safety on the line opening the plant in california defying orders "squawk box" begins now. good morning i'm becky quick along with joe kernen and andrew ross sorkin. u.s. futures have been lower we did see the dow down yesterday. nasdaq up slightly sorry, s&p was up less than a point and nasdaq up less ththa than .8% we are watching oil prices wti is up more than 3% i saw $25 a barrel a moment ago. looking at the 10-year yield

firmly above 1.7%. andrew thank you. we have a crazy big show for you this morning let's just tell you about the lineup among the highlights, we have author ben measurer. former of ceo of airlines. first television interview with the ceo wework in the midst of all of this big questions. ceo of general mills and then someone who never holds his tong, venture capitalist and investor coming up in the next three hours. we are going to do it. history in the making today. central bank will begin buying etfs their corporate bond etfs but

the first time ever. the idea is to be able to direct the money into the credit markets faster than by buying bonds. reporting that the purchase about $250 billion of the fed's $750 billion program inching closer and closer to stock etfs. probably not a health of a buy on this buy owe tech etf we can't make that leap, right guys when you read this, weren't you like, etfs >> it is not that favre a jump >> once i read it, instead of this bond, that bond, let's do it i understand it does cause people to take it

to the eventual conclusion of stocks some day. >> i understand why they are going this they have to firm up their markets and make sure private investors are willing to lend to these companies to keep things afloat the further out they go, the easier the transition becomes to say look, their bailing out wall street not main street. some of the businesses qualified for a few months as long as they were willing to keep 75% of their people employed. other things like making stores and restaurants safer. in the meantime, we are going to buy stocks and bonds i understand why it is important for those to stay open but it is a bigger lightening rod and one that will come up again where we get back to the same course we heard in 2008, 2009.

>> we've had guests closely in line with cnbc they fully told our viewers that the fed buys s&ps when the stock market goes down too far i don't think they have. i don't really believe >> i don't think they have either >> do you think the problem is that the fed is too much of a blunt instrument the problem is that technically. i don't think. they can't send out checks, $1,200 a pop to every man, woman and child. that's sort of the problem to some degree. >> the weapon that needs to be used however, it is difficult to understand and easy to manipulate if you are a

politician who says you are leaving us behind. some politicians may not even understand how important the fed is, what happens if these markets close down >> i would argue if jay powell had his way or ben bernanke had his way, they would have tools >> they print the money the treasury sends out do they need more? >> they need to make sure the markets stay open. they don't have enough money to keep every business afloat they need to make sure investors freely comfortable otherwise the place doesn't operate. they don't want to send the money direct >> what does mmt really lead to?

the conclusion of being able to print as much as you want without any upper limit. >> that's what they are doing. the point is to have a tool you never use. andrew, who do you think they'd want to send the money direct to >> i think if ben bernanke could have, he would have preferred to find a direct route to individuals and homeowners and people who actually needed the money because the fed is a blunt industry. >> who would you send it to now, everybody needs it would you send it to cruise ships, hotels, small businesses? >> no, no. you look through the tax record. individual tax records from last

year, you'd say whatever you made last year, assuming under a certain number, pick your number, $60,000, $80,000 and we'll effectively send you the money like you were on payroll currently as if you were >> i don't know how that makes sense. you are talking about going to a restaurant that is closed down can you send me more money, it doesn't mean i'm going to spend it >> no, no. you'd means test it. a, means test it on the number and whether you have a job yes, if you worked at a restaurant last year and made whatever number it is and you 0 obviously can't work, they'd send you that money. that is taking place all across

europe when people look at the numbers in germany right now or any of these nordic countries saying what is going on and why does the economy seem to be okay? everybody is still getting paid. the reason why there is not civil unrest and people are not angry is because they are still getting paid the money >> andrew, if everybody is getting paid, who is going to go to work and make sure the supply chain stays open and the rest of them will stay open. i don't think you want to be in the position of picking winners or losers. >> you only get the money in these of these european countries, you only get paid if taken off the payroll. it is essentially unemployment >> so you get to stay home and

get paid but i'm working on the front line >> that's a better outcome than the outcome where in the next 10 years, we'll have a major debate of who is the beneficialry you know who the beneficiary will be and it is not the guy on the front line at all. >> so if you are a health care worker, work in a shop, amazon workers, you are out of lock you have to keep going to work while the rest of us stay home that is a worse situation. >> that is the situation right this second. if you work at amazon or on the front line, you are working.

>> but they are not getting paid by the government to do that >> correct if they are still on the payroll, that's how you would get paid it is a better outcome than the folks at a bol oh, black stone and effectively every american getting bailed out when they aren't >> you are going to have the fed saying they are bailing out the rich once again. less government money has to go to work. >> that's your narrative now for 2008, sorkin you don't think you need to save the financial system everybody was doing pretty well 10 years ago >> with the argument about 2008. give me one second, i'll give it to you 2008, you know i've been he have

spoken against that. before, we were trying to save wall street to protect main street that's what 2008 was about >> it is the same thing this time around. how is it different? >> this time around, we should be trying to save main street to save wall street if this gets to wall street, the whole thing gets undone. >> this started on wall street >> we have an opportunity to do it on the main street side. >> how >> exactly how i just said the fed doesn't have the tool, which is how the discussion began. if they have the tool, rather than funnel everything through wall street, you find a way to do it through min stain street zwlee did that with the ppp.

that's your idea to continue to do that and coach small businesses afloat. or go straight into people's homes and spend how much two months, three months >> i said this could cost us $10 trillion >> i'm in the middle box now i've asked the director to do this so i'm going to have to mediate. >> you are the peace keeper. you two, i don't know what it is anyway andrew, we got to say -- >> i'm not sure i understand >> you want to let the airlines go bankrupt. giving the money to workers, you can let ubi and this will get

you to your u toepia faster. >> you are in the middle that's not true at all >> i'm in the middle >> what i'm not sure about just so i understand you are advocating, you think what the fed is doing is accurate and good? >> yes i think what the fed has been doing to step in and prop up these markets has been right we would have had much bigger problems if they didn't step in two months ago if you are of the idea that jay powell wishes he could give every person a check, i think you are wrong. >> i think if he had other tools he would take them and prefer them >> never a waiste of crisis. we may be able to get to socialism before the next

election >> we won't need that. not every single person. he would prefer a more efficient method of getting the money to people as opposed to supporting the private equity firms and big investors. >> you think he would get every needy person that doesn't have $80,000 a check. that's what you put that out too? >> he would find a way to get money to different individuals we'll debate this. a longer one we have to keep moving >> i believe when people say the left wants to use the crisis to migrate us to socialism. you just made that case. you really do want to do that. >> i don't understand what you are talking about. we are running the largest corporate welfare program in america right now.

rather than -- >> are you talking the ppp >> who do people work for? >> the small business and large business, largest program in america. >> people work for corporations. they don't work for the government the government doesn't have any money. >> unless they print it, which they are doing they are printing the money anyway what are we talking about? >> this is circular. that's why it happened if everybody worked for the government, that's cuba, venezuela. >> i'm worried, you fan the fire of this sort of political firestorm. >> that's cuba >> we have a lot more on the other side of this >> explaining why is this happening? question should be explaining why is this happening. everywhere else, they'll be beating them up for helping the

wealthy people that was not the intention or the plan and i don't think that's the end result and i don't think it is fair >> i don't think it is the intention at all but given the limited tools, they are using them the best they can i'm saying there is a more efficient way to do it more to talk about dr. fauci expected to deliver a warning to congress about reopening toolerly we'll get a reaction from dr. scott gottlieb shares higher in hotels. the company is laying off 1,300 gloenal glo globally and cutting pay across the board as a massive change set to go into effect june 1 we are back after this these days staying connected is more important than ever.

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visit xfinity.com/prepare. welcome back dr. fauci expected to deliver a dire warning in an email to the new york times, he said his main message will be in the danger involved in reopening the country too early. the plan involves three phases

such as a downward trajectory in positive cases and contact tracing. he said if we skip over the guidelines, we risk the danger of multiple outbreaks throughout the country. this does not mean the result of opening back to normal one of the main concerns for businesses, potential liability, the judiciary committee will hold a hearing on expanding tests for businesses testing is key to all of this. the president gave an update on monday the administration plans to distribute $11 million to bolster testing capacity bringing in dr. scott gottlieb, former fda commissioner and sits on the board of illumina and

pfizer is dr. fauci right when he says we are opening too soon? >> look, we are going to see cases go up you. if you look at al alabamaabama,h dakota and texas, we've seen cases go up. i think we are resuming activity off a high base-line of spread i'm not surprised that tony will be making that statement his testimony more than likely went through the white house he wouldn't be giving that if he didn't clear it. the bottom line against the back drop the other piece is that most assume by may we'd see a decline of new cases

we didn't think going into may, we'd be at a plateau. we are in a tough spot keeping the government shut down into june or may will be difficult for the nation there is a lot of hardship on the other side of this we are opening amid more spread than we presumed >> walk us through the time line there are governors that haven't opened yesterday looking at this almost grand stait-by-state skpirn skpirnment. looking at the time line, you don't see a massive spike, is that the will that open them to

say, okay if there is going to be a reinfection, now long >> the wouhite house saying two weeks. we wanted to see the decline in cases and wait a couple of weeks. you want to know we are on the downward trajectory. we are not on that the only part of the country that has experienced that on a whole is pacific northwest and the northeast. states hard hit like new york, new jersey and connecticut are setting a time line to reopen later this month they are seeing those declines southeast, southwest, the sun belt, you are not seeing that. maybe we are seeing some declining type of cases like florida. certainly not a sustained decline. they are reopening against a

back drop of a lot of spread you are going to see cases go up they are going to look at hospitalizations, not necessarily new cases. we are testing a lot more. the hospitalization rate is going down just looking at new cases doesn't tell you if you are testing more you want to look at hospitalizations that is a more objective test. the only challenge of looking at hospitalizations is it is a lagging indicator. there is a delay in time to hospitalization. they are only going to be looking backward a little bit when being looing at hospitalizations i know the fda put out guidance that lays out clinical and none clinical testing. i don't understand it.

can you explain it a little. >> fda put out guidance but they got granular typically a guidance document like this would be more difficult general. saying a difference between mild to severe disease. they layout clear clinical criteria this is a draft guidance, so people will present comments to it it will help drug developers they layout the follow-up. they talk about 28 days and difference between mild to severe and talking about the oxygen saturation. the specificity is important not something the fda usually does but will be helpful for people trying to develop covid

therapeutics >> the other question we have for you is testing we've talked all sorts of different testing plans and programs, to some of those check points, we are supposed to be doing testing and tracing. it doesn't seem that tracing is a key point what about testing do you think literally there will be testing at certain sites daily, week or more >> we have to hire people to do the contract tracing work to ask people to self-isolate that will be slower. the testing is ramping there will be technological inflection points as new systems come on to the market. we saw one machine authorized over the weekend that will

probably bring 1.5 to 2 million tests a week into the market we'll see other inflection points where they come on to the market and increase capacity of testing. we are getting there in terms of your question, when are we going to have capacity to do broad row teen testing, that's probably a more broad event. we'll have, three million, four million. we are at about 2 million tests a week we are not quite where we want to be. we are reopening against the back drop of not having that testing. we don't have 3 million or 4 million. we have two. >> always great to see you cnbc gathering health care

leaders at the center of the fight of covid-19. request an invitation at cnbc events.com/healthy returns watch coverage all day here on cnbc coming up, new data on what investors have been doing with rear tirement accounts futures right now are positive oil is up almost 5% on the saudi news we look at some images of the pandemic's impact yesterday from across america coming right back. derek, seems like your team is operating just fine remotely.

yeah, everything is running smoothly with the now platform. (bling) see, incident resolved. how did you... gotta enjoy the small wins. you keep being you, derek. keep being you.

long term investors are taking even a closer look at their retirement accounts. after a month or two ago, joining we now

>> good morning. after the initial market turmoil, people seem to be doing exactly what financial advisors say they should be with long-term investments. that is setting a strategy and staying the course in april, daily trading in 401 ks was about three times less than it had been in march. tracking about $2,000,401 k accounts only three above normal trading days in april compared to 18 in march. mainly to bond funds and money market funds but outflows were from target day funds. target day funds accounted for half of new contributions. participants are likely to stay the course to the largest 401 k

provider, fidelity >> tell me how this works. the cars act, you have more flexibility on what you can do with your 401 k. are more people taking money out now that that's easier to do or available to them? >> fidelity looked at the first two weeks of april and found 82% were stopping or increasing contributions or what third in march. if you could take out a loan up to $100,000 or hardship distribution of up to $100,000 if you have coronavirus-related issues it found actually the number of people taking distributions was less than 1%

a very small number. that number could rise as more companies adopt these and as more people realize that is the only place they can go for this money. >> the idea that this administration will allow people to take money now if they agree to take less seshl security later. that seems nuts to me. >> a lot of people were alsoer already concerned about their social security benefits going to the easy access of their credit card or retirement fund a lot of people will go where it is fun to try to find that money. >> thank you g. to see you when we come back, we'll talk to the authority ben mezrich to talk about the changes from the virus to the

way we are living. first, a look at yesterday's winners and losers these days, it's anything but business as usual. that's why working together is more important than ever. at&t is committed to keeping you connected. so you can keep your patients cared for. your customers served. your students inspired. and your employees closer than ever. our network is resilient. our people are strong. our job is to keep your business connected . it's what we've always done. it's what we'll always do. high protein. low sugar. tastes great! high protein. low sugar. so good. high protein. low sugar. mmm, birthday cake. pure protein. the best combination to help you stay fit.

welcome back the so-called stay-at-home stocks have spiked the nasdaq is just off its all-time high. all after people started sheltering in place because of the pandemic let's go to best selling author

ben mezrich. we want to thank you for joining us >> thank you for having me >> you have been behind so many of the trends we've watched from facebook, bitcoin, you've got your finger on the pulse for how people live and work and how some of those changes take place. this is new for all of us but what do you see happening as we continue to shelter at home? >> what we are seeing is that people are starting to live like h hermits. we are watching and consuming like we don't want to go outside anymore. steamers are going crazy online is going crazy. i've been writing this story in the boston globe

i've been writing this book in chapters people are reading it i want to think because i'm a good writer but bays they want to be consuming and now they are going to take over >> what you are writing is getting huge pickup. all of our lives have changed. i don't think the new routine i have is necessarily one that is going to be here forever maybe this lasts three months, six or even 12 to 18, if you believe what some epidemiologists have said. i do feel eventually we get back to more normal i appreciate the slower space but i don't think i can control that >> the question is when things

get back to normal, are you going to go to a movie theater or have 10 people over to watch something or are you going to be likely to watch something and communicate through your phone or computer. there is this urge and want to go out and see people. some of the things like watching whatever you want when you want over and over again is going to stay with us i really think the streamers are going to be more and more part of our lives the question is how are we going to maintain because they've got to start producing more content. i think certain things are going to stay. i do think more and more, like my kids watch a movie with all of their friends and they are loving it. the idea that they can do this from their home and text on the computer screen while they are

doing it with one of these watch parties. this is not going to go away >> what does that mean for the media conglomerates that have so much invested? >> i do think they'll have to start ways to produce more and more content for the streamers i think they are in a massive battle for eye balls same thing, you are ordering everything from amazon or from home, you want to be able to order everything you want to watch. that movie, was it sonic or whatever it was, came on tv, every single kid watched it. this is going to be a battle between movie goers and staying

home sfl >> i see your book "the stay-at-home millionaire" behind you. >> i speak to the twins all the time those guys are amazing people. i think they are doing well with it bitcoin skyrocketed. so they are doing better and better, i think. >> you think they've doubled down and everything in bitcoin >> they are big believers in where bitcoin can go bitcoin makes a lot of sense in a time like this we don't really know what's going to go on with the economy outside but we do know bitcoin has become a little more skars they are big believers of it in our future and our financial system they are long holders.

they are those guys. >> ben, want to thank you for being with us and writing and keeping people entertained through all of this. good to see you. >> thank you i hope people keep reading thanks when we come back, we'll talk about the future of air travel with the former ceo of spirit airlines watch or listen any time live on the app and a look at states and businesses opening across america. there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed,

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the ceo of being out with a warning about air travel and get reaction from the former ceo of spirit airlines "squawk box" is coming right back bright dawn our country has endured. it has seen the break in the clouds before anyone else. for the past 168 years, we've also stood by you, helping you weather storms like this one, to protect your loved ones. and we'll do it for 168 more.

boeing ceo dave calhoun without with a bleak forecast for the airline industry in a this morning, calhoun say he does not expect air travel to rebound by any substantial measure by september >> do you think there might be a major u.s. carrier that just has to go out of business? >> yes, most likely. you know, something will happen when september comes around. traffic levels will not be back to 100%. they won't even be back to 25. maybe by the end of the year we approach 50. so there will definitely be adjustments that have to be made on the part of the airlines. >> joining us now, ben baldanza, former president and ceo of spirit airlines. you look around. it's funny, when i'm at home now and i'm in newark flight path to some extent, and it's a rarity,

it seems like, maybe i'm not paying enough attention, but i'm not seeing that many jets like we used to you're seeing glimmers of some return to -- by the flying public there are flights. i don't know who's on them. >> there are flights i'm not exactly sure who was on them either. there are people flying but dave calhoun is right about one thing. he's right about the fact that adjustments need to be made and adjustments are being made capacity is down a lot by the whole industry, and bookings are down a lot if dave is right though about a 50% return by the end of the year, that's actually quite optimistic and so i think the idea of a major u.s. airline fair lielg is nfailing is not g

happen >> ben, obviously we need an airline industry and there's going to be help from the government on this, but there are certain things that are just facts of life. there may be consolidation previous instances like this have brought consolidation that could mean that people lose their jobs when you downsize or when you rationalize some operations because demand is down 50%, that does -- there's no way that you can keep a work force at the same size. so the critics are going to say, wow, you didn't keep everyone employed and they're going to play that card when we know full well that there's not a company in business having some employees left ora majority of employees left is better than having none left at all and not having a company at all. they never seem to understand that sometimes when there is some cost cutting. how are we going to politically walk that fine line where the

companies are saved but not all the employees are able to continue working >> that's a great point, joe the industry will be smaller, at least for a while. i actually agree with what becky said just a little bit earlier, that eventually we will get back to a normal kind of life again and at some point there will be lots of planes flying and the industry back to full employment, but that may be many years off before that happens. so in the meantime, yes, the industry will be smaller people will lose their jobs in the industry as a result of that when there isn't as much activity and that's just the reality of it, but, joe, i don't believe that the economy can recover without a viable and vibrant transportation network that includes airplane and trains and trucks, of course, but the economy needs that infrastructure to recover. >> well, there's the real world and there's the -- i don't know what that other world is. >> neither do i. >> but i hear about that other

world all the time anyway, so what's happening right now, what would you do if you were running spirit to make passengers feel comfortable? obviously they have social distancing were the planes clean before because i'm hearing that they're clean now, which makes me wonder what was in those seat backs and trays all along. they're much more stringent about getting them sterilized and safe to fly but i don't know, the recirculated air makes me worry about covid no >> no, i don't think you should be worried about that, joe air in the airplane flows virt particularically it flows from the top of the plane down to the bottom of the plane. unlike a restaurant or office building where the air moves horizontally, it's pushing your cough and droplets down. that's a good thing. it's a safer air environment

than most buildings we've been in planes have always been clean but just like in your own home, my guess is the countertops in your kitchen are cleaner today than they were a couple of months ago because you're taking more care and that's what's happening in the industry. everybody is more careful. i'm encouraged, joe, there seems to be a starting of a coalescing of ideas how to make customers more comfortable facial coverings that jetblue started. there are some talks around general consensus with temperature checking, the cleanliness at your own seat, things like that ultimately customers are going to decide what makes them comfortable to be on an airplane, but i'm encouraged the industry is working together to try to -- try things that are going to get customers comfortable. those things along with low fares will bring demand back. >> beck? >> ben, i think we eventually get back to some sort of normal

world but i hope you never see people taking their socks and shoes off and putting their feet all over the place those days are gone? >> i certainly hope so, becky. >> nasty stuff >> yeah, it is nasty stuff don't confuse middle seats with social distancing either people have been doing that and saying, well, if i don't get my middle seat empty, that's not social distancing. having an empty seat is great. i like that when i'm not traveling with my family anyway, but empty middle seats, once there's demand for those seats, are going to get filled again. the important thing is nobody is sitting face to face the air flow is really, really good if everybody's conscious about their own space and what they're touching and not touching, i think we can get back to a normal at some point here. >> i don't see how fares don't go up because we finally thought the airlines in terms of capacity had figured it out so that the planes had to have

every seat full and now just by definition it's going to be half full so they get a little bit of a break with jet fuel prices at this point, but even after we help these players, there's going to be some that just don't make it, i think >> well, i don't think that's true in 2020, joe. >> okay. >> you may be right if low demand exists for much, much longer we don't know what's going to happen with air travel demand. if that happens there may be consolidations or there may be failures or bankruptcies or something, but in 2020 i don't see an airline failing. >> all right, ben. we will see. and we hope to see you again soon, too. becky. >> same to you stay safe, guys. thanks, ben. thanks, joe. when we come back, today's market moves the futures picked up since andrew and i started fighting. maybe we should do it more

often. futures for the dow up 44 points when we come back we'll talk with ceo of hedge fund giant man group. happy birthday! so, it goes... ♪ hold up your answers. how is mickey doing today? ♪ you're just a really hard worker. ♪ ♪ ♪ ♪

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investors are working on the economy. we'll speak with one of the largest hedge funds to see where you should put your money to work. the ceo of wework joins us on the steps he's taking to ensure workplace safety and the future of the company. elon musk at it again, this time defying a local stay at home order and reopening tesla's california production plant basically daring officials to arrest them. don't arrest anybody else, just me we have the details coming up as the second hour of "squawk box" begins right now good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin and i'm with becky quick and joe kernen. s&p looks like it would open 3 points higher, dow 40 points higher and nasdaq opening call

it another 3 points higher as well joe? >> we may remember today, we'll see, kind of a history making day. the fed is going to begin buying etfs, in this case corporate bond etfs. that's the first time ever the goal is to direct money in the bond markets faster. joining us is luke ellis, ceo o man group. do you wish you were in charge of the fed are you happy just to comment on it i'm glad i'm here commenting >> yeah, i think they had it pretty impossible, joe you got quite excited at the beginning today, i was listening to it. the reality is the fed and the government had to throw money at the problem given we have a really dramatic recession going on in the real economy, but it's almost impossible for them to do it in a way that doesn't create moral hazard, doesn't create problems we have to deal with later.

>> maybe not quite as much moral hazard i guess the argument can be made that, you know, if you were the smartest ceo in the world, you'd have pandemics on your list of things you need to prepare for maybe you'd have a stronger balance sheet, i guess, but, you know, we -- sars never -- you know, didn't turn into that and mers didn't turn into that and it's been 100 years. the moral hazard is not as much as when it seems to be something caused by what people would have called greed or speculation or a housing bubble or any of those things it's not quite the same, is it >> well, sort of it is i think the reality is the trigger this time was the pandemic obviously that came out of left field, but the reality is if you look at 2008, what we learned through the course of na was that banks ran with much too levered balance sheets and with no ability to withstand stress and the government had to step

in and help them since then banks have been through regulation, have run with much less leverage and abilities to withstand quite big stress tests what's happened over the last ten years is that excess leverage and the lack of ability to withstand a stress test has moved on to corporate balance sheets and so we've ended up in this thing where you have a lot of companies that just weren't in a position where they could withstand any sort of shock to their business clearly the pandemic has been a somewhat unique type of shock in our experience, but a shock nonetheless is something -- you know, i think coming out of this regulation is going to force companies to lunch more conservative. >> if you ran a cruise line, how would you have prepared for a pandemic if you ran an airline, what should ceos have been doing to prepare for a total shutdown of their business for six months.

how could you have prepared for that >> yeah, no, look, i understand. at the same time you've got to run with -- it's not like the first time airlines have had to run cap in hand sort of airlines are constantly running out of cash at the same time as doing buybacks, running very levered balance sheets i think even if you pick a couple of industries, if you look, the big problem is so much of the economy has run with very little margin for error and we're suffering for it now >> okay. so the way you run your business, you derisked early because that's what man is known for and you make the point that a lot of times the momentum trade is more important than the value trade. you said that last time you were on, that was early in the pandemic to not buy in

with that strategy did you buy any of this dip or are you still totally out even after the markets rebounded 35% and the s&p's just down 13% now. so you bought at the bottom then >> no, we didn't buy enough at the bottom, of course we didn't. the good thing was we got ourselves in a position to make pretty good money out of the first leg of the move and not to give it back in the second leg of the move and so, you know, overall we got through it pretty well. >> have you done anything other than conserve money? are you reinvested any of the money you conserved at this point, since we've come back 35%? we're now only down 13%? >> yes, but i think one of the ways of looking at it is probably we took -- you know, in the sort of classic portfolio that looks at a 60/40 world, we took risk -- we took growth balance sheet down by 95%. we've gone up by 400% since

then that sounds like a big thing except of course that gets you to a balance sheet that's 1/3 or 1/4 of the size it was before with this just because volatility still hasn't settled down. >> you could end up going back in well below the previous lows for all we know depending on how the virus plays out. becky, do you have a question? >> that was my question. luke, you said you bought at the bottom but didn't buy enough you answered a little bit in your answer already. you don't necessarily think that was the bottom, you think there's a second leg how do you think it plays out? >> well, again, i mean, i think part of the process we look at with momentum was it wasn't that we bought at the bottom, we bought as things start to come back up. that's part of the point of the momentum i don't think -- i don't think we have a great ability to predict exactly whether we're going to meet new lows or not. we've had a battle here between a massive injection of capital

from governments and central banks offset against an incredible recession going on with pick your number, 22 million people unemployed, which has real consequences. and we found some sort of equilibrium here in markets for now. i think the bit that would worry me is that it feels like the buyers are running out of steam. buying is getting more and more concentrated into fewer names in the stock market and we're headed into the summer in january you see less buying on the summer. on the other side of that, the supply continues to be enormous, whether it's the fed is going to issue record amounts of treasuries, whether it's we have a secondary biggest ever on blackrock. companies are going to keep pushing the thing and i think the worry is you get into one of these summer swoons where we

have people still issuing, that side of it, but we haven't got any buyers left. >> hey, luke, you're going to hear from a lot of people that the fed and the central banks, as you mentioned, it's all of this money that they put in to support the markets that really prop things up you will hear from all kinds of people, politicians in particular, say that that was a bad move it was helping wall street, not helping main street. what would have happened if the fed and other programs hadn't done that to prop up the markets? >> look, we would have certainly ended up in a proper mess where we had a financial crisis to add on top of the economic crisis. i think they had to do something. i think they had to do things that were dramatic in order to stop it turns into a route, but i do think there's a worry that it's turned into trying to stabilize individual parts of the market as opposed to stabilizing the system that couple of days where the treasury market ceased to function in any sensible way the

fed have to come in and do something because if you can't price treasuries properly, you can't price anything else properly that was obviously the beginning of a base put in, but i do think they need to be careful of ending up with a place where you can say the bank of japan has ended up where they're constantly trying to pick almost individual securities to support. >> so, i mean, what i read in everything you're saying, luke, is do everything you need to do. you've got to do it. but just prepare for the backlash because you're going to hear it. i don't know whether or not that's fair. i guess it's just real we appreciate it >> yeah. >> you have 105 -- you have a lot of money under management. not a gray hair under your head. i'm not sure how that works. appreciate it. >> thank you all see you later. >> becky when we come back, walking the path forward in a pair of fine italian shoes we'll talk to a boston based

company that imports footwear made from italy. they are hoping business will come back since the company opened up last week. we'll hear from the ceo after the break. plus, elon musk reopening tesla's california plant we have the details in just a bit. "squawk box"ilbeacafr quk break.k te (vo) since our beginning, our business has been people. and their financial well-being. it's evident in good times, with decisions focused on the long-term. and crucial when circumstances become difficult. that continued emphasis on people - our advisors, associates, clients and communities gives us purpose, strength and a way forward. today. and always.

welcome back, everybody. last night's rise up telethon raised $150 million for people in new york. it was hosted by tina fey. it had a star studded cast including jimmy fallon, jennifer lopez, mariah carey and lots of others i have to say robert deniro at the entry, he nailed it. he had me tears already. he had me go donate. all of the donations are supporting the need for food, cash assistance, health care and shelter for those in need for the pandemic andrew, i'm sure you watched it, too. >> it was really quite special and extraordinarily. we've all been to the gala in person and i thought that they topped it last night and the need is real so -- but so many people watched and donated.

meantime, want to talk about small businesses this morning. italy just opened for business last week. that's good news for a company closer to home njemi is a boston based business the co-founder and ceo ben fishman joins us this morning. ben is the founder of ohh-la-la. nice to see you, ben help us understand what the last couple of months have been like and how opening in italy -- the reopening in italy has changed bhis for you. >> yeah, thanks for having me, andrew big news for us last week with italy reopening. we started this business four plus years ago with the idea of putting italy back on a pedestal as a manufacturing community they make this incredibly unique and fabulous product and much of the world was leaving italy to manufacture products at lower

prices we went there to put it on a pedestal and had seen great success. we got hit with the terrible virus. we got hit two ways. the consumers stopped spending dramatically on our type of product and italy shut down and with italy shutting down, so did our flow of inventory. last week with italy opening, very, very quickly things turned around they got back to business last monday and our first shipment of goods is coming -- was shipped out of italy on friday so big news for us as far as getting that inventory flowing again. >> but speak a little bit though about the other side of it, which is the big question for a lot of people, the demand picture. i happen to be wearing sneakers today. i typically when we're on the set am wearing a nice pair of italian shoes, in fact the question is, if people aren't going to be going out as much, what's that going to do to the demand picture for you, do you think? >> yeah. so i think for sure demand has

changed. we're actually still selling product, but it's a very different type of product. we do make italian sneakers and our sneaker business is quite strong for men and women the dress business is very soft right now. and we don't foresee the dress business coming back in any significant way any time soon. so we're focusing on comfort product. we're also a little bit apprehensive with what happens when the world starts to reopen and the amount of inventory out in the market and the level of discounting that's going to take place. not only is consumer demand different and are people wearing sneakers and not dress shoes, there's going to be a lot of product at very low prices out in the market for a very long time we're paying close attention to that and watching that luckily, our product is sold at a pretty unique price point. it will be a pretty interesting time for consumers to find value and for brands like m.gemi to maintain our business and

margins that we need to survive. >> what's happening to the customer acquisition costs since most of this for you is online and direct to consumer you know, you hear about ad rates coming down but then again there's the demand picture how has that changed for you >> so cpms, ad rates on all the major channels are lower than they have been before. the difference though is conversion is also lower what does that mean? you see ads on facebook, you see ads on instagram, you see ads on google, you click on them but is the consumer buying at the same level? yes, you're getting eye balls. no, that's not necessarily leading to sales so businesses like ours, m.gemi, we're focusing as much as possible on leveraging our customer file. once again, low cpms for us does not mean high sales. in fact, low cpms with low conversion gets you to probably a pretty negative spot.

>> have you seen any shift in terms of which service is more useful these days? is -- has greater efficiency has anything changed people keep talking about us all being at home. is instagram working better than it used to or snap all of a sudden moving to the top of the spot >> so we're finding content. you know, used to be that when you wrote long content on the internet people would say -- people don't have the patience for that it's a sound bite economy and we actually are seeing that content advertising, telling stories, explaining what you do, how you do it, why you do it is working better than ever whereas, three months ago short ad, big picture, move quickly, that's what worked story telling engagement is working better than ever for us right now and we're looking for new venuesto do that actually, which really opens the door. when a brand can tell a story, you can create unique

engagement. >> we wish you all the luck in the world. hope to keep track of your progress hope to come back on in a couple of months and letting us know. >> look forward to you putting those dress shoes back on. >> appreciate it thanks >> thanks, andrew. coming up, tesla's elon musk restarting a california factory and says that if it happens, he's ready to be arrested. phil lebeau has the details. then later, the ceo of wework joins us to discuss the steps he's taking to turn the company around after its failed ipo. they have some other issues they're dealing with in addition to that. check out the futures ahead of the open we are now up almost triple digits not quite. 87 points on the dow s&p and nasdaq both indicated higher "squawk box" will return right after a quick break.

it was certainly full with a number of vehicles there elon musk in the afternoon yesterday basically took to

twitter and said, we're starting back up. we're not going to sit here and wait any longer for the county he tweeted tesla is restarting production today against alameda rules. if anyone is arrested, i ask that it only be me i will be on the line with everyone else. no one was arrested. here is the county supervisor talking about their ongoing back and forth with tesla >> i wish elon would have waited one more week so we could have just done this in a methodical fashion that really put people back to work safely. >> reporter: this back and forth between alameda county and tesla, yes, california approved but an unelected county official illegally overrode all other auto companies in the u.s. are approved to resume. only tesla has been singled out. this is super messed up. that was not a tweet from yesterday, that was a tweet from over the weekend bottom line, it was closed for

five weeks we've put the safety protocols in place we're ready to restart production we still haven't seen anybody arrested and it's unclear whether alameda county will take an enforcement action. it's one thing to say you haven't met the rules. the other is to say send the sheriff out, block the entrance or arrest somebody, that hasn't happened yet >> phil, thank you very much joe, andrew, where do you guys come down on this? >> you know, i like -- when people like elon, i'm en@they ma i have started liking him a lot more i started liking him with the flame thrower. i liked him the next time he had done -- he did something else. what was it, andrew? you know, the original -- >> i don't know.

>> he's saving the world and all. >> no. i love him -- i love him because -- >> tweeting nasty things you've been calling him out on being wrong about the covid virus -- >> i don't love this i don't love this. >> it's a different issue here >> california opened it though so you are siding with the unelected county official? you think -- >> i am siding with the law. i'm siding with the law. >> as you always do in sanctuary cities okay still to come on "squawk box," former white house chief of staff bill daley joins us to discuss the reopening of america. wo ceo san deep mathrani coming up. buying a car from vroom

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welcome back, everybody. from main street to wall street, everyone is watching the reopening of the american economy and in an effort to try to jump start things, the white house is considering a number of stimulus measures including a payroll tax cut. joining us to discuss that and much more is bill daley. he's wells fargo chairman and former white house chief of staff and u.s. commerce secretary. bill, good to see you today. >> nice seeing you, becky. thanks for having me >> let's talk through things, both on the national level and at the bank level. maybe we start just with wells fargo because i think what you all have been seeing is a very good reflection of what's really happening out there. i think you all have 7% of the small businesses in the entire country that you do business with

i wonder if you can give us a feeling for how things are going with that, how businesses are doing and how the bank is doing in terms of being able to get help to them >> well, we have been able to give our customers a tremendous amount of help probably around 4, $5 billion of accommodations so far to a couple of million of our customers, but this is a -- obviously extremely difficult time in a very short period. you look at where we were the end of february even even though there was the turn around covid, our economy was still doing quite well in a period that we've never seen this sort of thing, a collapse in many ways of many sectors that are vital to keeping us and the nation going. so this is tough for our customers. we are doing everything we can to accommodate them. whether it's the ppp program, whether it's accommodations on our own. so we're all working together, and i think this is obviously unprecedented times. and where this goes, how it goes

over the next number of months is unknown we're trying the best we can to try to accommodate our customers, which our customers and employees are the most important things to us now. >> bill, let's talk about that nobody knows exactly where this thing is going, but as a bank you all have to be looking at this and figure out how many of the customers that you serve are still going to be going concerns at the other end of this what type of long-term potential do you think this has at this point? obviously things can go in different directions is there a range you all are looking at thinking if things don't open up here, then x number of customers are going to be really pressed to be able to come back? >> we aren't at that point yet we are still predicted in this quarter, we shall see, a rise from last quarter, and be also a rise in the fourth quarter so we think there's going to be priors from the collapse of the second quarter but it remains to be seen. we are all trying to figure out not just when we go back, how we

go back. there may be opportunities for businesses as we try to prepare for how we go back we're doing that now we have over 200,000 employees working from home. we never envisioned such a thing, nor did many other companies, so how we bring them back and service our customers at the same time is a big challenge for us we are not going to be rushed, either by some political drum beat or other things it's going to be about the safety of our employees and our customers. right now we're obviously servicing our customers and that's the most important thing we can do right now to keep the economy moving and to be there for them >> you said you're not going to be rushed back by a political drum beat that's moving. >> right. >> what authorities do you all listen to? who are the experts that you're consulting with to try to figure out when is the right time to come back? >> we're talking to the health officials throughout the country

and local areas. obviously there are some parts of the country that are not affected anywhere near what other parts of the country are so we're going to have to make judgments, but the most important thing will be how we go back. it will take time to reconfigure our offices, reconfigure some of our places of business and as i said, we never envisioned two months ago that we'd have over 200,000 employees working from home of the 270,000 people that we have. now many of our employees have to go to the branches, have to go into certain offices, but i think this will be a gradual comeback and what we all want to do is do it the right way, which each company is going to have to make that judgment around how they bring their employees back and at the same time how they're servicing their customers. a big challenge in -- our attitude, charlie sharp's

attitude, we'll make our decision and won't be pushed by the political system and the wins of the day. the medical experts will have to give us confidence and know that the procedures that we put in place are the right ones even though we're all in unchartered waters, the right ones to keep our employees safe and then our customers. >> hey, bill, you've served as chief of staff in the white house. there are all kinds of different discussions taking place right now to try to figure out what comes next, whether there are additional funds to come to small businesses, additional funds that will make their way to the states or local municipalities and whether there should be a payroll tax cut. what do you think of any of these plans? >> look, i think there needs to -- i don't think there will be another small business relief like a third version of ppp. i think you're going to see the democrats put together a very regressive piece of legislation around sort of the debate you and andrew had early this

morning. you try to get more relief in a direct way to certain people, and i think you're going to see a big push by democrats for that i think you're going to see a pause by many republicans -- a desire to have a pause by republicans and see what impact the relief that has been given, and you've got to give credit to the congressional leadership and the members for the amount of action they took in such a relatively short period in march. it really was unprecedented to see congress come together, put together a couple of trillion dollar package to try to help bolster our economy and bring relief to the health care system, which we feared greatly would be stretched and in parts of the country it is being stretched. >> you're a democrat what do you think the right answer is? should there be more money that goes directly to consumers should there be a universal base

income >> i'm not there for universal basic income yet i believe we've got to bring more relief -- as of right now the more immediate problem is our states and local governments are stretched because of this crisis not using that to solve the long-term problems but to try to really address the enormous costs that are going on and the depletion of their revenue if you have any taxes, any revenue that's based upon sales tax or other taxes, that's gone right now and i think it's going to be very slow to come back and so the enormity of the costs on our public systems are really -- have got to be addressed by congress in a relatively short period, in my opinion. or just compounds it. >> you also understand -- sorry. you're a democrat. you understand how the banks work you've been a chief of staff and tried to figure out how policy can address these things

we saw a huge backlash in 2008 and 2009 it was a back -- lash against the fed or the government and taking the side of wealthy people and creating advantages to people who had money and leaving others behind. that's why there's still such a rift in this country the moves that the fed has taken, i would argue, have been moves that were very important to stabilize the markets but i think there's going to be an even bigger backlash that comes from this. what do you do how do you prevent that backlash how do you deal with it? >> the backlash is really based on the inequity that's risen in our society over the last 30 years really not over the last eight weeks really that's the heart of it '08 stretched it because there was a financial crisis caused by the financial system this is not. this is a pandemic i think it is very different i think that's why companies like ours and so many others are out there trying to be there for their customers, for their employees with a very different

attitude and i think they had or at least were postured as having in '08 and that was sort of you've got to help us. now we are aggressively out there trying to be helpful you know, we've done 150,000 of our customers have gotten ppp loans. 80% of them have less than ten employees. we're not taking fees for that program. that's taxpayer's money. we're going to work with customers to turn it from loans to grants. that will help bolster 150,000 or more customers throughout the country, all 50 states and puerto rico. we have had guarantees for so i think the business is stepping up in a very different way than they were viewed and wall street and the big banks and regional banks and small banks. look at the number of small banks that got into the ppp program in the first go round for their customers. so i don't think that sort of rub is going to be there that

we're bailing out main street and then main street's not helping the little guy i think that's different now i think you're going to see a democratic plan that probably does direct more payments than just was what was done with the stimulus checks. there's a move afoot to try to have some sort of basic income for certain people whether that's a good or bad idea, i watched the two of you debate that this morning when i woke up i knew the world was upside down when i saw joe sitting between the two of you i couldn't believe it. >> it is a complicated debate. very nuanced debate. bill, we appreciate your voice on this and we'd love to have you back more to talk more about it. >> we will thanks, becky. have a good day. stay healthy. >> you, too. take care. andrew coming up when we return, managing the work space during a pandemic the ceo of wework is talking

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welcome back to "squawk box" cnbc is hosting a virtual event today featuring top health care ceo, technologists and investors. the goal is to explore the ways that companies are approaching the coronavirus crisis and its lasting effects.

last night jim cramer spoke to one of the many great panelists that will be joining us. jim spoke to the ceo of bristol-myers. >> this is a time for our industry and companies like bristol-myers squibb to step up to the challenge, work together and demonstrate what we are capable of when we work together that's our industry. that's what we stand for that's what we are, and this is a time in which the value of science and innovation is becoming very clear. >> to access today's event go to cnbc events.com/healthy returns. becky. thanks, joe. when we come back, wework ceo sandeep mathrani will join us after this break we'll be talking workpcela safety, commercial real estate and the future of the company. stay tuned we'll be right back.

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looking to reopen. companies are rethinking how their offices are designed for employee safety. we work is rolling out changes to its co-working spaces across the globe. joining us now in his first tv interview as the ceo of wework sandeep mathrani good morning, sandeep. nice to see you. this pandemic on its face appears like it would be very,

very difficult for the world of commercial real estate and especially the world of office space, but there's a contrarian view that i know you have and some others do about what this may do for companies like wework >> good morning. you know, as i listened to eric schmidt over the weekend on face the nation, the ex-ceo of google, in this pandemic social distancing is the norm, effectively we will need more office space not less. i'm a firm believer. it's speaking to many of our enterprise clients they're speaking more space to make sure professional distancing becomes the norm. the key to wework is flexibility. flexible space, flexible in time we believe in the hub and spoke model. our enterprise tenants are telling us that effectively they need a hub and spoke model the spokes need to be closer to where their employees live to minimize the amount of time it

takes, commuting time it takes to get to the office we've learned extensively from our experiences in china over 100 buildings of what it takes to create best in class spaces of professional spacing, hvac systems, we spent the entire month of april spending tens of millions of dollars getting our spaces ready for when people can get back to work i want them to feel safe i want them to feel as if they are in their own homes so we're pretty encouraged with the planning that we've done to encourage the employee work force back to work >> sandeep, that's the question though because the conventional wisdom is that wework has always been about community, about bringing people together, even people that don't necessarily work at the same companies together for that community. but in the social distancing world, you know, how many of those people are going to prefer, given that they're in relatively white collar jobs

that can be done on a laptop and a telephone, that they're going to prefer to do those at home if they're not going to do them at the traditional office that they otherwise would have gone to >> actually, the key to wework is flexibility flexibility of space, flexibility of time. on the contrary, the only place that we can actually make space flexible and if you actually come visit our wework locations you'll see that people can sit six feet apart, there's distancing available, it's very easy to reconfigure our spaces to make it safe for the employees. it is not conventional space where you have walls, you have cubicals that cannot be relocated so quickly as i was listening to some of the earlier players on your show, one of the questions was how do we reconfigure the space. again, you should think of us as flexible flexible means you can dedense si phi you can spread out the locations and people come to work. i've been going to sell wework

offices in the past few weeks and it is encouraging to watch people come and sit in open spaces six to eat feet apart as a matter of fact, the key word for us is flexibility collaboration while keeping your distancing >> right sandeep, what does it do though to the economics of your business even if you're able to fill all of these offices at, let's say, i don't know is it, a 25%, 30%, we talked a lot about what's happening at disney it's one thing to be able to reopen it's another thing to be able to get to a significant enough group of people who are there to make each location profitable. >> so that's a very good point we ended q4 with about 740 locations. we're ending q1 with about 830 locations. one thing that happened, you know, that's fortunate is we had this additional supply that came

online at the very right time. so in our case, the way we look at it is that effectively this gives us an opportunity to increase occupancy and, therefore, we should not impact much of our economics. we took a period of time, almost 18 months to 24 months, to mature these buildings, and so if you've got 60 additional buildings with capacity to mature over a 24-month period, occupancy's more the important factor than actually occupancy per square foot for rent perspective. we believe because of our ability of where we sit on an occupancy range, that effectively economics will not drive our decision to create a safe environment for the employees. >> the other question when it comes to safety, there was an article in today's "wall street journal" talking about elevators. how many people can go in an elevator there are people developing and thinking about an elevator for one. how does that work and how are

you thinking about it? >> so, again, looking at what's happened in china, we've been able to see where people are taking four people per elevator. you essentially time it. people can come in it's almost like commuters when you commute, you pick the best tame to commute to make sure traffic is the least for you. i think over a period of time people will get used to, you know, the times elevators are busy, lines are busy people will time it out. 40% of our buildings we sit lower in the building whereby people could use stairwells as well that can happen by default we took real estate lower in the buildings and that helps the commuter coming into the building without traffic so, again, i think, again, the fortunate part of being flexible in our office space, our location within the buildings allows us to, you know, be more nimble when it comes to serving

our employees. >> and then the other question, this idea of sort of distributed workplace, how much do you think that improves the cause for some companies? because the question is either -- i mean, you could argue either everybody should be at home or everybody should be at the office, but this sort of midway strategy or middle ground strategy, does that advance things for a big enterprise company that may want to only -- or may put, i guess, a handful of people in brooklyn so they don't have to travel into manhattan if, in fact, that's the kind of thing we're talking about here. >> so, again, looking at our own work force and seeing how we bring them back to work, we find it to be -- it doesn't really work if you have an a/b system if you have teams that stay at home and working by zoom and other teams that come to work. so, again, the aspect of being geographically distributed, going back to the hub and spoke

model, bringing teams together so they can work in packs, even if that means they're in different offices, is actually the way i think people will come back to work i think it's all or nothing, but it will be scale no one wants to rush we ourselves are bringing in 25% of our people week one and after two weeks we'll bring another 25%, again, having our own geographic distribution. we're able to accommodate our colleagues to come back and spread out throughout the city and the boroughs of new york city the aspect of wework, having the flexible space, being geographically distributed within the city and around the world will actually be an advantage and enterprise clients of ours are reaching out and saying, you can provide something to us that we really can't provide ourselves, which is that professional distancing and geographic distribution closer to our employees.

so we think this could be a silver lining that actually will help okay cue paps si of our new assets to be brought online in the first quarter. >> hey, sandeep, adam neumann, the founder of wework and the former ceo is suing softbank from walking away from the $3 billion tender offer where do you come out on that? what's your position the situation has changed. >> softbank has provided about $5.5 billion of liquidity to wework from the fall of 2019 that gives us enough capacity to operate our business we still have $4 billion of liquidity today and effectively we've been able to right size our organization we've been able to improve by leasing our assets we're on our path to profitability in 2021. the $3 billion tender offer has to do with existing

shareholders it's noise in the background as far as i'm concerned my focus is to right this ship and it doesn't really take up our time or our energy in focusing on lawsuit between existing shareholders and softbank we are focused on righting our ship >> hey, sandeep, the other question i wanted to ask is, are you paying your rent and how many of your customers have called you up and said, wish i could but i can't pay my rent this month? >> so, you know, a good friend of mine, jeff blau of related said, if you can pay your rent, pay your rent. i called him up and i asked him a question i said, what should i do he said, the places you make a lot of money you should pay your rent i'd like to sit back and say i followed his advice. we've paid our rent in over 80% in april and may the remaining places we're in discussions with our landlords in a friendly way. therefore, we plan to make whole on our entire obligation

i believe in the trickle down economy. if i don't make my rent the landlords can't make their payments and it's a domino effect on the collection side, we've collected over 70% of our rents in april and we are working with small and medium businesses in deferrals, freezing rents, different aspects with them. i speak to them myself on saturday i spoke to a gentleman out of los angeles and worked out an amicable solution. yesterday i spoke to a gentleman out of our london office and worked out an amicable solution. we are working with those who can't afford to pay rent in deferring their rent for a period of time and accommodating to create a win-win situation. >> okay. sandeep, we appreciate you taking the time to speak with us this morning we hope to follow your progress and hope you come on back as things move forward. thanks again >> thanks for having me. have a great day >> you bet thanks. coming up, another big hour of "squawk box," includi tnghe

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breaking news, tech stocks powering the rally the futures are once again positive this is as the fed gets ready for an unprecedented move into the corporate bond market. and what does the auto industry need to weather the biggest crisis since the great recession? a bipartisan pair of representatives from capitol hill pitching a solution. we'll talk about elon musk's standoff with one california county that says he shouldn't restart tesla production lines well, elon is already ignoring

that the final hour of "squawk box" begins right now good morning, everybody. we've been watching the markets this morning things have turned around. in fact, u.s. equity futures, the dow is up by over 100 points, 110 points s&p up by 11 and nasdaq up by 28 the dow closed down and the s&p 500 and the nasdaq closed higher treasury yields this morning, so far it looks like the 10-year is yielding above 0.7%. the latest tick, 0.078%. oil prices are up. last i saw it was up by over 3%. yeah, talking about wti above $25 a barrel at $25.52 joe? >> thanks, beck. detroit's big three automakers are gearing up for production next week after closures from

coronavirus. ahead of that, democratic representative debby dingle and fred upton both from michigan are asking for financial support from the auto industry in a letter to house leaders that will be released later today. they write in their words, the projected economic fallout for the industry is grave. many businesses in the industry face a cash crunch even as they prepare to ramp back up. liquidity is challenging, particularly for suppliers and it will be necessary to support demand for some time to ensure a meaningful recovery. in some regards, challenges that the industry faces exceed those of the 2008 financial meltdown dingell and upton join us in a heartwarming show of bipartisanship in what is rare nowadays congress people, thank you for joining us i appreciate it. who wants to start congressman dingell, in a

perfect world, companies aren't supposed to need this repeatedly why does it make sense in this situation? i'm not sure she can hear me then you can start, congressman upton. did you hear the question? why does it make sense in this situation? >> i did look, one in seven jobs across the country are auto related we saw news this morning, toyota is expecting that their profits are going to be down 80% now we're looking at millions of lost car sales this year, and, you know, we need to help. debby dingell and i have helped lead an effort in the house. we're submitting a letter to the speaker and kevin mccarthy on the republican side, 75 members, bipartisan, that we ought to make sure that this next stimulus package needs to address not only the auto

assembly folks but the auto suppliers, the whole supply chain and because this is a critical industry, manufacturing industry, that america needs to have >> yes representative dingell, can you hear me now? i actually addressed the first question to you. why does it make sense in this case do you say? >> well, the fact of the matter is that 10 million jobs. 5% of the private industry economy in the united states and i want to make it really clear, the auto industry isn't asking for a handout in any way they're asking for a handup. the fact of the matter is that there is an ecosystem that starts with the worker, you've got the oems, the car companies themselves, the suppliers and the dealers and there are a lot of -- when you get to this car community, there are jobs in every state across this country.

so we are worried about the economy. the auto industry is still the backbone of the american economy and we want to make sure as we talked about other industries, many are part of the discussions, the midwest matters. it matters, by the way, more than at election time. >> andrew? >> let me ask either of you this question, which is i think we all want to save the employees and help these industries, no question the question, of course, is how to do it, which is to say when we rescued the -- when we rescued the automobile makers in 2008 and nine, the united states taxpayer took a piece of the company, received equity effectively in the company and participated to some degree in the up side of that because we were protecting those specific -- those specific industries we've now done something similar though at a lesser level with

the airlines how would you think it should be approached >> so iwant to be really clear this is not 2008 the companies are not in the same position. you have to divide this into three categories first right now is just the reopening. how do you keep the workers safe they need ppe. there have been very stringent protocols implemented at plants and for everybody across the ecosystem, how do you keep people safe? two, as you start back up, the suppliers need liquidity they're on a 45 day payment process. there are many suppliers that simply do not have the money to pay for raw materials. some of them are facing bankruptcy so you've got to make sure that the liquidity is there they don't want anybody to give them a grant all they want is an ability to access a loan until they can pay it back. and then as we slowly get back to work, people -- you know, there isn't going to be demand for vehicles there was a good month last month surprisingly, but then how do you drive demand later in the

year >> my other question to both of you that relates to this is, you know, gm, for example, has -- had, i should say, in past tense, a did i have 2ke7bd progr dividend program and buy back program. one of the great challenges of this pandemic for all companies is -- the lesson is just how much or how little of a rainy day fund any company in america has been operating with throughout all of this how would you think about that, that in the future if we were to provide some help? >> well, you've got to remember when we did this back in '08, the auto companies did pay the money back and, you know, as you look at the situation now, debby pointed it out, the suppliers are paid 45 days after they actually provide the supply for the parts. so as a consequence, since they've already been closed

since mid march, as the autos start up again, they're looking at doing production at 25% next week, that means the suppliers aren't going to be paid until july yet in fact they're back into business this week producing those parts that have to go down the assembly line next week. i don't think they can wait until july whether it's paying their -- for their raw materials or their employees and, you know, when you have an automobile that uses about 2500 parts, it doesn't work unless they're all there. this is a critical industry for america and one of the reasons why we've asked our leadership, republican and democrat, to really take a look at this knowing it had a tremendous impact on manufacturing across the country, not only here in the midwest. >> i don't think anyone disagrees with you the only question is what's the fairest way to do it to implement it? to get the money to these companies and to protect the taxpayers at the same time

>> one of the ideas that debby and i are tossing around, and we're getting close to coming to a conclusion on this, starting some discussions, is not like what we did before there's no cash for klunkers program like there was back in '08 where people traded in automobiles and get something new. the fleet sales. ernst was talking about the bankruptcy route this past week. you have your communities that are buying police cars probably not going to be doing that in the near term with the shortfalls in state and local budgets. one of the things debby and i are talking about is something that's actually consumer driven. not a bailout, not a handout, not a plan directly to the auto companies, but in12ed the expenses for a consumer, whether on the digital or business side, you get that demand up and then bring back the volume of cars in

production and obviously the manufacturing back to america. >> okay. representatives, we appreciate both of you joining us this morning. we look forward to watching this and seeing how it progresses and, of course, we wish everybody in the state of michigan and everybody in the auto industry all the good luck that they can get. when we come back, a lot more on "squawk box. we're going to talk to the ceo of food giant general mills. the safety of the food supply to move away from stockpiling that characterized the early days of the coronavirusin this country what comes next. a little later, a very special interview with the ceo of social capital. you don't want to miss it. biotech company novavax.

it is receiving $348 million for vaccine trials jim cramer will be speaking with the ceo of logitech tonight. stay tuned watching "squawk box" right here on cnbc.

welcome back to "squawk box. dow up 121 points. s&p 500 up 11 and nasdaq up 23 points higher. becky, over to you. thanks, andrew businesses across the spectrum are hurting from government mandated shutdowns we are joined by the ceo of a food giant that has just raised its guidance general mills says the manufacturing plants have been

producing above normal capacity since mid march. more people are eating at home joining us is jeff harmony he is the chairman and ceo of general mills. jeff, thank you for being with us today >> yeah, thanks for having me on the show this morning. >> so i know this has been the case -- sorry? jeff, i didn't hear you. can you say that again >> thanks for having me on the show this morning. >> great hey, jeff, i know this has been the case in our household. we've been eating a lot more cereal, cheerios, we eat yogurt, granola bars, we've been making cake from mixes and things i guess i just wonder, in terms of how consumers are eating now, do you think that lasts? do you think these are situations in consumer behavior that last when things change, when the pandemic's over >> well, you do see people

eating a lot more at home, particularly cereal, but also doing a lot of baking. it's hard to say how long the current trends will last, but certainly consumers will continue to work from home and we believe continue to eat from home while it's tough to say how long these trends will last, we do believe that many of them will >> how have you been handling this increased demand that's come through i know that you guys have been trying your best to keep up with the demand for everything that's out there. how do you do that have you hired more people run more shifts? >> well, i give a lot of credit to our people on the front lines, which are our people on the manufacturing plants more than 95% of people are coming to work every day and our outputs have never been better interestingly, safety at our plants has never been better as well general mills has taken a lot of precautions to keep our employees safe and so far we've

done a good job of keeping up with demand. >> what has that entailed? do you have more workers that you've been hiring >> we have we have hired a few more workers but, you know, importantly we've kept the workers on the front line, we've kept them safe we've offered leave for people who are sick or taken care of people who are sick. we've offered bonuses for people to stay. most importantly, our workers know now that the jobs they're doing are making food america needs. our people are taking a lot of pride in the food they're making every day. >> there have been so many questions about the supply chain in every aspect, everything from toilet paper to beef, and how those things get through have you run into any problems with your supply chain, with being able to get things manufactured, delivered to the grocery stores on the shelves? >> our supply chain is working very well.

we -- the demand for our products in the u.s. was up more than 40% in april, more than 30% in march for the most part we've been able to keep up with demand. all of our plants are up and running. we have cut down on some of the variety of items we're selling instead of making 90 different varieties of soup, we might be making 50 or 60. we have cut down on a number of items to make sure we can get things through our plants faster, but i've been really pleased with the way we've been able to service our customers and eventually our consumers. >> jeff, you're a global company, and obviously we are kind of looking to china and to europe to see how they're coming out of this to try to anticipate how things might go here in the economy. rebecca schuneman is asking what's happening with the haagen-dazs stores you have in china. in the conference call you said traffic was down 60% year over

year where do things stand right now? >> thank you we have two businesses in china. one is an at-home business, a frozen dumplings and the otheras we saw 90% closed in february. now all shops have reopened. we saw traffic down 90% in february now traffic is up over 50% and so -- or is down 50% from where it was at its high we see the economy coming back but coming back gradually. we see the frozen dumpling business continues very high demand as consumers in china eat more at home just as they are here in the u.s. >> jeff, want to thank you for your time today. really appreciate it good to see you. >> thank you good to see you as well. we've got some breaking

economic data still to come this morning, an important read on inflation for the month of april, and right out of that we're going to speak with social capital's chamath palihapitiya on what he sees on the economy take a look at pnc financial and blackrock. pnc is selling its 22% stake in the asset management giant the ceo said it was the right time to unlock the value of its investment stay tuned you're watching "squawk box" on cnbc associates doing their best to keep our nation going. because despite everything that's changed, one thing hasn't and that's our devotion to you and our communities. our priority will always be to keep you and our associates safe, while making sure you can still get the essentials you need. ♪

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commission free today. welcome back to "squawk box" this morning take a look at the futures right now. we are in the green. the dow up 105 points. we have a little over an hour. s&p 500 would open 10 points higher and the nasdaq looking to open 20 points higher.

joe? >> andrew, the shares of toyota are falling in japan overnight company reported positive numbers for the fiscal year that just ended but it is forecasting a 20% drop in revenue for this year because of the pandemic also warning that profit could drop by 80%. toyota expects the car market to bottom in this quarter but says it may take until the first half of next year to fully recover. speaking about the auto group in california, tesla ceo elon musk is telling his twitter followers he's willing to be arrested after ordering his fremont plant to resume operations despite local orders to be shut down. in a tweet late yesterday musk said tesla is restarting production today against alameda county rules i will be on the line with everyone else. if anyone is arrested, i will ask that it only be me shares of the electric car maker have rebounded almost to

prepandemic levels well under $800 a share. when we come back, a lot more on "squawk box. a breaking read on inflation from the labor department. we'll bring you that number and market reaction. ext, never one to hold his tongue, chamath. he has a lot it say when "squawk box" returns ed. first words aren't delayed. caring isn't postponed. courage isn't on hold. and love hasn't stopped. u.s. bank thanks you for keeping all of our spirits strong. we've donated millions to those in need and are always here for our customers and employees. but inside... there's advanced research, modeling and refinement. constructing funds that don't simply follow an index.

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for all of us. in news out from mow derp na, the biotech company, company winning fast track designation from the fda for its covid-19 vaccine candidate. as you know, you've seen moderna on here along with the ceo who was actually one of the guests at our healthy returns conference today moderna is in the process of preparing phase two and phase three trials the this means they will get an expedited review when it is finally submitted if it is for marketing approval andrew >> meantime, joe, dr. anthony fauci expected to deliver a very dire warning today when he testifies before the senate health committee that's going to happen this morning. in an email to the "new york times" he said that his main message will be of the danger

involved in reopening the country too early. white house plan involves three phases with criteria, as you know, for each one, such as a downward trajectory in positive cases and robust contact tracing. fauci said if we skip over the checkpoints in the guidelines just to open america again, then we risk the danger of multiple outbreaks throughout the country. this will not only result in needles suffering and death, but would actually set us back on our quest to return to normal. dr. fauci's message underscoring one of the main messages for businesses potential liability. this afternoon the senate judiciary committee will hold a hearing on expanding protections for businesses so when they do open, if in fact there are outbreaks, those companies may be protected that's going to be a debate as well in this country joe? >> we have just a few minutes away from the latest consumer inflation data the futures are up just under 100 points on the dow. that would be three straight up

days for the industrials we will take a quick look. look at oil too. up 5% over $25 the shares on saudi production cut backs. .7%. rick santelli standing by. at the cme in chicago. we have time before the numbers come out, rick >> i never thought i wanted to buy a tesla. i seem to have an affinity for having one in my driveway. me, too m i don't know what you'd call it.

i can tell you, the same old political lines are delineated is it a left brain, right brain? can you figure it out? can you hear me, rick? >> i've got yeah, joe. you and i could keep talking you know what, it's going to be fascinating to see how it all works out. there's a lot of different rules around different parts of the country. i understand this is complicated and people are nervous yet there's a lot of people that seem to be a little bit more

comfortable venturing out. different parts of the country are different, but we are abou to see consumer price index, and the reason this is important, of course, is there's a lot of people know they're paying more for, whether it's cleaning supplies, certain food groups. yet they are swamped by things like oil, car lines. a lot of services. we'll look for various parts of the number here it comes. down .8. it's amazing exactly, exactly as expected by most analysts. down .8. the headline number, the lowest it's ever been since 1947 when it made its debut was minus .6 in january of 2015 so this by far wins that award, of course, and if we -- no, i'm sorry. i'm sorry. the last time it was january of 2015 minus 6 cents the all-time low was november of '01. at 1.08. if we strip out food and energy,

that is what has never been seen before, down .4. core which goes back to 1982 at minus .2 and 1963 at minus .3. obviously this wins. so it's the core that's all-time never been down here at levels before if we look at year over year, .3 core year over year, 1.4 this is also interesting, i know a friend of cnbc peter bookfar is out there somewhere listening. if you look at the year over year core, we've had 25 months in a row, joe, it was either 2 perfection percent or higher that streak ends officially this month. how did the markets react? 141 during and after this was picked and carefully handicapped because we all know some of the effects of shutting down the economy it doesn't dispel the notion that there's a lot of questions about prices, joe. and the here and now, many believe it is going to be deflationary pressures as far as

the eye can see. there may be a point down the road where that may be reversing and of course we know it all depends on the demand equation back to you. >> sorry, rick you got in a higher close to the end which i was waiting for. thank you. becky, are you back among the hearing now with the audio >> sort of i mean, this is the risks working at home. i don't have a spare ifb i'm blaring it down the line i'll do my best to stick around. i can hearsort of. >> that's probably because it's blake down the line. i'll try and stay out of this. steve liesman joins us he has more on these numbers too. steve, what do you think >> reporter: well, i think there's a great contest going on here between the forces of inflation and deflation. i think what rick said was interesting there. had just the tag end of what he was talking about what may

happen down the road when i separate things out, i have historic decline and demand, historic rise in joblessesness. at the same time we have historic spending by the federal government unprecedented supply shocks. it's not really showing up very much except for one category, the food at home category up 2.6% i haven't looked at the details of things like beef and pork i know joe would be interested in the bacon prices, but that's a place where you're going to have some price pressure on the way up on the other side you have the joblessness and the extreme decline in demand. let's look at some of these prices here that are monthly changes but they're like decade changes here energy commodities down 20% with a 20% decline in gasoline. fuel oil down 15%. if i look at apparel prices, they're down 4.7%. medical care also down transportation services, that's going to pick up the airline data overall what you're going to have here is you're going to

have the forces of deflation will win for a while and then we'll have to see if either fed policy, government spending and a rebound in demand together with the supply shock end up somewhere down the road in the next severalmonths creating some inflationary pressures the other way, becky >> okay. steve, thank you andrew, i'll send it over to you. meantime, want to bring in our very special guest to talk more about the economy, job losses, reopening the u.s. businesses and so much more. chamath is the chairman of virgin galactic. great to see you this morning. i want to start with the big news of today and what's become a debate the fed planning to buy up etfs backed by bonds and what that means and what you think it says about our economy and what kind of debate you think there's going to be in this country about the steps the government's

taking. >> well, i think that if there was any doubt before, there should be no doubt now that we have completely divorced the economy from the stock and bond markets. the fed has been the principle agent of that obfuscation. what these guys are doing now is with the ballooning balance sheet and all of this money going in to prop up companies, what you are going to start is a really bad -- or you're going to accelerate a really bad deflationary super cycle if you think about this, andrew, like the best technology companies in the world have literally been training billions of consumers to not really spend money, right the whole idea is if you wait, tomorrow you'll get more for less whether that's youtube or facebook or google or amazon, the point is that these guys have really conditioned people

that, you know, you on balance want to actually not be spending that much money because we'll just be giving you more and more value. when you on top of that then add to the fact that the fed comes and pumps in all of this money that has to go someplace, consumers respond by picking these companies that give them more for less. that's where all the profits get trapped. as a result, a handful of companies really disproportionately perform and inflate the equity markets the companies that actually traffic in traditional business models that don't necessarily have tech at their disposal get decimated and so that cycle is just going to get exacerbated and exacerbated. in that real world things will get cheaper for the future. >> chamath, here's the question. i'm not advocating the fed doesn't do these things. i'm not thinking there are many more options the problem is it's a blunt instrument to some degree. while you'd love to make the

stimulus more effective or get it to the right people, we don't have a system of government that's necessarily -- can or is willing to do that >> well, we have to figure out how to break the cycle of deflation and when we're a debtor, when you are a debtor the best thing for you is some form of inflation or at least to minimize the effects of deflation. and the reality is that we do have a system and you don't have to pick who the quote, unquote, right people are the right people is every citizen of the united states i've said this before, but this is a point in time where direct fiscal stimulus should be going to the hands of u.s. taxpayers it is the most effective way to blunt this unnecessarily rampant asset inflation in the markets and at least balance it with incentives in the hands of consumers to buy things. and if you don't break this cycle and teach a new pattern of behavior, we're going to be looking at a japanese style

deflationary period where we will have ten years of unemployment, the economy will just be stagnant and we'll wonder why he cequity markets k going to all time highs when it doesn't map to what you see in the real world on a day-to-day basis. >> i want to touch on so many different issues with you. one of the hot topics of the morning is what's going on with a company that i know you like a lot, which is tesla and elon musk is elon musk doing the right thing by opening in the face of rules in alameda that would effectively tell him he can't? >> i think this case is so interesting because it actually paints what you guys spoke about before i have been and will continue to be a huge supporter of his what you have right now is this issue where the federal government has a specific set of guidelines people may think that they fall into those guidelines. then states issue those guidelines and on top of that you have regulations at local levels when you put them altogether, it's incredibly confusing.

if you are a business owner and you're trying to figure out how to get back to work because you believe the risks are manageable, there is no clear way that you can go and actually get the approvals to do so because if the federal government says yes and the state government says yes but then a local government says no, what are you to do what are you supposed to do for your workers this is an issue where if you take a step back what it says is there is still so much we don't understand about the virus all of this regulation is actually quite confusing these local, state, and federal agencies have a responsibility to americans to figure this out and be coherent. otherwise, you have all of this disparate. one side people think we should be closed until there is a vaccine. on the other side, thousands of workers are clamoring to get back to work because of their livelihood there's no coherent policy response that's unfortunately where we are. >> chamath, that's the policy issue. my question to you is do you

support elon musk saying, local laws be damned in this case, i'm moving ahead >> i don't think -- i don't think he's saying local laws be damned i think he was trying to get time with the folks in alameda and frankly what i saw in twitter is somebody telling him to "f" off it was not the kind of discourse you would expect from public officials for engaging with business owners. alameda should sit down with tesla, have them walk through their entire testing mechanism, the protocols they're taking and make a decision and not fight him over twitter >> hey, chamath, i wanted to go back to the point on the fed look, i realize that it's ugly and that it's not the perfect way of doing things, but i think if the fed hadn't done what it did two months ago to step in and stabilize the markets we'd

be in a much worse position than today. by stabilizing let's say the credit markets, companies that are good, strong, conservative companies were able to go to the market and borrow money and make sure that they're going to have enough money to get through the tough times to come and as a result they'll be able to keep their employees on you think back to the financial crisis that we faced in 2008 and 2009 where there were serious questions about a company like ge being able to make payroll. if you saw big companies not get access to credit or money from private investors, i think we would be in a much worse position i can understand your point thinking there are a lot of people who still need help along the way, but i feel like things would be worse if the fed hadn't taken those actions. >> this is what i say. 90% of the gains happened when the fed signaled they were going to do something. you're absolutely right. it calmed down the markets where the big companies could go and

get the capital they needed. if you separate, the fed's primary and secondary facilities aren't necessarily going to affect or help the best companies because in order to sort of qualify for these programs, you need to have -- you need to go through a whole bunch of hoops you need to sign up for, you know, supervision on executive compensation you are going to self-select at least in their primary facility for probably the worst performing companies and when you go and buy etfs, you're buying baskets of things that also contain a bunch of these zombie companies the best companies can and will continue to self-finance in the markets by themselves. yeah, you're right, the fed did calm the waters, but by now actually stepping in and spending more and injecting more capital, what you're going to see is the equity markets rip higher you're going to see the credit markets continue to go towards negative rates and none of that stuff does anything to actually fix the economy. and so asset inflation, we learned this from 2008 to now.

asset inflation does not solve income disparate it actually doesn't solve full employment it doesn't do any of the things we need it to do for it to be a robust economy what it does is allow people who flay in the financial markets to make money those don't trickle down to normal people. until we admit that and until we realize this dogmatic idea is bad, that's a dated idea, we're not going to move forward. i appreciate the fed did something. i think it was critical. i think it was great they did it now pumping in all of this money on top of the money that's already gone in is creating a deflationary super cycle in the united states that is not helpful. consumers are not going to spend. they are going to save >> chamath, i want to throw one other big topic at you and then we're going to take a pause because we're going to extend this interview out a little bit.

buybacks you have been a critic of buybacks recently and yet warren buffet made an interesting comment at his annual meeting a week ago to becky i believe where he said there is nothing immoral about buybacks sometimes buybacks are stupid, sometimes ceos make really bad decisions about pursuing buybacks but there's nothing immoral about it do you disagree with warren? >> it is a fundamentally idiot particular business practice and i agree with that. it is for the ceo who is unimaginative and has no idea what to do and is largely held hostage by hedge funds or their board. 1/3 of s&p companies spend on r&d, only 1/3. that means 66 out of 100 companies don't even bother to think about tomorrow they just take all the money they have, they just send it right out the door and that kind of behavior is fundamentally dumb because when you go through a pandemic like

this, what you realize is you should have been building for some resiliency so that you would have savings, so that you can actually keep your employees through a drought, so that you can actually have business models that keep you in business that can still generate revenue but because you didn't do it you're now all standing at the till asking for a handout from the u.s. taxpayer. that dynamic needs to get fixed. the simple way to do it is have a checklist. before you are allowed to do a buy back, there are certain things you should be doing you should be spending on r&d. you shouldn't be compensating your ceo 600 times the most -- the lowest employee in your company. there are all kinds of simple checks and balances. after 2008 we asked the banks to do this. we said let's clean up and give health checks to these banks before we allow them to lever up and sort of push this into an abyss the way they did in 2008

coming out of 2020 i think what we should realize is we have a very brittle economy, a very fragile ecosystem of companies that are over levered. we need to create incentives for folks to save and invest in the future the best way to do it is not to allow them to take the short term easy way out. when you look at a.m. ma mazona interesting is people used to lamb bast jeff bezos for not being profitable when you looked up under the hood, he was a single best investor of our generation, even better than buffet he would take billions of dollars and invest it in the future there is a business case to be made in every company to either save and/or spend to plan for the future and instead to just give it back randomly in the open market is one of the dumbest business decisions you can make warren is right and i agree with him. >> okay. we're going to continue this conversation with chamath. stay where you are we're going to press pause we'll come right back in just a

moment all right. we'll tell you what warren actually said because you don't agree with him, chamath. we'll check in with jim cramer as we make our way towards the opening bell cnbc is gathering health care leaders at the center of the fight against coronavirus for an interactivity virtual event. you can learn more and request an invitation at cnbcevents.com/healthyreturns. you cacah mpten tccole coverage all day. stay tuned "squawk box" will be right back.

cnbc headquarters. jim cramer joins us now. santelli wants to buy a tesla now. you had -- you had sort of a -- you turned around and wanted to buy a tesla. you liked the company after you drove a tesla? >> yes what do you think of what elon musk -- >> i liked driving in it, my

wife liked it, my daughter liked it my friend who was a former cfo said they could raise $2 million in a heartbeat stock was 270. i came in. i can't fight the tide i think too good my wife is a huge car person, gigantic she said this is it, jim if there was ever a stock you should recommend -- and i finally decided, that's right. i looked at the financials, i realized they don't have to advertise. people love it and elon is a genius people say he's willing to put his workers in harm's way. i think if you go in and inspect his plants, if they're doing things in harm's way, change them i think this man's a genius. i think he makes great cars, and i think he should be able to do this car secretary mnuchin said the same thing yesterday. i hope it works out. this guy is the best we have in terms of manufacturing i'm tired of hearing people on my twitter feed say don't you

know what happens once he opens? he'll hurt people. is there anything that makes me feel he'll hurt people i think he'll help bring back american manufacturing he's the best we have. >> all right, jim. we'll be watching at 9:00, for more on this and many other things, buying -- fed buying some etfs, why not we'll see you in a couple minutes. coming up, more thwi chamath palihapitiya the stay tuned you're watching "squawk box" on cnbc take allegra-d... a non-drowsy antihistamine plus a powerful decongestant. so you can always say "yes" to putting your true colors on display. say "yes" to allegra-d. we were paying an arm and a leg for postage. i remember setting up shipstation. one or two clicks and everything was up and running.

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back with us is chamath palihapitiya, ceo of virgin capital. this is the direct quote from buffett. the criticism towards buybacks is largely uncalled for. it's very politically correct to

be against buybacks now. when the conditions are right, it's obvious to repurchase shares and shouldn't be the slightest taint to it any more than there is dividends. you do not agree with that that's fine. i understand exactly where you're coming from though i do think as a guy who loves risk capital, if a company is a stayed company and they redeploy that into technology companies, i don't think it necessarily should be viewed in a negative light i really want to talk to you about whether we ever go watch the warriors play again. do you wish you had sold the warriors before this happened or you're in it to win it

or are you thinking we'll play hoops some day >> i think the key part of warren's sentence is under the right conditions all i'm saying is you don't send the money out the door before you take care of yourself and invest for your own future most of these ceos have not. that is ridiculous when they go and ask for money. >> they got a level -- it's bad. from the last time we did this, we didn't want cash compensation, we wanted them to have a stake in the company so they tried to shrink the float, to raise the eps, to get the stock price up to where compensation kicks in. i understand that. it's the unintended consequences of what we did last time i understand will i be able to sit on the floor and it will be just be me and you if i come out there? >> i think this is a really important question we need to

figure out the reality is, in my opinion, there are certain experiences going out to eat, going to concerts, going into large areas where basically you have anonymous interactions, so stadiums, casinos, i think frankly cruise ships these are all the last things that can come online because you're taking a level of risk where you have to underright your own comfort that's not something that we've ever had to do before. it's not as if when you got on an airplane there was a 50/50 chance that something could happen the reality is these were 99.999% safe so flying across the country was just a thing we did. but if you are going to see a concert, all of a sudden if that's 50/50, 60/40, 70/30, for some people those risk also be okay probably the younger you are the older you are, those risks

shouldn't be okay. these will be the longest things to figure out. you'll see some unfortunate byproducts of this you may see college football stadiums empty for the next two years. or you may see people separated by 10, 12 seats, which what kind of an experience is that i don't know i don't know the answer. i don't know what the nba is planning to do if you're asking me as a person who manages risk, i wouldn't be super comfortable taking a huge risk going into a casino floor or, you know, a concert for the foreseeable future >> it is true. it's not enough time with you. we had paul tudor jones on yesterday, he was talking about, you know, qe infinity. however you want to look at it maybe the time will come when you need to have some type of asset that there's a fixed amount of. he was referring to bitcoin. >> here it comes >> i think even paul tudor jones -- >> bitcoin

i have to disclose i own -- compared to you, i own 3 cents out of a dollar or something but, i have to disclose i own it paul tudor jones made the case yesterday -- yesterday was the time when the stock to flow has gone up. >> this is again -- now you're seeing a lot of lines of different thinking converge. so when we started to believe in the long-term value of bitcoin, it was as a store value, and it was that schmuck insurance you kept under the mattress. a small cohort of us believed this for the last ten years now. when you have people like paul tudor jones who don't come to it from that perspective because he was probably first in gold or, you know, curve steepeners, now all of a sudden he's looking at bitcoin. the reason is we're in this massive deflationary spiral.

you have to figure out how to protect yourself so however you think about it, from a classic economic theory or the schmuck insurance where you're somewhat skeptical of the established governing masses, it is important that we have a hedge. noncorrelated hedge. i struggle to find anything that is uncorrelated to anything else and to everything else than bitcoin. i think if we see it have its day, it's a moment where you're going to wish you had just bought the 1% and kept it. >> yeah. one man's 1% is another man's -- any way. i -- it's been great having you on we all -- i don't know >> i miss you guys >> russian table tennis. there's one guy i have to tell you about. he's so good you have to bet on him on -- no, that's all we have it's horrible. i can't wait for sports to come back i want to do it safely

i know you probably feel the same way sorkin, thanks i don't know what happened with your -- it's hard when the audio goes out see, i don't even need audio a lot of times i will say what i'm going to say any way. make sure you join us tomorrow "squawk on the street" is next good tuesday morning welcome to "squawk on the street," i'm david faber wicarla with jim cramer and david faber. big news today, fauci is in front of the senate in about an hour the fed buys corporate bond etfs wti up 5%, as net long positions are at the highest since april of last year, jim. core pci, the biggest month on mont