that's the one to own. >> keyside technology, i screwed this one up, got out way too soon had unusual activity and hanging in well at $96.50. i think you stay with it long time. >> good stuff, thank you, everybody. "the exchange" starts now. >> thank you, scott. hi, everybody, here's what's ahead, west coast versus east coast. a battle is brewing between silicone valley and wall street as they point the finger at each other for the slumping i know market we will explore where the blame should lie and one company that could be at the center of the larger unraveling of the new york real estate market chxt cities and companies have the most to lose from that. the justice department could get involved with california's move to allow student athletes to get paid. we will look at how that can play out with thformer act of michael jordan but we begin with the deepening sell-off dom chu is here with the rundown. >> it's deepening because when

we started off, it was all in the green. triple-digit gains and s&p 500 was actually up by 15 points at its lows down 29. you can see we're just aroun there right now. ness the ois is the one we wanto highlight. the average price of s&p 500, an area where some traders are looking for some support so markets can bounce from are there. we will keep an eye on that. you mentioned hot ipos recently. check what's happening with uber, lyft, chewy, off almost 4%, off over 4%. the sentiment continues to deteriorate for some of recent radarsnd will end with a check of the online brokers. td ameritrade, ee trade, schaub, all down 23%, 17%, 9%. schaub pacing at 9% for the downside here. they're putting trading commissions at zero. you can only imagine what will

flow through the rest of the industry a lot of spread compression. onlike brokers taking it on the chin today thanks to schaub. >> they are getting torched. don, appreciate it welcome to "the exchange," everyone, i'm kelly evans. the president is blaming the fed for the weak manufacturing report saying nathey've allowed the dollar to get too strong the odds of another fed cut have actually risen from about 50/50 to a 65% chance this afternoon p and that's where we begin today. rick santelli is tracking all of this action for us rick >> it's been a wild day all along. before the ism number, you're looking at the chart, weakest level since june 2009, i was there before it came out before that though it was all about the bank of japan taking a recess from dsubsidizing and buying negative instruments. what happens when the biggest pocket disappears? the fool theory falls apart.

interest rates grow up look at the two-day notes, up around 167, 168 and they're now at 155 you look at one week charts of tens, you can see we're just starting to break out of the range we had the last couple of days up to 175 boom, everything dropped on that number remember, the u.s. turns the market look at boons, testing minus 50 and also seld off in a big way finally here's the epicenter, jgbs you look at this chart you can see minus 15 that's a rally of yields but it is and it happens to be the highest yield close going back to august 1 of this year kelly, back to you. >> if only we had someone following this very, very closely. rick, thank you. not just mr. santelli. as you mentioned, they lost all of the gains after the manufacturing data is this the sign of a larger slowdown ahead let's bring in sandy dillry, comanager of the dillry fund

chef investment officer and cnbc contributor and our own steve liesman is here as well with a lot of moves since that report was released steve, i will start with you the headlines are pretty scary it's the worst in a decade, export orders worst in a decade. employment index at a four-year low. if you're waiting for signs to be convinced we're in a manufacturing recession, this is probably a pretty good sign of that. >> no doubt about a manufacturing recess we are in one i think pretty clearly. at least the data showed that. the large he question is are we in a broader recession we looked at the data and what the data shows is not quite yet. you have get down 42, 43 on the ism. here's what we did, went back and looked at how good of a signal it provides six months before you're at 53, three months before 52 average now is 48, where we are now. one month before is 44 during a recession year it's 43.

not quite there yet. it doesn't give you a great warning about an overall recession but when it does hit that area, it tends to be lower than it is now. >> we saw plenty of people saying we have to take this seriously for when this report behaves the way it does but the only thing different is this is fully signaled we knew the manufacturing slowdown was coming. we know why it's happening the tariffs hit this sector really, really hard. we've been hearing for months about how bad it is. so it is really telling us the whole business cycle is ending as the consumer held up really well as all of this is going on? >> the question is what grahe are y degree has it been weakening of the 18 industries surveyed, 15 reported a contraction. now not only are we in contraction but the skeptd of it is more broader based. >> right that said, how do you invest around this? do you say look at bond yields

today, right, we were just talking about how high they're going because ofhat's happening in japan and other things and they came all the way back down. what trades are you supposed to put out now, world is ending trade or gdp is still growing at 1 1/2% trade >> it's extremely difficult because the safety trade, utility, consumer durabilities are expensive. expensive for good reason because they're invulnerable to the slowdown. >> and everyone is piling in. >> right i'm still focusing on value stuff that's already beaten up and cheap and discounting a lot of bad news and actually going to some of the markets overseas that have already been beaten up and have had terrible ten-year runs and already reflect a much more dire economic situation there's still a lot of hope in the u.s. we will avoid that but that's why stock prices are still very elevated because people still think we're somehow going to skirt this and manufacturing situation will be contained to that one particular area. >> right the interesting thing is watching that market reaction today. major averages are down about 1%, which again, we've got major

bad data point but if we're getting new information about the much higher odds of recession, you would think we would be down a lot more than this, right? >> yes, really we're looking at the fed and trade war and here we go with third quarter earnings third quarter earnings are supposed to be down 4% the trade war could end in more of a divorce situation than marriage we will see how all of that shakes out the lower manufacturing numbers at ten-year low, that did increase the odds of a rate cut. i think the fed that they're going to stay dovish and stay supportive will probably help the stock market over the long run. we want to buy high-quality growth it stocks to get beaten up in this environment and use the most volatile month of the year to buy stocks. >> we also saw the odds of a rate cut until october had been 50/50 before this date hit. >> it was actually lower than that before the data from what i saw. and then it popped up back

again. >> maybe above 60%. >> it's back. >> i wonder though if sandy sort of overstates the ability of the fed to offset. i don't think that's 100%. i think yoill get into a situation if the fed cuts this time and maybe cuts again where they cannot completely offset the economic weakness. all of that said, our cnbc rapid update, we had a construction spending money number, we're still running 1.9 on the third quarter and 1.9 in the fourth quarter. recession is not the odds-on bet. weaker growth is and whether or not we can escape -- there's the q 3 on the construction spending today, down .1% to 1.9% we've been around too. so the question is can we escape this i looked back at prior incidents, you can do two, three months of ism manufacturing in contraction and the economy still goes on. it happened in 2015 and '16.

>> if i can mention the dow is now down about 300 points, 1.1% drop is this different, peter, because of the self-inflicted nature of it there was always a chance maybe manufacturing wouldn't get hit heart bud it was obvious this is the sector most exposed to a political fight. is there a difference to the business cycle ending or does it probably not matter? >> it's probably a combination if you're 10th or 11th month cycle, you're at late stage. so there's no question tariffs tipped it off. the question is what happens with the consumer. that will depend on what are the hiring intentions of manufacturers. it's clear they're no longer hiring and cutting hours and likely going to fire people the longer this goes on. and this goes over to service, which we have already seen we've seen a reduction in the ism services and does that start impacting hiring. >> the president, if he believes his own political rhetoric, that this is all the fault of the

fed, will miss the proximate cause of trade and tariffs he continues to keep trade and tariffs up there, even though while interest rates are way down compared to a year ago. >> he might get the rate cuts ironically. >> if tariffs are the cause, then he's not going to fix that. >> sandy, just before we go, can you give us specifics on the place in the market you would be right now? >> i like a couple health care names, high-quality growth stocks abmd, i think they have a phenomenal problem in a temporary heart pump and another company called teleflex, tfx. i think they're going to do quite well with a product called uralift, growing 19% year over year two quality stocks. >> what is everyone worried about, heart pumps and urology whether we grow 1 1/2% or not. >> doesn't matter. all about stock picking at the end of the day. >> there you go. guys, i appreciate it very much. >> here's what else is ahead on

"the exchange" -- coming up -- did low rates fuel a commercial real estate bubble and if it did, will wework be the reason if bursts plus, a battle is brewing in the ipo world between the east coast and west coast we'll tell you why they're pointing fingers at each other when it comes to underperformance charles schwab ups the ante in the race to zero on wall street what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price.

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we're watching markets closely this afternoon dow is down 309, pretty much session lows and selling intensified since the weak ism report at 10:00 p.m. eastern time nasdaq down 74 pretty consistent 1% declienz. and all of the s&p sectors are lower led by industrials, materials and energy meantime there's growing concern wee works, large retail footprints in places like new york city, can become a problem for the broader new york real estate market. robert frank is live in manhattan with more on this story for us >> hi, kelly we work with the largest company in manhattan this highlights the landlords,

lender and broader market. this is family owned by randy newman it is leased by weworks and subleased bieb the building is for sale right now for $110 newman and his partners bought it a few years ago for $70 million and there's now a loan on the building of $78 million a lot of different levels of exposure here for other investors. the sale comes amidst oversupply of office space in new york and there are some landlords who right now will no longer lease to wework citing those risks the building cominon the summer in part is adam wants to reflect the criticisms in advance of the ipo, the ipo now, of course, on hold back to you. >> wow robert, appreciate it. thank you very much. joining me for more is don peebles, founder and chair and kyi of peebles corporation now there are some landlords that won't lease to weworks.

how big can these ripple effects be >> i think it's very significant. there were landlords before who would not lease to them. what we will see now is i think defaults by wework coming down the line, certainly the buildings they are tenants in are going to be penalized in their cap rate when they go to market to sell them. frankly, cap rates are the reflection of the risk associated with commercial office buildings and people are buying, investors are buying income stream and dependability of it. anyone looking at a building with significant wework occupancy has to be concerned and will penalize that building. >> if wework is in there, people want a higher rate because they say it's a riskier investment, i guess, would be one way to look at it. you mentioned the imbalance here wework had $47 million in future landlord operations over the next 10, 15 years versus $2.5

billion cash on hand in the middle of the year as we look at the company's struggles to raise more funding, how quickly do they need to get money in the door so more of those defaults as you mentioned don't happen >> very, very fast they're losing about $2 billion a year and they're still getting the benefit of a significant amount of free rent from some of the newer leases they signed so, therefore, they're going to begin to have to pay full freight. frankly, that's going to increase their losses. what happened is, i heard one of your reporters earlier talk about the bigger fool. they had one fool so to speak to invest in them billions of dollars and they just haven't been able to find anybody else willing to do that i think right now what's going to happen is they're going to begin to see a significant pullback and access to any kind of capital i'm not sure lenders will see them as a significant investment opportunity anymore. >> right we saw their debt, the yields

there popping yesterday on the news they had officially pulled the s1 if we look at markets like manhattan, they account for almost 70% of leasing activity last year, 5% this year. those are big numbers, obviously. but these are also the most liquid real estate markets in the world. how serious a threat are they facing are you expecting -- you can name names if you want but the office owners who have exposure here, the receipts, shouooets, b selling them or can the markets handle that? >> i think what's happening is wework artificially stimulated new york's real estate market. it's propped up. think of the concept we work as the largest tenant in new york city they surpassed jpmorgan chase, which has been in business over a century. just imagine that. so what's going to happen now is they're going to have to contradict in order to stay in

business that means they will have to work on giving back some of the space. the question is how much goes back into the market without them in the market, the vacancy rates would be significantly hire in manhattan and offers for risk would therebe belawyer office risk is relatively soft, except in certain pockets. i think it's a very big risk in new york city and offices in washington, d.c. >> don, appreciate your perspective today. don peebles, peebles corporation founder, chairman and ceo. coming up -- east coast/west coast showdown not seen since tupac and biggie, at least in the financial work fingers being pointed on who's to blame and how to move forward with recent ipo failures and facebook facing off with senator elizabeth warren over breaking up big tech what mark zuckerberg said that got warren so fired up next.

welcome back to "the exchange." the dow is down more than 300 points, 1% declines for all of the major averages bob, the first day of trading goes, this isn't a great one. >> no, it's not. this big miss on september manufacturing is a big problem so the sch &p is 40 points lowe. this is not just a big mix it moved the index into

contractionary territory, the lowest reading in ten years. more importantly this immediately drops cyclical sectors, industrial stocks, material stock, energy stocks dramatically and also bank stocks drop because bond yield drops. we know manufacturing is weak globally we know this but the issue is will it bleed in capital spinding and more importantly will it impact consumer spending in the u.s. that is essentially holding up the global economy the jobs report on friday now becomes very, very important, kelly. we're expecting 145,000 new jobs all it takes with this kind of reaction, one jobs report that is really below expectations for people to try to start connecting dots that somehow the consumer is weaker i would keep an eye now on the big consumer stocks that have risen dramatically this year names like home depot, like starbucks, mcdonald's and costco all have had move someday 20% or more this year see they're a little weaker here today. kelly, back to you. >> bob, thank you very much.

appreciate it, bob pisani there. now over to sue herera for a cnbc news update sue? >> thank you, kelly. here's what's happening at this hour, everyone secretary of state mike pompeo meeting with italian prime minister gu seppi when he received an unexpected piece of cheese from a local journalist cheese would be affected by president trump's potential new tariff on european union products prime minister conti, as you can see there, was not amused, asking security to direct them out. we are one year of flying commercial in the united states. flyers will need a driver's license that is real i.d. complaint. only new york, new jersey and oregon have yet to begin issuing the i.d.s. >> one year from today tsa is prohibited from accepting a nonreal i.d. compliant driver's license or other noncompliant

state-issued i.d. for travelers seeking to fly on commercial aircraft and francois and his son are donating $100 billion to rebuild the notre dame cathedral they were relying on small donations to fund the repairs. thank you very much. >> thank you very much, sue herera here's what's else is coming up on "the exchange" -- >> saying good-bye to trading commissions. the facebook versus elizabeth warren battle heats up a real-life james bond story is playing out at credit suisse. and it turns out meat isn't as bad for your health as you thought. staffing a small business is challenging.

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and looking at her profile... . ...i saw shared connections. that was a plus. but the most important thing... ...is the ability to connect to people and she had it. and i knew... ...she was the one. post a job today at linkedin.com/grow let's catch you up 0 and a few headlines that should be on your radar. it's time for "rapid fire. here who take brown the stories for us, dominic chu, corey and dominic chu. if you're wondering why the market is down so much, yes, it's the ism report but major players are getting hit today.

check out what's going on. charles schaub is getting rid of trading commissions all together for u.s. stocks, etf aq acquisitions last week great for the newers but now shares on schaub stocks are down more than 10%. td ameritrade is down 24% on its news for the worst day in 13 years. >> so the writing's been on the wall for decades now i remember when it was a big deal when trades went to like $50 a trade, down to $29.95, down to $9.95 and $4.95. lowered by charles schaub. and then etfs with zero trading and zero fees. the spread concession has been happening for years. they announced a $1 platform trade in the last couple of weeks. the whole thing has been going

this way for a while what it does is beg the question whether or not these people can continue to make money i will tell you, yes, they can i will not get into the -- >> charles schaub has a bank, which is why they get hit on low-interest stories but that's why thers a ifrp differentiation with their interest model. >> they have about $400 million in asset management. >> the last time they cut their fees, they did the fund managers by $80 billion that's a lot of money. >> they're counting on more money coming in the front door as a result of this change i wouldn't be surprised if -- >> they even manage their own etfs, by the way they have a slew of funds they manage themselves. >> great point and they will be looking as you said for different business models but this tells you schwaab will not be the only ones doing this.

they will follow them down to the business raise of zero. >> yes i am guessing they're thinking they're going to make up on the other side, asset side so the competitors need to have those kinds of assets. i don't know when td ameritrade and e-trade have in terms of assets but clearly the market thinks they're being hit harder. >> you can tell by stock financials in td ameritrade and financial are more dependent on broker commissions as opposed schwab so they're getting hit harder sh harder schwab is one of the biggest retailers for advisers so for advisers placed at schwab, and manage the platforms. >> watch this space. >> great for investors. >> great for investors great for trading.

>> up next -- will malls bailout bankrupted retailers forever 21 and brookfield property customers were in talks to help keep forever 21 afloat but the talks built down simon is owed about $5 million and brookfield $$7 million we've seen this before where a mall operator signed up with a company. >> yes, that was 2016 and the most recent earnings call with simon property group, simon did address this everybody thought forever 21 was on the brink of bankruptcy at that point and we know they're a big tenant simon said it worked out great for us we made a ton of money we will look into doing other deals. we will work on other distressed situations but we're only going to buy companies that we think have brand and volumes worth doing. what's interesting about forever

21 -- >> it could be one of those brands. >> it could be because of the size of the store. if the average store is 40,000 square feet, bigger ones 100,000 and ironically forever 21s have taken over old department store spaces shortly after the financial crisis it's a pretty big deal but they didn't give away any of their hand if their really looking at 21 at that point. >> will they end up owning more of their own retailers as part of this whole deal, rather than just being tenants >> it's certainly very possible. they would have a lot more control. i think some of these cotenancy clauses cause fear and ripple effect if you lose a big tenant, whether it's a department store or forever 21 space, you can lose other tenants and that gets quickly out of hand and your vacancy goes higher. >> last final quick word, is it over or no when they say look, these talks have fallen apart, does that mean that's it >> i don't have any of my own

reporting on these talks specifically but i think it's never really over. as the bankruptcy days and clock starts ticking in court, sometimes that price gets lower if there are not that many bidders. so it's possible they can be waiting and seeing what happens at the end. >> they have so much skin in this game, as you said. >> for sure. >> facebook meanwhile, a lot of headlines here today, taking on regulators and taking on elizabeth warren first "the washington post" detailing how the company geared up for its fight with the ftc that resulted in the record $5 billion fine the company reported it believe it's would have prevailed in court if it came to that and now zuckerberg's confidence on that and senator warren's call to break up big tech. >> like elizabeth warren think she has the right answer is to break up the company if she's elected president, i would bet we would have a legal challenge and i would bet we would win the legal challenge. does that still suck for us? yeah. >> warren fired back in a tweet

what would really quote/unquotc corrupt system that lets companies like facebook engage in illegal practice. >> first of all, he's a human being and not the robot we see and hear. >> i would say this, and folks who watch the program know i'm not the biggest fan of online data sharing and privacy i have real reservations about it but it made me feel good hearing your coach talk in the locker room if you know your team is down three touchdowns at halftime this is the kind of speech you should give as a ceo of a company if you're being assailed from the outside. >> or if you're a concerned consumer saying this is how we will fix or practices. you know what i'm saying >> i totally get that. >> we're gng to win, we're not doing anything wrong we will rally through. >> if they really believe they're not doing anything wrong, that is the speech you should be giving tell employees listen, we've got

a real problem on our hands. let's go out and do this and win this game. i understand why elizabeth warren is saying what she is they have a valid concern. i share those concerns but mark zuckerberg is doing from a leadership standpoint what a lot of people say he should be doing, take a lead on the stand. >> ironically. jim cramer was joking earlier today, please break up these companies because the returns the last 52 weeks, they're all trading below all-time highs facebook down 15% from its all-time high. >> i'm not sure that's as a result of bad business but just the regulatory haze that's formed over these companies and the fear that these regulations are going to come to fruition. i have been saying, you know, given all of these investigations and everything that's coming at them, walking away with just a fine of some kind is not going to be acceptable they're going to have to give a pound of flesh some time i know they're saying it's not going to happen. you called this existential move on elizabeth warren's part to call for the breakup of the

company but i think there will have to be some sort of divestiture at some point by facebook. >> i think it's good they're addressing it and thinking about a possible playbook if this happens. if you're an investor, it's good thinking about this as a real possibility. >> sure. i would still like to hear more about why they think they would prevail in court. >> what do you expect him to say? we hope we don't have to go to cost because we probably won't win. >> to the post's point this is something they thought, we will fight this but we will win in court. that i find fascinating. guys, we have to go. thank you very much, i appreciate it. we have a news alert on gm let's get over to phil lebeau for that what's going on? >> we look at shares of general motors sharing at or near the lows of the session. the company issued 6,000 temporary layoff notices to workers at its plants in sew law, mexico. the significance of this, that is the plant where gm builds the chevy silverado as well as

sierra pickup trucks there are two plans to build in sa lieu and ft. wayne, indiana it shut down because of the uaw strike and now the plant in mexico, effectively shut down because of parts shortages they issued 6,000 temporary layoff notices shares of gm, down over 3% back to you. >> temporary but larger and larger ripple effect from the strikes, especially for one of the biggest products phil, thank you very much. phil la ebeau with the latest ns on gm. coming up -- who's to blame for the recent ipo carnage in the silicon valley, wall street or someone else entirely we will debate that. plus, check out all of the major averages it's not just the dow. s&p is down 32 and nasdaq down 92 for better than 1% decline as markets continue to sell-off thisrerthipo ts morning.

the year of the great ipo is turning out to be a pretty big bust following disappointing debuts from lyft and uber. now endeavor and wework shelve their plans to go public what is to blame it's great to have you both here stefan, i will start with you, i don't know if you would defend silicone valley. you yourself saw when you guys went public in '98 or '99 the huge one-day pop, which bill gurley is saying, quote, investment banks have been fleecing company by pricing shares low so they pop on their first trading day and benefits institutional clients who buy at the popping price and flip when it soars is this wall street's fault? >> i would say it takes two to tango. when you have been in this business certainly in the tech sector and living in the ipo era

for 25, 30 years, you start to see these cycles and repeating patterns that are rhyming. yes, i stated ever since the globe ipo, the globe.com ipo, i think public markets, gamification of how to gpublic and how to play the game every single quarter is a very broken system, it's very my optic and short-term driven. wall street and investors in general all want to get rich quick. so there's a lot to unpack here in terms of reforming the process of going public, what it's like to be a public company, gamification of it. but also everyone is looking to make a quick buck and we're now seeing a repeated cycle of taking the most cycle and overvalued and over-hyped companies and trying to see who will be the last investor who will come in at the table and take on all of the losses. >> so you're saying it takes two to tango, the company and wall street dick, we know there is a meeting

of venture capitals about 1:00 p.m. local time of start-ups to convince them to go public through direct stock exchange listings instead of ipo as a way of kind of getting back at wall street what's your reaction to that >> i think the reason this is happening is because there was a shortage of shares in the marketplace. in other words, with all of these companies buying back stock with no issues coming to market a couple years ago, you were developing a shortage so the prices of stock continue to rise at a pretty rapid rate we had this ten-year bull market that effect is it would be normal for wall street to be going to silicon valley or any other place in which they can find more shares to sell because the demand for shares was so high as just indicated, it's a major, if you will, dance to determine who you're going to pick as your underwriter and who are you going to pick in terms of the company you want to underwrite. >> right. >> therefore can you not easily

blame one side or the other. the bottom line is once you start meeting the total demand for shares and think of shares as just a product being sold in the market, once you start meeting the demand for shares, it doesn't matter whether the underwriters do it or venture capitalists do it directly, prices won't go anywhere. >> dick, here's the data from jay ritter at the university of florida, the past decade goldman led in underpricing venture capital-backed ipo, its issues on average notching first-day gain 34%, morgan stanley 29% is that an indictment of what they're doing or what they're doing wrong? and if these companies start to push back, do goldman and morgan have a lot to lose here potentially? >> i don't think they have a lot to lose because ultimately if you want to go public and you're a large company, you will have to use the services of goldman, jpmorgan, bank of america, et cetera you can't distribute your stock evenly this gets back to what the issue

warrants is the issue the stock spread to retail does it want it institution? what size blocks are they willing to sell? do they want to sell overseas? do they want to give some incentive because they think a year and a half from now they will come with a secondary there are so many questions that have to be answered. the company that has the best marketing plan that will generally get the deal. >> and here's what roger mcnamee had to say this morning on "sqack alley." >> i don't think this fixes the core problem venture today which is pat mania, really taking reid hoffman's notion of blitz scaling saying if you get big enough, it doesn't matter that your business model is terrible, you will still create a lot of wealth i think we're seeing there's a dark side to that because the public market is looking saying

this is ridiculous it doesn't matter how you list what matters is you have a business model worth something. >> do you think he's right about that and the timing of ipos at peak loss is the real problem here >> i tend to agree with that particular statement as we mentioned, we're going through these giant hype cycles and the public market, which is usually the last player to come in on a series of financings, is now wheezing up. we went through this in the '90s, where anything dotcom was exciting and overvalued. i lived through that myself. then when the internet renaissance kicked in, google going public, facebook going public those were companies generating billions in profits. now we're hitting the peak hikele again, started with snap's ipo, followed by lyft, uber and wework failing.

which is saying these companies are losing too much money and getting too big for their own britches and the market saying how many years do we need to wait and subsidize losses so we can prove we make profits? >> and air bng if they go that route as well, it because they're down positive, which is the difference between them and some of the other names that struggled. thank you, both. coming up -- a spying scandal at one of europe's largest banks led to the departure of of one of its top executives that story is ahead. look at the dow now, down 312 and biggest losers cisco, 3 m, caterpillar and my's enacev down 1%. we're back in two. - when i see adversity, i find a way. - when i hear never, i say now.

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welcome back a top executive is out at credit swift following a spying scandal at the bank. what can you tell us >> good evening from zurich

where credit suisse will be hoping to draw a vail over this. the head of that investment business deciding to move to ubs. that's where the chief operating officer stepped in and initiated a spying surveillance operation to make sure that no further credit suisse staff were poached. things turned when the out going head of wealth management basically confronted the investigators on the street back on septeer 17th and then told management he was unhappy about this story and called in the police subsequently credit suisse have

carried out their own investigation. they said the chief operating officer has to two he has resigned along with the head of security but the ceo's job appears to be safe at this time my question to the chairman of the board is if the chief executive didn't know about this surveillance operation, is he actually in control of the bank? let's hear what he had to say to me >> obviously this was key focus of our investigation obviously we base our decisions on the evidence we have. we have discussed this point within the investigators about this we have zero evidence he was informed about it.

they suggest that some investors are still not sure about the explanation the bank has given back to you. >> thanks. consultant to the wall street said they committed apparent suicide last week. this is straight out of hollywood. it's tragic. appreciate all your reporting. thank you. good to see you. coming up, why california's new law to pay college athtes would become a big legal ahead for the ncaa we'll have more on that next we present limu emu & doug with this key to the city. [ applause ] it's an honor to tell you that liberty mutual customizes your car insurance so you only pay for what you need. and now we need to get back to work. [ applause and band playing ] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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welcome back just about two hours of trading today. the dow is down 327 points 1% decline for the major averages and yields on move today. the u.s., weak manufacturing this morning reversed that trend. you can see the spread between the two in ten year yield narrowing. the transport getting hit. union pacific and u.p.s. down 3% gold moving higher

we'll have much more an power lunch at the top of the hour mplgt k california is allowing athletes to profit from their name or likeness fewer rules and the demise of college sports my next guest is a college sports expert. andrew, great to see you my first question, the ncaa was working on loosening up some rules. what specifically might they have to come up with now in order to prevent this here >> there is a committee working on this already. they are due to report on something later in fall but

obviously this is going to push up the time frame and make some other issues they've got to address this. they want to loosen up restrictions they don't want it to ever get near the idea of pay for play where you lose amateurism, however we define that in college sports >> here is what our colleague said he said this is what comes with a move like this the end of the ncaa. fewer rules and more cheating and the complete professionalization of college sports players won't need to go to class. to y do you agree with that >> we'll see violations. maybe schools do these athlete compensation packages and it becomes an arms race to get the top players. the top players hold the cards in basketball and football we know that that's not going to change that may exacerbate a little bit. the key is what happens to the

99 p 99% of other athletes. even for like swimmers and golfers and tennis players to go out and do some clinics. it could have far reaching effects. >> the pac-12 it, the western conference is worried it would reduce opportunities for student athletes in the olympics and have a negative impact for the females. is this the end of the ncaa as we know it >> 2023 is when this goes into effect we have three years to get something done now we have florida and states following. there's a lot of chaos right

now. i think they will loosen them up >> thanks very much. that does it for us. power lunch begins right now thank you. we'll see you in a moment. here is what's new at 2:00 on power lunch. a slowdown shocker new manufacturering data hitting its lowest level shots fired in the free trade war. mark zuckerberg caught on tape railing elizabeth warren.