples with $100 million or more could avoid the tax by

divorcing, split the fortune in half, and put each taxpayer below that threshold a couple worth $1 million, i they would pay a million dollar wealth tax but if they divorce, they would each make 50 and wouldn't pay he talks about a $1 million-a-year penalty i was told they could lower the exemption for single tax peayers so individuals would be tacked on $25 million, which would make that much less lucrative and he said 80% of top wealth holders are married, so they have, quote, not focused this issue. guys, back to you. >> guys getting divorced i love the warren plan all right. i guess. thanks, robert. >> thank you, guys. >> that was a real pick-me-up. "squawk alley" starts in a few moments. don't go away.

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alley is live. ♪ good monday morning. welcome to "squawk alley." i'm carl quintanilla we're going to start with wework as several board members look to push out adam newman, ceo. karen swisher joins us this morning, new york times columnist and cnbc contributor we