>> silicon valley is doing well, we think this is one. >> cloudera. >> d oc? >> penn gaming. >> josh? >> i'm still with slack. do you believe in miracles, judge? >> always will that does it for us. "the exchange" begins now. >> thank you, scott. welcome to "the exchange," everyone i'm kelly evans. here is what's ahead underappreciated that's what goldman sachs says about this market and the risk from coronavirus does today's sell-off mean they're right? we'll ask. plus doubling down where does it leave goldman? we'll explain that piping hot stock walk out on oracle and political ads all over mulu. we begin with bob pisani with the latest on this market. bob? >> interesting ten-minute period after 11:00 a.m. eastern time

when we saw a roughly 300-point drop someone decided to lighten up. no immediate headlines around coronavirus or anything else somebody obviously decided to take a little money off the table. you take a look at some of the big momentum names we've seen. that's where you saw most of that early damage. virgin galactic, the momentum stock dropped 32 to 31 in literally a few minutes. tesla had a big drop another big momentum sector drop it's been going sideways the last week, running out of some steam, down about 2% another factor, 10-year yields dropping you saw a new lows for the year there. that got people thinking about what the implications of that may be finally it's strange when the markets are new highs. there's also new highs gold we saw, seven-year high dollar, three-year high. utilities at a high.

something has to give way and those momentum stocks gave way. >> appreciate it, bob pisani major merger in the trading world. for morgan, doubling down on management and biggest takedown since the financial crisis morgan stanley's ceo touted the benefits of this deal for his financial advisers earlier on "the street. >> you need a partner to help you with those needs that will be added to that because we'll be giving them online banking, online trading for children or friends or family if they want to open another account and referrals out of the system. it's clearly positive for financial advisers. >> let's dive deeper into the deal now with principal of partners and dom chu is here as

well rich, all the trading partners are down big since the schwab announcement last fall that they go to zero. >> i think it's a good deal for morgan stanley and e-trade now good strategic back-to-back like mr. gorman said, they can get referrals. e-trade has a big corporate stock plan business that they can refer these customers to also, morgan stanley didn't have -- they had bought solely a few years back they're adding to this corporate stock plan business as well. nice, strategic fit. it might have been done earlier, before the zero commissions, but it is a good deal between the two companies. >> morgan stanley shares are down 4%. one of the critics is mike mayo, who downgraded the shares equal rate he said there's a lot of

operational risks, not necessarily the best fit, goldman's invest versus sflashing out $13 million for morgan stanley what do you make of the merits of that argument is morgan stanley making a good case for itself if you consider it out drls performed goldman by 2x and goldman appears to be chasing the consumer business that morgan has long been in >> what they don't get if they don't try to build it organically, e-trade has a corporate stock plan business, over 300 billion in assets that gives morgan stanley access to clients where e trade is managing, you know, a bunch of s&p 500 corporate stock plans. when they award stock to their employees, they have e-trade accounts before when they cash out, they wouldn't be able to go to an e-trade adviser. e-trade was trying to build that morgan stanley gets that

business they've already worked at that business, started inroads. the other thing they get with e-trade, e-trade has built a lot of digital capability, whether it's e-trade, banking, robo advising immediately it catapults morgan stanley up to the most modern technology backbone in the retail brokerage industry. >> it's the second biggest merger now. >> sure. >> td ameritrade and schwab has that mernler. >> it doesn't seem to be a problem with anti-trust. with schwab and td you could have made that case. in a zero commissioned world it's hard to argue that the customer one of the things that schwab had going for trk it was able to take on deposits, had a stable money base, funding source,

interest margins to make there td ameritrade didn't have as much of that here morgan stanley gets e-trade taking on those deposits as well and gets a more stable base as well this landscape is part of what i've been calling the reta retailization of financial services, globally. >> can you even call it wall street anymore >> u.p.s. and ing. sergio armani is stepping down from global swiss banking giant for ultra high net worth who do they tap to run it? a guy who has done retail banking and insurance at a dutch lender to come and do that sort of thing why? he has experience with taking on deposits, also with the digital and financial technology ing at one point, even here in the united states had ing direct. >> sure. >> goldman has the market savings platform now. >> yes.

>> that's all happening at the same time. >> rich, that's why i do wonder if tra tishl wall street has been shrinking, this business is going, what should goldman's next move be all those stocks are trading up today, perhaps in the hope that someone will be the next target. do they look at a start-up like robin hood or stick with what they've been doing >> i think the other assets are trading up, but to acquire something else right now will be expensive for goldman. i think goldman has probably made the biggest inroads digitally of the big banks from a retail standpoint. if i were them, i would continue on they've made good progress with marcus, consumer lending they're working on an institutional platform as well they've done -- they've made pretty good progress so far. like morgan stanley, this will catapult them and get them that capability pretty quick. >> a price target in mind, rich,

for where goldman should be trading now? >> i don't cover morgan stanley. my partner, jeff hart does he can address the price target of morgan stanley. >> i'm sure if you're liking it, the ceo is speaking quite positively about it and perhaps the share also come around, down 4% today rich, we really appreciate your time. >> thank you. >> richard peto. dom chu, thank you as well, sir. still ahead to come on "the exchange," the dow down as many as 388 points earlier, falling for the fourth time in five days yields have been declining and the dollar continues to rally. dollar index is now at its highest level in nearly three years. joining us, head of investments at victory, and rick santelli joins us as well rick, first to you set the landscape here, as bob mentioned on the top of the show, things had looked more grim over the past couple of hours. is that triggered by these drops

in bonds what are you seeing out there? >> i'll tell you what. bonds, interest rates, domestic and global, are all tied in, in various channels today in particular, i would like for viewers to look at three charts two-day chart of the dow, nasdaq and s&p in any order the minute we traded under yesterday's lows and all three of the major indices, you see what happened. now i'm not saying that it was technicals that were the catalyst maybe it was the global times story about more coronavirus cases in china i don't know what the trigger is it seemed to be that whatever the trigger was, it hit at just the time we were slicing under yesterday's lows and if you're nervous, that is the first signal, especially considering that yesterday's indices, especially the nasdaq, was layered completely above the previous day session when it went down like that, i think that was the main catalyst of that 275 point kind of air

pocket. >> sure. what are your thoughts as we mentioned -- there's this idea out there that markets haven't been discounting coronavirus enough we've hit a bit of an air pocket lately should that pocket be larger >> yeah, kelly yesterday the story was the markets are inoculated by the fed and any kind of bad news is going to be met with a wave of liquidity that's going to help what we learned today is that the movie isn't over yet there's more to come in this story. and the expansion of that virus, whether in japan or now in korea is causing investors to think about that and the concentration that we see in some of the mega cap stocks, in these indices are the most vulnerable in this type of situation. having a much better balanced portfolio that can help you immune yourself in your portfolio from that type of a drop is what we're doing in our

portfolios the wake-up call for the market is today that the story isn't over yet and there's more to come from that front. >> if what you're doing is basically holding under weight the biggest names, the fang, sort of microsoft, tech giants, that's a risk of underperformance, right? that's where the action has been for years now. >> that's a good point, kelly. last year, those stocks led the way and the market was up a lot. for example, s&p 500 was up 33 odd percent. led by those stocks and, you know, a product like cfa that we invest in, that is going to reweight those stocks in a much more risk balanced way and we're actually going to be underweight those stocks what happened last year, despite that strength that they had, that kind of a product was still up 30 plus percent to give up a little bit on the upside, to have that inoculation when things like this occur is a trade-off that we're willing to take because of the way that index is constructed and also

where we think where the markets are, given the valuations of what we're looking at, especially of those large cap names. >> before we go, rick, we started with the dollar. i just want to end there what levels are you watching three-year highs already what happens if we go higher, what implications do you think that holds >> the world being nervous, as we've been discussing, is one of the reasons as you look at a chart of the dollar index, you can see how it's accelerated as businesses, especially foreign and chinese businesses start to fail due to corona virus, they still need to procure various dollars to pay, whether it's interest payments or dividends or servicing any of their dollar denominated debt. this is huge if you start to take out some of these levels right around 100 -- and we've gotten close today, 99, 92, that will create a whole new dynamic of buying that could set us up as high as 102 or 103.

i don't think the dollar index rally is over and the more nervousness exists over corona viruses and impact on the global economy, the more you're going to see investors globally trying to find procured dollars. >> well said thank you both rick santelli, rasheed retief, appreciate it today. du pont, what they're doing to help combat the coronavirus. plus, political ads are flooding the streaming services and it could spell trouble. >> and the shorts are circling one former ipo darling as it gets set to report we see access to fresh food being the global norm, not the exception. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility.

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welcome back the number of confirmed corona virus cases top 75,000 worldwide and number of deaths at 2,100. dupont are building the midnight oil to improve the production of protective gear. seema mody is there. >> reporter: protective garment suits. here in richmond, dupont's

largest manufacturing facility here is where it starts. the fabric is being rolled from here, sent to a warehouse and shipped to one of nine manufacturing facilities around the world. as factories in china return to full capacity, dupont says it's increasingly relying on its operations in vietnam to meet the demanding surge in china. >> we were able to, within one week, provide more than 30 times our traditional volume that we supply to china, more than 30 times within one week. >> kelly, there are a number of different protective garment suits, but dupont says this suit that is increasingly used in high-impact regions in china, specifically in wuhan, can cost anywhere between $5 and $15 and much more higher industrial hazmat suit can cost over $1,000. >> seema, it is loud as heck there. i can't imagine what it must

sound like inside that factory, basically running at full capacity around the clock? >> reporter: yeah. that's what the company said full capacity. they've dedicated more employees to this effort, about 1,800 here at this facility spanning 500 acres. that doesn't account for the employees that are at manufacturing facilities around the world, specifically in vietnam, where they're working around the clock to get these suits to china and other countries where there are confirmed cases of the car ownavirus. >> hopefully that can help it from spreading further seema mody at richmond, virginia tune in to cnbc's special report outbreak: coronavirus. coming up, shares of domino's pizza are extra topping. why they're up 25% and if this is sustainable plus, could political ads flooding streaming services become a major problem in the presidential election? one of my next guests says yes will he tell us why ahead.

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welcome back to "the exchange." we were town 390 points earlier today. s&p off 21 and nasdaq down about 1% here are some of the movers this

hour after doubling earnings and upping their forecast, calming feels after the u.s. postal service would impact service vicom, on pace for the worst day in a decade, company reporting a loss, completed its merger with cbs, offering three streaming services shares of norwegian cruise lines, the company warning on four-year targets due to the coronavirus, calling the impact swift and severe it's one of the least exposed to the chinese market but ceo is blaming broad-based fears for increased cancellations. 30 minutes until "power lunch," i'm joined by tyler mathison with a little preview. >> kelly, i have a concept for you. it's called mail you write a letter, put it in an envelope and put a stamp on it somebody carries it to

somebody's house it's going to be big. >> what about this idea that people might deliver milk to your door? >> that's right. >> there you go. >> 2:00 eastern time we'll be talking about the sanders effect he is leading the democratic field, whether you watched the debate last night or not. >> i did. >> it was a bit of an eye fight. bernie sanders, whatever you think of his policies, he has remained consistent. today we'll look at his policies and how they would affect both the banking and financial industries and the real estate industries and housing to put it mildly, our guest believes that the effect, if he were able to win and then bring some of these policies to bear, would be negative on both of those segments he wants to break up the big banks, wants to put caps on interest rates, among other things. >> and his odds are going up, predicted after last night we see it. >> that's right, calling for federal rent control that would certainly affect housing. we shall see. >> lots to dig into. we shall see thanks so much. >> brian sullivan for a cnbc

news update. >> hi, guys. free virginians, by the way. one of president trump's staunchest allies has been sentenced to 40 months in prison after the they backed off its original recommendation of seven to nine years, fined $20,000 he declined to address the court. president trump putting his ambassador to germany in charge of 17 u.s. spy agencies. richard grennell will become acting director of national intelligence criticism that that job should be held by someone with deep expertise in intelligence. saudi air base where some 2500 u.s. troops are stationed, pompeo visits. finally good news, university of southern california will faze in free tuition for students with an annual family income of $80,000 or less. ownership of a home will not be

counted in determining a student's financial need changes are fazed in for the first year students fall of 2020 kelly, that's the most expensive or one of the most expensive colleges in the united states. tyler paid like six cents when he went to uva in the '70s i paid three grande semester at ver virginia tech. >> usc, it's also free tuition, you get caught up in the bribery college scandals, they played a prit big part in that too. >> it wasn't free for many of the parents who will be in jail. >> that's right. brian sullivan, thank you. here is what else is coming up on "the exchange. >> l brands says good-bye to victoria's secret. oracle employees are getting ready for a walk-out is apple getting ready to open up its closed system and get ready for more pitaldsolic a this time on your streaming

service. it's all coming up on "the exchange."

welcome back a few stories that should be on your radar, rapid fire, jon

fortt, kal brands is selling it victoria's secret franchise in a deal she told us about come on down, valuing the retailer at $1.1 billion l brands are higher on the day after they opened lower. you broke the story last week. we talked about it a little bit. any take-aways from the completed deal now >> the interesting thing to me and investors was that it wasn't a full acquisition it was majority stake and a lot of people were expecting full acquisition, which is probably why we saw the shares fall i spoke to advisers on it, got some inside source there was a lot of concern that shares of l brands have fallen so much over the past few years that to sell the whole company now, it's kind of a tough pill to swallow the pitch to investors is, have faith that they can turn things around in victoria's secret and

ride it on the upside. >> we should call it l brand if it's just down to bath and body works but does retain some exposure to victoria's secret on the upside >> yes, that's the goal. >> even when your article broke, which was great, everyone was thinking about a much higher valuation than $1.1 billion. think about lulu lemon that is valued at $34 billion with half the sales and i think people didn't think it was going to that cheaply that shows how far it's fallen. >> it does i've spoken to a number of private equity sponsors about the deal it is within the realm of other sponsor interest maybe analysts were overestimating its value. >> can it be turned around it's really fallen behind the times, its advertising doesn't seem to resonate with young women anymore and the brands haven't done that well is it able to come to fruition it will be interesting for people to watch. >> it's a great question i don't know that, frank ly,

anyone has the answer. i haven't gotten the answer yet. sycamore is known for getting down and dirty and l brands, board has long been very inciden insular. whether or not they can turn it around is one question their ability to cut costs, make it more efficient, there's probably room to go there. >> are they going to get rid of him? >> he is stepping down as ceo. he's staying on the board. >> they should bring back swim wear that's the only thing i got from victoria's secret. >> that's the biggest culture we don't want this anymore in the fashion show. >> an acknowledgement of how times have changed. >> and how noninclusive it's become. >> a firm called nike new vehicle torah's secret basically saying that's where the sexy is today, 100 different body types, people in it

ath-leisure -- you can't work out in ath-leisure these days. it's sequins. >> sequins, pearls, rubber it's everything. >> lauren hirsch, thank you. appreciate it. look at shares of domino's today, soaring to an all-time high after profit and same store sales in the u.s. beat expectations, stock is up 25% right now, on pace for its best day ever my question, what does this tell us they are the original delivery model. their own employees, not using third-party delivery companies. >> that's right. >> is this sort of saying to them, yeah, that's work for you pretty well? >> such an important quarter haven't beat on same store sales in more than a year. they don't partner up with aggregators. we've been wonder hog is the last man standing, domino's has kept its head down, stuck with the plan the stock had taken a hit over the last year. look at this it's up with these huge gains

today, i think investors are confident in the plan. they talked about fortressing, their strategy of opening up more stores closer together, shorten delivery times that's been profitable for drivers and franchisees. he talked about aggregators saying there's a circular firing squad. we may catch a few stray bullets. we don't know what consumer behaviors will be like in 2020 but maintain their guidance and that was really important for investors, too. >> if you're uber eats, how does that make you feel >> uber eats, postmates, door dash it's a unique play, though it's delivered pizza how much can they expand outside that we'll see. there's wings. there's other things that people get. domino's is in a unique position of being the apple of food delivery, right? vertically integrated. they can interrate quickly with new product and command their employees in a certain way i'm not sure they're going to be able to have the full apple effect apple charges a premium, it's a

premium product. pizza is pizza. >> whoa, pizza is not pizza, jon fort. >> are we going to see $100 pizza? i don't know. >> here is wohere i knew domino was going to be huge i live in manhattan, which has good pizza my daughter loves domino pizza, of all the pizza this is all we get now domino's thin crust which, by the way, is more expensive than most pizza you can get in manhattan. she loves it that's all she wants if i could buy stocks i would. >> they were way ahead in the curve, telling you when the -- >> robots on the way they talked about this test with the neuro robot. we interviewed rich allison about over the summer, getting closer to regulatory approval for that he's going to see the test in houston himself. don't forget about that. >> and proving this can work in the post patrick doyle era be sure to tune in to "mad money" at 6:00 p.m. for jim

cramer's interview with rigtch allison. oracle employees are planning to walk off the job after finding that larry ellison held a fund-raiser for president trump. it's a classic silicon valley story in the sense that it's like, okay, the culture of the employees there tends to be quite progressive. it's creating all these skirmishes. >> quite progressive we'll see how many people show up for this protest. >> how serious a protest is this what is their specific beef? >> i'll be surprised if it's that serious title of ceo at oracle was on president trump's transition team i don't know if anybody missed that but there's no huge surprise that this is where oracle might be. >> was there outrage about that at the time? >> no. this is not salesforce, a mark benhioff brand where he's out to

save the world larry ellison does not rescue puppies. >> he buys them. >> i'm not saying that this is the prototype for tony stark. >> it's one thing to be an amoral executive you don't take a moral stance but another thing for a company that says we don't pick a political candidate, endorse specific candidates and as a leader you just want to stay apolitical so you don't alienate, in this day and age, one party or workforce holding a fund-raiser, i don't think it's necessary and i think it does cause -- >> for anybody >> and does cause an amount of stress. >> soul cycle, look at that backlash. >> you can quietly lobby that is effective which delivers the interest of the company, which is, after all, what he's all about, without getting everyone or a certain part of company upset at you and a certain part

of the company who cheers you. it's a lightning rod whenever you support and raise money for a specific party or candidate. he raised money for bill clinton and democrats. he has never been afraid of this i just think it's -- you can do without -- you can be it through lob. >> i lightning rod, that's larry ellison. if anyone said i never expected -- >> he's being bold. >> purely look, i hold this fund-raiser. it's going to benefit the company. >> look how oracle sues, look how oracle lobbies, does m & a oracle is about oracle. >> they have a case in front of the doj, which couldn't hurt. >> well put. apple a moment ago let's go to this one the company is reportedly considering letting users choose programs belong to a third party that is not one of apple's 38

pre-installed apps as somebody who recently converted to microsoft's outlook apps, which i never thought i would do -- >> there's an app? >> yes it's wonderful and i love it, as opposed to the default -- they updated ios and the trash button is where the reply button used to be, which is driving me crazy. >> that's why you never read all my emails. >> exactly i accidently deleted them. >> new tech-forward kelly evans. >> i'm on tiktok what is the significance of this really for them, it would be a big deal to let anyone kind of have those in-roads. >> it would be hugely significant because a lot of people on apple's ecosystem have complained there's a toll for certain things and certain features you can't access. siri integration is one of those things apple tends to tie in its own services and apps very tightly to siri. if you ask for a song to play it's not been that easy to get it to play from spot if ify, for

example. if apple starts seeing its services the way it looked at the ipod long ago, as an entity unto itself that should allow access to all kinds of things, it will be interesting to see what business model builds around that. they've taken some steps around that, building apple's tv app into third party tvs, including samsung. if they took it in this direction, it would be a very big deal and a shift in trajectory for apple and have a huge impact. >> do you think it's because they're trying to avoid anti-trust concerns down the road >> no coincidence. >> are they heading off the existing investigation and will it help? >> i don't know that i think the anti-trust argument against apple is that strong, right? because all kinds of big stores have their own brands that they sell in a store that they give

anchor -- >> they ultimately got microsoft over bundling internet explorer with windows, which doesn't seem like that big of a deal but is enough to -- >> it automatically went to certain things and windows had dominant market share. operating systems on their own devices, which are a fraction of the total market unless you start defining apple as its own market even though it has minority share and is a luxury niche, i mean, i'm not a lawyer but i don't get it yet. >> but you did stay at a holiday inn express last night. >> i did stay at a holiday inn express last night. >> we'll leave it there. that does it for rapid fire today. this year ads are moving on to hulu and other streaming platforms. there's a big problem with this trend. no transparency laws we'll look at the potential

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senior reporter at "the washington post. tony, people are furious about how many political ads are on hmt ulu. what makes them different? >> the ads might look like the sort of thing you're used to seeing on traditional broadcast networks what makes streaming a critical new battleground for these political campaigns is the new ability to target some of these ads based on browsing behavior or once political affiliation

and so forth we're seeing campaigns embrace sites and services like hulu and roku as dollars have flooded those platforms we've not seen any sort of change to federal law that would bring more transparency to some of the ads that appear there. >> what could we be talking about in terms of confusion, shall we say, for the broader public in what way would you draw analogies between what happened here and what happened in 2016 >> it's important to know where we start exactly in the united states if you're running an ad on a local nbc, abc or fox station, you generally have to file information to the station and they put some of that data online it's called the political file long-time regulation here in the united states. that same thing doesn't apply to streaming. and i think the stakes of it are evident if you look at our platforms where political folks are advertising of the take facebook, for example. you can go on to facebook and generally see how much money a particular campaign or organization is expending and the people that they targeted with that ad

but even though the same targeting tools are being used on streaming media sites like hulu, we're not getting the same level of transparency. you can't see, for example, if a politician is lying to people at scale or narrowly targeting those lies and falsehoods at particular populations. >> a couple of things could happen i mean, users of these services could say listen, we need to make sure we aren't microtargeted in a way we're not aware of or not comfortable w h with the other piece of this as well, i guess, is that you have transparency factor that has led some to say facebook shouldn't accept any political ads, for instance should these streaming services follow the steps that twitter and others have taken by saying we're not going to take these? >> there's certainly a lot of pressure on capitol hill for these streaming sites to do something, and that's generally putting out archives, repositories where people can look at the slate of ads on the platform and the reason those

ads have been targeted in the first place. we're not seeing companies like hulu, roku and sling tv put forward those archives talking to experts, one of the things that they say is that these ads are much different than the kinds of things you're used to seeing on facebook and google the targeting isn't fully there just yet with respect to streaming. it's slowly getting there. we're beginning to see these video ads deployed in the same ways we're used to seeing traditional ads on facebook. that concern around what some people would call microtargeting is why you're seeing a push around transparency right now. >> there's more in "the washington post," tony rahm, thank you, sir. >> thu thanks. up next, you've heard of nimby. but do you know about yimby as more people get priced out of the housing market we'll dive into that, next just wasting time. wasted time is wasted opportunity. >>exactly.

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california has a huge housing problem. mckenzie global institute estimates they would have to build 3.5 million more houses by 2025 to close that gap as goes california, so goes the nation drama playing out in the bay

area and what that means for the rest of the country and his new book "fighting for housing in america. joining me now, the author, and a long time friend. >> yes. >> we go way back to and congul the book i loved it i read it it was awesome and it opened my eyes everyone around here knows, it really opened my eyes to this whole thing. i know that's not what you're saying the book is about, but talk to us about where this kind ov move by especially younger people to be pro development is coming from it and how big do you think it's going to get? >> there's all sorts of people around the country who can't afford housing and that's going higher and higher up there's all sorts of people. millennial, renters, people who work at facebook, google, who can't afford their rent. they're b mobilizing. as i was doing the research for the book, i found people have

been talking about this problem. larry katz, old harvard professor used to call, when he was a college student, he was writing about this problem in the early '80s and they all said along the way, well you could never really make a constituency out of this. because there's no one to fight for housing that doesn't exist yet. >> yes, yes. >> and these people are trying to do it it's weird if you think about it, but u really needed. >> and you had this great ant dote in the book that shows up to your typical city council et meeting to fight for a building when people show up to say not in my backyard and that kind of crystallized this whole movement so it's becoming more popular. you can look at minneapolis, which has been really progressive in the way it's now letting people build multifamily or multistructured dwellings in single family neighborhoods. do you think the fabric of communities in this country is likely to change or is this just unique to the bay area and some of california's whackiness so to

speak? >> i don't think it's going to be a relic of the past, but i think it will be b more rare minneapolis became the first major city in america to get rid, to essential ly get rid of single family zoning and they're going to allow people to build three, it's not super intense, five story buildings, but you can build three units on any lot but if you look at all the democratic presidential candidates, bernie sanders, elizabeth warren, amy klobuchar, who's from minnesota so she's taking from that plan, they all have some sort of zoning component in their plan. now whether or not any of those are are really ever going to happen, who knows but it's becoming a statement of purpose that this is not sacrosanct anymore. >> interesting, housing is still pretty much regulated on a local level. i don't know if there's that much you could do in the office of the white house so to speak to change this overnight and i don't know if something like that is coming, but i wonder how

much of this is in california, to be b fair, rent control that bernie sanders has talked about taking nationwide and doing something like that, and also and this is a little isoteric is prop 13. the way that keeps people in housing and doesn't really pave the way for the next generation of homeowners seems to contribute a lot to this >> as a major prop 13 beneficiary, i have mixed feelings about it. but no, what the real hidden thing about prop 13 is isn't so much that it traps people, it's that it makes cities hate new housing because they don't get higher taxes from it >> interesting so they, you look at palo at o p where a will the of tech companies are based. four jobs for every housing unit, more so than even say m manhatt manhattan, but they were financially insented to do that because the commercial property returns a lot more than the residential property, which is not the case in new jersey where i'm sure you pay high property

taxes. >> yep >> so what we're seeing is this skewed incentives that encourages places like the silicon valley to have way, way, way more jobs than housing what do you get? three hour commutes. people getting priced out of their homes. teachers sleeping in their cars. >> now and you've documented all this so i guess the point is while california maybe has policies that could contribute to make ing it worse then they're trying to fix that, what about for the rest of the country? what happens if something like rent control goes national because the idea is hey, you know, this is somebody else's fault and so this is a mechanism fix that will fix the problem and i as somebody trapped out of single family housing have a more affordable lifestyle. >> i think we're going to need a mix of policy solutions. as we know, there's not enough housing and people who make enough money how you sort of, you know the mix of the how you're going to, if it's going to be a version of build more housing, that's

what's going to, that's what needs to happen. >> such a sea change >> yes, but also that you're see ing this show up in other cities minneapolis, boston, portland. any place that isn't declining has this problem because as you know, tech jobs, finance jobs, they conglomerate in these places >> when we were covering the housing crisis, what would have thought about what a shortage we have >> you could see it in certain cities, but it was hard to talk about. >> absolutely and now you've done a great book on it. good luck with it. the book is golden gates shares of drop box are down 35% since its ipo two years ago. there's increase d cloud competition from google and microsoft. can the company get back on track? that's next. than just the business you came for. ♪ this wave is rolling, let's get going ♪ ♪ we got places to be ♪ hey-ey-ey

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call unitedhealthcare and ask for your free decision guide. learn more about aarp medicare supplement plan options and rates to fit your needs oh, and happy birthday... or retirement... in advance. shares of drop box are down more than 27% and the short sellers are taking notice. diedra has more. >> hey, kelly. well a few things getting the wrong kind of attention from spruce point capital from the ceo joining facebook's board

which they call a distraction to its new headquarters which they call poorly timeded and expensive to an acquisition that spruce point says still doesn't make them a competitive intersurprise. they declined to comment, but they're in cold water ton company's progress that may hurt the most because since its 2018 ipo, drop box has been trying to prove to investors that it can turn its large consumer following into paying customers coming to the platform not just for cloud storage, but for clab b ration tools competition is stiff across the landscape and puts drop box up against the biggest, best capitalized names in the tech like microsoft and google. >> and the company, they get a sense they might be pulling out anything else here >> that they might be i'm sorry? >> pulling out anything else to try to turn things around? >> well, they have, kelly. for much of last year, they talkeded about this desktop app launch and i think investors are really going to want see some momentum behind that they've signed partnerships with

some of the hottest names like zoom and slack and that still hasn't really shown they're able to convert these customers at a greater rate >> we'll see what happens this afternoon. thank you. diedra out west. that does it for the exchange. thanks for tuning in i'll go join tyler on "power lunch. see you there. >> and we'll see you in a little bit, kelly thank you very much. i'm tyler mathisen and here's what's new at 2:00 on a thursday stocks have been b getting crushed much of the day. the dow down as much 400 points in a sudden midday drop. we'll tell you the sprying reason behind the selling. the dow is thousand back up relatively off those levels. plus the largest deal by a bank u.s. bank. morgan stanley buy iing e*trade. $13 billion for that one we'll tell you how it's paving a new era on wall street and later, the sanders effect. bernie coming out strong against