millions in texas still in the dark power remains off with little or no heat. now, the water supply's in jeopardy frozen pipes are bursting faster than they can be repaired. and the reddit rebellion arriving in washington, alongside the hedge funds they were trying to bring down. regulators want to know exactly what went on it's thursday, february 18th, 2021, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen, and andrew ross sorkin and let's take a look at the u.s. equity futures at this hour yesterday, the dow set another record it was up largely because of gains that you saw with verizon which was up by 5.3%, and then

chevron which was up by better than 3% after berkshire hathaway holdings showed that they had really built up big stakes in both of those companies. especially in verizon, which is now one of the six biggest holds for berkshire hathaway this morning looks like things are pulling back a little bit. dow futures down at this point by 90 points, the s&p which was down yesterday by just a point is indicated down by just over 15 points this morning, and then the nasdaq, which was off by about a 1/2% yesterday is indicated lower by about 90 points as well let's also take a look at what's happening with the treasury markets. treasury yields you'll see at least right now, the ten high temperature year yielding at 1.28%. again, after crossing 1.3%, still sitting very near those elevated levels, at least compared to what we have seen very recently. and also let's take a look at what's been happening with bitcoin. it crossed above 50,000 for the first time on tuesday. this morning, it's back above 51,000, down by 1.2%

51,693 andrew. >> pretty crazy. we have been talking about bitcoin all week, but meantime we've got an update to bring you on the pandemic. some new reports this morning from the new england journal of medicine saying pfizer and moderna, those vaccines appear to be highly effective against the u.k. covid variant that's the good news but showed a decreased ability to neutralize the strain that's dominant in south africa pfizer said it's working on a booster shot or updated version of it vaccine. new this morning, a cdc report saying that life expectancy in the u.s. dropped by a full year in the first half of 2020 from 78.8 years to 77.8 years the drop was worse for some population groups, including a drop of 2.7 years for black people, and 1.9 years for hispanic the lead author says covid-19 is responsible for the majority of the decline, including factors

indirectly related to the pandemic like the rise in drug overdose deaths. joe. >> yep, factor all of those in an update on the texas freeze now, millions of residents remain in the dark and cold as another winter storm moves across the state across this state as well. the latest problem, water. after thousands of pipes burst and officials warned residents that supply was low, and unsafe to drink unless you boil it first. yesterday, governor greg abbott signed an executive order ordering natural gas providers to stop shipments outside the state and ordering them to direct them in power stations in texas. the electric reliability council of texas said it had restored electricity to about 1.6 million homes but nearly 2 million customers still don't have power. much more on this story at 6:30 a.m. eastern i read somewhere that, you know, pricing, i guess, is what

happens, and if you want to fill up your tesla so to speak it's t like $900 or something i don't know whether that's true or not. >> and some people that had the smaller electric companies or intermediaries that they had signed up with to make sure they got the best prices, surge pricing on some of these things, their bills had gone to $900 a day on certain situations, and some companies saying find another electric company because your prices are going to skyrocket if you're not careful with this. it shows you a lot of the weaknesses in the system, and it reminded me a lot of sandy, hurricane sandy where on the east coast people were without it for about a week. we rely on these subpoenas we think they're always going to be there, but it takes a strange event to show you the biggest weaknesses and where you're not prepared. >> if you had a generac, it's natural gas, so i guess those

are running down there those are running. >> assuming you're getting natural gas. >> right >> exactly >> right folks, let's tell you about the other big story on today's agenda that's the congressional hearing into the reddit saga yesterday on closing bell with a blunt statement on the risks to the markets. >> we have come dangerously close to the collapse of the entire system, and the public seems to be completely unaware of it, including congress and the regulators. >> leslie picker joins us right now with a look at what to expect, and leslie, it's a little surprising to hear that from tom at peterffy, because he is not given to hyperbole. >> and he's someone in a position to know and if you look at a list of witnesses set to appear before the house financial services committee today, it may sound

like the start of a badjoke, two hedge fund managers, a social media ceo, robinhood, and roaring kitty walk into a congressional hearing, but the heads have been called to discuss serious issues, issues of market fair ness, financial populism, complicated workings of market structure, potential manipulation mix that in with lawmakers and several hours worth of questioning, there's expected to be quite a few fireworks at the least the impetus fwas the late januay volatility in gamestop that drew attention to robinhood as well as the sub reddit group wall street bets where stock tips were shared, gamestop bulls, igniting this whole david and goliath narrative. each witness will defend his

role in the gamestop frenzy. many will deflect to what they see as issues elsewhere. griffin and tenev, huffman harks at this idea of fairness expect to see a lot of that as well today >> just in terms of what to expect from the questions that are asked from the congressional representatives, i mean, it's hard to think they're not going to come down on the side of populism on these issues what kind of hints have we seen so far in the statements made publicly. >> i would agree with that representative maxine waters was on closing bell yesterday, and she actually took a very muted stance on the whole thing saying, you know, i'm here to listen i just want the facts. one thing she did mention she was interested in better understanding is the idea of the relationship between citadel and robinhood, the relationship between citadel and melvin, how

all of the different players connect and the various incentives there i think you're right, the fact that, you know, you do have this whole little guy versus big guy narrative that has played out, although if you really dig beneath the surface, it's so much more complicated than that. still, you know, this is politics this is washington it will be broadcast, so there is some sort of a theoretical aspect that is to be expected here, especially when you have a situation like this one where it is very complicated. i'd personally love to see it go down, you know, deep into the weeds, and hope it gets there, but i think there will also be some theatrics as well >> yeah, not usually the forum that is good at dealing with nuance and complicated subjects like this. >> no. unfortunately. >> leslie, thank you, we'll check in with you later today. obviously there's a lot to look at with this and a lot to talk about before and after we'll see you soon. >> thank you. okay coming up after the break, a

wide ranging interview with billionaire bill gates including how companies are tackling climate issues he's got a new book out. that's coming up when we return. as we head to a break, though, take a look at a few of the companies set to report ahead of the openings bell, including walmart and marriott "squawk" returns right after this

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this morning, microsoft cofounder, bill gates out with a new book, titled how to avoid a climate sdaster and he warns the economic damage could be like a covid disaster every decade. we started out by asking him what he thinks of the role of business should be in trying to solve this >> businesses are paid to think ahead, and you know, consumers will be looking at the carbon footprint of the companies they buy from they will be looking for business to be part of the dialogue about shifting these systems around so climate is big. the younger generation, i think, their energy is already very

hi high but i see that going up even in a bipartisan way, and so measuring the footprint, being open about that, and being willing to devote resources to getting those numbers down over time, i think no matter what business you're in that will deserve a lot of attention >> but can the problem be solved if big businesses and microsoft and apple and google and others have announced very ambitious plans but they are all idiosyncratic, they're doing it on their own can it work if everybody's doing it on their own or does it effectively require regulation and laws >> over time, you'll have regulations that will drive the market for green products. but even before it gets the stage of having those regulations, having enlightened companies create markets for

some of the earlier stage green products like green steal or green cement that will be super important having the tech companies figure out how to run their data centers 24 hours a day without using, every using, any coal will have based generation that will drive the market for storage products we've got to have the innovation, that's the first thing, that's more r and d money, more venture capital. more smart people doing those innovations, but even once you do the innovation, you need the market to start buying, you know, just like japan and germany bought solar panels early on, paid a very high price, that created the learning curve that was catalytic it got that extra cost, what i call the green premium to come down, and we need the tech companies, the finance companies to be early customers of green

products, and then when the premium comes down, the government will come in and drive in even broader adoption. >> so many of the big companies that have announced these ambitious plans are very profitable, cash rich companies, and obviously as you go down the chain, there are going to be smaller businesses that frankly just can't afford to do this so who should pay for it >> some of the early low volume stuff, the highly profitable companies just because of their desire to be a positive force on society, you know, they should set aside hundreds of millions to help in these areas it all comes back to this green premium, you know, if it's very very high, then you've got a tradeoff and so that's why, you know, i really come back to innovation to drive those numbers down.

in the case of the passenger car, you know, we clearly have an expectation in the next 15 years that green premium will be zero, because the battery costs will go down the range will go up the charge points will be pervasive, and it will be quick charging, and so that's why gm can say, okay, in 2035, we're not going to make any gasoline cars and politicians can say, you know, we'll ban those because say sacrifice, because this category has gotten the volume up and lots of innovation it will get to zero. >> there's been a critique of companies like microsoft that have been outspoken on issues about climate, yet at the same time have made aggressive targets around what they're doing, yet, at the same time, in certain cases, they have supported politicians on the other side, and i asked bill gates about that

>> there's enough issues that if you have a strong enough filter that you won't support, back anybody that does this or that, then you're probably not going to give any political donations at all, you know, waiting for the candidate who conforms to all the views you have on, say, immigration or r and d or climate. and, you know, so companies have to make that assessment. the work to help drive forward innovation, you know, it's really by being a customer it's by sharing what's worked in the tech industry, which is a lot easier to innovative there than it is in the physical economy. you know, the government wants to make progress this this boyd

biden has it as a very high priority the important thing people care about this issue, we have this goal, ten years from now, people can see we're not going to get the number down by much at all >> when i talked to bill last fall at deal book, he made a comment that went pretty viral about business travel. he said it was going to get cut in half by -- business travel cut in half across the board i asked him how he thinks about that now, and how he thinks that in the context of climate and whether businesses are going to say to themselves and their employees, we're going to limit travel because of climate issues >> well, i do think we're going to have a lot of air travel, you know, as the world gets richer and just for vacations alone, which is the majority of travel, and so we've got to get some way of flying planes, either by making green aviation fuel or switching over to green h hydrogen, we've got to multiply

by zero. we can't, you know, just cancel trips and get down to zero, even just moving, you know, products around the world, weill still be an important part of the economy. yes, companies should start buying green aviation fuel, and help boot strap that market, but i don't see reducing trips as a path where you get all the way to zero, you know. if you just look at the developing countries, every one of the activities that's admitting, they should do more of, build more shelters, lights at night, more conditioning, and so reducing consumption, although it can be a good thing, it's not the thing that gets you to zero. >> and we're going to have a lot more of that interview with bill gates in the next hour, including his response to the

energy crisis in texas, what the governor said there. we're going to talk about elon musk we talk a little bit about bitcoin, and so much more. of course the book is called how to avoid a climate disaster. joe? all right. coming up, facebook shutting down news content on it platform in australia, now government officials are calling the social network arrogant and heavy handed details are next as we head to break, check out the shares of tilray, the cannabis company reporting smaller than expected. international medical cannabis sales grew 191%, and canada adult use sales grew by 49%. tilray also reduced costs by about $57 million year over year we're coming right back.

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welcome back, everybody. australia's government is slamming facebook's decision to block users in the country from all news content on its platform parliament is expected to pass a new media bill that would require platforms like google and facebook to pay news outlets for displaying and linking to their content. facebook launched a preemptive strike against this proposed bill yesterday blocking all news content. that included news sites as well as some government accounts including those that provide updates on the pandemic and bush fire threats facebook said it took a broad definition of news to respect the law as it's drafted but said it would reverse any pages that were inadvertently impactedment

i think they have since said that was a mistake to block some of those government web sites. australian officials are speaking out against this move calling it arrogant, heavy handed and unnecessary this decision comes in stark contrast to google which announced earlier yesterday that it agreed to a revenue sharing deal with australian media company news corp. which owns the "wall street journal" and the "new york post" and of course many other publications this is something that has been brewing for a while. news corp. has insisted it should get paid by companies linking to its news and profiting off of it. if you look at the digital ad sales, $81 out of every $100 that's spent, 81% of the ad dollars in australian go to either facebook or google, and the government has said this is its way of stepping up and helping some of the struggling publishers against these technology giants. this is going to be a battle watched very closely because as you can imagine, it can get picked up in other countries as well. >> i don't know if you saw,

microsoft has been very public about advocating for this rule now, they are obviously in much of a different business from most of the businesses, but linked in and others are advertising businesses it would be interesting to see if this comes right on shore but you're absolutely right, it's the big issue in the media land meanwhile, we've got a headline for you, somebody who's on the show regularly, former chairman of the s.e.c. jay clayton has now been named the lead independent director at apollo global management, ties between leon black, and jeffrey epstein, an investigation found black had paid epstein $158 million for tax and estate planning services but found no ties between black and epstein's criminal activity. black had announced plans to step down as apollo's ceo he'll remain chairman by july. it also appears that jay clayton is going to go back and become of counsel to sullivan and

cromwell, his former law firm. becky. thanks, andrew, when we come back, the crisis in texas. we're going to talk about the extraordinary move by the governor to halt natural gas exports from the state we'll also get reaction from the ceo of southern company. that's next. right now, as we head to a break. let's take a look at yesterday's s&p 500 winners and losers i made a business out of my passion. i mean, who doesn't love obsessing over network security? all our techs are pros. they know exactly which parking lots have the strongest signal. i just don't have the bandwidth for more business. seriously, i don't have the bandwidth.

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good morning, welcome back to "squawk box," take a quick look at u.s. equity futures at this hour. three hours before the market would open dow opens down about 90 points s&p 50070 points, and nasdaq 105, 106 points right about now. joe. thanks, andrew let's get back to the crisis in

texas where millions are still in the dark with little or no heat brian sullivan joins us now with the latest, bring us up to date as you do so well, brian >> well, joe, thanks very much i mean, thankfully the numbers in the last hour or so seem to have gotten a lot better, i even hate saying these numbers, good news numbers 670,000 without power, according to power outage.u.s. keep in mind, these numbers move a lot. they change a lot. these rolling blackouts, you could have a better look at numbers now and in another hour have a half million more without power. that's the current number right now. we're headed in the right direction. the power in places like austin, dallas, houston, others, it is slowly, slowly returning you still have people that haven't had power or heat for two or three days, and it's still a little sketchy, given we've got cold weather on the way. texas last night, taking the unusual step of banning out of state sales of natural gas telling people you can't sell

your gas outside of the state. keep it here, we need all the gas we can get to run the power plants, that is a short-term rule, but pretty dramatic step, now of course as you guys know, as people freeze, the one thing that's heated up is the finger pointing, and it's sort of devolved like everything these days into sort, you know, your side, my side, right, left, red, blue, fossils, renewables, i thought we would actually look at the numbers, the facts, i don't know, novel concept, and see exactly where the break down was in power production here's what i did, we did this on the shep show last night, this is the percentage drop by production platform over the two days of the storm versus the five day average before that. natural gas is much bigger if it goes down 24%, it will have an out sized impact on a level. from a percentage basis, ironically, they all kind of fell about the same, coal, you had frozen coal stacks, wind,

some turbines did freeze up. they bought cheaper turbines without a winterized package, didn't have carbon fiber natural gas down 24. ironically, solar doubled, 4% of the power plant output but solar did pop. there's the numbers on the percentage drop. maybe, joe, every side, you know, it's your fault, it's your fault. maybe they all have a point, all of them with the exception of solar came down, by the way, the impact of this on the consumer, i had a $55 target on oil a couple of months ago my predictions, people said i was nuts i'm going to have to revise that up wti crude at 61. natur natural gas continuing to rise there was a trade yesterday done at 660, becky, so $660, so people who have to buy on the spot market because they need to buy the power are still getting

their faces ripped off and a lot of consumers, unfortunately, who kept the heat on are going to have gigantic bills if they're on a pay as you go plan. >> hey, i love the interview you did earlier this morning with the guy from the university of texas who talked about how people looked at this back in 2011 when there was some similar weather patterns, not as bad as this for texas, they made all kinds of best practices recommendations. but those were recommendations they weren't necessarily things that had to get done and my guess is a lot of people didn't do them one question for you, though, when it comes to this idea of banning natural gas sales, they're saying you have to restrict them to just texas, and not letting those sales go out of state what does that mean for the natural gas pipelines. if there's not enough natural gas in the pipelines, they'll shut down, and they go all the way up to canada. >> that's a great point. i don't know, and here's the thing, they're all interconnected, right, it's kind of the blood vessels of the united states, and what do you

do the pipeline doesn't care when you hit the border you shut that down, there's a lot of questions about this. i presume it's existing inventory, becky, that might be stored of course they store natural gas in the caves, basically, so that's there in order, if you're going to extract it, you can't take it out. the stuff in the pipeline still must be able to go we in the northeast actually rely on a lot of that gas from there in louisiana for our heat here we don't think about that very much the colonial pipeline here in new jersey, thankfully it's snowing but warm we've got power obviously. we rely on tha lot of gas from there. the pine lines themselves, many are not insulated. gauges are not insulated and that was part of the recommendations, buy winterized gauges or else, and they were like, sure, okay, and they didn't >> all right brian, thanks, we're going to talk to someone who's in this

business for more on the issues facing the energy industry, let's bring in tom fanning tom, a frequent guest on our show, ceo of southern company. tom, you're also out with earnings let's start with that. $0.47 a share above estimates by a nickel revenue is below you have talked about revenue likely being affected by covid issues, but overall for the year and for the quarter, you would characterize a company as, what, managing well through this >> oh, it's terrific, you know, and the other thing, joe that we have done over the years talking about revenue is a lot of our revenue is tied up in fuel prices and if fuel prices are low, the revenue is also lower, it's just a straight pass through to customers, as any impact, the bottom line and lower fuel prices benefit customers. that's a great thing about half of the revenue lost is covid, half is lower fuel prices.

>> overall bottom line was terrific. >> right and we'll get to some of the individual things that you have done at southern company, but you're watching texas, we're all watching texas. >> oh, gosh. yeah >> in a nutshell, well, i've heard it's because of deregulation, it's because of green issues did they think that they would never have another winter storm down in texas, is that what we have been convinced at this point, that there's no such thing as snow in texas anymore or in greece at the parthenon? >> well, look, it does start with this is an extreme weather event. every operation in our industry builds to a certain weather standard, and this weather condition over the past week or so has exceeded their planning criteria so they are experiencing difficulties i thought the report that brian just gave was right on the

money. that is this is a whole portfolio problem. this isn't just renewables or just base load the other thing that you started to point out, joe, is really true this is a market structure issue. ercot, the energy reliability council of texaseffectively makes the state of texas an energy island in the united states that means that the transmission connections between texas and the rest of the united states are really pretty limited so it's difficult for other places in the united states to come to their aid by shipping power. the other thing is, and i don't want to get too technical, but they run their market on an energy only basis. in other words, where i live in the southeast, we go through very thorough processes of building optimal portfolios. some base load, some peaking, some intermediate, and gas and renewables and nuclear andthe whole thing, and we build a

portfolio first. in an energy only market, they rely on essentially independent power producers to build generation that will make money in the market at that time and so therefore there is no real incentive to build more resilience into that market, which we would have, i think, in an integrated, organized market. >> you can, depending on where you digest your news, you can see two different takes on this, one side saying this is the future, you know, if the sun doesn't shine and the wind doesn't blow, this is what you're going to get. the other side says, hey, wait a second, this was conventional energy break down in the delivery of conventional energy. what can we glean from this? what does it say about the future, and how we should react to what kind of energy future we

should build >> yeah, joe, i feel like i'm pitching your show to you. the segment you just did on bill gates are terrific bill and are on the american energy innovation council. i think i have said before several times, southern company from an r and d standpoint it the largest in proprietary research and development, the key to that is continuing to invest this the solutions of the future whether it is storage, whether it is developing hydrogen alternatives, generation 4 nuclear, and don't forget more efficient energy efficient end use solutions, so look, i think the issue is how can we transition the fleet and provide for innovation, technology solutions that will get us from where we are to where we need to be in the future i think we can do that >> hey, tom, curious if you could just explain as you were talking about sort of the

regulatory frame work that's in texas relative to the southeast, just to speak to that a little bit because -- >> sure. >> what i'm trying to understand is did the market unto itself create the approach that's being taken in the southeast or was it regulation that did that relative to what we saw in texas? >> so about half of the united states is built in the model o what we call organized markets effectively what that means is they disaggregate generation, and there's lots of providers of generation, be it base load, intermediate or peaking, and they disaggregate transmission which is another way to iterate around a generation solution you can build another solar plant or you can build more transmission, which can move power potentially more effectively. in our opinion in the southeast in an integrated regulated

market, the construction of an optimal energy portfolio is done through iterating around optimal solutions of what should the generation be, just like building a stock portfolio, and what should the transmission solutions be that support that optimal portfolio. in organized markets, you don't do that. it's done basically on formulas and depending on the kind of market, all of these markets are a little bit different, you just have to kind of play in the market and see. >> tom, so it sounds like the southeast is a more regulated market but i'm sure some folks kw who would say, look, regulation may get you that in the southeast but the market in california is pretty regulated too, and they have had problems as well, no? >> but it's also disaggregated, right. their generation market is not regulated the way ours is. it is not built on creating optimal portfolios

we go through this it's called an integrated resource planning process. they rely on an organized market of their own it's different than the southeast. >> okay. >> all right tom, if i am one of your customers, can i send you bitcoin for my monthly bill? is that possible to do >> not yet, joe. >> why are you laughing? >> yeah, no. you know, with my years at the fed we have wrestled with what to do with bitcoin we're not taking bitcoin payments just yet. >> what is the fed going to do what would you tell them to do >> i don't think bitcoin is a currency, it's an exchange medium, kind of like gold, but it's not a currency. >> okay. that's tom fanning, we ask everyone, you know, i see someone on the street, i say what do you think of bitcoin,

you know, we want to know, with my mask on and everything, and usually they don't hear me because i'm mumbling, they just say, i don't know, this guy is crazy. thank you, tom fanning. >> always good being with you. >> good being with you andrew >> thanks, joe coming up when we return, much more on today's big hearing in washington on the reddit revolution we're going to tell you what to expect straight ahead. as we head to that break, check out shares of sun power, beating estimates but revenue falling short. third quarter revenue guidance coming this lower than expected. we're going to be right back after this

welcome back, everybody. shares of cloud company twilio are up sharply this morning after the company posted a surprise profit for the fourth quarter. revenue also beat expectations

twilio provides tools that developers can use to add text messaging, video calls and other functions into applications. the current quarter earnings guidance was below expectations but the revenue guidance was higher than had been anticipated and that stock is now up by about 10 1/2%. when we come back, not david versus goliath, but goliath versus goliath, that's how our next guest describes the gamestop show down we'll tell you why next. don't forget to subscribe to our podcast, you'll get interviews, original content, and behind the scenes access look for us on apple podcasts or on your favorite podcast app, and subscribe to "squawk pod" today. dana-farber cancer institute discovered the pd-l1 pathway.

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today lawmakers finally get a chance to grill some key players in the recent gamestop trading frenzy our next guest says the drama

that played out was not one of david versus goliath but goliath versus goliath she was a guest on alexandria ocasio-cortez's twitch stream and talked about this very issue. joining us is alexis goldstein she works as a senior policy analyst. alexis writes about the financial markets in her news newsletter, markets weekly good to have you here. >> thanks for having me. >> let's talk about your background i think that's an important thing people need to understand on how your opinions have been formed in this you're a computer programmer and you worked at a lot of big firms including morgan stanley what did you do there? >> so i was a programmer at morgan stanley we developed a software platform we gave away to hedge funds for free in order to try to solicit their order flow i moved to maryland where i became a business analyst and was an equity derivatives and

helping to build their internal risk management software and trading platforms. i did the same thing at deutsche bank. >> let's talk about first your time at morgan stanley where they were building this program that they would give away free for the hedge funds. why? nothing's ever free. why would you give this away to hedge funds for free >> you can think about it. it's in some ways similar to the robinhood situation. the flow of institutional players, very profitable for firms that execute lots and lots of volumes of trade. it's a volume business and if you are able to get better execution than your competitors, which i think morgan stanley is confident it was able to do with the sophisticated software and very fast speeds and various trading algorithms we could make money off the volumes of institutional players. that included hedge funds. we wanted to solicit more trades than, say, our competitor goldman sachs. >> when you say you think this

is a goliath versus goliath situation, what do you mean? you don't think these were retail investors on the other end of the trade >>i think wall street guards its positions ferociously. they don't want you to know what their position is but they spend a lot of money to figure out what their competitors positions were we had tens of thousands posting not only what their positions were but what their plans for their positions were in the future i think it's highly unlikely that that kind of data would be up be used by large wall street goliath. i think it's probably likely that hedge funds and other major players were watching what the plans of the retail players were and trying to figure out how to profit and ride the stock up and ride the stock all the way down. at the end of the day, the traders i worked with at merrill lynch and deutsche bank had their best days when there was extreme volatility and price movements. if i were to make a guess, i don't have a crystal ball, i think a lot of the first quarter

earnings that have the flow trading desks in options and equity options that i used to work on are going to have a good quarter because of this volatility >> it's complicated stuff. washington is going to dig in today. complicated stuff like this is not always something that's easily discerned through one of these hearings where people have a set number of minutes that they can talk and a lot of them are trying to grandstand and make attention and what advice would you give to lawmakers if they were serious about trying to reform this what would you tell them >> well, i think that this is an issue that has the potential to bring a lot of attention to sort of an underregulated market, which includes hedge funds, right? they are regulated but less regulated than major banks questions that will bring out transparency into the practices of citadel llc or to the extent they want to talk to melvin capitol, i'm not sure if you're getting too many questions directed to melvin capitol

this is a good opportunity to set the agenda of how they want to respond to this and ask do we need more regulation, do we need more transparency, do we need changes to the kinds of things hedge funds are reporting to over-the-counter markets there's a whole place that's not available to retail traders which is the over the counter options market i think they're going to be asking questions about what is the volumes of options trading that are totally inaccessible to retail investors i think you might see questions today from congress about that >> alexis, we're about out of time if you had to pick one thing that struck you as the weirdest practice on wall street that didn't make a whole lot of sense, what would it be? >> they would try to guess who -- which of their interdeainterdeal er brokers were in violation of rules of gifts they would get bottles of champaign at the end of the year and you could give them a gift worth $100

they would google it and see who cheated. good job well done. that was one of the weirder things i saw >> alexis, we'd love to have you back i think you have lots of insight about what's happening and we're going to be following 24 pretty closely. thanks for your time today good to talk to you. >> thanks for having me. >> sure. joe? all right. thanks, beck coming up, futures in the red after record highs earlier this week still to come, more of andrew's interview with billionaire bill gates. don't go anywhere, you're watching "squawk box" on cnbc. this is what community looks like. ♪♪ caring for each other, ♪♪ protecting each other. ♪♪ and as the covid vaccine rolls out, we'll be ready to administer it.

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earnings alert walmart reporting results. we have the numbers and the instant reaction straight ahead. the crisis in texas growing and the finger pointing continues. hundreds of thousands at least still without power as the debate about fossil fuels versus clean energy rages on. the latest from texas is straight ahead plus, the reddit rebellion in the hot seat alongside the hedge funds they wanted to bring down a preview of today's big hearing on the hill is straight ahead. second hour of "squawk box" begins right now.

good morning i'm andrew ross sorkin 72 points off of the dow s&p 500 off 15 points and nasdaq looking to open down, call it 96 points joe? >> andrew, walmart walmart's reporting. can't wait for the revenue number i always like that like to see the revenue number of walmart we're joined with the numbers and comments from the company's cfo. hey, courtney. >> reporter: hey yeah the revenue's a big whopper this one, joe for the holiday quarter walmart did miss earnings expectations adjuster earnings coming in at 139 per share. that includes a 7 cent impact stemming from a u.k. tax issue consensus was $1.50. revenues much stronger than expected, $152.1 billion versus

estimates of 148.3 billion it's reinstating guidance looking for sales to be up low single digits and earnings to be flat to slightly up. but those u.s. comparable sales up 8.6%. well above estimates and that's not even the strongest number of the year central retailer, walmart played a big part in the pandemic u.s. net ecommerce sales grew 69% for the quarter, 79% for the year i spoke with walmart's cfo brett biggs who said, quote, the walmart contribution margins do continue to improve. that's good news biggs told me we're in an unbelievable financial condition. a great competitive position and now's the time to be even more aggressive with our strategy you're going to see us increase investments. so walmart is targeting $14 billion for this fiscal year's capital expenditures up from a rate of 10 to 11 billion. the increase going mostly

towards supply chain, automation, all things improving the customer experience from that omni channel view walmart is also raising its average employee wage to $15 an hour starting pay though does remain at $11 when it comes to stimulus, biggs says, quote, when money hits, we see spending pick up pretty quickly. i would anticipate if we get another round of stimulus, which is being debated, we would is he something very similar becky, back over to you. >> thanks, court you know, the stock is down by about 2.6% again, people are just kind of going through this there were a lot of stronger than expected numbers. what stood out to you as something the street might see as bad news? >> reporter: there was a miss on the earnings you know, $1.1 billion spent in covid costs. that actually wasn't even the biggest quarterly cost for the year i think it was the second

quarter they spent 1.5 billion maybe they were expecting a little more when you're looking forward to next year when they're saying earnings were going to be flat and sales up, you know, low single digits. they're going to have a pretty big investment period here there's an investor day that starts at 8 a.m. there's going to be a lot more detail for what they're going to go through with the year we know walmart's looking at sort of alternative businesses i would call it for a retailer talking about amping up advertising. they've gotten into health care by offering insurance and some health care centers. still some more details through there that i think investors need to know a little bit more about. it takes away a bit, supposedly, from the core business remember, mark lorie is gone so what does that mean for online innovation. >> trying to figure out, courtney we always talk about a million employees, whatever it is. not many are probably new

employees. just trying to figure out if there was a national mandate for 15 bucks you go 11. that's an extra 4 per hour >> right. >> i wonder how many employees we're talking about. that would be material even to walmart. >> it would have to be right. it would have to be. walmart is the largest private employer in the country and, you know, i think it's something that is worth talking about today. like i said, they are pointing out that the average rate is going to be above 15 but starting is still 11 they have instituted a lot of bonuses during this covid time they've hired a lot of employees. i think one number was 400,000 i saw. i don't know if it's actually gone up since then some of them eventually do end up staying on as permanent employees, but these are all furtherdetails hopefully we ca get during the investor day. >> hey, courtney thank you. again, take a look at that stock

right now. down by 2.3% joining us to talk more about it is stef wisink, research analyst at jeffries. there's a lot to digest. what courtney was just talking about with raising the average wage they have there to $15 an hour making $14 billion in investments. i think it's interesting if you look at the investments they're talking about, they say it's to build the supply chain capacity and automation to stay ahead of demand raises a lot of questions on its own. what do you think just at first blush? >> i concur with courtney's assessment i think this is a little bit of a mixed bag this morning clearly the headline number on comp was strong. it was across all of the operating units. even sam's club saw a nice comp with membership growth up almost 13% as well. i think all of the indications around the health of the top line seem to be pretty strong. to your point, it does seem like

walmart is taking the opportunity with the tailwind of covid and the destination for consumers to amp up the investment spend and make sure they are competitive and can meet consumer spend. it's interesting putting in the top lines of the headlines a commitment to wages. walmart in many respects does set the standard we're going to look at how this might affect retail more broadly with a higher minimum going to $15 on average. >> hey, steph, i remember several years ago going back must be four, five years now when doug mcmillan came out and said he was going to be investing in the stores and people raising wages it came as a bit of a shock to wall street. he said that in an investor day. when the street found out how much it was going to cost, it took the stock down pretty significantly. this seems like another moment where doug mcmillan is saying

we're going to be doing these investments. you may think he won some credibility with investors based on his last investments and how they paid off. it made the company be in a position to be ready to pivot much more to online sales. what do you think this time around >> yeah, i think it's something similar. walmart sets the standard across retail it is in many cases the biggest employer as courtney mentioned in some small communities as well we know there is a flywheel effect, spending power goes up in many global markets walmart is a beneficiary on the back side as well in terms of higher sales, better opportunity. i also think that to courtney's point earlier, too, walmart is investing in other areas of the business that aren't necessarily related to the store footprint we're looking at things like health care which are tied to the stores but are an appendage, investing in media, investing in advertising and advertising platforms with vendors there are other effects that

could develop maybe that would be somewhat different than five years ago that could help to defray some of the headwinds from rising wage and rising investment i do think there are some counter points that we need to get some attention to today. i would expect the investor day to focus on those to lateralize some of the investments that we're doing. >> i don't see anything in the release just yet, again, i'm glancing through things as quickly as i can, that says anything about how walmart's customers are being impacted by the economic outlook there have been a lot of people who have suffered pretty greatly under this -- the covid and the reaction to it and i think walmart may have had a tougher time with it, walmart customers, than maybe target customers where you have seen a breakout there have been questions asked about that what's your best guess of where things stand and how walmart's customers are fairing right now? >> i think it's a fair observation.

i think the target customer was part of that protected class in terms of jobs were secured, spending commerce and there was a pretty big shuffle in terms of retail where that shopper found a new destination to shop. target seems to be a winner. i don't know if walmart is viewed as a destination for shopping, for grocery and basic general merchandise. i think target did win that consumer with the destination shopper. if we look at target versus walmart which we don't like to do too much, it's a somewhat different customer, what we are looking to do is improve the general merchandise and developing private label lines, working more closely with partners this ties back to the bigger ad in content strategy. i think one of the other advantages target had was an establishment of the loyalty program. walmart didn't have that we are watching, too, to see what happens when walmart starts to collect more personalized

customer data and how do we use that to foster bigger baskets. i think with respect to walmart's period, it is somewhat ironic where we see strong comps. relatively higher than we've seen and i think to some extent walmart is consolidating the shopping ticket was up 22%. traffic was down or transactions down almost 11 fewer trips, bigger baskets does seem like walmart is still winning with its consumer but maybe not winning with the broader consumer if we're looking at relative benchmarking. >> steph, we have to run very quickly the stock is down by 4.25% you have a $177 price target on the stock. $37 from here. you've got a buy rating. is there anything you see in this that changes your mind? >> not at first glance again, i think we were looking for walmart to step up investments this year. i do think the point on low

single digit sales growth is a positive indicator might have to unpack that eps a little bit more closely to see why there's not incremental pass through and what the assumptions are for the adjacent value areas. maybe that's the conservativism and maybe we'll see that when the initiatives start to take hold. >> great steph, thank you for your time >> take care. programming note, walmart ceo doug mcmillon will be on coming up at 11:30 a.m. this morning. it's an interview you don't want to miss. joe? >> thanks, beck. marriott reporting adjusted earnings at 12 cents a share comes in a penny above expectations the hotel's chain revenue did come in below estimates. marriott's earnings beat comes in after expected rival hilton and hyatt. the company does go on to say that an accelerated adoption of

vaccines would be a big positive for marriott, which is still being affected it's the largest hotel company in the world 1.4 million rooms and since the hotels are full service, they have a lot of business travel so it's been affected as far as who takes over for arne, who was a great friend of the show and, you know, that bad news that we got on monday, we should know within two weeks and analysts are talking about some of the people that arne put in charge a couple of months ago when he stepped back a little bit from some of his duties. we're talking about stephanie linardt and a gentleman that i actually know, tony copuano, group president for global development design and operation services a lot -- marriott's had some tough news this week it was tough for us, beck. i know you weren't in when we

got that news, and i mean we knew arne so well. >> no, i was watching. >> thought he was doing well he was very thin it was unexpected because he was doing pretty well. when you are getting some of that real serious treatment for something like pancreatic cancer, sometimes unexpected things happen just in the treatment. i think maybe that's what -- i don't know what happened on monday, but he's -- he was a great guy. >> he was a friend of the show and friend of all of us. >> someone we got to know very well. >> a decent and good man we've got a lot more coming up on the show a little bit later bill gates is going to be joining us again we'll be talking about his new book, "how to avoid a climate disaster." his comments about what needs to change and how investors should be thinking about this issue before we head to break, let's get a quick check on the markets. we are in the red. dow off 92 points.

s&p 500 off 15 points. nasdaq off close to 100 points "squawk" returns after this.

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when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store. welcome back to "squawk box. hundreds of thousands of homes and businesses in texas still without power. texas governor abbott earlier this week said this shows how the green new deal would be a deadly deal.

our wind and solar got shut down they were collecting more than 10% of our power grid and thrust texas into a situation where it was blocking power on a statewide basis. it shows that fossil fuel is necessary. i asked bill gates what he thought when he heard that from governor abbott. >> well, there's actually a legitimate point in there, which is that having weather dependent sources means that you have to have a lot more transmission, and texas is kind of isolated so they couldn't bring much power in we're using our open source grid model to show how much transmission would have allowed texas to get through this without any shutdowns. actually, it's more their natural gas plants that have been affected by the cold weather than their wind, so he's got the factual basis isn't totally correct there, but the idea that we expect reliability

from the electric grid and that we're going to have more strange weather conditions and so really looking at those to understand is it nuclear, is it storage, how do we maintain reliability, that is an important point >> do you think that nuclear power will ever be politically palatable again? >> absolutely. you know, nuclear has actually been safer than any other sort of generation. coal plant, coal particulate, natural gas pipelines blowing up the deaths per unit of power on these other approaches are far higher, and the miracle is that, you know, i'm not even talking about the current generation of nuclear. there's a new generation that solves the economics, which has been the big, big problem with nuclear, at the same time it

revolutionizes the safety. so, you know, the next five years the u.s. government is funding demonstration projects, one of which is tera power 50% private money, primarily from me. as we solve these engineering problems and cost problems, i hope people will be open minded to see how incredibly safe the next generation will be. >> interestingly, bill gates personally divested his fossil fuel stocks as an investor i asked him about the debate and whether getting out of these names is what investors should be doing or would it be better to stay in certain fossil fuel companies to push them forward into what might be, what he would consider, the right direction? >> wiell, fossil fuel companies have incredible ability to do big engineering projects whether it's putting nuclear

waste super deep so there's no issue, putting co2 underground, figuring out how to make and move green hydrogen around, the capabilities of those companies can be applied in a very positive way i happen to divest my direct ownership of those things, but i don't claim that's going to reduce a singleton of emissions. reductions come from investment, not divestment, and certainly we're going to be using fossil fuels to get to work and, you know, to have the economy work you know, we hope we can drive that demand down over the next 30 years so, you know, it's -- i'm not saying that everybody should divest, i'm pushing much more on the please invest in the new approaches, particularly in the hard categories which are the industrial areas that have

gotten so little attention, unlike electricity na passenger cars which are less than 1/3 of the problem and people don't know the rest of it. >> so much of the effort so far has been focused in the business world on buying carbon offsets i note you apparently bought some carbon offsets for yourself personally which i found fascinating. how much do you spend yourself annually >> i'll spend over 7 million a year, you know, and i'm paying on average over $400 a ton so people at climb works does direct air capture, people like world energy provide aviation bio fuels. i have projects where i fund using heat pumps instead of natural gas and i pay the up front capital costs for that so a variety of things including, you know, electric

cars, solar panels and, you know, i hope as i purchase clean aviation fuel that can be catalytic to growing that market, driving innovation and competition. that same learning curve that has worked so well for solar and lithium ion batteries. >> i also asked bill how he thought that investors should think about investing in green stocks and what kind of returns they should expect listen to what bill had to say. >> when i invested in impossible food, beyond meat, quantum scape, i was doing that to help their role in climate. now it looks like they'll also be three very successful companies. and so, you know, i'll have more money to put into the tough areas of climate, things like cement and steel breakthrough energy ventures is in 40 companies, and so far, you know, they are making progress

and even though some will fail, it looks like we'll have quite a few successes there. so you have to be willing to take high risk, but if you do it in a tasteful way, the green economy is going to have more than one tesla >> tesla ceo elon musk was recently on joe rogan's podcast and speculated that bill gates was shorting tesla stocks. i asked bill gates to set the record straight. >> i think what elon's done with tesla is fantastic it's probably the biggest single contribution to showing us that electric cars are part of how we solve climate change, and now he's got a carbon removal challenge. so we need more elon musks we need one for steel and cement and all the different categories >> so you're not short tesla

stock just so we're clear? >> eah, i'm not. i don't talk about my investments, but i think he should be very proud of what he's done. >> and for more of that interview with bill gates, we'll bring you more in the next hour, including his take on bitcoin. joe? >> what do you mean he doesn't talk about his investments we just heard every investment he's made in green energy. okay right? didn't he just tell us everything he's ever invested in and won't answer the i don't talk about my investments? that's what the entire interview has been about anyway, coming up, reckoning day for robinhood. that's the focus of this week's on the other hand. otoh it has a moniker, he joins us, jon fort does, right after the break and we're coming right back time now for today's aflac trivia question. the technical abbreviation http

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now the answer to today's aflac trivia question. the technical abbreviation http stands for what? the answer, hyper text transfer protocol welcome back to "squawk. today on capitol hill a reckoning for robinhood maybe. we'll see. lawmakers have questions about what led the app that allows free and easy stock to restrict certain types of trades from gamestop a couple of weeks ago we're sure to get a lot of talk. does congress need to step in and get apps like robinhood. jon fort has a take or two on that jon? >> andrew, no. no congress should absolutely not mess with the way robinhood works.

i'm not saying they're perfect we saw the way they shut down buying gamestop without clear explanation. this is giving individual investors the tools the big guys have had last thing we need is lawmakers slapping a bunch of new laws and regulations on what the little guy can do how about target the way the big guys operate put some commonly sense limits on short selling then we can talk about maybe messing with consumer apps, andrew >> so what robinhood is bringing to the market is good overall once you get past those trade restrictions, is that what you're saying? >> well, on the other hand, if anybody knows a lot about stock trading, it's congress, right? there are a few things about robinhood that aren't great? the whole thing is the model is based on payment for overflow. or the idea that robinhood is

gamefying day trading and trading it into a vegas slot machine. i'm not talking about keeping people from trading but i am talking about setting the right kinds of conditions. we can talk about robinhood democratizing it and investing got democratized with etrade and others robinhood isn't democratizing investing it's gamefying trading investing. any other kind of market it's downright dangerous. >> so the real issue isn't whether retail traders have a fair shot or not >> you know, i don't think so. really when it comes down to it, most people should not day trade just kind of like as a routine thing. we just know this from the data. the more often people trade, the more they tend to lose and this whole idea of the little guy versus wall street, come on, we know that there is so many tools, so much information out there that big firms are paying

a ton for. there's no way that if this is us versus them individuals are ever going to weigh out. this should really be about encouraging healthy investment behavior >> okay. jon forttb both sides of the argument >> we'll see what congress does. >> you're absolutely right joe? i mean, that's a good point, isn't it, andrew you were on the lee cooperman thread yesterday >> yes >> i don't think he said it was just off the record, but he was saying that if investors follow certain, you know, stayed, established rules, you can do better than the professional if you day trade, i think all bets are off and that's why it would be better to do, you know, draft kings where you get some odds or something. if you're going to do something

every day, put $2.50 down and maybe play around like that. his point was that individual investors historically have done better than some of the professionals by being more nimble and by being able to follow certain guide -- i think peter lint said that know what you know that was a good segment for jon. if you're doing that other stuff, much more difficult but invest invest. coming up, much more on eaday's big hearing is straight ahd. plus dr. scott gottleib on the fight against covid, which is looking a little better. we'll be right back. all in one place. portf, because when it's decision time, you need decision tech. only from fidelity. ♪ ♪ (upbeat music) you need decision tech. ♪ ♪ ♪ ♪

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the investing world is focusing on the hearing on capitol hill looking at gamestop, reddit community leslie picker joins us with more days like this come every once in a while, leslie it's important but it's also sort of entertaining to watch, right? >> reporter: yeah. >> excited about it. >> reporter: buckle in it could take four hours to get through all of the questioning, joe. you should have plenty of time for the entertainment aspect of this today interestingly this whole

gamestop phenomenon has shone a spotlight on the world of hedge funds. largely the industry garnered criticism when initially calling for house financial services hearing to investigate what happened, chair woman maxine waters took direct aim at hedge funds saying their quote unethical conduct directly led to the recent market vulnerability. hedge funds, their use of short selling, will be in full focus from lawmakers today gabe plotkin will serve as the voice of hedge funds he notes in his prepared remarks that, quote, absolutely none of melvin's short positions are part of any effort to art if i ligs depress or manipulate downward the price of a stock. he was voting against gamestop and it soured as it skyrocketed

ken griffin who funded citadel which is more than quadruple the size of melvin will appear he only makes passing mention of his hedge fund focusing on citadel securities, a market maker that buys order flow from robinhood. guys >> leslie, thanks very much. we're going to be watching this closely. joining us to talk more about it is howard lutnik he's cantor fitzgerald's chairman and ceo good to see you. you have been following this pretty closely i want to read you a close from thomas pederfy, founder of interactive brokers. he said yet on "closing bell," we have come dangerously close to the collapse of the entire system and the public seems to be completely unaware of that including congress and the regulators i think you have a bit more sang begin view of this what do you think? >> come on

there was huge volatility. something no one could have foreseen we're going to take one day of the system to sort of reset. remember when the stock went up so, so high people needed to put up the money the securities firms needed to put up the money to make sure if you buy and sell a security, you get paid with that take one day, robinhood to put up an extra $3 billion, something they hadn't thought of one day of the market sort of resetting itself, making sure everyone had the money and moving forward, i think we came dangerously close to proving how amazing the u.s. financial sectors really is. >> there are some retail investors who are very angry about this though, who thought they were getting into a deal where they could trade as much as they want on these things maybe they didn't understand the rules. what would you say to them >> i think, look, they are right because the fact that robinhood did not have enough money to keep itself going for that extra day was really -- you know, in this sort of wild swings was

really difficult for these investors and very, very tough for them the fact is, robinhood just didn't have the money to put up. all of the wall street firms had to put up money. anybody who trades stocks had to put up money cannon fitzgerald had to put up money because, let's face it, stocks were really volatile. it was disappointing for them and very difficult for them. let's face it, robinhood didn't have the money on them they got the money in a day, very impressive. they were back up and running but it was tough for a lot of lot of people. they have a right to be angry. >> so what would you tell congress as they start delving into this and as the regulators are applying more. are there regulators that could use extra regulation or do you worry that could change things the way business is done >> look, it was crazy. when you short a stock there's a

common thought when you short a stock you can owe this much money but you could lose an infinite amount. people learned what that means from 4 could go to 400 and they have lost their tails, the short positions. lost their tails maybe they'll think better next time before they short it. no, i think the market performed brilliantly. yes, did robinhood need to close for a day? did it do a good job and get back up and running the next day? i think when it's all said and done you should be very, very impressed with the way the u.s. financial system worked. the stock went from 4 to 400 and it worked all but one day. bummer for the day >> you know, gabe plotkin is going to be in the hot seat representing the hedge funds and the short sellers in this situation sitting before congress you have vlad tenev who will be there, you've got ken griffin. what do you expect or anticipate

that we're going to see today? do you think this is going to be grandstanding or do you think this is going to be something where there's maybe some regulation that comes out of it, howard >> i think you have the word grand-standing everybody talking their own book everybody saying what they, you know, prepared remarks nobody laying it out there look, the market did incredibly well to survive this easily in one day. robinhood needed to put up the money to defend itself it can't do all that business. they can't buy and sell stocks from us without having the money to pay for them. if these things are moving up and down in a huge way, the rate -- the clearing corporations, the one who collect all of this money, when you sell a stock, you want to get your money they need to make sure the companies who sell it to you have the money or buy it from you have the money to pay for it so i think there's going to be a lot of -- no, unfortunately. >> howard, this is definitely shining some light on things

people don't generally think about, talk about. things of paying for order flow. why that's so valuable to have the order flow coming in why you would have big companies that would be willing to pay for it does any of that bother you? does any of it strike you as being wrong? or do you think this is the right way of doing business? >> well, you know, there's an old saying where when something sounds too good to be true, it's too good to be true meaning it's probably not true. when someone says to you your trading is free. is your trading really free? someone must be paying the other guy, right i'm not paying the other guy, right? so payment for order flow allows individual traders to trade for free, right? remember, if it's too good to be true, it's not true. somebody's got to pay. it's the other guy paying. if you cut off payment for overflow, you're going to go back charging commissions. i'm here to talk about my spac cfac just took an amazing publ

public, ayae they are a light arm company it's going to change the way we look at driving cars i'd love to talk about that a bit if you don't mind. >> well, sure. talk a little bit about it i wasn't here yesterday. i think we had the ayae ceo on talking about the spac, talking about what's there what attracted you to this >> so, you know, when your mother told you don't shine the laser light on it, it's a laser that detects and ranges how far away it is your mother said don't schein a laser in someone's eyes, it could blind them most companies have that less expensive you have one for a pointer these are 1550 laser there's only one other company, luminar, that uses 1550 and it's over $11 billion this company ayae is going public it's amazing what it does, it can see a brick

in the road. it knows when people are in the road it knows when a dog runs across the street when you have these in your cars, which will start being in cars in 2024, you will no longer hit a dog running across the road, kids whose ball come across the road, the car will know it's coming, it will stop this will change our lives ayae has the best technology continental is amazing the largest tier one manufacturer which means it creates the parts that go in the big cars they're building a huge manufacturing plant, they told me all about it in germany, to start putting it in cars in 2024 ayae has the ball and will run with it huge. >> what ev companies are early customers of ayae? >> well, it's not trying to go into e -- this goes right behind

your rear-view mirror or in the grill of your car and that will be in all manufacturers. as a big investor, general motors is an investor, so it's helpful, subaru is a big investor and continent tall has announced they have a large premium manufacturer of cars, they don't say who it is, because what happens is the car companies want to announce it when it's on the showroom floor. i am pointing out there will be an ayae factory in germany. >> howard, it's good to see you this morning like i said, we spoke yesterday about the company when you and i weren't here but we appreciate your time this morning i'm sure we'll be hearing more about this >> thanks. i'm really excited for ayae. it's really cool this is the future of how we're going to save ourselves and if you want autonomous driving, they'll put 6, 8, 10 of thes per car and cars will be able to drive themselves

great to see you >> thanks, howard. take care. andrew >> see you later. >> thanks, beks. on the other side of this break, dr. scott gottleib going to join us, the distribution pipeline and the president's covid relief bill. later microsoft co-founder bill gates. "the game" stop saga bti teanghe headlines and so much more right back after this.

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a new report in the new england journal of medicine says pfizer and moderna, those respective vaccines appear to be highly effective against the u.k. covid variant but they showed a decreased ability to neutralize the strain in south africa which prompted pfizer to announce it was working on a booster shot joining us is dr. scott gottleib, former fda commissioner, i will lumen na and pfizer board member. all of your accolades, we barely have time for the interview. before we get to the troubling news, i look at it like once a month now. it says covid, just fading away. now after the last year that we -- the world has been through, to even say that, and

it's just the sensationalist crap you read all the time, but it does point to something we have seen recently and that is globally a decrease in cases and i'm just -- not just here. we have the vaccine, we're using it a lot 16% here the w.h.o. talking about it around the globe going down. is that something to be expected a positive fading away? after the year we've had, supposed to be gone by april, easter of last year. i guess that's not going to happen but are there signs that it's starting to ameliorate >> well, if you go back and look at our discussion on this show back in january and even december we talked about the virus collapsing in february and march. i actually used those words with you and we talked about this the reality is we've infected now 1/3 of the public, of the american public. we've vaccinated another 10%, a little bit more than that.

there isn't as much overlap as you think with the groups because most of the people being vaccinated are older americans who have sheltered themselves from the virus we have protective immunity from 40% of the public. people are pulling back. people are wearing masks more. we're heading into warmer weather, at least in parts of the country we're heading into spring as we get into later february and march all of these things combined are decreasing prevalence. we expected this i think the spring and summer will be relatively quiescent we'll see more infection than we otherwise would have the risk is to the fall of 2021 and 2022 when we see the other variants getting a foothold. they will cure some of the prior immunity although we don't know whether the immunity you get from the native strain will protect against the new

variants. >> that's how we started the -- that was the introduction about the south african strain it may get too far in the weeds, but how does it get around the pfizer vaccine at this point do you know where the mutation is it's in the spike protein? >> yeah. these new variants have mutated regions of the spike protein a key part that we develop some of our most potent antibodies against. you're getting a poly clonal effect because they use the full length spike protein not all antibodies are created equal. some more potent than others in clearing the infection it's mutated parts of the protein, the new variants have you are still left with antibodies that work, it's just that the antibodies that are left might not work quite as well we don't know what the impact is going to be from the mrna vaccines what we've seen from the nof voe

vaks trial, it's put out good data and j&j has good data we have a 20% efficacy now whether that's going to read through with the mrna vaccines as well, we don't know yet we don't have clinical evidence. even if it does, you are still left with a very effective vaccine as is the j&j vaccine. the data shows it was 60% effective from the new variants. that's still good efficacy if you had asked me four or five months ago, what i'm hoping for with respect to the vaccines, the overall efficacy, i would have said 60% in all candor. the fact that they're 60% effective still leaves us in good shape >> all right they wanted -- we were going to ask you about governor cuomo, but we don't have any time, which probably makes you very happy that we don't have any time to get into that whole controversy. but anyway, doctor

thank you. got to go. >> thanks a lot. >> beck? joe, when we come back, congressman josh got heim mer will join us with his take ahead of today's hearing all coming up next we'll be right back. some companies still have hr stuck between employees and their data.

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it's often right place, right time. ♪ ("four seasons: spring" by vivaldi) ♪ fiverr gets that. from graphic design to web development. or even a pr expert for things like, i dunno, (over loudspeaker) booking a press conference. ♪ ♪ fiverr has the freelancers to get you where you wanna be. is this the lobby? this is not a hotel... good morning from wall street bets to capitol hill, key players in the reddit rebellion about to find themselves grilled by d.c. lawmakers.

we are all over this story with everything you need to know going into today's high profile hearing in the house. fourth quarter earnings posting from walmart commerce surging the slowest rate since the outbreak of the pandemic began. bill gates on bitcoin, the reddit rally and facebook supreme court with the question of whether it should reinstate former president trump on the platform more of the special interview on the way as the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box. welcome back here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin u.s. equities futures are now indicated down on the dow triple digits after what has been a series of record highs

a little bit of a pull back today. nasdaq indicated down almost triple digits. about 94 points or so. s&p 500 down about 14. interesting. yesterday the inflation numbers as well as the retail sales numbers, a lot of what look like some positive economic data points that we're seeing, which could explain, becky, did you see the ten year ten year -- >> i did 1.3%. >> 15 basis points like surging 15 basis points >> right >> on a percentage basis on a percentage basis obviously it's a fair amount i just think it's weird that all they -- they throw out the risk curve and all the other yields are down, junk, muni bonds. >> junk especially the historic low levels. so it's a little bit of a mixed message, mixed signaling this year we'll see. definitely things to sit up and

kind of pay attention to we see the dow down a little bit today. part of that is because of dow component walmart. we did just get the fourth quarter results out from the company a short time ago walmart came in with adjusted earnings of 1.39 a share that included a 7 cent impact from u.k. tax repayment. the consensus had been at $1.50. revenues did beat the forecast top sales were up by 8.6%. that was well above the 5.8% the street had been anticipating in the u.s. ecommerce sales were up 70% sounds great but it is the slowest growth rate since the start of the pandemic. the ceo doug mcmillan said they are boosting pay it's raising above $15 a share this is a move that they have made over time it continued to kind of push those starting wages higher.

opening wages were higher too. the company said it's going to be investing pretty heavily. for fiscal 2022 it's planning on spending almost $14 billion in investments, capital investments to do things like build the supply chain capacity and also to invest in automation they said to stay ahead of demand that stock is off by about 4.6%. part of that is because of all of the investments they're making in the stores and the company and in employees, and we've seen that before when walmart has invested, but it did really help the company get prepared for all of the rush to online shopping. so we'll see what the company has to say, get more details from it, and then see the street's reaction as well. don't miss an exclusive interview with doug mcmillon today on "squawk alley" at 11:30 a.m. eastern time. andrew. let's get to the other big story of the day the capitol hill hearings focusing on recent volatility. shares of gamestop, short selling on wall street

kate rooney has a look at what all of this means for robinhood, hedge funds, market maker citadel. julia boorstin is also covering the reddit angle let's start with kate. >> hey, andrew robinhood and citadel getting more heat from the other side of congress ahead of that gamestop hearing today. we're just hearing from elizabeth warren's office that the senator is sending a letter to finra urging the regulator to look into the revenue model of selling customer trades. she's concerned by robinhood's actions around gamestop that appear to represent an uneven playing field as she says that may harm investors warren is reaching out to ken griffin today and looking at potential conflicts of interest. it gives us a glimpse into what we may see from other lawmakers today. analysts are looking at scrutiny

of shutting down the buy side of gamestop we got early copies of the witness testimonies. vlad tenev addressed whether they acted to help hedge funds he says off the top those claims are, quote, absolutely fault and market distorting rhetoric tenev plans to defend how they make money pointing out most retail brokerage firms do get paid in order to offer free trading. the sec has permitted that for decades. joe, back to you. >> kate, thank you let's get to julia boorstin now and what we're expecting from the ceo of reddit today. julia. >> reporter: well, joe, in his prepared testimony steve lutkin defending his role he lays out the rules that prohibit harassment, illegal activity and rules enforced by reddit's team and investors.

huffman saying we have analyzed and to see whether bots, agencies or other bad actors have played a significant role they have not. everything we checked was well within normal parameters quote -- he goes on to say, quote, we will cooperate with valid regulators we do believe this community was well within our policies he said they may look more chaotic from the outside but the fact we are here today means they have managed to raise issues about fair nans and opportunity in our financial system today's testimony comes as wall street bets reaches $9 million with 4 million comments per day. that's 26 times the number of comments from the beginning of the year reddit's downloads also surged at the end of last month

the company which reported 52 million users just raised another round of financing and $67 billion valuation. >> julia, thank you very much. our next guest is a member of the house financial services committee. josh got gottheimer. i'd love to hear your thoughts ahead of the testimony in terms of who do you think got ripped off here, if anybody >> well, i think a lot of consumers got ripped off spent $20 or so, went to 400, they kept buying now it's back down to around 40. a lot of people who, you know, as you know, becky, haven't played options before. there's a gameficatn on this followed people posting on reddit and

went for it and lost a lot of money. people took out $20,000 loans who have never traded before the question is for me, among other questions, you know, was this just a pump and dump zmeem was there collusion that went on in reddit? what did robinhood know and when should they have any responsibility for who's on their site and what they're posting about on reddit and should they be responsible for that at all? of course, there's the separate citadel question, but really this is about for us protecting consumers. should the sec do its job here, i think it should, and make sure there's strong oversight about what happened between people who were posting and what they were buying and selling there's investigations we've got to get to the bottom of that. for us there are real consumer protection questions >> you know, josh, that's where i think it gets into a little bit of tricky terrain. i agree with you i don't like the gamefication of the system i don't like it looking like a

casino or anything else that happens. i definitely don't like the idea that there could have been a pump or dump scheme, people were saying one thing and doing another. that concerns me but i also think you walk a fine line here. you start talking about making sure you are protecting investors, a lot of times that means telling them they're not smart enough to figure this out and they haven't done things the right way and we're going to protect them so they do things more sophisticated investors are doing. how do you protect them without being paternalistic? >> no, that's an excellent point and i agree with you, which is why you have to look at making sure there are certain disclosures and education that go up front so that if you're going on to robinhood and you're trading you understand exactly the soup you can get into, understand how the system works. i think there has to be disclosure there if you're posting on reddit, does reddit have any responsibility to know just like facebook does who's on it, what they're posting about?

they apparently do some screenings to make sure people there who are on it know what they're talking about and aren't involved in some scheme. what's their responsibility level. letting consumers trade if they, of course, seek to and i think that's up to them. for me it's just about making sure the information is out there. if there is a pump and dump scheme, we have the sec, regulatory bodies. there's self-regulation that goes on. it's very important that those agencies do their job to make sure there wasn't a scheme going on here. we have those pieces in place already but they've got to do their job. >> what's your gut tell you in terms of whether there are conflicts of interest when you start looking at relationships between citadel and robinhood or whether robinhood was prepared for what they would have to be dealing with in terms of putting up more money and not having access to it those are questions i have. >> question i have as well

why didn't robinhood get ahead of it? was it because the stock shot up so fast? they said, we need more cash on reserves and they were suddenly stuck that's one question we should get to the bottom of everyone has questions about citadel. what did they know how were they involved was there really separation here was there a wall up? i think there's fair questions to ask of them but, again, we have systems in place that should be looking at that and i think the regulators need to do their job and have strong oversight. the question for us is really going to be are there further cash requirements that should be in place are there more requirements in terms of consumer education an disclosure to make sure consumers have all the facts because this gamefication, i understand this is not just betting on a football game want people to get stuck if they don't have the facts and

education up front you're right, becky. people since thebeginning of time have been making bad trades made money, lost money hedge funds on both sides. the question is did anyone have an inside track? that's where the regulators have to really step in. >> you know, we had thomas petterfy on cnbc yesterday saying he thought we came very close to all kinds of problems that he thought we came dangerously close to the collapse of the entire system. you talk to other people and they kind of scoff at that and say that was not the case. it was a bad day, a bad week, there were a few players that weren't prepared for this and that had ripple effects that went through the system. how do we get our arms around that how do we try and make sure that doesn't happen again who should be on the hot seeat for that >> "the wall street journal" wrote a piece this morning about hedge funds and liquidity requirements and disclosure in terms of short selling and, you

know, years ago they were told there should be more that the sec should take steps to ensure there was more disclosure. that was a question we need to bring back to the fore here. we've seen, as you know, becky, well, periods in the past where we've gotten close a lot of people almost lost their shirts and then people stepped in and we came back around as happened in this case as well. so i think what all of the regulators -- again, what we need to ask questions about, we will today, are enough trapped -- enough fail-saves in pl place to avoid these traps are we taking every step possible to ensure the markets work as they should? as you started out, the markets need to be allowed to operate but we should ensure there is a level field here so everyone can operate with the same information. >> congressman gottheimer, we

appreciate your time >> thanks so much, becky. don't miss cnbc's live coverage of today's hearing on gamestop, robinhood and the reddit rebellion all kicks off at noon eastern time andrew >> thanks, becky. bill gates on bitcoin, "the game" stop frenzy and former president trump's presence on social media we have more of that interview on the way later on "closing bell," don't miss an exclusive interview with menet yellen at 4 p.m. eastern ti stay tuned, you're watching "squawk box" on cnbc

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. welcome back to "squawk box" this morning microsoft co-founder bill gates is out with a new book titled "how to avoid a climate disaster." we heard some of our conversation in the show but i asked him about some top tech issues facebook social media giant has built an internal supreme court i asked gates if he was on that board whether he would allow former president, president donald trump, back on social media? here's what he had to ay

>> well, i think at some point he probably will be allowed back on and probably should be allowed back on. you know, it's weird when you're saying that the election was stolen without any facts there and how corrosive that is, but i'll bet they'll find a way to let him back on. his stuff may be labeled as false in a lot of cases. in a way his people's interest in what he says may go down quite a bit. that will be interesting to watch. >> i also asked gates where he lands on the topic we talk about virtually every day on the program, bitcoin how he thinks about it seeing how bitcoin takes enormous amounts of energy to digitally

mine. >> i don't own bitcoin, i'm not short bitcoin so i've taken a neutral view i do think, you know, moving money into a more digital form and getting transaction costs down, that's something our -- the gates foundation does in developing countries but there we do it so that you can reverse the transaction, so you have total visibility of who's doing what so it's not about tax avoidance or illegal activity. but, you know, bitcoin can go up and down, you know, just based on the mania or whatever the views are. i don't have a way of predicting how that will progress >> we also talked about the soap opera that's going to take over today, which is gamestop i asked him as somebody who's been watching people come together online for a long time, whether he thinks this recent social media enabled phenomenon going on is a transformation

>> well, people enjoy gambling, and, you know, sadly, you know, it's a zero sum game you know, the idea that yo drive a valuation way, way beyond what is rational, it's hard to see that societally is a good use of time and the people who get in it early get a windfall, the people who get in late feel like suckers but, you know, how the disclosure rules should work now that you have reddit forums where people have a chance to push something and get out at the high prices, the sec has to look at this. we don't think of the stock market as just performing a casino-like role we have restrictions on gambling activities so how do you take

social media touting stocks, this reminds us of the 1930s to some degree. >> one of the things it reminds me of the 1930s, too it almost up ends so many of the ideas i had about investor protection because one of the things that this almost social media enabled group of people are saying is we actually don't want your protection in fact, not only do we not want your protection, we believe your protection is actually protecting the other side, protecting the establishment and the hedge funds and the like do you think there's been a reversal here? >> well, i think, you know, if the general public investoris pitted against the hedge funds, over time the hedge funds will come out ahead you know, the fact that wild rumors cause people who can't look at the sanity of the valuation to lose money, i'd

look at that individual investor that's what the sec is there to protect and, you know, i'm sure there will be lots of stories of people who got caught up in the frenzy, which really served no societal purpose >> and bill gates's new book is out. out this week called "how to avoid a climate disaster." great book you can catch more of that interview with the microsoft co-founder entirety is on cnbc.com. you can listen to the full interview on today's episode of "squad pod" in your ears joe. >> audio only, andrew? have i got that right? okay anyway, coming up at the bottom of the hour -- it's a pod. i know that. coming up in the bottom of the hour, slew of economic data. initial jobless claims, housing starts and much more stay tuned you're watching "squawk box" on cnbc

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welcome back to "squawk box" on cnbc. we are just seconds away, but like multiple seconds, maybe almost like 50 seconds from a bunch of economic data, jobless claims, housing starts, import prices and more. yesterday obviously we saw some pretty interesting numbers on when they finally came out the futures right now, walmart's not helping the dow. walmart is off after reporting

some numbers and factoring into the dow's 140 point loss we're seeing today the s&p indicated down about 18 and the nasdaq is now down, has moved into down triple digits territory, down about 103 points there's a very handsome, well-known individual standing by at the cme in chicago rick santelli is his name. rick, the numbers please >> all right survey says. well, let's start with what's trickling out here if we look at building permits, they were up 10.5% boy, big number. 1,881,000 seasonally adjusted units. on the start side, an opposite picture, reverse picture down almost 6%. 1.580 million. 1,580,000. these numbers are hovering at numbers we haven't seen in close

to 15 years. on the start side it gets very complicated because i can't see the differentiation between single family and multi-dwelling and there really is an important distinction there. i'm sure diana olick jobless claims out, 861,000. this is definitely about 100,000 more than many expected. it's a rise. benchmarked against a revision upgraded to the up side. not good recorded at 793,000, now stands at 848,000 continuing claims, a week in arrears, 4,494,000 that's roughly about, i don't know, much higher than the 4.2 we were expecting and the revision also was higher from 4.545 to 4.558 finally, import prices, joe, for january, all higher than expected around the block.

month-over-month import up 1.4 that's definitely much more than the 1% we were looking for if you look at x petroleum, that's up .9 if you look at year over year up .9. those are double what the expectations were on the year over year. now on export prices, wow, expecting .8, joe. three times that up 2.5%. year over year, 2.3. these are big jumps. going to fuel the fire as to what pricing issues we're going to be looking at when we start to, of course, get on the other side of covid. back to you. >> thank you, rick higher and fueling the fire. you said higher three times, rick great to have you back thank you for that i was waiting for them three little dings there steve liesman joins us with more today's edition of liesmania hey, steve >> thank you very much real quick i want be to add in, i don't think rick gave us the

philly fed which we have at 23.1 that's good news for the manufacturing sector bad news on claims we have to start thinking about what's going on with the u.s. economy, 861,000 we're headed the wrong way the trouble we have is every one of these numbers well above the worst times we had in the financial crisis housing i'm not too concerned with at the moment i'm seeing -- when i look at the table of housing, it looks like there were problems in the west. i think you had weather issues going on midwest down i think the issue right there is weather, but when you see the permits, you see where the howinhow i housing industry is going. saving the best for last the inflation story. the fed sees these as

potentially temporary here looking for a time, joe, when demand and supply both don't have the constraints on them created by the virus then it will figure out an inflation problem. you have to talk about the huge amount -- the size of the relief bill that's coming down the pike from washington right now on whether that combined with other issues that are out there, real imbalance in the economy services not so much of a problem. goods is a problem right now we'll see if the manufacturing sector, both domestically and internationally can create supply that offsets. inflation a big part of that was petroleum. we'll have to watch that as well joe? >> stick around. we're going to continue this conversation talk a little bit about the market reaction to the data. i want to bring in brenda vitilino from santos global advisor. trying to get your sense rick's with us as well

what's your sense of what the market reaction is to this are we looking at the numbers or expecting the stimulus to come and that's what the market is keying off of anyway >> well, i think the most important data point in terms of more stimulus was the jobless claims numbers clearly we are still in an environment where there are a lot of people unemployed and need help. there's a real disconnect between what's happening and the stock market we will be in an environment where we need to have more stimulus to support people who are still not employed lots of sectors of the economy are not going to be able to get back to full employment until we can reopen the economy that is going to take some time and it will require support until that can happen. >> if stimulus doesn't come as fast as we expect it or comes in a lower number version, what's the impact on the market at this point, do you think?

>> well, i think there's two sides to the story here. those concerned are going to over stimulate and those concerned are going to under stimulate. i think it will be a tough job for the fed really from a communications standpoint and from a policy standpoint and how do you properly stimulate the economy without even overheating wall street, which we've been seeing some signs of excessive risk taking within the stock market as we know, the stock market is so different from reality in the way it's composed and the sector composition there, there are really two different worlds. so i think we could see some volatility as a result i would not be surprised i think it would be a healthy development for the stock market to see a little bit of volatility here. it's not going to be an easy road for the next 6 to 9 months. >> hey, rick, what's the view from chicago this morning?

>> i think the view is focusing mostly on the fact that the stimulus is a big number the big number is going to have to ultimately be dealt with in the debt markets over time from the global perspective, the numbers are so staggering. it might not be the popular water cooler conversation that we've needed, we haven't even delegated all of the previous funds from, for example, the 900 billion package that was passed. i think you're going to continue to see pressure on interest rates and i'm not sure we're going to actually see the complete package close to 2 trillion get passed and actually i hope it doesn't. i'm not saying that i don't think people need help, but there's a lot of work-infested numbers in there we could talk about college debt, the trillions there, but these are issues that we need to think about at a time where debt is exploding and the fact of the matter is we're going to see

productivity globally just under huge pressure, probably for the next five or six years we're still feeling effects from the credit crisis. i think if you're looking for interest rates, look for them to go higher. if you're looking for corporate spreads, it will probably continue to narrow to take away some of that pressure that's building in the sovereign markets. >> hey, steve. we're going to hear from janet yellen later today on "closing bell." are you getting any sense either inside the treasury department or frankly inside the fed that there is any worry about inflation or there is a worry about the market mania or whether it even is a market mania as a result of this? >> i'm not, and maybe they're just keeping a bright face on it, andrew what i'm hearing is that the fed's specific policy is to aim for higher inflation to the extent they get it, they're happy to abide it at least for a time they look at the 10 million, and i know janet yellen does, too,

the 10 million jobs we've lost since february i think we have a very, very, very, stop me when i get to 10, very long way to go to get the market back -- to get the economy back to where it was i talked earlier about the three things the fed is watching those remain the size of the stimulus bill and relief bill will matter. if they see that the economy is ahead of where it thought it would be and inflation ahead of where it thought it would be, it could bring forward some limited extent the time that the fed doesn't turn around at least on qe but they're looking at this saying, you know what, there's a lot of problems in the economy supply problems. demand problems. we're just going to wait until things shake out to figure out whether or not we have a real inflation problem. this is important to underscore. you can have a temporary rise in prices that is not necessarily inflation. inflation is a long-running process where prices rise and rise and rise one after another.

one-time blip in prices as a result of what's happening with a pandemic is not the sort of thing that's going to move the fed. >> okay. steve, brenda, rick, thank you for your insights. becky? >> thanks, andrew. when we come back, a bit of a bookend today to the first chapter of the reddit rebellion and the rise and fall of gamestop key players set to be questioned by congress in just a few hours. when we come back we'll ask allianz advisor mohamed el erian if he sees any market reforms that could be on the way stay tuned, you're watching "squawk box" and this is cnbc. i invested in invesco qqq. a fund that invests in the innovators of the nasdaq 100, like you. become an agent of innovation with invesco qqq. ♪♪ we see temperature control software giving everyone a shot at vital vaccines. at emerson, our software is shepherding medicines through every step of the cold chain, helping track conditions

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welcome back to "squawk box. take a look at futures we're under an hour before the open 160 points off nasdaq off 20 points and s&p 500 off 22.5 points. shares of volkswagen higher. a little bit of news for you, joe kernen >> i was thinking about that earlier with lutnik when he said a german company it didn't narrow it down i'll give you a hint it's a german company. it would be great if it was mercedes, bmw. volkswagen audi there's a lot.

they're not all created equal. former sec chairman jay clayton has been named lead independent director at apollo global management. an investigation found that black had paid epstein $158 million. that expression we have of him right there, that's like when you hear it, that's kind of like the expression i have. when he paid him $158 million for tax and estate planning services but found no ties between black and epstein's criminal activities. black had already announced plans to step down as apollo ceo in july. jay clayton is a cnbc contributor and he's going to join us tomorrow on this very show at 7 a.m. eastern time. that's good news on both fronts, that he's a contributor and wil join us tomorrow >> thanks. meantime, taxing

millionaires including new gamestop millionaires. how much would the government make if it collected all of the taxes? details on new legislation ussigned to do that. pl, allianz advisor mohamed el erian will join us on "squawk box" on cnbc doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today.

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there's a new push in washington to ramp up tax collection, and progressives hope that the gamestop and reddit frenzy will revive taxing the wealthy. ylan mui has more on that front. good morning >> reporter: good morning, becky. the name of the new bill says it all. it's called the stop corporations and higher earners from avoiding taxes and enforce rules strictly act aka the stop cheaters act. it's brought by representative ro khanna. it highlights the ways wall street doesn't play by the rules so washington needs to get better about enforcing those rules. his bill would require the irs

to audit almost every single company with more than $20 billion in assets, half of individuals earning $10 million. 1/3 earning 5 to 10 million and 20% of people earning 1 to $5 million. it will increase scrutiny over gifts. the irs does not have the capacity to do this. it would provide $100 billion over the next decade to hire enforcement staff, upgrade technology so it can go after the biggest fish becky, there's analysis to estimate more than $1 trillion in uncollected tax revenue that's being left on the table >> ylan, is the -- i guess the insinuation is that everybody who's wealthy is cheating on this what about the idea of closing the loopholes that exist in the tax code as it is? >> reporter: certainly not everyone who is wealthy is cheating on this, but it's estimated the top 1% of easterners and there's even been

analysis that shows that the most audited areas are those of low income companies of color and hundreds of high income earners that don't file taxes at all. there's clearly a gap there. you can make up the most revenue by going after those who owe the most. >> is there support for this in congress do you this is something that will actually get passed? >> so congressman condit is circulating the bill today but what he has done in the past, he has partnered with senator bernie sanders to provide that senate progressive push and some of that momentum around the progressive community, increasing funding for the irs is something that has bipartisan support, what makes it different is the strings that are attached to it, so we'll see where it goes. >> thank you good to see you. joining us now to talk markets and what is expected, if anything specific from the gamestop hearing in washington

mohamed el-erian, allianz adviser and president of queens college in cambridge there is a hearing today, mohamed, and when it was happening, we did speak to you about whether there were bigger issues involved in that entire incident so maybe you do have some thoughts, but i would also like to get your thoughts on some of the recent economic numbers we've seen, we've got not great news in the jobs market, but some inflation numbers that were interesting, to say the least. and then also, what was the other one, the great retail sales numbers, and it is kind of a flush consumer, so there's a lot of trade winds, a lot of different things going on. where are you? >> so let me start with the hearings, we're going to get lots of headline, lots of sound bites. the big message, shadow joe, will that regulators have lagged in a serious manner. the migration of risk on banks to nonbank, and the changing

market structure the other big signal will be that we can look at a market accident, but we're not going to get very specific guidelines on regulation because there are so many competing issues here on the economy, yes, the data is mixed. yesterday's retail sales was great. today's employment, jobless claims numbers, disappointing, but the key issue, joe, is looking to the reaction of markets. good news is no longer good news for the markets. bad news is no longer good news for the markets. and keep an eye as you heard me say for the past few weeks on the 10 year yield and on the steepening of the curves that's going to tell you how the market is going to react to a mixed economic picture >> mohamed, which interest rates are giving us the true signal, the rates going up on the 10 year, the rates going down, with the curve, on things like junk

>> so i think we're getting two signals. one is fear about inflation. and that's why these curves are steepening and if you add up the numbers, we can easily get to injections of 20 to 25% of gdp, even under some modest policy scenarios because remember, you've got the fed pedal to the metal, at 120 billion a month and 3 to 4 billion coming, trillion, coming in, from the fiscal two packages so there we are, there are inflation concerns and that's what the bond market is telling you what the spreads are telling you is that for now, for now, the markets will not believe that the fed effectiveness in delivering low volatility in the credit market is going to change because they don't believe likely that we're going to have a wave of bankruptcies so as long as the fed has your back covered, you will continue

to buy credit. but the two things conflict at some point, and that's what people who look at the details of the market are investigating very closely where is that point? some people think it's around 140 to 150, on the ten-year yield. >> are the stars aligning for inflation to at least be higher than its been recently maybe we don't have resurgent inflation like we worried about or stopped worrying about, or we used to worry about it, but look, maybe wage pressure, who knows, what happens, all of the stimulus, that we're seeing, energy prices, which are going up, a flush consumer, just a lot of, all the money printing, it's just, i can point to a lot of things, what's deflationary at this point, mohamed, to offset some of those things >> so the inflation side, and i won't use the word inflation, i will make the distinction steve

just made, we are going to have a pop in the price level this year that's going to be well above what the fed is expecting. why? because of the mistiming demand is going to go up effective demand is going to turn, notional demand is going to turn into effective demand, and supply is not going to respond that quickly so we will have a pop in price levels the economists will tell you, i'm not sure it's an inflationary process the market will not make that distinction. so we will get a change in price level that is in excess of what the fed thinks, and it's going to put the fed in a difficult situation. as to the underlying element, i think if you look at the supply side, and you look at other influences, this is likely to be a price pop, as opposed to inflationary process >> mohamed, so that's price inflation. in terms of asset inflation, i know you admit, you sold your bitcoin, you sold it at -- >> 19. >> i don't want you to admit

that. >> i bought at 5 and sold at 19 and watching it above 50 thinking i'm an idiot. >> is that, the b word, the b word, bitcoiners, or is it bold, one manifestation of a lot of money chasing something, we saw the hearings today, money chasing gamestop, we saw money chasing spacs, we see money chasing junk bonds there's a lost liquidity chasing a lot of -- a lot of liquidity chasing a lot of things. is there asset inflation and are these troubling signs that some day we may look back on it and say how did we not point to these things when they were occurring, or is it still early? >> yes, on both. we have excessive risk taking. it's rational because so much liquidity is being injected into the markets, so yes, we have

excessive risk taking, it is going to continue for a while. and i am afraid, i gave you my four risks, and i told you the highest probabilities are a market accident, and the fed loses control of the yield curve. we came close on market accident thank god we didn't have it. and there's concern about the yield curve. so those are the two risk factors that are now flashing yellows and investors should look at them but it's irrational behavior if you've ridden this liquidity wave, whether you've done it on spacs, high yield, bitcoin, no matter where you've ridden it, you've done really well, so the investor conditioning is very deep at this point, joe. you really need a major correction for us to change the conditioning of buyer, regardless of the cause. >> just out of curiosity, where would you go back into bitcoin if you could >> so, joe, i don't understand

bitcoin well enough to give you an answer. psychologically, having sold at 19,000, i find it very hard to get back in, unless we get to 19,000 i was with you, if you remember, a few years ago, on set, when we were at 19,000 and you asked me, when will you buy it and i told you below 5,000 and that's why i bought and 19,000 became my framing. i don't have a theory for the pricing of bitcoins. so i am more behavioral on this than anything else, so you shouldn't listen to me on bitcoins >> all right you know, depending who you listen to, there are models and different ways to try to value it, but any time do you, it there are a lot of assumptions that are involved, and i just wondered what your take, people, for example, if someone says it's going to 100,000, and you know, at 51,000, or wherever it is, it is, it would be, you just have to close your eyes and do it, i guess.

but there are some, obviously some people are buying it here but it would be tough after -- >> good for you. >> but buy it here, if you believe the private sector adoption will continue and then every signal to suggest that's the case. however, the officials are pushing back and that's the tug of war that you've got to figure out as an investor can you simply bet on the private sector adoption? or do you have to incorporate that governments are going to react. they are going to react. they're not going to give up on their notion of a currency and that's what you're trying to figure out. >> right right. you're absolutely right. and taxing authority, everything, it is, it's a loss of control for a lot of major players. mohamed, thanks. a wide range, all over the place. but we'll talk to you soon see you again soon >> thank you >> i wasn't rubbing it in, that 19,000, i was just trying to get -- >> that's okay, i'm not worried about you being audited by the

irs, joe. >> okay. one more reminder, don't even say that one more reminder to catch an exclusive interview with treasury secretary janet yellen today at 4:00 p.m. eastern time, on closing bell. we got to go make sure you join us tomorrow see you guys "squawk on the street," that's next good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber and leslie, cramer has the morning off, more signals this morning that the backup in yields is beginning to pinch equities at the margin features are weak. nasdaq is down a percent over the past couple of days. ten-year 130 energy prices spike on what's become a true humanitarian crisis in texas. our road map begins with the gamestop hearing with the ceo, robinhood, reddit, melvin, and citadel, all sort to testify. >> then the latest on that very cold weather i