melissa. thank you. we appreciate you being here today. andrew sorkin, every day, right, we come in here. >> every day. >> how do you know how do you know what it's going to be? we really do need to keep an open mind and be ready to talk about anything, i think, which we do anyway. >> we do that we do. >> good to be here. >> see you tomorrow, my friend. >> we'll see you "squawk on the street" is next ♪ >> good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber we are moments away from the fed chair speaking to the jackson hole symposium conducted virtually, one of the most important speeches of the quarter, maybe the year, and we will bring it to you live. there is a look at the fooed they're giving us in the meantime futures are flat, q2 gdp revised slightly higher, claims although above a million edged down week on week and oil close to a five-month high on hurricane

laura. jim, one of those every now and then we get a day that is truly consequential and that certainly fits at least the expectations for powell's speech. >> i wish that we hadn't come in so hot when you have a company that gains $50 billion in one day, salesforce, when you have a tremendous number of nasdaq stocks that have just kind of out of control to the upside you don't want to have anything that could disrupt that i think it's heightened, i'm glad we're covering every minute of t david, you know that this is a day that we would normally be talking about abbott labs and talking about the mysterious tiktok mayor issue which are both huge stories but we have to defer to jay powell. >> we do we have to defer to powell we have to continue to understand what the fed balance sheet will look like with that $3 trillion that's been added to it which is a staggering sum, guys jim, your point is well taken. yesterday salesforce i have rarely seen anything like that move, yes, they were

extraordinarily strong numbers, but, wow and then even names like facebook to your point. >> yeah. >> up, what was it, 8% yesterday. >> on a fight with apple >> yeah. yeah is that good news? i didn't think so. >> no, it's not. that's why yesterday was really strange action, david. it's like desperately -- desperate to get long ahead of september, a terrible month. i thought yesterday's action was quizzical and i don't mean that necessarily in a negative way. i have never seen it before. carl, when we have these stocks, big cap stocks that are up huge on nothing, could they go down huge on something? and that would be i'm not a bear, but, i mean, what if powell says there is a lot of issuance and things have gotten much better, the whole day is going to be like the weather it's going to be gloomy. >> to your point about august, jim, dow pays for the best august since 1984, s&p best august since '86, nasdaq since 2000 we know, jim, august typically

is not that great, lpl had a great statistic saying the last two times that august was up 6 plus, september was down 5 in 2000 and down 8.5 in '96 so is there going to be pay back >> i got out of the goldman program in 1984 in august and it was just -- i just said i had the magic touch, i'm brilliant, now it turns out it was the best august ever, maybe it wasn't brilliant. i do think that people have to take something off i mean, i was going back and forth with marc benioff last night. $50 billion? marc is surprised. there are very few people and, david, i say this very rarely, but there are very few people at the beginning of the day like a stock and at the end of the day it's harder to like because it had a takeover like move, david. it was like salesforce got a bid from microsoft. >> no. there's no doubt about it. it was extraordinary and it's worth sort of focusing on again.

a 25% increase in the company's market value we are not talking about some small biotech here that got a big piece of news. we ev we are talking about a giant company that added $50 billion in market cap to what was already a $200 billion value it was absolutely stunning the point you are trying to make is it goes to the speculative nature this have market that we've seen with he love to see more participation, we have made the point many times that there are people who may not understand a lot, but they understand enough, but, wow that name at least there was news behind it. >> right. >> when i look at some of the other moves without any news whatsoever and i can't help but sort of come back to that period of time 22 years ago where we sit there in the morning with similar questions. >> i disagree, david, because if you remember 22 years ago usually that positive or no news that moved things up we had negative news on

facebook to me this apple versus facebook fight is huge, okay? gigantic for the future of apps and facebook gets its face slapped so, what, does it go up 22 points? carl, there has to be some -- this is not disney world which had numbers that are down 76%. this is -- it's not a video game it's not grand theft stock market there's got to be some reason. >> but, i mean, if we're going to continue to make analogs to 2000, ndx's 28% above the 200 day in 2000 it got into the 60s, right, 60% above so although we are in rarified air, jim, you could argue we are not close to those euphoric levels we saw 22 years ago. >> that's a very good point. i also kind of come back to i know we've got -- i absolutely understand that we have the jerome powell but i've been working all night and you know that because you follow my tweets and all morning on the

abbott, the abbott test. i think we would be talking about buying every single airline stock today, no matter what, because we're going to fly again because the person next to you is going to have been tested and you will have been tested and there isn't any way you get on a plane after a 15 minute test and test positive i downloaded the app and it's interesting. it stops you with a qrs code if you are positive you can't get on a plane, which means everybody on the plane they just -- let's just say they're safe i would buy any airline stock today and i hate the airline stocks david, you know the airline companies are back to their old ways not making any money but i would take a cruise, too >> let me interrupt you because i think we're getting the fed chair starting maybe a tad early. let's take a look. >> earlier today we -- revised statement on longer run goals and monetary policy strategy, a document that lays out our goals, articulates our framework for monetary policy and serves as the foundation for our policy

actions. today i will discuss our review, the changes in the economy that motivated us to undertake it and our revised statement, which encapsulates the main conclusions of the review. we began this public review in early 2019 to assess the monetary policy strategy, tools and communications that would best foster achievement of our congressionally assigned goals of [ inaudible ] and price stability over the years ahead in service to the american people because the economy is always evolving the flmc's strategy for achieving its goals, our policy framework must adapt to meet the new challenges that arise. years ago the biggest problem our economy faced was high inflation, great inflation demanded a clear focus on restofg the commitment to the flmc's to price stability. chair volker brought that to

bear and the coal kerr dis inflation of allen greenspan led to the stabilization of inflation and inflation expectations in the 1990s at around 2%. the monetary policies of the volker era laid the foundation for a long period of economic stability known as the great moderation this new era brought new challenges to the conduct of monetary policy. before the great moderation expansions typically ended in overheating and rising inflation. since then prior to the current pandemic-induced downturn, a series of historically long expansions have been more likely to end with episodes of financial instability, prompting essential efforts to substantially increase the strength and resilience of the financial system by the early 2000s many central banks around the world had adopted a monetary policy framework known as inflation

targeting although the precise features of inflation targeting differed from country to country the core framework always articulated an inflation goal primary objective of monetary policy inflation targeting was also associated with increased communication and transparency designed to clarify the central banks' policy intentions this emphasis on transparency reflected what was then a new appreciation that policies most effective is when it is clearly understood by the public inflation targeting central banks generally do not focus on inflati inflation, those are flexible inflation targets take into mind targets and inn fla igs objective. under ben bernanke's leadership the federal reserve adopted flexible inflation targeting with he made great advances in transparency and communications with the initiation of quarterly press conferences and summary of

economic projections which kpris the individual economic forecasts of flmc's participants board choice chair janet yellen led an effort to codify the approach to monetary approach. in january 2012 the committee issued its first statement on longer run goals and monetary policy strategy which we often refer to as the consensus statement. a central part of this statement was the articulation of a longer run-in flags goal of 2%. because the structure of the labor market is strongly influenced by nonmonetary factors that can change over time the committee is it not set a numerical objective for maximum employment however, the statement affirmed the committee's commitment to fulfilling both congressionally mandated goals the 2012 statement was a significant milestone reflecting lessons learned from fighting high inflation as well as from

experience around the world with flexible inflation targeting the statement largely -- the framework the committee had been following for some time. the completion of the original consensus statement in january 2012 occurred early on in the recovery from the global financial crisis when notions of what the new normal might bring were quite uncertain since then our understanding of the economy has evolved in ways that are central to monetary policy of course, the conduct of mon monetary policy was evolved, a key purpose of our review has been to take stock of the lessons learned over this period and identify any further changes in our monetary policy framework that could enhance our ability to achieve our maximum employment, price stability goals in the years ahead our revolving understanding of four key economic developments motivated our review first, assessments of the

potential or longer run gret ra rate of the economy have declined for example, since january 2012 the median estimate of potential growth from flmc's participants has fallen from 2.5% to 1.8% some slowing growth relative to earlier decades was to be expected reflecting slowing population growth and the aging of the population. more troubling has been the decline in productivity growth which is the primary driver of improving living standards over time second the general level of interest rates has fallen both here in the united states and around the world simts of the neutral federal funds rate, the rate consistent with the economy operating at full strength and with stable inflation has fallen substantially. in large part reflecting a fall in the equilibrium real interest rates or r star. this rate is not affected by monetary policy but is instead

driven by fundamental factors in the economy, including demographics and productivity growth the same factors that drive potential economic growth. the median estimate from flmc's participants of the neutral rate has fallen by nearly half by early 2012 from 4.25% to 2.5%. this decline in assessments of the neutral federal funds rate has profound implications for monetary policy. with interest rates generally running closer to their effective lower bound even in good times, the fed has less scope to support the economy during an economic downturn by simply cutting the federal funds rate the result can be worse economic outcomes in terms of both employment and price stability with the costs of such outcomes likely falling hardest on those least able to bear third, and on a happier note, the record long expansion that

ended earlier this year led to the best labor market we had seen in some time. the unemployment rate hovered near 50-year lows for roughly two years, well below most estimates of its sustainable level. and the unemployment rate captures only part of the story. having declined significantly in the five years following the crisis the labor force participation rate flattened out and began rising even though the aging of the population suggests it would keep falling. for individuals in their prime working years the participation rate fully retraced its post-crisis decline. defying earlier assessments that the global financial crisis might because permanent structural damage to the labor market moreover, as the long expansion continued the gains began to be shared more widely across society. the black and hispanic unemployment rates reached record lows and the differentials between these rates and the white unemployment rate narrowed to their lowest

levels on record as we heard repeated by in our fed listens events the robust job market was delivering life-changing gains for many individuals, families and communities, particularly at the lower end of the income spectrum in addition, many who had been left behind for too long were finding jobs, benefitting their families and communities and increasing the productive capacity of our economy. before the pandemic, there was every reason to expect that these gains would continue it is hard to overstate the benefits of a strong labor market a key national goal that will require a range of policies in addition to support of monetary policy fourth, the historically strong labor market did not trigger a significant rise in inflation. over the years forecasts from flmc participants and private sector analysts routinely showed a return to 2% inflation, but these forecasts were never

realized on a sustained basis. inflation forecasts are typically predicated on the natural rate of unemployment or u star and of how much upward pressure on inflation a rieszs when the unemployment rate falls relative to u star as the unemployment rate moved lower and inflation remained muted estimates of u star were revised down, for example, the median estimate from flmc participants declined from 5.5% in 2012 to 4.1% at present the muted responsiveness of inflation to labor market tightness which we refer to as the flattening of the phillip's curve also contributed to low inflation outcomes in addition longer term inflation expectations which we have long seen as an important driver of actual inflation and global dis inflationary pressures may have been holding down inflation more than was

generally anticipated. other economies have struggled to achieve their inflation goals in recent decades. the persistent undershoot of inflation from 2% longer run objective a cause for concern. many find it counterintuitive that the fed would want to push inflation up, after all, low and stable inflation a essential for a well-functioning economy and we are certainly mindful that higher prices for essential items such as food, gasoline and shelter add to the burdens faced by many families, especially those struggling with less jobs and incomes. however, inflation that the persistently [ inaudible ] can pose serious risk to the economy. inflation that runs below its desired level can lead to an unwelcome fall in longer term inflation expectations which can pull actual inflation even lower resulting in an adverse cycle of ever lower inflation and

inflation expectations this dynamic is a problem because expected inflation feeds directly into the general level of interest rates. well anchored inflation expectations are critical for giving the fed the latitude to support employment when necessary without destabilizing inflation. but if inflation expectations fall below our 2% objective interest rates would decline in tandem in turn we would have less scope to cut interest rates to boost employment during an economic downturn din sling our capacity to stabilize the economy through cutting interest rates we have seen this adverse dynamic play out in major economies around the world and have learned once it sets in it can be very difficult to overcome we want to do what we can to prevent such a dynamic from happening here we began our review with these changes to the economy in mind, the review had three pillars a series of fed listens events

held around the country, a flagship research conference and a series of committee discussions supported by rigorous staff analysis. as is appropriate in our democratic society, we have sought extensive engagement with the public throughout the review the fed listens events built on a long-standing practice around the federal reserve system of engaging with community groups, 15 events involved a wide range of participants, workforce development groups, union members, small business owners, residents of low and moderate income communities, retirees and others to hear about how our policies affect people's daily lives and livelihoods. the stories we heard at fed listen events became a potent vehicle for us to connect with the people and communities that our policies are intended to benefit. one of the clear messages we heard was that the strong labor market that prevailed before the

pandemic was generating employment opportunities for many americans when the past had not found jobs readily available. a clear take away was the importance of achieving and sustaining a strong job market particularly for people from low and moderate income communities. the research conference brought together some of the world's leading academic experts topics central to our review and the presentations and discussion we engaged in were an important input to our review process. finally, the committee explored the range of issues brought to light during the course of review in five consecutive meetings beginning in july 2019. analytical staff work put together by teams across the federal reserve system provided essential background for each of the committee's discussions. our plans to conclude the review earlier this year were, like so many things, delayed by the

arrival of the pandemic. when we resumed our discussions last month we turned our attention to distilling the most important lens of the review in a revised statement on follows and monetary policy strategy the federated structure of the federal reserve reflected in the flmc ensuring that we always have a diverse range of perspectives on monetary policy and that is certainly the case today. nonetheless i am pleased to say that the revised consensus statement was adopted today with the unanimous support of committee participants our new consensus statement like its predecessor explains how we interpret the mandate congress has given us and describes the broad framework that we believe will best promote our maximum employment and price stability goals. before addressing the key changes in our statement let me highlight some areas of continuity we continue to believe that specifying a numerical goal for employment is unwise because the

maximum level of employment is not directly measurable and changes over time, reasons unrelated to monetary policy the significant shifts in estimates of actual rate of unemployment over the past decade reinforced this point in addition, we have not changed our view that an inflation rate of 2% is most consistent with our mandate to promote maximum employment and price stability finally, with he continue to believe that monetary policy must be forward-looking, taking into account the expectations of house molds and businesses and the lags in monetary policy's effect on the economy. thus, our policy actions continue to depend on the economic outlook as well as the risks to the outlook, including potential risks to the financial system that could [ inaudible ] our goals. the key innovations in our new consensus statement reflect the changes in the economy i described, our new statement

explicitly acknowledges the challenge posed by the proximity of interest rates to the effective lower bound. by reducing our scope to support the economy by cutting interest rates the lower bound increases downward risks to employment and inflation. to counter these risks we are prepared to use our full range of tools to support the economy. with regard to the employment side of our mandate, our revised statement emphasizes that maximum employment is a broad-based and inclusive goal this change reflects our appreciation for the benefits of a strong labor market, particularly for many in low and moderate income communities. in addition our revised statement says that our policy decision will be informed by our assessments of the shortfalls of employment from its maximum level rather than by deviations from its maximum level as in our previous statement this change may be subtle but reflects our view that a robust

job market can be sustained without causing an outbreak of inflation. in earlier decades when the phillips curve was steeper inflation tended to rise noticeably in response to a strengthening labor market it was sometimes appropriate for that tighten monetary policy as employment rose towards its estimated maximum level in order to stave off an unwelcome rise in inflation the change to shortfalls clarifies that going forward employment can run at or [ inaudible ] of its maximum level without causing concern unless accompanied by signs of unwanted increases in inflation or the emergence of other risks that could impede the attainment of our goals of course, when employment is below its maximum level as is so clearly the case now, we will actively seek to minimize that shortfall by using our tools to support economic growth and job creation we have also made important changes with regard to the price

stability side of our mandate. our longer run goal continues to be an inflation rate of 2%, our statement emphasizes that our actions to achieve both sides of our dual mandate will be most effective if longer term inflation expectations remain well anchored at 2%. however, if inflation runs below 2% following economic down turns, but never moves above 2% even when the economy is strong, then over time inflation will average less than 2%, households and businesses will come to expect this result, meaning that inflation expectations would tend to move below our inflation goal and pull realized inflation down to prevent this outcome and the adverse dynamics that could ensue, our new statement indicates that we will seek to achieve inflation that averages 2% over time therefore, following periods when inflation has been running below 2% appropriate monetary

policy will likely aim to achieve inflation moderately above 2% for some time in seek to go achieve inflation that averages [ inaudible ] over time we are not tying ourselves to a particular mathematical formula that defines the average thus our approach could be viewed as a flexible form of average inflation targeting. our decisions about appropriate monetary policy will continue to reflect a broad array of considerations and will not be dictated about i aby any formula of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal we would not hesitate to act. the revisions to our statement add up to a robust updating of our monetary policy framework to an extent these revisions reflect the way we have been conducting policy in recent years. at the same time, however, there

are important new features overall our new statement on longer run goals and monetary policy strategy conveys our continued strong commitment to achieving our goals given the difficult challenges presented by the proximity of interest rates to the effective lower [ inaudible ]. in conducting monetary policy we will remain highly focused on fostering as strong a labor market as possible for the benefit of all americans and we will steadfastly seek to achieve a 2% inflation rate over time. our review has provided a platform for productive discussion and engagement with the public we serve. the fed listens events helped us connect with our core constituency, the american people, and hear directly how their every day lives are affected [ inaudible ] policy. conducting reviews is a good

institutional pro 'tis, enhancing transparency and accountability with the ever changing economy future reviews will allow us to take a step back, reflecton what we've learned and adapt our practices as we strive to achieve our dual-mandate goals as our statement indicates, we plan to undertake a thorough public review of our monetary policy strategy, tools and communication practices roughly every five years thank you very much. >> and thank you, chair powell. what is the fed chair as expected announcing that the fed has unanimously approved a new strategy to target inflation as an over over time looking for 2% steve liesman putting an emphasis on something he has talked about for a very long time and that is the benefit of broad and inclusive employment as he put it. >> yeah, carl, this is a historic move by the fed, first just a little background here, we didn't expect this statement from the full flmc until

september, the federal reserve moved this up for reasons that are not clear, i guess to coincide with the speech where powell was going to talk about this, but this is a historic change where the fed just to give you some context here, bernanke implemented the 2% inflation target, since that happened i believe in 2012 the federal reserve has not really hit that 2% inflation target so powell has come forward, said what do we do about consistently missing our goal the federal reserve saying i think a couple things are really significant here, one is it will allow -- average inflation over time and that means if you have a period of persistently low inflation that means it would allow it to run modally above 2% for some time until you hit that average. the second thing i want to emphasize here is they're codifying or putting into the statement here this idea which is really, i guess, repudiating decades of economic thought that maximum employment does not lead to inflation we should not aim for this

unachievable or unknowable goal of maximum employment, we should do everything we can to bring unemployment down and that we should ultimately not be too concerned about high inflation and low unemployment. >> steve, we will continue this discussion in a moment as we get the opening bell here. futures did move higher on powell's presentation, you saw gold spike as well, almost $30 celebrating an ipo ex-pon motors, we will talk to the president of the chinese electric car maker in about an hour steve, already some reaction from some that they are, i don't know, what's the right word, deemphasizing their mandate for stable money in favor of employment >> i think one way to put this, carl, is a decline in hubris and i will say that that, you know, powell has been a bit of a skeptic of the whole idea of the ability of the fed to know

certain things, maximum employment and the right neutral interest rate. and if you listen to his speech he said -- he didn't say this outright but he said, hey, we've gotten this wrong for a long time what we want to do is we've seen the benefits of maximum employment, we've seen what it's meant for communities, for low-income communities, for the whole nation to have very low unemployment that's a risk worth taking that if we have somewhat high or higher inflation or that we can tell people we're not going to pull the trigger or take away the punchbowl quite so quickly, that's a risk worth taking i'm not sure that that's exactly the right way to describe what you just said there, carl, but ultimately i think he's saying we are going to take a step back here, we're not going to be so formulaic about this idea, we're going to let it run a little bit hot if there are benefits. >> steve, we're going to talk about it all day with your help. thank you. we will say good-bye for the moment as we look at a new

record high on the s&p, new record high on the nasdaq. jim, let's get your thoughts. >> anything that makes it so that you take the fed out of the equation for a while, particularly some of the people who are on the fed who like to come on air and say things that move the market, i think i can now frankly almost ignore them because powell has laid down the law. these guys can say whatever they want, but what we're going to do is we're going to let things run and we won't be part of the equation until the economy does better than we think what a great thing, now we're actually looking at how companies are doing and are not worried about what the fed is going to do. obviously we have an election and that's going to happmatter steve says, guy, let's go get the economy back i will have your back. i am not going to get in the way of it. it was also really -- chairman powell, these other -- didn't found like -- we've sat down and decided what we're going to do he basically said, okay, this is it, lay down the law, these other guys can yap all they want

but they're not determining a thing. jay powell is on the side of the bulls. >> he did say, jim, we will not hesitate to act if inflation rises above levels consistent with our goal. >> good luck >> i guess he's got that in his back pocket. >> right, but i think he's also willing to let it run. i think the whole time jay powell has -- no, not the whole time initially there was a period where he came in and he was on talk shows saying how he had to tighten, tighten, tighten, staff was doing that is correct a lot of journalists were pushing him, hedge funds, then he became his own man. he realized all those guys don't have any heart and what matters is to have a heart, to let the economy -- the working person do well and now he is on the side of the working person again. i think he has done a remarkable job. he is not listening to people who say you better start worrying about inflation now he is looking about employment and realizing we have to be sure that we don't go back into a

depression after we have had some nice come back. david, i don't know, to me he says don't you have to worry about me anymore let it overshoot why don't you guys focus on what really matters, maybe that's too simplistic, but i like that. >> right does it lend, though, jim, a -- or to continue the speculative tone in this market. >> yes. >> given it's going to be low yields forever, low, bound to zero forever that wouldn't seem to do anything but add fuel to the fire >> i totally agree that's basically he said, listen, i'm not going to give you any yield. look at all these companies they do bond deals at 1.3%, junk is like 2 for a five-year and i just say, yeah, i mean, game on for the speck la tiffs it's his robin hood speech, taking from the rich and giving to the young people who have $20 in their pocket. >> he is penalizing savers,

continues to do that, who cannot find a return anywhere except perhaps the stock market to your point when you have ten-year junk paper trading at 2.85 when it's an issue, it's stunning >> how about when the government has to raise all this money. carl, the government is going to have to issue more debt than ever in the month of september august obviously it didn't matter to people we used to sit there and look at the long bond and say if it goes up you have to sell these high multiple stocks but i don't think the robin hood people when i mention that, these are people with money in their hands to actually take action this he don't understand that relation they haven't read the sydney homer inside the yield curve book i think they're not focused on the yield curve, i think they're focused on finding the next electronic vehicle stock or buying tesla the buy tesla -- there must be some piece of paper you get if you're under 25 that speaks buy tesla. it's like unbelievable carl, i have never seen anything like it. hey, how is the weather out? it's raining

oh, buy tesla. >> buy tesla. >> buy tesla. >> jim, you make it sounds like it's a strategy that only a fed chair who is not an economist could have announced, right? i mean, it's the inverse of volker in some ways. >> all these guys. >> bernanke and yellen as liesman said. >> he said i'm not hurting people this is a terrible economy, it's nobody's fault, i'm not going to be in the way. he's not saying party on, just, look, i'm not going to hurt people that is not what an exist says, an economist says, well, the data says i have to do this. he is a he not moved by -- he doesn't want to be ruled short-term by data carl, he doesn't want to be ruled short-term by data because it's roughly we're celebrating 10% unemployment it was at 3.6. let's put people to work he doesn't want to get in the way of that. >> indeed. >> guys, really quick, we've been talking about to the extent we can the departure of kevin mayer from tiktok. now breaking news on that from julia boorstin

good morning >> good morning, carl. yes, i've been talking to sources and one source close to the situation tells me that one reason that kevin mayer announced he is stepping down now is that he was excluded from the negotiations with microsoft and oracle, the negotiations with microsoft i'm told were being led by the ceo ming while the oracle conversations were being led by ford with ming participating in those conversations. as to the questions of why mayer was not involved in the negotiations i'm told it's because tiktok and bytedance had a relationship with microsoft before mayer came on board that tiktok's cloud provider is currently google and i'm told that tiktok was having conversations and ming was conversation conversations with microsoft about switching over to have microsoft be their cloud

providing. after kevin mayer came on board it was then when the talks shifted from having a contractual agreement to them towards the conversation about having a sale but that mayer was not brought into those conversations. i'm told by multiple sources that mayer wanted to run a large, powerful company and not be running a division that was a part of a large tech company such as it would turn out to be should tiktok be bought by microsoft and that if tiktok had been bought out by a group of investors which was one conversation that was being held at one point in this, it does not seem that that's going to be the case now, had that been the case, had this been an investor buyout mayer's role would be much larger. the fact that he's stepping down does indicate we're likely to see a doo he will with a microsoft or oracle, more likely microsoft and that deal could come in the next 48 hours or so. >> interesting i was going to ask you and i'm sure david wants to jump in here as well the part of his statement where he said we expect to reach a resolution

very soon, sort of ties into what you just said >> absolutely. i think that we could see a deal imminently and i do think this really indicates that this is not going to be a situation where it's a group of investors buying out the company we are very much likely to see a big tech company buy tiktok and that's precisely where kevin mayer did not want to stay he did not leave disney in order to be running a small division at microsoft and i'm told by some sources that the fact that he's leaving now rather than deciding to go remain coo of bytedance, remember, bytedance is not allowed to operate in india or the u.s., by leaving now leaves more doors open to him to return to any media or tech company in the u.s. down the road >> julia, it's david i think, again, given everything you are saying and certainly what i've been hearing over the last few weeks when it became clear that this was going to likely be a sale to another company that mr. mayer was not

prepared to stay on, as you say, if, in fact, it had been a group of investors where he would become the ceo of tiktok u.s.a. perhaps different, but at the same time and you helped clarify this a bit, it was curious as to why now. because i had been hearing different things in terms of his potential role, especially given his history in m&a, as you know he was very much involved in disney's talks with fox that he was involved here, he had been designated by ming to at least help the process along, that he may, in fact, even have been helpful in getting oracle to the table to create another bidder here, which is obviously very helpful for bytedance which is going to be forced to essentially sell this asset. it was curious for me that he would choose to leave now, not even on the announcement of perhaps a buyer, which could be, as you say, very soon, my understanding and it seems to be the same as your reporting is

that by the end of this week they will go exclusive with either microsoft or oracle, they are sticking with that september 15th deadline even though it's become somewhat unclear given the executive order that followed that that might actually extend it, they're sticking with september 15th as a date by which they want to i a nouns who the buyer of this business is going to be. i did expect him to hang around at least perhaps until then, but, you know, being excluded from the talks would seem to indicate perhaps that it was just enough for him at this point to say see you later and focus on other opportunities. >> david, you make a really good point. at disney kevin mayer was the dealmaker, he was really involved in shaping the transformation of disney with so many different major deals over the course of his time there, fox obviously being the biggest one. i think he went from being the leader of the deal talks at disney to being not the leader of the deal talks in this tiktok situation. so he may have been involved in

the conversation the fact that he does have relationships with so many business leaders here in the u.s. is certainly a huge advantage for bytedance in those talks, but what i'm told is that he was not leading those talks and because ming, bytedance's coo did have a preexisting relationship with microsoft he was the one running those deal talks with microsoft and mayer was not. kevin mayer was not the one who got to make the decision about whether or not tiktok was going to be bought out by an investor group which would have been mar for beneficial for him and his potential role in the company. the fact that he was not the leader of them really ended up driving the decision to especially leave now in anticipation of a deal being announced shortly. >> my work says that this date, hard date, september 15, this man wants to -- wanted to have a big ipo, hoping to become a company -- leader of a gigantic entertainment company and not going to happen, go back to

l.a., come up with something new. what i'm intrigued by is does this cut in favor of microsoft i say that because with oracle you might have had an investment group that was going to play a very big role because oracle could only apparently buy 20%, that's all they wanted to do, the investment group was going to buy 80. does this say it's going to go back to microsoft even though i know the investment group wants competition? >> i think that's what it would indicate jim, i'm hearing the same thing. the truth is that microsoft has different divisions, they own skype, have video gaming assets and linkedin tiktok would be one small division which would be overlap. linkedin sells advertising, tiktok sales advertising and it would need to fit into the way microsoft operates and you would want to have synergies and cross-pollination across the microsoft divisions. at oracle it would be a separate thing and i think that kevin mayer would have had a huge amount of independence or more independence running tiktok as

part of oracle than he would have had running tiktok as part of microsoft the fact that we know he would want to have the most independence possible does indicate to me that this is a deal that's more likely to go to microsoft. >> julia, thanks for that. great stuff as we continue to try to make sense of the departure after only three months kevin mayer from tiktok that's our julia boorstin. just about 14 points away, jim, from s&p 3500. you've got airline, hotels, cruise lines leading do you think this is about the abbott test? >> definitely. i think that we are underestimating the power of this abbott deal, there are a lot of people i think don't really understand what's going on, what's meant to be if you have 50 million tests, minimum, in the month of october, say, and maybe even more than that, what they're basically saying is -- i downloaded the app and the app is easy, it took me, i don't know -- it took me about three minutes to download the app and it's called navaca you get it, it's right in the

app store and what you do is you find out in 15 minutes whether you have it, if you have it then you are not getting on the plane, if you don't then you are on the plane how can you not buy united air how can you not buy southwest? how can you not buy delta and, yes, even lowly worm american. i say that because they have a bad balance sheet. i think it is the game changer for travel and may be the game changer for school i wish it had come out earlier to help more school people. >> listen, that could be a key although, jim, you do need to be swabbed by a health care professional it's not a do it yourself. >> not yet the fda made it so you have to go to a cvs clinic or something cvs is a dog stock look, i think that's the initial debating factors, but, look, the only thing that's open in new york city are like the 50,000 mini clinics and you can go to any drugstore, this is a mini clinic just go get it i'm going to probably get tested as often as i can.

i'd like to travel again wouldn't that be fun to go somewhere? i mean -- >> hard to imagine >> what was it like -- >> you can get in your car and go somewhere i don't remember. >> i don't, either >> i remember it being kind of cool carl, it's the game changer, the market doesn't -- the market is loath to admit it, i think >> jim, can you blame them because we've been heartbroken before when it comes to convenient testing. >> yes and there you go >> if what you're saying is true what does that mean for meadows and pelosi apparently talking this afternoon as "politico" says >> i wish it were secretary mnuchin in there, too. the skinny deal, i don't know what's going to happen. >> i mean, i guess is the need for any further assistance, support, stimulus diminished because of the promise of this test >> i don't think -- i think that

your correct skepticism because we have had rapid tests didn't work before because they didn't have enough -- because they gave you too many wrong readings is making it so that i don't think anyone initially trusts the test why do i trust the test? i don't know, i believe in mr. ford and mr. white running abbott labs. i have faith i know some people were let down by their rapid test before so, no, i don't think people -- i think people are too skeptical and in the meantime we have 15 million people who have questionable employment. this would make it so that you could go to a game, go not airport, get somewhere all the things that we care about i think in terms of getting out of our homes, but it doesn't solve the unemployment problem yet and, for instance, if you own a restaurant in new york, you're still trying to figure out if you can have a restaurant i mean, it's not fun to have a business but being told by a mayor, david, i know that you have that you know by mayor who says here is my policy, i have no policy. all the employees that we have we try to tell them we're going to -- one day we're going to

open, it's going to be dynamite. what a world. >> although it's not clear to me that you would be able to use -- i mean, you are not going to have people -- you're going to have them wait in line >> no. no you bring your qsr and i scan you. you don't wait in line at my restaurant what am i, a doctor? o. >> i see you show you just passed your test. >> yeah. >> i understand. >> you download it it's easy to download. download, david, you buy things on the store >> yeah. yeah >> did you ever see these cool things they're called apps >> i'm somewhat familiar with them they keep showing up on my phone. >> they blow up your phone navaca is the answer, i downloaded it, took four minutes and my fingers are clumsy. i'm going and i'm going to have my qsr. >> understood. >> this thing is very big, but, carl, you're right, this has been a boy who cried wolf, you say this time it works and this saliva test works and bio

reference labs and then seven nfl guys -- it's been a heart break, heart break, heart break, but i got the app, have app, will travel. >> listen, if it does actually promote travel, perhaps the name like tiffany which i wanted to get to, guys, because it did report earnings this morning will benefit of course, tiffany in the u.s. to a certain extent and not an insignificant one relying on tourists, certainly at the flagship store which remains closed because they're renovating it and changing it on fifth avenue and 57th street they did report numbers, jim, you talked about this name a couple days ago when i was reporting on the continued desire on the part of the buyer lvmh to potentially pay a lower price. that is something i will continue to say is something they would like to do, there is something called a material, a material adverse change clause, this he would actually need to find something that would allow them to find a wedge in which

they could at least claim a mac, that remains very much unclear the numbers at least from tiffany's perspective will say, hey, we're not doing any worse, in fact, we're doing better than our competitors, sales down 44%, e-commerce up, although as a percentage overall at 15%, 15%t it's moving up dramatically in terms of e-commerce and china is rebounding quite strongly. the question remains, jim, as the viability of the asset over a longer period of time given all the changes that have taken place in terms of behaviors fro the pandemic that will continue into the very long -- into the future, period, and whether or not this asset is anywhere near 135 if it were on the market today and somebody wanted to buy it >> i agree i'm thinking about simon properties tiffany is mall-based. gap store comes alive and other

brands and they can say we're the greatest china play in the world. look at our china numbers. last night, we have -- i had triple m on, and they said china is terrific. you can say listen, you can't break the deal china is great kind of like the microsoft to buy tiktok deal in 48 hours. >> we'll see that's going to be interesting again, the owner, the founder of bike dance he's 36 years old. of course he's going to run the process. no doubt how you figure in on tiktok and other potential buyers who want to roll into tiktok usa is a complexity, particularly because they're sort of playing both sides here they want as high a bid to maximize the potential for the ownership. anyhow -- >> the ceo has to come out

tonight and speak now or forever hold her peace >> why >> this is a jugjuggernaut it's happening >> what? >> tiktok is a juggernaut? >> yeah. september 14th deadline is not that far the president wants it now basically. >> a few weeks away. >> no? >> apparently. apparently as we know. >> i think it's good if microsoft gets it. it's a steal i like what facebook is doing with this new thing. a competitor product which is ina reels. we're going to have to go on that and dumb that down. david, when you watched -- carl, look attic tok i've never felt like i was a member of mensa and spent time on tiktok. >> no, but i see lindsey graham was quoted in "vanity fair" recalling the time he told the president if you shut this down, you're going to get kicked in the you know what by a bunch of young people

and that fits the demographic we know about tiktok. the banks are charging banks are up 1.5% as yields flipped. let's get to rick santelli >> yes everyone has had big u-turns intraday of tens the first response, we dropped down to 64 basis points people are buying. now they're reversing course and when you reverse course, you take a loss. not only have we gone up to the 69 level, we shot up the bunds are where they were before the chairman started to speak and the dollar index, almost exactly where it was before he started to speak and starting to firm a bit the interesting one, of course, is gold n. because many can say it was thinking about inflation, but boy, that's just a whisper of what it thinks about when you consider where gold was in 1980 and 12 years after that. it's hard to make the inflation argument nervous about the fiat money argument

that i understand especially looking at where the dollar index traded versus gold if we consider all the issues powell brought up, i walk away with one notion, the correlation between globalism and low inflation. countries like china, exporters are low inflation. we exported many jobs, outsourcing cheap labor was the rule all the supply chains. but is globalism reversing and we see the dark issues of it, prices follow. the big drops aren't coming. 2012 they said was the new recovery the chairman decided 2% was the rate to follow but they didn't tighten rates until the end of 2015. so they ignored the new recovery and powell realizes inflation never did anything during globalism and now he's nervous between the contraction and what may lie ahead after co-vid why not drop it, let it run and

let's see what happens steve was right. there's not a lot of hubris with this chairman. he seems to be a middle of the road honest guy about they have no idea what's going to happen >> okay. and i'll take it thank you, rick. with the bond report still to come right here, we're going to talk about the economy and the 2020 election. yes, meg whitman, long-time republican ran for governor of california, supporting joe biden for president. hear what she has to say about his economic plan and a lot more stay with us

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i was out last night for a 50th birthday. none of us go to restaurants sure enough study darden, steven says they're going to go to restaurants heavily. this is olive garden this is the time to buy even though the numbers are down 27%. next year they think plus 7. people will go out all they want time to get on the restaurants i don't know i think it's premature but the call is sticking and working today. >> indeed. a lot of classic services doing well >> i got the app tonight i have william sonoma.

stocks down. shipping issues. not really splunk, unbelievable quarter david's friend from hp, got to find out how they're doing and then david's friend from workday. so -- which is -- david, i'm circling now i have all your friends. i let meg whitman be on your show but that's okay >> thank you, jim. are my children living with you at this point as well? >> we're going to patch that thing up now that he's $50 billion -- >> i cannot wait >> what a show we handled everything. right? didn't we? kind of? >> we got to just about everything, jim. yeah, we didn't really cover nba much at all. and the impact on the disneys and draft kings of the world, but we'll learn more today we through as some of the management and owners structure

meets and tries to figure out a response from here what a dramatic last night. >> up eight points but nothing confirmed. i leave you with the mystery and enigma of this market. >> something to watch tonight. mad money, 6:00 p.m. welcome to "squawk on the street." i'm carl quintanilla with david faber. kayla is with us for the hour. historic day in terms of the fed as chair powell rolls out the unanimous approval on the new strategy to target inflation as an average over time the dow up 265 record highs the dow is green once again for the year and we're getting some pending homes. >> carl, pending home sales in july rose 5 .9% month per month. and up 15% annually.

that's a nice beat the realtor's chief economist said homes are going under contract in record times remember, pending home sales measures signed contracts during the month. in july we saw mortgage rates set a couple record lows and they continued to fall in august that's helping buyers with more purchasing powers. the northeast was seeing the biggest sales up 25 .5%. up 20% annually. part of that could be the flight from new york city to the other parts of the area including as far as philadelphia. sales very strong in the west up 6.8% for the month and up 13% year over year other news at this hour the regulator of fannie mae and freddie mac announced they're extending the moratorium on foreclosures and eevictions. they extending it to

december 31st. pending home sales a nice beat and an extension on the foreclosure and eviction mor fore yum >> this is a question as democrats raised about where money comes to actually pay that eventually we'll follow that. that's an important detail from the fhfa a rally on wall street after this morning's jackson hole speech by jay powell we are joined with highlights on powell responding to the bernanke 2% inflation target with a legacy of his own >> you're right. this is an historic change for the federal reserve under chair powell the committee will now seek to achieve not just as you said, the bernanke 2% inflation target put in place now the fed is saying it will seek to achieve 2% inflation

over time. they may let inflation run above 2% for a time if it's persist t persistently low powell saying the average inflation target will be flexible, not tied to a formula. he explained why the fed needs to make this change and combat inflation that's too low >> with interest rates generally running close to effective lower bound in the good times the fed has less scope to support the economy by cutting the federal funds rate the result can be worse economic outcomes with the costs of such outcomes likely falling hardest on those least able to bear it. >> now, a really important part of this change is powell saying that and the statement saying that a robust job market can be sustained without causing inflation.

the federal reserve essentially killed its relationship to the phillips curve this relationship between inflation and unemployment saying that's not necessarily true the economy can run above full employment without calling inflation. they said the fed will not hesitate to act. kayla give you a lesson. in the early 80s inflation was the leading threat to economy. greenspan focussed on the inflation expectations and embedded forecasts into the way fed made policies. bernanke implements a 2% inflation target and yellen said inflation can be too low for too long and be a threat to the economy. now powell making this historic change where the fed should aim for 2 % inflation over time and allow it to run above 2 % if

needed and the idea that the linking between unemployment or too low unemployment and inflation is not going to be a big part of the fed's policy from now on. kayla? >> all right steve with a recap on powell and something the markets are going to be digesting for now. >> steve, kayla, thank you chair powell warned about the risks of low inflation if you missed it earlier this morning, here's what he said >> inflation is persistently too low can pose serious risk of the economy. inflation below the desired level can learn to a longer fall in inflation expectations which can pull inflation lower resulting in an adverse cycle of ever-lower inflation and inflation expectations >> let's bring in john hatzius good morning

good to have you >> good to be here hello. >> luke tilly at wilmington trust said i think we can call this the death of the phillip's curve. can we say that? >> i think that's a bit strong i think clearly they're downgrading the relationship i mean, i think if you ask most of them they would say there's probably a relationship, statistically between tight labor markets and inflation. i think with that, change in the formulation of employment, you know, how employment or da deviations influence monetary policy, they're going to be less preemptive they're less likely to say inflation is going to come -- rise strongly in the future just because the labor market is strong and that's a reason to hike that has been changed. and i think that is an important

change i wouldn't call it the death of the phillip's curve in their thinking, though >> right he did say any overshoots were likely to be modest. what do you think happens the first time we get a legitimate spike in inflation how is the fed going to have the fortitude to stick by this strategy and what are all the rest of us going to do in terms of those who normally worry about inflation spikes >> i think it depends on the extent of the spike. i mean, if we're talking 2 .25% for core pc, inflation, or even 2 .5% for core pc inflation, i think that's very consistent with this moderate overshoot story. if we're talking 3% or more, i think that would be concerning even for this fed. so when they're saying moderate, i think they mean half a percentage point i don't think they mean one, two, three percentage points >> janua it's clear the fed

broadly missed the 2 % target. but you also have higher education and housing that have skyrocketed in the last decade 10%, 20 %, 60% in some cases how flexible is the fed's policy to attack extreme price hikes in some parts while inflation lags in other parts >> there's nothing they can do about that they can focus on overall price indices, and all of the things you mentioned. they are incorporated in the various inflation indices in different ways and obviously in ways that you can often argue with but they certainly can't target specific prices with a monetary policy that is always going to be one size fits all just by its nature that's going to be really up to if they are policy makers that

can do something about it, it has to be other policy makers at the fiscal policy making level or maybe even the state and local level. of course, in many cases, this is not -- these are things that are hard to target with policy because they're set in markets, and not something that where economic policy has a big impact >> powell noted the fed will be flexible he tried to highlight the nuance saying they'll revisit it every five years his term goes until 2028 what is the likelihood you think he's in that role in five years and what does this look like in a post powell world? >> well, i think that's very difficult to say whether he's going to be there. obviously that's going to be a presidential decision where running up to a presidential election so i think that's premature to say. i would say, though, there is quite a lot of continuity on the

fomc it's a large number of people. 17 currently 19 at full strength if you look at all the participants, and it's not just the chair that imposes policy and imposes the goals on everybody else. it's really very much a discussion that culminates in changes like this one. and this is definitely historic change but it's been a long time and coming, and i think on the day what we're seeing today is not particularly surprising. there's a nuance for sure. but the idea that they've been going toward average inflation targeting, i mean, that's been clear for a year or more >> right finally, you've been pretty i would say relative to your peers constructive on employment levels at the end of the year. certainly on a q-3 gdp rebound are all of those theses intact

and did the speech do anything to move it at the margin or data today? >> i think they're intact. the speed of the rebound in both the third quarter we're at 26 .5% currently for gdp growth there and also for growth in 2021 that's really been driven by the idea that certainly certain sectors of the economy can come back you know, quite quickly. manufacturing and construction in particular. and also by our expectation that we'll have a vaccine that is going to help basically bring back the laggard sectors of the economy that chair powell talked about like travel and entertainment. and i think the data have been consistent with that i don't think that chair powell's appearance at the symposium today does anything to

this one way or the other. i mean, we are building in easing monetary policy from the fed and it was consistent with that, but it's driven by mostly other things >> right it's great to get your reaction especially after this morning's speech thanks talk to you soon jan hatzius of goldman sachs >> thank you i want to get back to julia boston with the latest on that somewhat unexpected departure of the tiktok ceo mayer >> that's right. a departure earlier than we expected a source says one reason that mayer announced his resignation as ceo was he was excluded from the highest talks with the buyers the parent company ceo -- around

negotiations to have microsoft provide cloud services the ceo general atlantic bill ford led the negotiations with oracle even if mayer was participating somewhat in the deal talks he was disney's primary deal maker for year managing the acquisition of fox's entertainment assets marvel and lucas film he's accustomed to leading deal talks in fact sources tell me he did not want to run a small division at microsoft and mayer would have had more autonomy if tiktok was bought or if oracle did. at microsoft his running the division would be less powerful. i'm told he left disney with ambitions of running a large company. the fact that mayer announced the resignation yesterday could indicate a deal is coming soon for the company, perhaps even in the next few days. >> yeah. you and i both hearing the same in terms of at least entering

exclusive talks with either microsoft or oracle. things change so quickly for mr. mayer from when he joined the company with the idea it would expand in the u.s. and perhaps you'd move it over here in some fashion and he would be running the overall tiktok business. now he's looking for a new job julia, thank you up next, meg whitman is with us she's backing joe biden. you'll want to find out why she thinks his economic plan is the better of the ones for the country. keep it here >> i'm a long-time republican and a long-time ceo. and let me tell you, donald trump has no clue how to run a business let alone an economy. joe biden, on the other hand, has a plan that will strengthen peleeconomy for working op and small business owners. for me the choice is simple. i'm with joe hey, kids!

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learn how to draw with a minions expert... how to build an indoor obstacle course! plus... whatever she's doing. and me, jade catta-preta. the host of e's the soup! camp tonsafun. it's like summer camp, but minus the poison ivy. unless you own poison ivy. in which case, why? just say "summer camp" into your xfinity voice remote to join. former vice president joe biden and president trump battling over who is best the lead the country we're digging deeper into both sides's plans. joining me to discuss joe biden's policy is meg whitman, former republican candidate for governor in california currently the ceo of quibi meg, it's nice to see you again. thank you for being with us this morning. >> it's nice to see you, dafvid.

>> last time you joined, i think i got a power outage and lost you. that's not going to happen this time let's start off on mr. biden the one area that polls show, people are more confident in president trump is in the running of the u.s. economy. why do you believe that that is not the case and that joe biden is the superior or has a superior plan? >> well, a couple of things. first is the number one thing we have to do is get the co-vid pandemic under control because without that, it's going to be very hard to jump start the economy. i think everyone would agree that trump's handling of co-vid has had very poor results. lots of death, second waves, not paying attention to science. that's the first thing i think joe will do a better job there, and i like joe biden's economic plan. there's three things i think

republicans and independents and democrats can rally behind the first is what he calls make it in america. we have the to the revitalize our manufacturing sector what we have to do is look at the next generation industries that america has to lead in. whether that's ai or robotics or bio tech these are things we must lead in precision manufacturing, the leader is germany. labor costs aren't lower in germany than the united states we must invest, get the right programs to own these new industries and you'll be surprised in some ways to hear a republican say this i think we need an industrial policy and that's what joe has the second thing is -- >> i wonder. meg, if i could just jump in for a second specific to this idea of bryn bringing back supply chains

and -- if there's a distinguishing characteristic of the trump administration it's been that thing. they've talked about it, bringing manufacturing back. sparked a trade war with china, bringing supply chains back. how is biden going to approach it differently than has already been the case. >> let's look at results i think trump has talked a good game, but has anything happened? if you look at the last 36 months of the biden/obama administration, job growth was faster in the last 36 month than the first 36 months of the trump administration the trade deals with china, there's been a ton of rhetoric, but nothing has really happened. there's been phase one of a trade deal that hasn't been enforced that hasn't benefitted americans and hasn't benefitted farmers. and so you have to actually get things done. you have to say what you mean and deliver. and that is the strength of joe biden. i think it's a huge advantage, actually, that he's been in washington as long as he has many people say career politicians. i can tell you right now i think

we need someone who has the relationships who is a legislator who knows how to get things done and follow through and surround himself with people who can really help him. >> meg, a lot of voters and republicans certainly will always focus on taxes. it's an important component in terms of their perspective biden says he's going to reverse some of trump's tax cuts for corporations that was one of the key features of the tax bill and impose common sense tax reforms that make the wealthiest americans pay their fair share are there any specifics and as a long-time republican does that concern you? >> no one likes taxes but here's what biden has side. he's not going to raise income taxes on people who make less than $400,000 and he's not going to take up the capital gains tax rate for people who make under $1 million i think companies may pay a little more. wealthy individuals may pay more we are at a very different and i

think quite crucial time in american history the deficits are gaping. trump who is not a fiscal conservative ran the definicitsu prior to co-vid in a way no other president has done i think the tax may go up to the weltiest and companies but i don't think it's enough to hurt the recovery of the economy. it will do things about the deficit, and biden has said he cannot just run deficits for the next -- forever. he said we have to bring this under control in ten years and get the stimulus now, but this has to be taken into account and i think he will do that. the other thing is the tax cut as you well know, david, means a total overhaul first, as well as corporate, and it doesn't make sense, but there are big companies that don't pay any taxes. it's legal, but it's a fallacy of the tax code where big companies don't pay any taxes in

the united states. >> and as a long-time corporate leader you'd be comfortable raising the corporate tax rate not to where it was previous to the most recent reform but higher than it is. you don't believe there's been a benefit? >> i think there -- >> the president say -- that reform being responsible for that >> so listen, i think the economy prior to co-vid was frankly riding a cyclical recovery that started in 2008. and it's a lot easier to ride a wave of skroefr than it is to restart the economy. that's what we're talking act. that's another reason i think joe is going to be better on this the tax rates have to go up a bit for companies. think about income inequality and 25 million people who are out of work right now. reports are 16 million people are going to be evicted in the next several months.

i think the main street is facing a real crisis here, and another topic we could talk about is why wall street is disconnected from main street. honestly, i think we need some bold action that may cause people pain. frankly, as you know, most companies don't even by the current tax rate they pay lower and some companies pay none and i think we have to get in the same boat and start growing. that's joe knows how to bring peopling at the. i think that has to happen now >> meg, this is kayla in washington to the point that you just raised the former vice president has borrowed rhetoric from the progressive wing he's talked about transforming the economy and the need to take bold action and the most detailed economic plans from his campaign are part of the biden sanders task force where he talked about income caps for how much individuals spend on health care on debt, on housing, and he's proposing a move toward

universal health care. a broad climate deal over the course of the next 15, not 10 years. when you look at the collection of proposals, i'm wondering what leads you to believe that he would govern as the moderate he's running as rather than govern with the set of rather progressive policies he's laid out with senator sanders >> well, he is not for medicare for all or the green new deal. he is not for a government-run health care program at all so i think his policies if you read them carefully had input from all parts of the democratic party and some republicans this is where you know joe we have known joe for 40 years we know who he is, his character and integrity. i think he's going to bring people together. he's already listening to republicans. he's listening to the progressive wing of his party. that's what you do when you're a

leader when you're a leader you listen to people and bring people together we have to get over this partisan divide, because i think people are tired of not getting anything done. and that's where i think his relationships and his skill set lie which is bringing people together to get things moving. sometimes perfect is the enemy of really good that's what i think he'll do >> meg, is he listening to you are you frequently in contact with him and is there -- can you give us a sense as to who perhaps is laying the largest role when it comes to formulating his economic policy? >> well, he has an economic team i talk to the economic team. i've had a couple meetings with the former vice president himself. i think he's listening to a variety of voices. i will tell you he's listening to fiscal conservatives. he's listening to moderates and taking it all into account i think if you read his economic plan in detail, i don't agree with everything, but i agree with most of it, especially given the situation in which we find ourselves in this country

>> meg, in the brief time we have let'ft, i want to get to yu day job. i've known you for many years. you love a challenge it would appear you've set yourself up for quite a challenge with quibi we don't quibble over the numbers but i think it's fair to say that perhaps the launch has been a little less than anticipated. what do you tell people right now in terms of the future of that company and what your hopes are for sort of getting it on track? >> well, i always knew this would be a challenge whenever you do a startup, it's a challenge. we're creating a new category. our use case was mobile on the go viewing hollywood quality content for your mobile device we got off to a rocky start. we launched in the middle of pandemic i wouldn't recommend that to anyone but we had no choice we have to go. and so it was a rough start. things are looking up. just on the content side we're up for ten emmy nominations. that's unusual for a new

platform we won for lebron james' documentary. we are ordering new seasons of our best shows like most dangerous game and thanks a million. and we have real winners on the site on the app so that's exciting and also i will say listen, we're just going forward we're seeing growth now in new users and trialtrials. we've expanded things are looking up. we have work ahead of us but i feel good about where we we are and we came back after a rough start, i would say >> well, we'll be watching it closely. meg, finally, not to -- again, to your future if you were offers a cabinet position if biden won the election, would you take it? >> i think that's highly unlikely remember, i'm a republican they're democrats. so usually you don't see a lot

of the opposite party in the administration and i made my run at politics, and i think i'm better off in the private sector >> all right meg, we appreciate you always taking time with us. thank you for joining us meg whitman, ceo of quibi. >> nice to see you, david. thank you. >> she did not say she would not take a position, though. very notable it's time for our etf spotlight looking at the ticker ihi. up double digits for the year. currently trading up about a quarter of one percent the etf getting a lift from the top holding which is abbott labs a stock up sharply after the rapid covid-19 test -- the stock up to 28% for the year so far. i'm going to take a quick commercial break "squawk on the street" will be right back - [narrator] at southern new hampshire university,

we're committed to making college more affordable. that's why we're keeping our tuition the same through the year 2021. - [student] i knew snhu was the place for me when i saw how affordable it was. - [narrator] find your degree at snhu.edu.

welcome back, everybody. here's your cnbc news update at this hour. laura is now a category one hurricane. eight hours after making land fal. storm surges in some areas have hit 11 feet. that's less than expected but still bad enough for louisiana's lieutenant governor to call for prayers for those who did not evacuate, saying it appears there is, quote, little chance of survival, end quote the first reported death is a girl in the state who was killed

by a tree. in afghanistan the death toll from brutal flooding has risen to at least 150 and hundreds more are injured. in new zealand the white supremacist who slaughtered 51 worshippers at two mosques has been sentenced to life in prison without the chance of parol. starbucks says it will make sure its employees will not have to choose between working and voting by providing resources and time if needed go to cnbc.com to read about the more than 700 companies that have joined the time to vote coalition. you are up to date i'll see you back here in an hour carl, back to you. >> all right sue, thank you very much when we come back, the latest electric vehicle maker to go public don't miss our interview with the company's president later thisorng 'lbeig bk. mni in san diego,

california. we were one of the first stations to pilot a fleet of electric vehicles. we're striving to deliver a package with zero emissions into the air. i feel really proud of the impact that has on the environment. we have two daughters and i want to do everything i can to protect the environment so hopefully they can have a great future.

the nba playoffs in jeopardy with both the board of groans a -- governors holding separate meetings to discuss the next steps following yesterday's cancelled games. we have the latest >> that's right. two meetings will be happening at the top of the hour nba team owners will meet while the nba players in the bubble will have their own gathering. at stake is whether or not to continue the season after the league postponed all of yesterday's playoff games. last night the players met and debated possible next steps. according to reports when teams were polled lebron james and his lakers team and the clippers preferred to end the season right now. it's important to note no final decision has been made many factors are impacting the decisions including financial ramificatio ramifications, the stress of being isolated in the bubble for months and the player's desire to have a bigger society impact.

back to you. >> erik, i mean, what -- is it really possible that they will choose not to follow through with the playoffs at all and the season will just end >> it's very possible. so a lot of league executives said the season is in jeopardy that's according to several reports. that's why they're having the followup meetings today. there was a lot of chaos and uncertainty with the meeting yesterday. that's why the owners are getting on a call in a few minutes. the union reps were saying if you cancel the rest of the season, you're probably losing 25% of next year's salary. the other players saying are we going to use the cancellation for the right reasons? are we going to places like kentucky and wisconsin or just going to sit there back at home? there's a lot of debate if they cancel it what they do some of the coaches are saying hey, your talent is your power if you continue to play, that's why people listen to you that's why your voice is heard it's a debate.

we'll see as emotions cool down what will happen we'll know more in the next hour and a half, i would assume >> but you have to think that being in that bubble allows players a unique opportunity to align their messaging where they haven't been able to in seasons past we'll come back to you as the news develops. >> in the next hour, we'll discuss with the co-owner of the strem sacramento kings, chris kelly, all about this we're back in two. traded goods.

tools, cattle, grain, even shells represented value. then currency came along. they made it out of copper, gold, silver, wampum. soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. that's why it's time for digital currency and your investment in the grayscale funds. go digital. go grayscale.

one under the radar trend could be bullish for the recovery. find out more on trading nation. more "squawk on the street" in a minute

a rival of tesla making a public debut ticker xpve. joining us is the ceo. good to have you >> good morning. how are you? >> good. what a time to come to market given all the anticipation about the future of electric vehicles andautonomy. your cars are mostly designed for driving in china and all the ca complications that brings. >> we developed what we call smart evs in china we have two products one suv model, the other one is

a force event model. what we have is self-developed new a smart cockpit operating system and voice control technologies and we have our own autonomous self-driving technologies we're heavily invested in r&d as a company and i think we're looking at future mobility that's more defined by software than hardware. >> it feel like you run more vertical than some of your well-own rivals. you operate your own network of charging stations. >> we believe providing customers a comfortable charging experience is one of the key differentiator factors for us. we have our own proprietary network of charging stations in china and we aim to further invest in that and i think in the long-run, i think having the infrastructure in china to service the ev

drivers is a critical factor to drive overall penetration. >> you got pretty sizable operating losses but you're trying to shave down the negative operating margin. can you address i guess what would be a classic investor concern and then, of course, the sort of elephant in the room, given the ongoing tensions between the united states and china. what gave you the confidence to come to market in the u.s. >> yeah. i think as a young company, obviously, we need to invest up front in order to develop our technologies and scale but i think we are rapidly improving our margins over the years. and even this year i think we have narrowed down our margin to break even almost. and i think we're seeing a positive margin trends for our products in the long run, i think once the volume picks up, i think we'll narrow the margin loss as well in terms of coming about u.s., i

think it's still, i would say the deepest pool of capital is the most sophisticated investors. i think in the geo politics the tensions are always going to be there, but we want to be partnered with the best and most sophisticated in our industry and can seize the opportunity. >> the trump administration made a specific threat to delist chinese companies listing in the u.s. what ainsurances did you get that you can continue to trade here, and what assurances did you have to give u.s. regulators about being able to audit your financials >> well, we work with big firms in china, and our auditor is aa to all the standards suitable for a u.s. listing

we have confidence in the rigorous system both in china and the u.s., and i think in my expectation, it's there will be something to be worked out between the two countries. but also as a company, listing on the capital markets we can always prepare for alternatives with the hong kong dual listing and others that could give us the options. but i think what you see in the u.s. market is one of the most solid and deepest and the best market to access capital >> finally, i wonder can you give viewers a sense of the degree to which consumer adoption of evs differs by market and i guess your clarity is best on china how is the consumer thinking about that transition versus say an american one? >> well, in china i think there is a strong emphasis on new energy

obviously the government has been providing incentives and policies trying to foster the industry more recently you start to see the consumer side really focussed on innovative and cool products and that's why tesla has been selling very well in china and also in a company who provide smart, innovative products capturing the consumer's attention. i think this is still early innings of the long-term trend the penetration china is still below 5% and also know that what i call the smart ev is just starting to take shape so we have a lot of hopes that this will be -- >> yeah. i think there's a growing sense this is very large and still just getting started brian, we'll await the open. we appreciate the insight ahead of time. hope to see you again. >> thank you very much look forward to seeing you

again. >> brian gu. >> a large deal. after the break hurricane laura is slamming the gulf coast. we're live in louisiana. ayitusbring you the latest st wh mpshire university, we're committed to making college more accessible by making it more affordable, that's why we're keeping our tuition the same through the year 2021. - i knew snhu was the place for me when i saw how affordable it was. i ran to my husband with my computer and i said, "look, we can do this." - [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at snhu.edu.

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hurricane laura making landfall this morning, morgan chesky has the latest. we're here in new orleans. we're 30 miles away from the gulf of mexico, but the evidence is incredibly clear how powerful the winds were i'm in front of a local tv station that saw significant damage and if you look behind me this is a structure right here, it is the tv tower that was sitting on top of that building until around 1:00 a.m. or 2:00 a.m. this morning we saw the eye wall make their way through the community. knocking down the corner of this

building this is just one block in lace charles. it saw the brunt of this powerful storm that packed winds up to 150 miles per hour they were just shy of category five the big thing we're seeing today is that it is not so much the storm surge they fared would be causing the serious problems but the sheer amount of wind dam as you see we go from this building across the street there, powerlines are down, trees relationshiped apart, and that will be basically what people are going to see across this entire town we know unfortunately that hurricane laura has turned deadly the governor here in louisiana confirming a teenage girl was

killed this morning when a tree was blown over on top of her home killing that girl inside. right now there is only death reported cameron parish right there on the water, this is the first place that laura struck when it hit louisiana and we know that a population of 7,000 people in that parish or county, there was about 150 that chose not to come down at all. it is important to know these are people who have seen hurricanes before. it was forecast today to 20 feet we reached out to officials in that area. we're still waiting to hear back so dawn bringing our first glimpse of the devastation >> evacuation orders are very

difficult in a pandemic. morgan chesky, thank you for joining us joining us now to talk about the hurricane impact on oil, the path of laura included 40% of the country' refining capacity how long could it take to return to normal? >> i think we're still in the early fazes of assessing the damage but this definitely affected the largest refinery in the country. it is in port arthur, texas. potentially down for awhile, and that is a daily capacity of about 425,000 barrels per day. we're looking at about 310 facilities that were shut down, and about 84% of our off shore production to 1.5 or 1.6 million

barrels per day taken offline. i think it has been mild at this point because the demand is not backed yet from the virus situation. we're really looking at a big john in the mark yawn in the market so far. even though it did quite severe damage luckily because of the virus we have immunity demand we're not going to feel this at the pump as severely as we would have if we had not already been in such a demand situation >> yeah, i was going to ask about that how much of a silver lining that demand was already down. consumers are not lining up to fill up their tanks because people are largely still not going anywhere besides work. how much does that help in a scenario like this >> demand in the second quarter was about 181 million barrels per day.

we're back up. we're still down about 8% from where we were although we're up a little in the second quarter i think that provided us with kind of the excess capacity to be able to absorb one or two of these mega refineries going down one of the larger -- at some point we need to look at the public policy problem of all of the refineries being concentr e concentrated on the gulf coast it really puts us all at risk for potentially a large shut down one day that could have even more severe consequences than hurricane laura >> yeah, that's why i know a lot of producers are advocating for pipelines to be built across state lines to be able to transport that to enable transforce elsewhetran transport elsewhere. fasttoward to next thursday or friday, what will the situation for consumers look like.

>> i think there might be a mini spike if the refineries are heavily damaged or not i think that the storage capacity is high, storage levels are fairly high right now, and the demand has been relatively muted. i think we will pass through this with a relatively modest impact on oil. investors know, and the market is reacting to these kind of shut ins in the golf that are a transient thing that are usua y usually -- i think that. that was dan, eberhart the ceo. i'm not sure if we still have dan with us. we may have had issues with his audio. certainly ahead of the labor day holiday it is something that americans that might consider traveling will think about but certainly our first and foremost

concern is taking into account all of the lives in the area and keeping destruction as little as possible refineries shut in, gasoline futures and oil close to five-month highs going into the storm, just an amazing assessment of the storm going into last night from the national hurricane service calling that storm surge unsurvivable a cat four, winds of 150 miles per hour few people know what it is like to be in something like that it will start to make it's way through the central part of the country. good morning, everybody if is 11 a.m. on wall street an "squawk alley" is live ♪

welcome to "squawk alley," deirdra bosa with us this morning. that has all time highs on the s&p and the nasdaq thedown dow green for the firsm since late february, and a prospect of more testing the retailers, the travel companies, live nation is up