power is slowly being restored in texas, but now, more than 14 million people lack access to clean drinking water we'll have an update straight ahead ahead. and treasury secretary janet yellen making a push for stimulus saying there's a bigger risk in not doing enough friday, february 19th, 2021, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernan and andrew ross sorkin. we're going to take a look at the u.s. equity futures. last trading day of the week, as you know things are up across the board dow futures indicated up 73 points, this comes after a down day of markets across the board. yesterday the dow was down from

a record high, down by about 120 points and right now for the week, it's sitting right on the edge of whether or not it's going to be a positive week. if we see these trends continue, like we're seeing right now, it will be another positive week for the dow, but like i said, it's up for the week to this point, but barely. s&p futures after declining 4/10 of a% are indicated up 12 1/2 points this morning, and the nasdaq was the big loser, down by 7/10 of a percent if you're watching the treasury market, you'll see right now that the ten-year looks like it is yielding 1.38%, pushing back against 1.3% like we saw earlier this week. let me send it over to the birthday boy, happy birthday, andrew. >> oh, goodness, i was hoping i was going to get away with not doing birthdays. >> no such skating. >> right out of the the box. >> thank you thank you, i appreciate it. >> happy birthday. >> you're welcome. >> thank you it's very kind of you. >> it's going to be three hours

of celebration three hours, a hundred and how many is -- 180 minutes of pure celebration. >> what do you request, beatles, you like that beatles song, a good one for you, to get the blood going, too maybe we'll play that it going out of the break. >> today is your birthday. >> besides the birthday, we have a much bigger lineup that has nothing to do with birthdays today, in reaction to the reddit hearing that took place on capitol hill yesterday starting with congressman richard torres at 7:00 jay clayton, former aei president, arthur brooks, at 8, td ameritrade joe moglia, and one those participating in the hearing, citadel founder and ceo ken griffin, all coming up right here on "squawk box. >> i mean, think if we forgot,

like molly ringwold, think about that she went through an entire movie. >> "16 candles,". >> it was horrible, and she got more and more depressed and sad that people didn't appreciate her. we wanted to make sure out of the box that's not going to happen know you know, we've done birthdays together all three of us very a very long time on this show. i'm very appreciative. >> is it 12 or 13? it's a long -- it is quite a while, and -- >> ten >> i watched you. >> is it only ten? >> yeah, because i remember -- >> he's in the 40s now, aren't you? you're no longer that young, you know, go getter, you're now sort of on the downward. >> as my son said last night, you're not just 40, you're now in your mid 40s. it's 44. he thinks that's mid 40s.

>> that's what kids are for to make us all feel better about ourselves. that's early 40s that's early 40s when you hit 45 is mid 46 through 48 is mid, and then, you'll see how to work it. you will find a way. it should come naturally. >> we actually had the mid, he said anything over 43. he thought 44 to basically 46 was mid 40s, and then he thought 47 was late 40s. >> i will say, he's doing it just like they do on the grading scale. that's what they do in grades at school, right, like, if you get a 94 to 97, that's a mid a it's not an a plus it's not an a minus. >> and he's 10 you seem ancient to him. we'll talk more. >> to joe, on the other hand

>> yeah, exactly treasury secretary, well, when you hit middle age, or early middle age, it does, you know, and i'm still in that sort of, okay, i'm in middle middle age now. treasury secretary janet yellen making a big push for a stimulus package. my hair is brand new anyway, here's what she said on cnbc. i think it's very important to have a big package that addresses the pain this has caused 15 million americans behind on their rent, 24 million adults and 12 million children who don't have enough to eat small businesses failing you know, i think the price of doing too little is much higher than the price of doing something big. we think that the benefits will far outweigh the costs in the longer run >> and i want to hear this,

secretary yellen also weighed in on the potential for regulating bitcoin. i feel it's important to make sure that it is not used as a vehicle for illicit transactions, and that there's investor protection and so regulating institutions that deal in bitcoin, making sure that they adhere to their regulatory responsibilities i think is certainly important >> okay. never mind i'm not sure what that meant exactly. anyway, the price of bitcoin right now, as you can see, up $660 went right through 666 now, closing in, perhaps on 53,000 becky. >> thanks, joe and we've got an update right now on the crisis in texas

as of this morning, power has been restored to many of the customers who lost it earlier this week. although around 200,000 homes and businesses are still in the dark but now there are more than 14 million people there who don't have access to safe drinking water. cities including austin, houston and san antonio are under boil water notices until monday some of the residents say they're bringing in shovels full of snow to try and flush their toilets. we'll get an update from brian br sullivan at 6:30 a.m. eastern time. pfizer has started testing the covid vaccine in pregnant women. they plan to seek to determine if the vaccine causes any harm to the fetus or if it could lead to miscarriages. separately, an israeli study found a single shot of the pfizer vaccine was 85% effective in preventing symptomatic disease, the news coming when governments debate whether to delay the second shot to make most of the short supplies that's an interesting and good

development. meantime, white house adviser, andy slavits says yesterday, the johnson & johnson could end being two doses. it is now conducting a study to see whether a booster improves the level and duration of protection against the virus progress hopefully on both fronts there, joe. >> it's like the opposite. >> right, the two shot for pfizer goes to one, and the j&j goes to two. >> i think we understand how it works. you give it some time. look, get one. get one. and then, you know, get one, and then i think the worst case scenario comes off the table that, you know, i'm not talking about published papers in the new england journal of medicine, but i think mostly, you know, i would like my chances a heck of a lot better after one, and then

get the second one, and then let's move on. supposedly by christmas. i want to be able to go to cancun, for example, if i'd like to i'd like to have the option of going to cancun perhaps. maybe. if i would like to maybe somewhere else >> it's lovely there >> you could just make a one-day trip >> this time of year >> yeah, this time of year, it's lovely. coming up, congressman ritchie torres weighs in on yesterday's hearing over reddit and gamestop, and then later, citadel's ken griffin joins andrew in an exclusive interview as we head to break, here's a look at what he told congress yesterday. >> we simply play by the rules of the road. payment for order flow has been expressly approved by the s.e.c. it is a customary practice within the industry. if they choose to change the rules of the road, we need to drive on the left side versus the right side that's fine with us. i do believe that ymt paenfor order flow has been an important

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for just $64.90 a month. and ask how to add comcast business securityedge. call today. in congress brought together some of the power players behind the january trading frenzy leslie picker joins us now with more hi, leslie. >> good morning, joe here's what happened during that 5 1/2 hour hearing yesterday

robinhood ceo vlad tenev received most of the attention with questions around restricting trading amid the volatility last month. ken griffin received his fair share of heat as well, asked to explain the various facets of off exchange trades that market makers like citadel play brokerages like robinhood for the privilege to execute melvin capital's gabe plotkin was largely asked about short selling reddit's ceo there were no nefarious actors, and keith gill about his case for gamestop perhaps the most revealing exchange of the testimony was this exchange showing how close robinhood really came to the brink. >> there were a series of steps that the robinhood securities team took to -- >> at that exact moment, did you have the liquidity for 3 billion, 5:11 a.m. >> at that moment we would not have been able to post the 3

billion in collateral. >> they're talking about january 28th there, and gonzales confirmed that had tenev not been able to derisk at that point in time, he may have been forced to liquidate a catastrophe for the firm, and its 13 million customers, guys >> leslie, i don't know, we saw all the usual sort of extracurriculars, right. >> oh, yeah. >> that we watch, and we just go, you know, we elected all of these people i'm not excusing the people that are being grilled, but there's a way of grilling people, and getting answers without, i don't know, what is it what is it that gets in their mind that they think they're in a position to -- i guess they are, but how about asking a question that's probably got 15 or 20 different answers and nuances and that you need to go into, you know, all kinds of detail to explain what happened

and they demand a yes or no answer and then if you start to say something, they'll say it again and again and again. just to slap you around, just so that you know who's in charge. i mean, did you see that >> i did. >> what is the point >> do you want to elicit information or do you want to let these people know you think they're scum. >> i joked on twitter, am i a cat, yes or no, that was keith gill's opening line, i am not a cat. he is also not a hedge fund, he said during his opening remarks. i heard of a lot of that, which is of course difficult when it comes to the intricate workings of our market structure system things aren't always exactly yes or no. but, you know, that's the theater side of this whole thing, you know, representative maxine waters did say there will be additional hearings on this if you couldn't get your fill in the 5 1/2 hours that there will be two more to follow to find more answers and there were certain things

that i was surprised they didn't actually even really hit at. when this whole thing went down, the whole dialogue from washington was all about short squeezes and what that means for volatility that really wasn't even brought up at all, nor was there a true postmortem of what took place on that day there was politicized issues payment for order flow became politicized. there was a transaction tax that was brought up a lot of course it went down into politics to a certain extent, you know, it will be interesting to see what actually comes from this >> people see the poll numbers, the politicians know the poll numbers of wall street, and the populist sort of feelings throughout the country, so they like to play into that, but i don't know, they shouldn't check the poll numbers for congress, probably you know, maybe don't look too closely at those while they're looking at the wall street approval ratings our next guest, uh-oh, he's on the financial services

committee. he questioned robinhood founder vlad tenev about what he calls the democratization of financial addiction. >> my question for the ceo of robinhood, how much of your revenue comes from payment for order flow. >> i don't recall the exact percentage, it's over 50%. >> i worry that the real world impact of robinhood is the democratization of financial addiction, you know, robinhood has gaming features that seem to manipulate retail traders. there's one feature in particular that encourages retail investors to tap on the robinhood app up to a thousand times a day. do you share my concern that a retail trader tapping on a robinhood app a thousand times a day is a sign of addiction >> joining us now is freshman congressman ritchie torres it's great to have you on the show, congressman, and i guess my first question is you went

into the hearings wanting to know certain things. when you left, do you feel like you found out what you went there to find out? or are you still -- do you have additional questions about what happened >> the plumbing of the stock market is enormously complicated so i have additional questions, but the purpose of the hearing was to go beyond the sensational david versus goliath narrative and establish what are the facts, what are the larger policy questions surrounding the gamestop short squeeze members have question about execution quality and payment for order flow, and gamification and clearinghouses, and you know, for the first time, the ceo of robinhood confirmed, as your previous clip showed, that robinhood did not have sufficient liquidity to meet the original $3 billion margin fall, and that was the first time that he had acknowledged as much in a public hearing, so it's

important for congress to get these financial players to answer questions under oath and to answer as honestly and forthrightly as possible. >> that's true, congressman, and it's especially true that in hindsight that is not a good position to be in. and maybe we, to some extent, you know, dodged a bullet. we have had some people come on the show and said it could have been a complete disaster that day. we've had other people come on and say that the markets worked well but once again, in hindsight, wiwe now realize they need a lot more capital if they're going to play in this business the way they're going to play. at least that's a positive, right? >> exactly the state admission of robinhood is democratization finance you have to assure your company is sufficiently capitalized to live up to the state admission but the company in my opinion has been poorly served by the

mixed and muddled messaging from the ceo. there was an interview, a cnbc interview in which he famously said that the company had no liquidity problem, and i thought that statement only served to contribute toward the swirl of conspiracy theories and misinformation that took hold in the immediate after math of the trading restrictions >> congressman, it is arcane and there are a lot of nuances to wall street, do you think it's fair at this point the way it's characterized, not necessarily by congress, or the media or elsewhere, but there is a perception now that it's just not a level playing field, and how would you change that? would it be -- does it need to be changed internally at the company's involved, or do you think that regulators need to exert more influence over whether the markets are fair for

everyone >> well, let me be clear that yesterday's hearing was the first of a series of hearings. there's going to be no rush to regulate for the sake of regulating there's a genuine commitment to fact finding and understanding and i think we all share the goal of how do we best make the markets more accountable to more transparent for, and more protected of retail investors. it's unclear that retail investors have the information necessary for evaluating which brokerage firm offers the best excuse in yesterday's hearing, i expressed concerns that payment for order flow does appear to have adverse incentives that under payment for under flow is a preverse incentive for a brokerage firm like robinhood to send orders to the trading firms that offer them the highest payment rather than offer the retail investors the best execution. that strikes me as a legitimate concern we should exam in much greater detail. >> congressman, one of the

questions i'd ask you is what you think we're trying to solve for when we have the conversation about payment for order flow there is an argument, as you know, that the companies will make that effectively it has democratized this. we talk about it allows effectively more people to trade, to participate, dare i say it's something that i don't encourage, but to speculate and to be able to speculate in the same way, maybe not, i shouldn't say the same way, but at the same levels, potentially, as some of these professionals which is what so much of the public seems to say they want in this instance. it's sort of a reversal of how we have thought about investor protections over the years how do you weigh that against the idea that if you took the payment for order flow piece of it away, that each trade would have a cost to it and therefore you probably have, i imagine, less quote unquote trading and maybe less speculation maybe that's a good thing. maybe it's a bad thing

how do you think about it? >> i want to be crystal clear, we're not advocating a ban on payment for order flow it seems premature to commit to a particular policy course of action it's true that payment for order flow is the basis for zero commission trading but even though there's no physical price, no commission at the front end of the transaction, there is a hidden cost to retail investors at the back end of the transaction. and it's not clear to me whether there's sufficient transparency around the hidden cost to retail investors that come from payment for order flow citadel securities stayed that it saved retail customers over a billion dollars for payment for order flow but i asked yesterday how could citadel possibly know that, citadel directly transacts with the brokers and not the retail investors. it's not clear to me at all how much of the price improvement is being passed on to retail investors and how much of it is being pocketed by robinhood as

profit so i think there's a case to be made for greater cost transparency. >> congressman torres, thank you for coming on and giving us your thoughts and your insights on how it went yesterday. we were all watching, and i'm sure there might be a -- it might be episodic, might be another one, might be another episode coming we'll all look forward to appreciate your time today, sir, thanks. >> take care. coming up on the other side of this break, a big legal loss for uber overnight take a look at that stock. we'll explain what's going on, off about 3%, this morning we've got details. check out the price of lumber, topping $1,000 per 1,000 board feet for the first time ever the higher lumber price likely behind a drop in january housing starts "squaw rur rhtft thisnsig aer ♪ ♪ (upbeat music) ♪ ♪ ♪ ♪

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time now for the executive edge. a big loss for uber overnight. the u.k.'s supreme court ruling that drivers there must be classified as workers entitled to minimum wage and vacation time the ruling expected to set a precedent for gig workers across the country. you're looking at that stock down about 3% right now. obviously this could have huge implications, will have huge implications in that country the question is whether that goes elsewhere they have had this debate in states across the united states, including california where they won effectively, that fight, guys >> they won that fight only because they were able to get on the vote, you know, on the ballot, and have the proposition that went forth with that. if this is the last word from the courts, and if there is no

means for them for getting on to the ballot, i guess the question becomes what does uber do in response i think they had threatened in california to say they wouldn't be able to operate in the same way, they wouldn't be able to have the same services there, and i wonder if that's what they're going to say to the u.k. after this this is a court case going through the court system for years at this point. >> and what i don't know, though, which is different in the u.k. than in the u.s. is part of it was there was a public pressure campaign, as you know, in california. in part because there were so many uber drivers, frankly, who relied on uber, and so there was a feeling that if uber were to pull back or have to raise their prices, it would limit the business the u.k., i'm not sure, i don't know how similar it is there's a very regulated taxi business that has been completely up ended, at least in london and certain other cities by uber and so there might be a bit more of a debate about how that takes place but we'll see. >> push back

right. anyway, the stock is off by about 2 3/4% this morning. this is news that just came in the last maybe hour or so. when we return, we'll talk about millions of people being without clean drinking water in texas, even as the power grid comes back on. brian sullivan will join us with the latest on the ramifications for the energy sector. right now, though, as we head to a break. we'll 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.

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good morning, u.s. equity futures at this hour are indicated up a little bit after, you know, a down day yesterday, that you could attribute to a lot of things, maybe mostly walmart, but you know, we get these for every

really positive economic signal we get, we're reminded of how many jobs are still gone, and when claims go up instead of coming down, andrew. >> meantime, the lights are coming back on for the millions of texas residents who lost power. utility officials saying limited rolling blackouts are a possibility if electricity demand rises and for that story, we go to our energy expert, brian sullivan brian. >> appreciate that andrew, thank you very much. listen, there's still 200,000 homes without power. that's 200,000 homes, probably maybe, i don't know, 800 to a thousand, to a million people, but that is way down from three or four million homes without power. so there is some good news the other good news that mother nature is going to help out, move these storms on, it is going to warm up in a few days in fact, i looked out next week, it could be in the 70s so that will just eliminate all of that. still a terrible situation, a lot of clean up to do.

but thankfully things are getting better look at these lines. that is people lined up for propane, for water remember what happened, certain water pressure dropped to the point where they weren't sure that the water supply would be safe or clean. so you literally have lines of hundreds of thousands of people trying to simply get water or to have heat. very very rough situation. hearing from a lot of friends down there in the houston, texas areas, and thinking about them everything is starting to come back online. from an energy perspective, at one point, maybe upwards of 40% of u.s. oil production was simply offline remember, when you have these wells, you get water vapor water vapor, what happens when it's really cold well, it freezes freezes gauges, knobs, uninsulated pipelines, wind turbine blades everything froze up. by the way, it is not quite over for the electricity side electricity something we don't think about, guys, there were still trades being done yesterday in the thousands of

dollars per megawatt hour. put that in perspective, would normally be about 70 bucks for a megawatt hour, if you wanted to buy electricity on the open market there were still trades done at a couple thousand or 7,000 per megawatt hour. who has to eat that? if you're wondering who's paying that okay there's a couple of companies you want to watch. one here, one in germany nrg, ticker, nrg, by the way, new jersey based company, has the naming rights of the houston stadium. that stock down 12% because concern they have to go out in the open market to pay these prices to continue to supply power, and rwe, that is a name that's probably unfamiliar to a lot of us, it's germany's largest power producer, they're actually a big wind farm owner in texas a lot of their wind farms were knocked out and last night or yesterday they warned they're going to have low to mid triple digit million euro hits to earnings

they had to go in the open market in trading and buy and pay. they can't pass, andrew, you know, i hope these prices on to their consumer you literally have an electric bill that could be $10,000 a month or something like that i'm not exaggerating someone is going to have to eat that, and coming up at 7:15, i'll tell you about a new report that shows that ercot was minutes or even seconds away from a melt down so catastrophic the blackout could have clasteda mont month. >> wow thank you, brian, it sounds like it may be cheaper just to fly to cancun for a day. >> which class of service, both classes, i'm sure it is cheaper. >> okay. thanks becky. thanks, andrew when we come back, fallout from the pandemic, the impact on workers hasn't hit all population groups equally. we're going to talk about women in the work force right after this. and later, former etna ceo

mark bertolini will join us on the vaccine rollout. also a reminder, you can watch or listen to us live anytime on the cnbc app (man) i'm a verizon engineer, part of the team that built 5g right, the only one from america's most reliable network. we designed our 5g to make the things you do every day better. with 5g nationwide, millions of people can now work, listen, and stream in verizon 5g quality. and in parts of many cities where people can use massive capacity,

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welcome back, everybody. a lot has been written about the pandemic, forcing women out of the work force because they have to take care of the kids according to the labor department, about 275,000 women dropped out of the work force

just last month alone. joining us right now to talk more about working mothers in the midst of a pandemic is joanne lublin, author and former management news editor at the "wall street journal." she's out with a new book this week that's called power moms, how executive mothers navigate work and life. it's great to see you. thanks for being with us. >> thanks for having me. >> so this is something you have been following for a very long time, and now everybody else is paying close attention to as well, because of the pandemic. when you start looking at power moms, i know you looked at different generations of mothers, kind of the boomers, versus the general xors. what have you found in terms of where we stand over the course of i guess a few decades. >> well, the biggest change is that we've got more supportive spouses out there. and we've got more supportive workplaces, and all of that is mae making the burden of being a

working mom with high ambitions for their families and careers easier than it was for my generation of boomers. >> i think people were feeling pretty good about that until recently, until what we saw with the pandemic with schools shut down in so many locations, it's really kind of focused the fact that working moms have had to bear the brunt of most of that >> yes, and that's why rather than calling this the she session, i think we should be calling it the mom session the burden definitely has been hitting working moms a lot harder than working dads there was a study that came out yesterday and it found that among moms with kids under 18, 28% had temporarily or permanently left the work force since last march versus 10% of such dads. >> wow, you think about the gains that women have made in recent decades and you just

wonder if those -- if that setback is going to be more than just a temporary issue, if this takes a long time to kind of work their way back from that. >> i think for many women, it will be a long road back, but luckily we're living in an era in which employers are more aware of the needs of working parents, men and women alike and they get it. they know particularly as we look ahead if they want to attract and retain best and the brightest, they need to be catering to their needs and it seems to me that means more permanent arrangements for working from home as we have already seen in recent weeks like the announcement by salesforce >> you know, part of what you do in your book, joann is talk to some of the trail blazers, women who did this first, women like carol bartz who went through

this, and hershey's ceo's, and women that pushed through when workplaces weren't quite as accepting. what lessons did they offer in ter terms of things we can all kind of learn from? >> well, i think it's really important not only to choose the right spouse and also to choose the right workplace, but it's equally important these women learned to have mentors and sponsors at critical stages of your career. men and women alike, but probably more so men because the guys are still in charge of most companies. >> in terms of what the workplaces are doing right now, joann, is this a national movement that you think is going to be hard to ignore in terms of more flexibility, in terms of letting people go out on maternity leave, come back in and not feel like they're punished for it?

>> i think the national movement is one about this experiment about working from home, and because no one really thought that was practical, having proved that it works i think is changing a lot of attitudes about other issues related to working parenthood and so you have more companies, particularly bigger ones, offering paid parental leave, i irrespective of the gender status. >> i want to thank you for your time it's an issue we want to watch closely as we continue through the pandemic we want to thank you, and congratulations on the book. >> thanks, becky >> thank you andrew >> okay. thanks, becky. coming up on the other side of this break, we're going to talk about some of the tech names that are part of the work from home trade, and whether they still have room to run those names, right after this. 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 podcastpp aand subscribe to "squawk pod" today. these days, we want sophisticated but simple. cutting edge made user friendly. in other words, we want a hybrid. and so do retailers. which is why they're going hybrid, with ibm. a hybrid cloud approach with watson ai helps manage supply chains while predicting demands with ease. from retail to healthcare, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm.

welcome back to "squawk," our next guest says power and p stimulus packages are what's wor working. we have the chief investment officer of camp capitol management and cnbc contributor. play this out. if that's the thesis, what are the stocks that you think are working right now but also how you think about that in the context of whether we actually get a new stimulus package or not and how big that package ultimately is. >> andrew, great question. so the way i look at this, we talk about millennial purchasing power. some companies are doing well because of the movement away

from the ways we traditionally did things let's look at square, for instance one of the things square has as a product is cash out. a lot of things occurred over the last few days particularly with the robinhood trade some are disgruntled cash app picked up additional users. the reason why i like square in this particular marketplace, they've been able to gain over 60 million users in a period of about eight years. it took jpmorgan 30 years to buy back positions to get the same number of customers so that's why we really like this. square had a great quarter last quarter. came in about 12 cents eps compared to a loss of 4 cents. so 400% gain square is doing all the right things has a good commerce ecosystem. >> here's the question >> yes >> on square, how much room does

it have to run we've shared a chart where it's been on its own run already. >> absolutely. we have to look at the business model for square they have the ecosystem. it's built on the entrepreneur the business owner we feel this is a place we want to make a positive bet on the increasing business owners because this allows square to reach those customers. so we think that they have a long runway given their ecosystem and they're doing something very unique in that they really work closely with entrepreneurs. they have classes to really assist entrepreneurs to be more successful this is difficult from a bank visit with entrepreneurs square has a long runway based off their strategies. >> what else do you like >> yeah. so ultimately we like etsy becky was just talking.

>> about moms working from home. etsy is a platform -- ecommerce platform that has, first of all, 90% of the sellers working from home second, 80% of the sellers are women. this company has done exceptionally well over the last year eps has gained 247% from 2019 to now, 2020. and, andrew, that runway we feel that this type of ecommerce is the way to go because you have a better connection now with the sellers and the buyers also, etsy purchased refer which is the instrument. we feel stimulus will happen we don't know the exact numbers. some things we like, cdw they sell technology to local governments and schools. what's going to happen with the

stimulus package, you have money flowing to the states and money flowing k-12 and colleges. cdw stands to benefit from that. they've been benefitting from that because more and more schools and governments have to depend on technology to deliver their educational platforms. >> okay. we've got to leave it there, jake thank you. we will keep our eyes on all three of these stocks. they have moved already and we'll see whether they continue to move up we appreciate it thanks so much >> thank you, andrew happy birthday to you. >> thank you >> only the beginning. coming up -- that was only one hour next two hours are going to be really good. coming up, huge lineup coming your way covering the big stories of the day, including reaction in the reddit hearing from former sec chair jay

clayton. citadel ceo ken griffin. as we head to a break, joe moglia picks from him s&p sectors that have lagged technology and health care the two biggest losers you're watching "squawk box" on cnbc so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. ready to shine from the inside out? try nature's bounty hair, skin and nails gummies.

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"the game" stop saga taking center stage in washington we have highlights from the hearing and what lawmakers learned minutes away. power slowly returning to texas, but the damage of this week's deep freeze could have a long-term impact on this week's industry and with drug stores like cvs getting access to vaccine doses, will it help the distribution bottleneck we'll speak to mark bert tow line any the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures on this friday morning,

2 1/2 hours before markets open. 31 points higher on the dow. s&p 500 up 7.5 points and the nasdaq opening 46 points higher. becky? >> thanks, andrew. here's what's making headlines at this hour shares of uber falling in pre-market trading after the u.k. supreme court ruled uber's drivers are employees rather than freelance workers that entitles them to full benefits they upheld a ruling by a tribunal that stock is off by 2.5%. roku shares are gaining ground after they reported an unexpected profit in the latest quarter. this happened as consumers stuck at home bought more content. roku shares up by 3.4%. pfizer's covid-19 vaccine was 85% effective after just the first dose according to a study of israeli health care workers

published in the medical journal "the lancet. pfizer's vaccine is designed to deliver maximum protection after two doses. there are questions being asked about whether the first doses should be given out to more people in order to get a broader number of people vaccinated. joe? >> thanks, beck. yesterday's house financial services committee hearing on the trading frienzy taking centr stage. ken griffin defended it. leslie picker joins us and she's going to outline every single thing you need to know about yesterday's hearing. is that correct, leslie. yes or no. >> in just win minute time. >> yes or no yes or no, leslie, are you going to do that. >> it's a more complicated answer than that. >> yes or no >> it's a more complicated answer than that. >> yes or no, yes or no. >> are you a cat, joe?

are you a cat? >> i am not a cat. if i'm anything, i'm a dog i don't mean it that way i love dogs. >> at least we learned something this morning to your point, after yesterday's house financial services hearing, very long hearing, many are now asking, okay, so what comes next here? chair woman maxine waters noted there will be two more hearings. the big question mark is whether lawmakers will pursue additional regulation based on what they learned yesterday. there was plenty of talk about things like conflicts of interest, the incentives structure on the front end and back end of payment like joe was talking about. but for those who stayed to the very, very end, representative waters offered a pretty strong reflection on the testimony. >> i'm more concerned than ever

that investors are being fleeced in massive market makers like citadel may pose a systemic threat to the entire system. the committee is going to continue to examine these issues >> okay. so the word systemic hreat, pretty strong words there. i'm hoping that ken griffin answers to those comments next hour when you all interview him. he did testify that his firm handles more than 40% of all retail volume. griffin also received a large swath of questions about that payment for order flow or how market makers pay brokerage firms to handle trade execution. for his part griffin suggested more regulatory action that would enable public exchanges to compete with off exchange venues like citadel securities, guys. >> okay. thank you, leslie, for all of that for reaction to yesterday's hearing we are joined by jay clayton, former sec chairman

as of yesterday, apollo's lead independent investor i want to ask you about that, jay. let's start with the hearing we're going to have ken griffin on later i'd love to get your take on payment for order flow which was so central to this hearing and these issues that are being brought to bear. do you think payment for order flow is a good thing or a bad thing? >> well, joe will laugh at my first two answers. first one is happy birthday. >> thank you >> the second one is it's more complicated than that. why is paymentfor order flow part of the system here and why has it been allowed? look, what we're trying to do is drive competition, transparency and resiliency in this system. one way to drive competition that the sec has looked at and should continue to look at, i

thought this was a terrific hearing because it brought to bear a lot of these issues, is through a payment for order flow at the end of the day does that practice drive better execution, lower overall cost for the retail investor is a good question the answer has been that we think so, but as the ecosystem changes and i think you're going to ask ken this, what do we do to continue to increase competition, to put the exchanges on a better foot you know, we have to look at this practice as well. i expect the sec will do it and i expect that congress will continue to ask them to do it. >> jay, you said just now that you think there is better pricing. i don't know if it's the prevailing wisdom, but the narrative is that because retail investors aren't paying commissions, they're paying another way through payment for order flow and, therefore, are getting worse execution. do you think that's right or

wrong? >> well, let's start with the premise that liquidity is not free, okay to tlrade there has to be some kind of payment. it's not free for several reasons including we have to build up an entire ecosystem that was resilient one thing focused on, how resilient is the system? are there systemic issues? it costs money, liquidity isn't free people take risks to provide liquidity so there is some cost. the question is how are we measuring that cost? and where it gets paid and are people aware of the costs that they are paying they should be they should be aware of the costs they're paying should be aware of how much payment flow could change their execution at all how we measure it today. this came out in hearings.

how we measure it today is against -- the term price improvement came out price improvement is how much better did you do than either the end of the bid ask spread. we measure that against a bid ask spread that is published, i'm being a little bit technical here, but that is published on the live exchanges for hundred share lots there's a lot that we should look at as to whether that is the right yardstick for measuring price improvement and best execution, including whether we continue to have 100 share lots or we go to smaller lots or higher priced stock. i just said a lot there, andrew. all of that came out during yesterday's hearing. i expect joe moglia and ken to comment on that for the types of improvements to --

>> jay, it's joe please do not give me just a yes or no answer i want to hear what you really think in terms of nuances so don't limit it to just yes or no last time you were on we were sort of still in the middle of the frenzy, and we used the term pump and dump and just raised the -- we used it to just say is this similar is it akin is it a pump and dump 2.0? is it a pump and dump with a social media component now we can look at a chart of gamestop and you've seen it. does this, in your view, represent a modern day pump and dump using social media? >> wow, you know what, i will give you a yes or no answer. the quick answer to that is no i don't -- i don't think so based on what i've seen. i think the sec is going to take a look at it whether there was any kind of

coordinated behavior to manipulate or not, they will be looking at that. as you look at the overall participation in this, it was fairly transparent what was going on here, joe i think you saw that in yesterday's hearing, that -- and, actually, i must admit to being enter taped by mr. kitty you saw that people are very transparent about what they were doing and why they were doing it, which was fairly interesting. >> you get on a chat room and get all of your friends to act on it and how is that different than what we would have seen with an eiomega, press tech, an of the names from the past i don't see how it's different >> well, you know, look, i think in the abstract you make a good argument that it's not different than, you know, a group of people decide that they like

this, but whether they -- whether they got all together and did it like the others knowing the end game here, i don't think so i thought there was a great comment yesterday about markets being self-correcting. let's not lose sight of the fact that there were retail investors here who lost money and they lost a lot of money. you know, when you see something like this, you should not be participating in it, you know, as a retail investor unless you're -- understand the risks that you're taking and are able to lose the money that you're putting in and in particular, joe, i just want to point out, i thought something very good about yesterday's hearing was options and margin and what types of qualifications that you need to buy stock on margin and to use options, to effectively use

leverage in your portfolio you just hate to see that for any kind of retail investor that doesn't understand those risks. >> hey, jay, one thing i've been thinking about and going through again and again in my head is just these potential conflicts of interest. every time vlad talks about protecting his customers, you've got to remember, the retail investor is not his customer they're not paying him anything. his customers are the ones paying him for the order flow. it gets me back to the order flow i know it's complicated. is the order flow worth more to these other firms than just the idea of being able to wrap it all up for volume and make more money off the top? is the potential to get a look at the order flow and that can help them with other trades? do you think that conflict exists >> look, i think you're framing the question the right way, which is we now have -- and i want to say i'm happy to see more retail participation.

i just talked about making sure the retail participation is educated and in the right place. i'm happy to have more retail participation, but we have a new flow in the marketplace. that is all of these retail orders payment for order flow for them clearly is something that is essential to the robinhood business model and they've done very well for it i think we should be looking at whether we can bring competition to that, transparency to that so that that cost is no more than it should be at the end of the day for the retail investor if we're going to continue to allow payment. >> jay, do you think if we dug into the numbers, if citadel made all of the numbers public and robinhood made all of the numbers public and you could demonstrably measure the pricing impact that you would find that investors or retail investors were getting a great deal or were getting fleeced

>> i think what you have to do, andrew, here is measure this over time and i think that if you ask people, if you look over the last decade, are retail investors getting better execution at the cost of liquidity, undoubtedly, yes. but can it be improved i think undoubtedly, yes, because it has so much improved over time and we need to keep asking questions like this to see if, indeed we can bring down the cost of trading further. so the answer to your question is i'm sure there's room for improvement through different transparency, and i think ken griffin as much as said that yesterday. >> jay, before we let you go, you were appointed as the lead director at apollo, this after leon black stepping down as ceo. he will remain chairman, and i'm just hoping you can speak for a second about the governance

issues there, his decision to step down from the ceo role but to remain at the company and what that may mean or not. >> well, i'm excited they're committed to moving from a founder governance system. i'm excited to be part of building out the board of directors and executing on those moves. so it's going to be very interesting. i'm looking forward to it and, you know, back to civilian life. >> okay. we'll talk hopefully more about all of this with you in the future i should also mention i'll be speaking with jay again next tuesday alongside robinhood ceo vlad tenev with the dealbook d.c. policy project. ed bastian, janet yellen, mitt romney which we'll be

highlighting on cnbc next monday and tuesday. becky. thanks, andrew when we come back, the deep freeze may be receding in texas, but the damage has been done we've got an update on when the lights and water will be back on in texas that's coming up next. also, a reminder to stick with "squawk box" this morning citadel's ken griffin will be joining us live in the 8:00 hour to talk about yesterday's questioning at the hearing and much more. before we head to the break though, let's get a check on the markets this morning right now it looks like the dow is indicated up 52 points. this is slightly up. this would push it over the finish line with that. s&p up by 10 points. nasdaq indicated up by 57. "squawk box" wl rhtacilbeig bk.

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texas is looking forward for the weekend. temperatures expected to reach the 50s and 60s. the damage has been done the story finally coming out about just how much worse it could have been. hearts go out, brian on top of the pandemic, masks, quarantining, everything else, then this. just like jobst for the people of that state.

>> hurricane harvey for the people the year before if it's not floods, it's freezing all of the friends and cnbc viewers in texas joe, as bad as it was, and it was bad, okay, millions of homes without power. 10 plus million people without water, at least for a day or so, it could have been much worse. this is not my story this is erin douglas, texas tri tribune. shout out to her i tweeted it out that report saying ercot says it was minutes or even seconds away from a more catastrophic meltdown of the entire grid that could have resulted in month or month-long blackouts, okay according to the texas tribune what happened is this. ercot noticed that power levels were falling rapidly at the same time that demand was soaring, right most people in texas use electricity, not gas for their heat they're cranking the heat because it's freezing. that supply gap between demand

and supply widened to dangerous levels, so in order to prevent something worse happening, ercot, the grid operators, had to start cutting back to industrial customers when that didn't work, start rolling blackouts to prevent a total meltdown surges if it all goes -- two power plants are sharing the load, one goes down, all the demand suddenly goes to others, it could result in explosions, fires, other damage like downed lines, wires, whatever it might be and if that would happen, it could have resulted, according to the article in the tribune, in a month long or longer blackouts or rolling blackouts, which is absolutely terrifying to think about so as much heat as ercot got for their handling of this, it sort of suggested as bad as it was, them doing some of these rolling blackouts and as painful as it was for so many families might have prevented a greater crisis. you say texas couldn't get help

because we know texas mostly has its own grid there is an ability to get some power, guys, from other places, states and mexico, but they were also getting crushed by the storm. they had 13 states in all that lost power they had no power to share as well very, very close to something worse, as bad as it was. a lot of talk, joe, about where this is going to go in the weeks, months, and years ahead, if anywhere differently, because it was a terrifying situation. 21 people as we know lost their lives. >> i just wonder what changes are planned. what's necessary what do you think, brian what are they proposing? >> well, one thing governor abbott apparently is asking or has asked the state legislature to make a rule that requires the wind turbine companies to buy or upgrade to winter rised turbines this he have heaters, carbon fiber blades, deicing mechanisms as well as one thing they might

try to do is require it versus in the past a lot of recommendations. maybe the same goes for pipe lines. what we've learned is the third huge freeze in 30 years. not often. every ten years you can't be losing power to a couple million people we'll see if they make any changes, joe >> thanks, brian andrew. >> thank lot coming up. we're going to talk free and fair markets with harvard's edward brooks and aetna's ceo right after this time now for today's aflac trivia question. what publicly traded company was acquired by pet smart in 2017? the answer when cnbc "squawk box" continues go aflac!!! what the heck, troy - that's not your kid! the aflac duck is just covering for sophie. same way he got me money to help cover her hospital bill

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now the answer to today's aflac trivia question. what publicly traded company was acquired by pet smart in 2017?

the answer, chewy. at the time the $3.3 billion all cash deal was the largest acquisition of an ecommerce business ever. >> and it's a big morning on "squawk box" after yesterday's hearing. i want to get to dom chu who's looking at some of the big surprises of the morning dom? >> happy birthday! ♪ ♪ >> these are my kids hi, henry, max and sidney. this is unbelievable thank you for the birthday wishes this is a true surprise. i did not know this was coming. >> we made you a gift at school yesterday. >> i made you a gift yesterday at home. >> thank you guys.

i love you so much that's so nice of you. and i'm going to kill the producers are who are allowing this to happen but i'm very appreciative thank you. guys, what's funny is i can actually go see you in a minute and i will i don't know what to say thank you, thank you you guys have been coming on over the years this is like joe's kids, becky's kids over the years. this is -- everybody's -- we're all growing up together so thank you. it's funny because my mother sent me an email last night. she said, are the kids going to be on tv should i wake up and watch i said, no, i don't know anything about that. i don't think so and she clearly knew more than i did so -- >> we talked to her secretly >> well. >> it's all becoming clear >> are you in the same house >> we were going on the show >> yes, they are >> they tricked you. >> good secret keeping, guys

well done. >> i love you guys. >> i think they should crash the set. >> they could have crashed the set. >> go down. >> we didn't want to scare you >> then it wouldn't be a surprise >> you guys did very well. >> that's true >> well, you can still do it we have time >> we're living in a new zoom world. who knew. >> yeah, but you're in the same -- you're zooming in the same house that's weird >> go, go, go. >> here they come. guys, come on. real quick are they coming? i don't know >> literally feet away. >> no, they're not feet away hold on. here they come come on over >> hello >> okay, guys. the whole troop is here. >> that's better >> much better. >> hi, sydney. >> want to say hi. >> henry, get in the camera.

okay well, we're -- >> we've got to go we'll be back after this bye. good morning! this is where everything started. the four way is engulfed in history. you're sitting in the place where giants ate. the four way is the heart and soul of the community. ♪

coming up on monday, we have a very special interview for you. probably the greatest rapper of all time, songwriter, record producer, businessman. hip-hop's first billionaire. entertainment labels, clothing lines, alcohol brands including a music streaming service title. we're going to get to talk to shawn jay z carter make sure you tune in for that exclusive interview. pfizer's covid-19 vaccine was 85% effective after the first dose according to a study of israeli health care workers published in the lance set medical journal. former aetna chairman mark bertolini will join us talking about the distribution and clearing up the bottlenecks in the system

later, ken griffin will join us in the first interview since stdas game stock saga hearings "squawk box" will be right back.

so it's ironic that people

are criticizing brokerage firms because they pause trading, which they sometimes have to do to comply with regulations the same folks are now saying, we need to respond to this with more regulations i would say if people don't like brokers occasionally having to pause trading, i'd suggest they look at the regulations that required it. at some point we need to realize piling on more and more regulations only be increases complexity and does not help investors. >> that, if you don't know, was congressman barry loudermilk, a republican from georgia. that was at yesterday's hearing on "the game" stop saga. joining us to discuss whether there's a need for federal regulation, arthur brooks, aei president emeritus he's also with harvard university, also a contributing writer with "the atlantic" and host of the podcast "the art of happiness with arthur brooks." thank you for joining us, my

friend before you became the archbishop of -- like a secular billy graham -- a secular billy graham for all of us. what are you exactly now before all of that, before all of that you wrote eloquently and thought very deeply about conservatism and capitalism, not necessarily conservatism but maybe more libertarian, more small government, personal freedom, all of that brings i guess in your view self actualization and maximizing your potential have i got that right? >> yeah, you got that right. in point of fact, the only reason i care about i guess conservative principles are the things that the three of you have always talked about and care about together is globalization and free trade and the american style of free enterprise system, pulled 2 billion of our brothers and sisters out of poverty and can pull more billions out of poverty as well. if you care about poverty, you

care about dignity and you care about brotherhood and you care about love, you need systems that are going to give people equal opportunity. this is the best system that ever will do it. >> but we're going to talk gamestop in fact, it's so eye opening, a lot of the things that you wrote, that a young andrew ross sorkin, i'm talking green behind the ears, and this is years ago because it's his birthday today, arthur, i know you know that. >> really? >> old man now i paid him $1 a page to read one of your books just to open -- just to expand things and then he charged me for the index and the appendage and all of those things he charged me a dollar for all of those because he's a capitalist. >> andrew, i just admire that. >> thank you >> he is he's kind of an elderly capitalist after today >> he's still got his hair with that kind of hair i could

be president that's unbelievable. >> right i know he's lucky both of us are envious no, mine is real hey, arthur, what are the lessons we learned about free markets, capitalism, all of the things that you opine about watching that hearing yesterday and the whole saga what do you -- how do you view it what needs to be done, if anything >> well, i see a lot of sort of irony and hypocrisy, particularly when i'm watching a congressional hearing about trying to protect the little guy from himself or herself. i mean, the idea that the democratization with the tools of capitalization and letting people make their own decisions can lead to bad utcomes. i'll take them seriously when government stops lottery tickets when they have a value of 40 cents on the dollar. they don't like predation unless they're the predators, i take it with a huge grain of salt quite

frankly. >> the remedy would be what? i assume that you're not -- you don't think we need to immediately start pulling the regulatory cards out and dealing them all over the place in terms of the financial market, but was everything that happened -- was everything that happened okay? >> yeah. no what you see is a whole lot of people actually posturing to show how much they care. there's a whole lot we don't know to begin with, i think it's a reasonable thing to say until we understand the nature of whether markets were manipulated and what laws were broken, it's a pretty good idea to put new regulatory ideas on pause. if you're posturing, you're going to get the cart before the horse. that's exactly what was going on yesterday. >> the way wall street is viewed, do we need to do anything with that, arthur where did wall street go wrong where did capitalism, which wall street is kind of a proxy for,

when did it go -- did it go off track just pr wise are there serious problems that engender a lot of populus feelings against the whole system >> capitalism has to protect itself every generation. the free enterprise brings incredible wealth, opportunity, growth, good lives to people but it's counter intuitive the whole idea that everybody can win is a very counter intuitive notion it goes against literally how the human brain is wired we think in terms of it as a sum. the result is we can take it for granted. the free enterprise system is under attack for people who just don't believe it can be true wall street has never done itself very many favors. the insensitivity that actually brings and the way it talks about markets, the way that it talks about or the way that it appears to favor the big guy or the little guy, it needs to police itself much better and not just in terms of

communication. it needs to pay attention to the fact if you're -- day trading is a really dumb thing to do because you're basically sitting down at a poker game with expert poker players and you're about to lose all of your money. it's the best way to take a bunch of money and turn it into little money moral swasion and telling people this is a bad idea it's in wall street's best interests to do that so we don't run into those populus problems. >> the fast traders, the algorithmic traders, the arbitragers, the short sellers that meet at the yellowstone club and decide to gang up on the stock, is all that okay? >> no. >> should it be regulated? no what? >> no, it's not okay the manipulation of markets and the manipulation of stocks, what

that's trying to do is create asymmetric failure we have regulations that are not very clear and not very well enforced they're not very well understood, as a matter of fact. what we need to do is make sure that kind of market manipulation is clearly prohibited and there's enough transparency in the regulations that we can enforce them but having more hearings -- piling on new regulations when we don't even enforce old regulations, that's exactly the way the public policy tends to get made when we're in theater as opposed to actually trying to protect people from market failures >> we talked and had john hope bryant on. there may be a little bit of a gap between what you need to know to do this effectively and what a lot of people do know, and there's nothing that retail traders hate more than being -- the perception that they're being talked down to >> right. >> but the democratization via

robinhood and all of these platforms is great but is there a way to -- i don't know that graham and dodd maybe a more long-term perspective can be emphasized so that, you know, we start dealing with, you know, people trying to save for the future, for the family, for retirement and not gamefy everything with a gamestop sort of a scheme. >> i'm not sure that we can. the cure might be worse than the disease, joe i mean, the whole idea of saying gamefying is a bad thing to do great way to lose your money in the same way, people make all kinds of decisions that are not intelligent necessarily. the freedom people have has value per se giving people the freedom to make their mistakes, that can be important as well. protecting people constantly against themselves and their own worst impulses, what should wall street do?

wall street should be more transparent about talking about the facts about how bad this can be for you as opposed to setting up platforms where people can more efficiently lose their money. at the same time giving somebody advice is very different than making something illegal because freedom per se is actually one of the most sanctified values that we have in our society. so my view is this should be much more of a voluntary transparency oriented communications endeavor. we should be moving away from larding on people protecting themselves from themselves even if they make mistakes. >> you talked about the dignity of work in a philosophical way happiness, you see people that win the lottery and they're not happy. >> yeah. >> you see people that have a job and make x amount of money and they're happy. i mean, some of this gamefication might be coming

from all of the money sloshing around whether it's the stimulus, the fed, whatever it is have we crossed over the point of too much enabling and are we in danger of doing more? >> we're in danger any time we have a system where people are learning less. i understand the philosophy about stimulus very, very well once we start seeing empirical evidence that people are day trading and the government itself, then the representatives of the government criticizing the day trading, once again the government is creating a se self-licking ice cream cone. i'm giving you money, going into your savings, you're going to day trade. we're going to feel bad about it, holding hearings so you don't do it anymore. this is pretty ridiculous stuff. what do people want? it's pretty simple people want dignity.

people want dignity from earning their success and serving people that's what you do you don't get it through lottery tickets, inheritances, government stimulus checks you get it from honest, decent work and that should be the goal of what public policy makers should be talking about. >> i think we need to cancel that bull fight shot behind you just on humane -- that's a risk for you. if you're comfortable with it, all right, but it just occurred to me that that poll is probably not going to end up going too well. >> that bull may have won that fight. i'm married to a spaniard so it's okay. >> okay. that's right barcelona and the french horn and all of that in that other life where you did a lot of this contemplating obviously. always love having you on, arthur. >> thanks, joe. >> any book that you've written -- any book that you've written, people can get a lot

out of it. a lot out of it. >> thanks, joe i appreciate it. >> andrew, the birthday boy, got a lot out of the book when he read it. >> i did. >> especially the appendix, the index pages. >> dollar a page >> it's a good book. even better when you get paid to read it. when we come back, former aetna ceo mark bertolini joins us on the biden administration's vaccine rollout. in> later, citadel's ken griffin jos us with the questioning at "the game" stop hearing. "squawk box" returns right after this

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welcome back, everybody. the biden administration announced plans this week to double the number of vaccines that are being shipped directly to pharmacies from 1 million to 2 million doses a week the goal of reaching 40,000 pharmacies nationwide. for more of this let's well come mark bertolini, the former aetna ceo and chairman mark, this is a plan we've been talking about for a while, the idea if you really want to get into the neighborhoods where people are, communities where people are, you have to go directly to the retail pharmacies, which by the way happen to be pretty familiar with how to vac sibcinate peopl. what do you think so far >> i think the supply and getting it out to communities is a big step forward i think that is sort of a

prerequisite for building a better system downstream, which i think we still need to do. as of yesterday we had 59 million doses administered, but that's only 80% of the supply out in the market. that means 14 million people haven't been vaccinated. i think that's the next step i think this is a great first step particularly in response to the new strains coming at us >> i saw those numbers, too. the idea that more than 70 million doses have been shipped to the states but only about 58 or 59 million have actually made it into the arms of people what do you think the holdup is there? is that waiting, saving the second doses for people when they come back i didn't quite understand it >> it's a conversation that we had the last time i was on, becky. we don't have a single platform to monitor this so supplies getting to the communities where the reservation systems, the appointment systems and the logging systems aren't connected

to the supply as tightly as they should be. some are better than others. but we've had as people try to hit these online reservation systems, they're failing we have stores that only let you reserve two or three days ahead. we have sights that are shutting down for the time being until there's more supply available and so when you have this sort of dispersion of supply -- of reservation capability and technology that is not stable enough to get all-americans in the system, the supply gets stuck. and so throwing more supply at it will be difficult >> yeah. it's not just the supply problems and the system problems, you mentioned that all of this is done with technology. i have to say, the target audience for this right now, those age 65 and up and over this past week i was trying to book reservations for my mother-in-law who's in her 70s and some of her 80-year-old

neighbors -- 80 plus-year-old neighbors, it's not easy for them to try and maneuver some of those systems as well. it just makes you wonder what happens to people who don't have kids or grandkids to help them out with this. >> they're stuck they're getting neighbors and friends and we've been helping friends out here as well to try to get into the system it's unfortunate this is an opportunity where, for example, salesforce in california is managing that system and distribution. it is helping to connect reservation appointments and you can see california's way ahead of most any state in administering vaccines to the state. you need to know where you need supply, getting it out there and another factor is the supply of people to do it. on a number of sites here in new york they're asking people, do you have medical capability?

could you sign up to come and help inoculate people? >> so what's the fix mark, these are long-term fixes and things that aren't going to be able to probably be papered over with in the next month or two. >> i think some of the -- i think some of the interesting projects going on here in new york city, so the armory up in washington heights now has 700 vaccine stations, people lining up going through i think we need to do more of that i don't think the pharmacies in and of themselves will be enough i think you see hospital and physician groups providing vaccines, but it's only for their patients we need to have mass vaccination. we need to have big facilities. >> that's been part of the problem, i think. >> right. >> hospitals that have ak stoes this. >> we need the knnational guard

>> they've restricted it to their patients which has made their own pecking order for who can get access to it. >> it does the reservation systems are all different. you can sign up for appointments in as many places as you can get online and find one, which tends to jam up the system as well >> right. >> so there's no coordination. i think this is something that you can teach national guards men. you can bring in nursing students teaching people to give inoculations is not that difficult. and if we do that and set up these mass vaccination centers, we can get the supply into people's arms because i think adding double the supply when we don't have the appointment availability, we don't have the technology to be able to get people in to get their shots really creates a bigger problem in the longer run. >> when you start asking people when things are going to start looking much, much better getting more of this rolled out, anthony fauci may say june,

july, august dr. scott gottleib has told us maybe april. what's your best guess >> from the standpoint of availability, i think it's going to be the latter part -- the latter part of the second quarter, but i think from the standpoint of 75% of the american population inoculated we're looking at nine months to a year based on these statistics if things don't change at the level of distribution in providing shots. >> mark, it's good to see you. thanks for your time this morning. >> good to see you, becky. happy birthday, andrew. >> thanks. >> that's a good one coming up, another hour. another hour 65 minutes, in fact. coming up, our exclusive interview with citadel's ken griffin after yesterday's hearing on the hill. that's still to come as we head to a break, check out the future ahead of the last trading day of the week. "squawk box" coming right back

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biden's nearly $2 trillion covid relief package the risk of short changing a stimulus bill is higher than the risks that come with spending too much and a capitol hill reckoning for robinhood as we hear from key players from the reddit rally in the past few weeks. this hour reaction to yesterday's high profile hearing from former t.d. ameritrade ken mowing gli yeah and scscsit citadel's ken griffin. the final hour of "squawk box" begins right now good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin u.s. equities up significantly not quite enough points. 85 points on the dow not getting back what we gave

back yesterday, not completely we've been close up triple digits in the nasdaq up 77 or so. the s&p up 16. that's treasury yields that has us at 1.3% holding on to some of the highest yields we've seen. in a fair amount of time 1.313. here's some of today's top stories speaking of treasury yields treasury secretary janet yellen making the case for going big in the next round of the economic stimulus yellen spoke exclusively with cnbc's sara eisen. >> 15 million americans behind on their rent. 24 million adults and 12 million children who don't have enough to eat small businesses failing you know, i think the price of doing too little is much higher of doing something big we think that the benefits will

far outweigh the costs in the longer run >> yellen said the president's nearly $2 trillion stimulus proposal could help get the u.s. back to full employment in a year uber losing a critical overseas court case the supreme court in the united kingdom ruling that a group of about 2 dozen drivers are entitled to workers rights like minimum wage that could have much wider implications for uber's gig worker business model. in a statement uber said it respects the court's decision which focused on a small number of drivers who used its app years ago. president biden is expected to announce a $4 billion commitment to the international covid vaccination efforts. later today biden will take part in his first meeting with g7 leaders since being inaugurated. he's expected to fly to michigan to tour a manufacturing plant making pfizer's coronavirus vaccine. becky? >> thanks, joe. let's get to that other major story on investors' minds.

yesterday's congressional hearing on the recent social media driven market volatility in stocks like gamestop. vlad tenev found himself on the defensive. they invested in the platform's decisions during the height of the trading frenzy including robinhood's decision to restrict users from buying shares of gamestop here's tenev responding to criticism he's received. >> look, i'm sorry for what happened i a pologize and i'm not going t say robinhood did everything perfect and that we haven't made mistakes in the past, but what i kplit to is making sure that we improve from this, we learn from it and we don't make the same mistakes in the future robinhood as an organization will learn from this and improve to make sure it doesn't happen again. and i'll make sure of that >> joining us now is a brokerage industry insider joe moglia.

joe, i'm guessing like everybody else, you were watching these hearings pretty closely yesterday. >> yeah, i was, becky. do you want me to comment on that >> i do. what was your biggest take away? what did you learn >> i think in general -- first of all, we've got to recognize it's only round one. there's going to be a lot more of this. with regards with what happened to robinhood, i think vlad did a very good job, while he was nervous, explaining how the halt took place he mentioned a minute ago that he apologized for the inconvenience, significant inconvenience to his client base he acknowledged the fact that potentially -- not potentially robinhood was at real risk you look at the other side that was really under scrutiny would have been what's going on with regard to ken griffin. i know he's coming on later on he got banged on both sides. the market maker as well as the hedge fund i think he did a good job of explaining that. i think he did an excellent job being succinct based on what everybody said,

there was no evidence to the contrary, there was no collusion or conflict of interest. at the end of the day the committee did a good job getting in front of its constituents the home run for the day, what happened with what happened with regard to reddit and gill. they had more people watching them and i'm sure that's a buzz in the social media world. >> yeah. it was entertaining to say the very least and educational, too. >> yeah >> joe, one question the payment on order flow. we had jay clayton the former sec chairman with us earlier this morning he said, look, it's been legal for years. for decades even it's legal, he thinks, for now although he said the sec will probably consider that pretty closely. i guess that gets down to the idea of just how valuable those flows are. is this a situation where it's valuable to a company to be able to get access to that because, you know, like walmart, if you have big enough volume you can make money off of it or is it

valuable because you can make a look at what retailer investors are doing and you can somehow get in front of that you know the a answer to that better. >> in general, becky, what happens in slow motion, the investor winds up doing a trade. the trade winds up going to the broker the broker takes that to the market maker and in return to that there's payment forward and the maker pays it to the broker. with that comes best execution the customer is getting the best possible execution in that moment in time in the entire marketplace. also with that comes price improvement as well as the flow that goes back -- that winds up going back to the broker so the individual that winds up with best execution normally price improvement, they get that for free and then the broker winds up getting a piece of the payment. >> so no conflict of interest as far as you're concerned? >> no, i don't think there is.

put it in perspective. i think one of the stats at schwab, 92% of the client base gets price included. i know when i was at ameritrade the differential is what we received in terms of order flow, what we gave the clients in terms of price improvement, price improvement was 2.5 to 1 so we're really doing a great job i think in terms of taking care of the clients. retail investment has never, ever had a better environment than what we have now. we've done a good job supporting that i recognize people don't understand it. we had something happen the other day, a major, major event. everything comes under scrutiny. at the end of the day all of this has worked out really well. >> you eluded to what vlad had said yesterday, which is acknowledging how close to the brink they came, how there was a moment where they didn't have the liquidity. >> yeah. >> fortunately they were able to get that liquidity. >> yes. >> when you hear something like

that, what do you think in hindsight? how big of a problem would that have been if they didn't get it? >> if they didn't get it, there's a chance they could have gone out of business 13 million clients would have lost access altogether i'm sure they're paying attention without question frankly, if i'm vlad, i think i've got to put all of my energy i've got to diversify, i've got to ford at this phi. i have to find a different revenue stream i have to look at that should i look at digital banks etf organization a robo advisor business? the other thing i think i'd look at, the day trader is different from the active trader two different things but the core competencies at robinhood are transaction processing there's no reason why they can't go more scale with that, take a little while to do that, but i think they can do that the other thing, they have to fortify the balance sheet. they have to get more cash to count on they have to look at the possibility of going public, whether that's through a normal

ipo or spac or potentially being acquired themselves. they've got to spend all of their time looking at that now and i'm positive they are. >> that's a very interesting point. the idea that you think they need to go public quickly through a spac, ipo, potentially get bought up by somebody else when you talk about diversifying the payments or the income that they're getting so it's not just a payment of order flow, is that something they can do by themselves would that require them to make acquisitions >> well, no, i think with regard -- if they're going to look at a digital bank, if they're going to look at an etf type business, i would think they should be able to do that themselves now here's where i don't know. with regard to whether they go public or be acquired, i don't know if they've got to do any of these things right away, but they have to be devoting all of their energy to be making decisions as to what they need to do here and then start to execute a plan they have to be sophisticated

enough what they have to do and the contingencies behind it and then they have to be wise enough to execute it quickly. how quickly? they would have a better idea than i would, becky, but they've got to do that. >> let's at that about the overall industry and potential regulation there has been talk about these issues. >> yeah. yeah >> free trades are available because of the free trade of order flow if the sec were to crack down on that, what would it mean for the industry what would mean change for the industry >> let's begin with paying it forward. in the front end everything looks very, very simple. you enter a trade, it gets instantaneously, price improvement. best execution in the marketplace. you get that for free, but t that -- there's a back end to that behind that there's a gargantuan

infrastructure it costs billions and billions and billions and billions of dollars. it allows the price improvement, best execution doing it for free to take place. somebody's got to pay for that now that gets taken care of through the pay it forward you take that away who's going to pay the billions, billions, billions of dollars? somewhere the costs are going to go up. right now it's worked well since i've -- i began at ameritrade in 2001 it's worked well i don't think that -- i think it's fair to re-look at it again. that's probably not something anybody wants to play with >> so what other potential regulation do you think could be something that would be concerning for the industry? >> i think the big thing now is, you know, what's going on with the shorts i think it's fair to look at that everybody's talking about settlement but the other piece of that is should you put a cap on the percentage of a short

that a company could be? would it make sense to take a look at the actual holding period with regard to what's going on as far as the individual client goes and at the end of the day i think there are a handful of things what i think we've got to be careful of, this was a major, major event. it was a one-day event getting a tremendous amount of inquiry, press, drama, et cetera the regulators will look into this and if something bad really happened, we'll find out right now we don't know. we haven't seen that i think we want to be really, really careful i know congress cares about the individual investor and free markets. it's worked well it's working well. what happened was not systemic and i think we've got to do a good job of making sure we don't over react to this because we don't want to screw up a system that works very, very well >> what about just questions of

transparency >> i think transparency is smoesed to be disclosed in the agreement that the individual signs. having said that, that's one piece in a big thing that i'm not sure everybody even reads. i think we can do a better job of explaining how payment for order flow actually works. i think we can do that we're pretty transparent across the board. can we do a little bit better job explaining it simply and easily like you're talking to an eighth grader? i think we can do a better job of that, yeah. >> there were a lot of questions from congress yesterday about protecting the retail investor and that's certainly high on the minds of the sec,too what could they better do to protect the retail investor without keeping them from being able to do -- have the freedom to do some of these things how do you protect them to not stop them? >> yeah. yeah i think, becky, that the one thing they can -- again, don't screw -- don't mess up the

system do what you need to do but don't mess it up the one thing i really believe they can do, they've got to take a look at, that is the three types of investors long-term investor, the active trader, not a day trader, then you have the day trader. the active trader and long-term investor give great education, have great risk management tools, they have a lot of stuff. the day trader doesn't necessarily have that. vlad was talking about they have online library well, that's great but, again, i think you've got to -- that's not enough i think where congress could help, if they really pushed the education of the day trader. for example, the market's going up suppose you bought gamestop at 5 or it gets to 10, gets to 15, 20 you're supposed to take something off the table then no, i'm not supposed to do that. wait until it hits 400 there's got to be an education suppose we taught the client as the market moves up, take half of what you invested off the table. now you cannot lose money.

you can't lose money you move forward from that what can we teach? there's a benefit and a negative two sides to leverage. i think there are things like that that the online brokerage business can really help -- robinhood can help with the day trading and millennials. i think the other piece of this is to what extent does social media, the reddits of the world, gills of the world are supposed to take some responsibility for this as well they can put on a great trade but how do you manage the risk with regard to that trade? that's part of their responsibility at the end of the day they have to take responsibility for themselves there's the other side of this, once the trade's on, how do you manage the risk after that i don't think we do a great job of that with the day trader. i think we do a great job of that with the active trader and that's something i think congress would question. >> joe, thanks for being with us today. it's good to see you >> good to see you, becky.

of course if i don't say happy birthday, andrew, i'm going to feel bad happy birthday, andrew. >> thanks. >> thanks, joe. thank you. when we return how fast can texas get its heat and lights back on following the rare winter blast that stunned the state. we'll speak to a former adviser to the federal energy regulatory commission stay tuned, our exclusive interview with citadel's founder and ceo ken griffin. "squawk box" returns right after this

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welcome back to "squawk box. i'm dominic chu. sectornomic spotlight focuses on the consumer spotlight the sector's only up about 2% versus the s&p 500's 15 to 16% rise one of the main reasons why people focus on consumer staples from an investment standpoint has to do with dividends take a look at this. consumer staples with a dividend yield in the red line you can see closer to 2.3, 2.4%. over the course of the last ten or so years it's kind of within the range of dividend yields you

can see there. on the lower end and still in the range. s&p 500 is closer to around 1.5% yields record highs for the s&p by the way, you have to go all the way back to the early 2000s to see a dividend yield that low. could dividends become attractive given the market's overall rise we want to take a look at the highest paying dividend stocks in the sector that have also had positive price appreciation over the medium to long term. take a look at kraft heinz 4.1% yield j.m. smucker company, 3.1. archer daniel mid lands, 2.7 and walmart 1.6. it's something to keep an eye on for sure se sectornomics keep it right here because tethilbeig bk l rhtac afr is commercial break.

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. welcome back to "squawk box. treasury secretary janet yellen making a big push for a stimulus package. here's what she said on cnbc >> we think it's very important to have the big package that

addresses the pain this has caused 15 million americans behind on their rent 24 million adults and 12 million children who don't have enough to eat small businesses failing you know, i think the price of doing too little is much higher than the price of doing something big. we think the benefits will far outweigh the costs in the longer run. >> you can see more of the interview with sara eisen nasdaq looking to open higher, 80 points higher, s&p 500 up 15 points meantime, pfizer with a non-arctic storage vaccine it can be stored for two weeks for temperatures found in typical pharmacy storage if approved, it will make it a lot easier to transport and use. joe? >> thanks, andrew.

power coming back online for many in texas after the winter storm that swept the south millions have been ordered to boil tap water before drinking it our next guest is both a texas resident and an energy expert. allison silver stein is a former strategic advisor to the energy commission what went wrong, how to fix them you're in austin and you lucked out, allison, because you were on the same power line as a hospital you have 12 people living in a house with you and animals. >> pretty close. the animals feel like a couple people apiece. yes, it's been crowded. >> i know how that works allison, we want to try to figure out what went wrong and, actually, you wrote a long piece back in i think may of 2020 about ercot and whether it could

handle what was coming up. at that point they were most worried about heat and air conditioning issues and it wasn't necessarily looking at it from this side of things where was the weak link in the whole chain in your view >> well, i think subject to -- there is a lot more data and analysis to be worked through, but based on a preliminary look there were five causes one of them was this was an unprecedented storm in terms of cold long duration, really high moisture and that knocked out eventually 40,000 megawatts of texas electric generation capacity it took out over 40% of texas's thermal generation fleet alone, 40%. that's natural gas, coal, nuclear generation and when they

started -- the grid operators started losing that amount of operation, they had no choice to cut load to keep the remainder of the grid afloat and avoid a really catastrophic situation. there was -- all of this happened because of insufficient power plant winterization. this was a guideline, it wasn't mandatory. there was a huge chunk of the natural gas supply for texas power plants that froze up, both at the well head level, at prod production, and in pipe lines so the gas plants couldn't get the fuel that they needed to run ercot under forecast customer demand by 20% which means they didn't have enough generation ready to serve customer demand that kept rising as the night got colder and colder. and, last, ercot's a standalone grid so they were unable to alleviate the shortages by importing electricity from outside from the rest of texas and that's a wonderful idea if

you like avoiding federal regulations but it's a terrible idea if you like protecting reliability against disasters like this. >> yeah, that last point we should talk about some more. the rationale was to avoid regulation hence, they'd call it deregulation but it leaves you in the position of being stuck with what you have and not being able to ask for help when you need it? >> correct and i have been both a texas state regulator and a federal regulator and i can tell you the fun of being a texas regulator is you are in your own small patch, the king, but it means you have nowhere to go for help. there are at least 4.5 million texans who have been sitting in the dark and cold for several days who are not particularly happy with the outcomes of texas regulation at this time and don't know the difference between state and federal

regulation other than they're not real happy with what they've got. a add to that the 20 million texans or more who are going to have to be boiling water or don't have any water to boil at all or any clean water and it's pretty clear that what we have done overall is not what people are super happy with let's be clear, regulation was only one of many issues that caused this situation. it wasn't -- you can't just say texas regulatory status is stand alone market the way we set things up for the institutional construct didn't work. you can say all regulators should have done things like make effective bins winterization for winter cold and long summer heat waves mandatory. weatherization is the kind of reliability thing that we should have been doing at every level as a mandatory measure, not as a best practice. >> well, you pointed out that the -- i forget what type of

energy you called it, but the more conventional energy, natural gas and others were affected by the cold just like, you know, initially certain people, maybe the governor, maybe people that aren't big green new deal proponents, the windmill froze and the sun went away so you didn't have solar and wind that wasn't true, but because we now know that the conventional stuff was affected by the coal, but what about renewables and the future that we're looking at will -- will we be ready for adverse weather events if we're much more dependent on this new age renewable energy >> of course we will the thing is what -- grid

reliability requires you to understand the system you have and you design to suit them. we designed to fit ozzie and harriette weather but we are facing mad max in terms of weather conditions we are already there issues associated with climate change are making extreme weather of every kind. winter storm, heat waves, droughts, floods, hurricanes everything imaginable is getting worse and more frequent because of climate change and what that means is we need to design the electric system in a way that suits the resources that are now more cost effective, which is wind and solar we can't do it overnight, and we don't need to do it overnight but we need to do it quickly one of the most important things we can do to make that system work is start changing the w way -- we don't need to shut down nuclear and thermal plants overnight, but we sure do need

to winterize them better we also need to rethink the way we do -- we need way more energy storage, distributed and supporting wind and solar. we need infinitely better electricity starting with low income and multi-family housing because they're the ones who are taking the brunt of rotating outages on either the summer or winter and we can make a grid much more stable with more efficiency. >> there have been cold spells before in texas. this was similar one that went back how long ago was it, about -- >> 2011. >> right >> 2011, but the point is -- >> 1990. 1990 as well >> yes but we obviously didn't learn the lessons. we did not implement all of the lessons like winter ryization. >> used to just be cold air from the arctic now it's a polar vortech caused

by the warming i need to see the peer reviewed science on the warming causing the cold allison, i hear the atmosphere is unsettled. >> everything is getting worse. >> okay. >> and so we need to plan the system that suits much more kinds of really horrible weather and part of improving reliability in a system is more transmission. >> we have to go. >> thank you, bye. >> thank you, allison. appreciate it. becky. when we come back, an exclusive interview with citadel founder and ceo ken griffin. we'll go in depth on his responses to congress yesterday in that sometimes heated hearing on social media market volatility. programming note don't miss a "fast money" special report on the new american investor starting at 6 p.m. eastern time. yoreatined, u' wchg "squawk box" and this is cnbc. ia keeps me moving forward. they guide me with achievable steps that give me confidence.

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stooupd up by 16 this morning and nasdaq up indicated by 85 points after closing down by more than .7 of a percent yesterday. >> up next, citadel founder and ceo ken griffin on gamestop, robinhood and what he's taking away from a high profile hearing in congress yesterday. stay tuned, you're watching "squawk box" on cnbc

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big loss for uber overnight. the u.k.'s supreme court ruled that drivers must be classified as workers entitled to a minimum wage and vacation time that ruling is expected to set a precedent for gig workers across that country guys, i have seen the early response from uber the stock is down by 1.75% they say they understand this ruling was based on some of its workers who were using an app several years ago. so it sounds to me like the way they're going to try to maneuver this is it doesn't apply to their workers today and this is outdated stuff based on workers who used to be doing it a different way using the app. i don't know i did see the stock kick up a little bit when they came out with those comments. >> yup and mark your calendar for the

next big capitol hill grill session. the ceos of facebook, twitter and google will appear before the house energy and commerce committee on march 25th. they will question the ceos about false claims that proliferated on the platforms about thecine and election fraud. roku shares are higher shattering analyst estimates of 6 cent losts revenue beating above expectation. it came from the licensing and advertising businesses it's been a remarkable story to watch over all of these years. i remember when they had their ipo when they came on the show and they were a little box attached to a screen i'm not sure everyone appreciated what could possibly happen in terms of this megaadvertising business they developed. becky? >> yeah. in the meantime, dropbox reported adjusted earnings of 28 cents a share.

that beat the street's expectations that did not include a one-time charge of $4.2 billion dropbox has a large office space in san francisco it will look into subleasing some of the space. that resulted in a quarterly loss of $346 million andrew. we've got a big interview coming up ahead. citadel's ken griffin will be live with us talking about the hearing in congress. quk"onnu wh n "saw ctiesitke griffin after this

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big interview coming up on "squawk box" on monday morning don't miss our live conversation with shawn carter, jay z rapper, songwriter, record producer, hip-hop's first billionaire and businessman with lots of different investments. we'll get to talk to him about many of those things coming up monday morning andrew. >> thanks, becky i'm looking forward to that. big interview. another big interview right now. the house financial hearing that

captured america's attention our next guest was grilled over "the game" stop saga and how they handled the reddit rally. ken griffin the founder and ceo of citadel thrilled to have him on the program. lots of questions. i know you answered a lot of them yesterday hopefully we can get through a couple of them thank you for joining us the big question, here's where i want to start, ken, seems to be the debate for payment order flow the idea that effectively your firm pays robinhood, where they get a majority of their revenue from, to execute trades. therefore, the public perception is you wouldn't be doing that if there wasn't a benefit to you at the expense of the retail investor can you explain the economics? >> certainly thank you for having me here today. happy birthday

it's 29 this year, is that right? >> a little bit older. >> all right you'll catch me eventually. >> by 15 years >> thank you pleasure to be here. yesterday was an important hearing in that we were -- i was hoping, one, to find some understanding of what happened in gamestop and the other stocks in the last couple of weeks. we spent a huge amount of time on a longstanding commercial practice referred to as payment for order flow in the united states retail brokerage firms are permitted to collect payment from order flow from market centers for whom they send orders over the course of the last 20 years as the ceo of robinhood testified, the retail brokerage firms have become extremely focused on putting various market makers in competition to execute their orders they will set a payment for order flow rate, say, you know, you pay us x amount per share

and they charge generally speaking the same rate to each market maker we're going to route the order to the market maker that provides us the best execution the upshot of this is the retail investor has a better execution than they can on exchange across the orders that we execute for them and for the retail brokerage firms, they have an important source of revenue that helps to fuel their business model and one of the key driving changes of the last few years has been robinhood's push to zero commissions that has spread across the industry for the benefit of all investors now as i testified yesterday, there are reasons that payment for order flow exists. first and foremost is that exchange are simply not as competitive as we can be off exchange in the processing of retail sized orders. one of the reasons for this is a regulatory mandate that exchanges have to trade in one cent wide increments we can trade tighter than a

penny and share the value that we can capture with the retail investor and robinhood and other retail investors in the form of payment order flow as i said yesterday, one of the ways that we can reduce the amount of payment for order flow is by permitting exchanges to be more competitive that will change the industry in an important way going forward if this is an area of undue concern. what i will say is that last year collectively the market makers delivered about $3.7 billion of price improvement to retail investors and through the payment for order flow -- go ahead, andrew >> let me just ask you a question about this though, and i want to raise a letter which i know you're familiar with that was written by your general counsel -- your former general counsel i should say back in 2004 maybe -- i imagine your thinking has evolved on this, but back then he wrote citadel group urges the commission, this was a letter to the sec, to ban payment for order flow payment for order flow is a

practice that on its face is at odds with a broker dealer's obligations to its customers we do not believe that a broker dealer that accepts payment for order flow and does not pass on such payments to its customers either directly or through reduced execution fees can consistently obligations. and i think -- >> do me a favor. >> what does the letter in reference to >> this letter was in reference to payment for order flow rulings around best execution at that time. >> no, in the u.s. options market, and that's an incredibly important distinction. in the u.s. options market, every single options trade must be executed on exchange. in the context of this letter, it has been the introduction of the very negatively impacting price improvement auctions which discourage market makers from

putting their best foot forward each and every day in the u.s. options market until they receive an order from a regional brokerage firm that they then take into a price improvement option so what is interesting is, back at the time the letter was written, we were witnessing a dramatic transformation, the u.s. options market, one that has been incredibly good overall for investors but one that has been in some sense taken somewhat offtrack, by the introduction of price improvement options. that's when you type in a given symbol on your bloomberg or on the internet, and a price for an option, the market could be 10, 15 cents wide, it is because of the existence of price improvement options. now for equities trading, on exchange, the issue here is that the exchanges can't be as competitive as we can be off exchange and -- >> can you explain - >> the online options, we are able to trade off exchange that's a very important

distinction. >> the other issue, that investors, a public perception, that you get to see the flows, that you get to see information, and that even if you're not front running your, i think, your investors, which is illegal, that the data unto itself has value how do you use that information? >> so i think there's been a number of misperceptions about the data that we receive from the retail brokerage community in fact, a prominent u.s. senator asked us specifically about what personal identifying information do we receive from retail investors the answer is none we receive an order, and as the party that has to execute that order, what we look at at the moment of receipt is what are the various options that we have to achieve the best execution for that order and you're exactly right we are not permitted to trade in front of that order, any execution that we can achieve, in the context of the market for fulfilling that order, we must provide back to the retail investor sometimes even with a

price improvement that we add on at the moment of execution so the big picture is, this conspiracy theory that we somehow or another are like some of the big tech giants that have access to personal identifying information is just flat out false. we have a price, quantity, a limit, that's what comes to us in an order from a retail broker. >> let me ask you a maybe more meta question about all of this, which is do you believe that the markets unto themselves are completely fair? and when i say fair, do you believe that my mother has the same opportunity to make money in the market as you do? >> so its all comes down to a matter of horizon and strategy it's like asking, if i went and played golf this weekend with tiger woods, would i win of course not. but there are various ways to compete with tiger woods off a golf course and do very well i'm not going to play him on his

game on his course your grandmother might be very aware of a sea change in technology or otherwise that will impact our economy. she might look at the car you drive five years ago, hmm, andrew bought a tesla and i think ev are the future of america and i'm going to buy tesla stock and if she bought tesla stock five years ago, she would have made a lot more money than we made at citadel, so i never underestimate the skill of the american retail investor at understanding the emerging trepid where real wealth is created and their ability to take advantage of that wealth transformation >> one of the big issues that this gamestop mania brought to bear is the issue of shorting. and in particular, the issue of short selling, beyond the float, beyond where you have situations where a stock is being, being shorted more than 100% of the shares that are available. can you explain to the public how that could happen, and whether you think it's right

>> it's a great question, and one that has quite a bit of misinformation when you short a stock, you have to borrow from somebody else and that's typically from a pension plan, or an endowment that holds the stock as a custody. as the short seller, you then sell that share of stock that you just borrowed into the market but the share is bought by another institution, that institution is again in a position to lend that share back out. now, why do institutions lend the shares, they can earn a very, very high rate of return, on money in a security like gamestop, in the middle of the recent events. you know, there were days when borrowing gamestop would cost a short seller an annualized fee of somewhere between 25 and 50%. that's real money to an etf holder or pension plan with respect to lending those shares. >> and let me ask you a separate

question, that maybe relates to the larger picture of citadel right now. you control, and you talked about it yesterday, more than 50% of the retail volume is that good for the markets when you think about competition? >> so we control, and we don't control, let's just be control, we execute about 40% of all of the retail order flow in the united states every day. we do it because we offer the best execution quality to american retail investors of any of our competitors if they decide that if i wrote legislation we should eliminate competition by which business is done in america, then clearly we would be in a position to do less business, but we are always advocates for markets that have a level playing field, that are transparent, and we're, the winners and losers are determined on the basis of their ability to compete we think it is such a role, that our team works incredibly hard and my guys put in absolutely insane hours over the course of the last two weeks to make sure that we were resilient and

stable in the height of the trading frenzy we see a world where competition dictates how business is done, we are in a position to do well for our customers and shareholders >> what do you think the implications are with what you see happen in the reddit community and what it could do for short selling and the like for example, do you think there will be a lot less short selling in the future? >> there's no down, in the foreseeable future of the amount of short selling will be reduced by the events of the course of the last couple of weeks there's just no doubt. what i will say is that it's unclear the power of the reddit community. that will play out over time, as we see them converge around other securities, other situations, and the price impact that they have as a community. i think the gamestop situation is incredibly unique in that it was such a heavily shorted stock, and there were some real potential drivers for change

as you know, the founder of chewy recently joined the board. he had a fantastic reputation in building chewy there's an opportunity for change at gamestop that will unfold over the months and years to come. i think it's a very unique situation. and i would be very hesitant to draw any significant conclusions from the events of the last few weeks in gamestop. >> given all of the conspiracy theories that were raised on social media and the implications of that, i'm curious if in retrospect, you obviously made a big investment in melvin, in the middle of this, melvin capital, do you think that was a mistake >> no, i think gabe plotkin is one of the finest investors of his generation >> but given what the public perception became of, around this idea that citadel was behind plotkin on one side, behind robinhood on the other, in retrospect, do you think it created a perception of a conflict >> if i had to run my business to the possibility of an insane

conspiracy theory emerging at any point in time, i would have no business. >> before i let you go, i do have to ask you one question, that's maybe a little bit off topic but it's been something we've been talking about virtually every day on this program for the last several months and that is as an investor, bitcoin, how do you think about bitcoin today? are you invested in bitcoin? >> i just don't spend much time thinking about cryptocurrencies. >> really? >> no, i don't you know, i don't see the economic underpinning of cryptocurrencies i understand the value of stock, and the value of earnings, i understand how to think about currency exchange rates around the world, i don't know how to think about what is effectively a digital situation. it is a longer conversation. ken, i want to thank you for being here especially after you got grilled yesterday and thank you for taking our questions this morning and i hope you come

back and i hope we can do it for more time. >> absolutely. thank you very much. >> appreciate it see you, ken thanks. that does it for us this morning. make sure you join us next week, "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street," i'm carl quintanilla, with david faber and leslie, cramer has the morning off, we are coming off the first three day losing streak for the s&p of the year dow though is on track for weekly gain. 10 year yield still elevated above 1.31 oil back below 60 as the texas grid operator says emergency conditions may end today. our road map begins with yellen's push for stimulus as the treasury secretary warns of risks ahead without significant relief >> then call it a short squeeze as the extreme weather adds to the production issue of semiconductor chips. >> and later, a regretful robinhood.