regulatory overhaul. and speaking of new rules, sec chairman gary gensler warning he wants to crack down on what he calls the wild west of crypto. wednesday, september 15th. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin who is live from the stock conference in new york we'll check in with andrew on what he has coming up today. first, let's take a very quick check on the markets this

morning. right now there are green arrows u. u.s. equity futures. this is a pattern we've seen for a while where you see green arrows in the morning and it doesn't hold for the close yesterday we were looking at some big advances but the dow up pretty significantly yesterday morning as we were watching the inflation numbers come in a little less hot than had been anticipated. that was good news because they thought the fed would be on hold that gave way. the dow ended down almost 300 points by the end of the session. s&p down by half a percent and the nasdaq down as well. that's five days in a row we've seen the nasdaq down it's six out of seven days that we've seen the dow, s&p and russell 2000 down. there are questions of what this means as, guys, we get into september that cramer keeps warning. september 17th is where you see seasonal adjustments. >> we've started before cramer, right, andrew?

surprised you weren't fixated on us every morning at 6 a.m. maybe not. >> no. >> the default trade does kind of look like it's down. >> yeah. >> although it's -- >> little heavy. >> -- just slow. might be better if it was a quick one. >> right slow, drip, drip, drip. >> friday was a big day but even on friday, the nasdaq does not participate at all. >> no. >> what's today, wednesday andrew, i want to wish you god speed on these talks i don't know what you have to do with this limiting strategic arms. >> no, no, no, silly, he's there for the state and local tax issues. >> it's a tax conference, that makes -- >> let's not undersell this. we'll look at treasury yields. what's coming up on the s.a.l.t. agenda it's a big deal. >> we're not talking about taxes or anything else, we are here at the s.a.l.t. event

this happens every year but this time it's in new york. it's at javits center. right across, of course, from the hudson river here. it's at the -- by the way, one of the first i think in real life events that's been taking place just about anywhere. a huge lineup of guests that are going to be joining us this morning. a huge lineup of guests that have been here all week. among them is bridgewater founder ray dale yes and mark spitznagel will be with us mr. blackwater himself we're going to talk to dr. scott gottleib in person he's going to be here as well. so many other big names have been here in the past several days including dan loeb, steve cohen. part of the topic, we'll talk about gary gensler and the crypto issue that is topic number one as is china, investing there then the debate we've been having on our own set over the past weeks, buy backs, taxes,

what that means. yes, to some degree s.a.l.t., itself, even though that as a topic is not what this is. so that's what's on tap today and we're going to be bringing it to you over the next three hours. >> you're not talking about the thing that causes, you know, potential health problems, high cholesterol, you are talking state and local taxes? >> i ran into a guy who got me into a conversation about s.a.l.t. but i don't know if he appreciated the irony of that and i don't know if that was more of a one off or if the entire place is having that conversation >> on accident do you take a lighting team with you? i mean, how many people are on your lighting people >> i take a lighting team wherever i go. these guys are the best in the business the best and i hope they all know it. and they're doing -- >> you look better than you do in person when you sit across from me. you look unbelievable. i mean, the jacket you're bright. >> thank you thank the team

thank the team our producers. jackie is here everybody has done an extraordinary job. it takes a village, it really does maybe we'll take a, what do they call it, a wide shot in the business later wr here you can t a whole team. >> are you willing to split your fat cat salary that would be the true egalitarian play >> you know, this is not an up stairs/downstairs situation. we're altogether, working. >> "downton abbey. we do. we do. and sometimes i question our -- i don't know, we do seem to do okay other people seem to do a lot more. >> they know i'm happy to carry the lights out of here, too. they know i've got hands i'm available. >> okay. all right. what else are we going to talk about? i mean, so -- so cramer says september -- >> 17th. >> today is the 15th. >> he said that yesterday and he said that last night on "mad

money. yes. that would be friday that he thinks things turn weaker. you know, we'll see. he's just using that historically as a day i think when the markets turn after that and things get a little more tumultuous. >> then we bottom sometime in october. get all pale and nervous and everything else. we will see. what about the buy backs 60 billion is microsoft trying to juice the system >> or do it before they start talksing buybacks. >> the company announcing they're going to buy back shares, microsoft. $60 billion. you never know what they follow through on raising the quarterly dividend to 62 cents a share. that gives it a dividend yield of just .8 of 1% one more announcement from microsoft. president brad smith being

appointed as vice chair. he looks familiar to me. >> friend of the show. >> he was on last week, right? that's how i -- >> he's on pretty frequently >> he is wasn't it just -- i think -- see, you guys don't know. >> it was last week after i came back so it was the end of the week >> just last week. >> see, i remembered that. >> can't get much by us. investors this morning also talking about apple after the tech giant's big product unveiling yesterday afternoon. here's what the company announced. a new low cost ipad and an ipad mini various versions of the iphone 13 but the promise of better battery life and the apple watch series 7 the new models charge faster, have a bigger screen area and they're more crack resistant people calling this revolutionary -- or evolutionary not revolutionary. big buzz check out apple shares though. they were down yesterday briefly. you can see this morning up by half a percent

meantime, in global market news casino stocks dropping as regulators in china beginning a 45 day period on macao's gaming industry this what they're calling sustained and healthy development in the world's biggest gambling hub they worry about impact of potential changes. at that i can a look at some of the moves during the asia trading session. wynn macao plunged 28% sands 32% and galaxy entertainment 20%. right here in the united states wynn resorts and las vegas sands coming under pressure. all of these regulatory crackdowns raising renewed questions about investments in that country we'll talk to folks here about that today joe? >> trying to figure out how the -- all of the previous moves we've seen by president xi, what

he was trying to accomplish across all of those different industries. >> control. >> what does that mean for gambling if you want to make it healthy and sustainable, i mean, that's why stocks were down what the hell does that mean >> they're talking about how they're going to be looking at every license they have in macao. for a lot of these companies, macao is second to vegas in some cases even before vegas in terms of importance. they're going to look at every single one of those licenses. >> there are -- >> right they may not get a renewal of the license. they may not have the length of the time of the license that they had been anticipating. >> right >> sounds like they will be putting a government official in some of these companies. these are heextreme measures to see that kind of loss in the value of a stock in the course of a single day is a balloon. >> it's hard to dress up gambling kind of we're used to it we can seem more comfortable

to make it sustainable and like a real positive, i don't know. i guess you can do it in moderation. >> look what they did with video games. three hours a day for kids >> yeah. >> or three hours a week not a day, sorry in political news, nbc news projecting california democratic governor gavin newsom will stay in office after prevailing the state's recall election. a bunch of them, only one really worked it's not that long ago doesn't seem that long ago gray davis, remember that guy? was he replaced -- oh, yeah, arnold schwarzenegger. how can an actor ever become a governor >> or an actor become a president? >> now the second governor in u.s. history has survived a recall election. when we come back, sec chairman gary gensler warning he

wants to crack down on what he calls the wild west of crypto. what that could mean to investors but you see this morning crypto prices up across the board. marginally, but up we'll talk more about this when "squawk box" comes right back. my son romeo has sought counsel with some strategic advisors. they suggest that we marry our fortunes with...the capulets. blasphemy! fear not. these advisors managed one of the largest mergers in history, creating billions in value. billions? plus, they have experts in global trade. this merger shall be a boon for our spice business. and set a course for growth. here, here! friars, send word at once. yes, m'lord. what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view.

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we just don't have enough investor protection. the influence and the trading and particularly the lending frankly, as i've said before, i think it's more like the wild west i've asked the sec staff working with our fellow regulators at commodity futures trading, the bank regulators, the treasury as well using our current authorities how can we best bring these to our markets. i stand willing to work with this committee and other committees if you take up any legislative initiatives. >> sec chairman gary gensler testifying before the senate banking committee. whenever you hear, you know, regulation and government intervention, you think oh, is that going to be a positive or negative well, when you see things like

steve cohen, the billionaire now investing in new cryptocurrency and trading and you see more and more stayed wall street firms that are opening the vision and even countries, okay, it's el salvador, but it's still a country that's using it as legal tender, all of these things seem to indicate we're here to stay now we just have to figure out what the regulatory framework looks like to protect investment isn't this all positive? >> super positive, but i am actually very surprised with -- not surprised at what he said yesterday, gary gensler. what i was really actually surprised is we are courting about business, some of the securities, securities, trading, they should be trading, not trading. why are we not trading going in and saying this is the regulation this is how it should be traded. nobody in this space is saying, hey, we don't want to follow are we going to be having an issue with following we want to so my biggest question out here

is instead of saying d5 is producing this much. why don't they say this is the reason we do the business and these are the regulations? >> if you could advise the sec cha chairman, how would you like to see this done? what is the -- to satisfy all the constituents >> sorry go ahead >> we need clear and predictable guidance chair gensler has stated multiple times that he believes the law is clear that is not true we represent over 200 businesses that are innovating with digital assets at the chamber of digital commerce and i have yet to have one company say, yeah, we understand what the rules to the road are in addition to that, we represent about 40 different law firms that are practicing in this space former sec officials in these firms advising companies who

also say the rules to the road are not clear and at the end of the day there is a brain drain this is the most innovative and fastest growing industry in the world today and we are driving that overseas and that really needs to be taken into account in the public policy process what is the opportunity of losing business due to not having clear and predictable regulations. it's not just me saying this commissioner perc has stated this over and over again she's put forward a safe harbor for digital tokens the sec has not taken it up for rule making. we urge them to do that. then there's about 30 different members of congress. over the past four years, this isn't a new issue, have either sponsored or co-sponsored legislation to fix this issue. there's about half a dozen pieces of legislation that looks

to clarify when a token is a token. hr 62 eliminate barriers to innovation the securities clarity act token taxonomy act we need clear rules. >> let's break it down i'm comparing it they are saying every agent that is directly custodial, noncustodial has to be taxed that's like saying everybody needs to have a fee if there is internet associated with it. i don't hold your crypto i have no idea whose crypto it is being in your house, how do i get taxed? >> yeah. here's another one so -- and i think a lot of this is about a power grab for the sec. at the end of the day, this is

politics >> quick one is it sec or cfgc? i'm very confused. they keep going on asking who has the real authority over some of the things? >> yeah. and at the end of the day, a lot of these products are retail products, especially in the stable coin market and if we take all of these products and define them as securities, hold them within the sec's jurisdiction, there's going to be less consumer financial protection the sec is not a consumer regulate ofr you have the cfpb, state regulators who are experts and who have the teams to oversee consumer protections that's not the sec's role. we need to think about how they could impact consumers before we do that. >> yeah. and i think going back -- sorry, going back to your question of if i have to say three things which he should -- which if i

can advise, one would be having it being understood in the space. second thing to add on top of it, if ustg or any stable coin is supposed to be a commodity, it's supposed to be an asset, come out and build a rule around it and the defy industry is so agile. the last thing is i personally think just thinking about coinbase as an example because a really strong ceo has a mind of his own to come up on twitter and just having them underlining doesn't make sense the whole defi role is a trading economy already. why are you only bringing up one exchange >> ladies, i guess we should maybe be happy that we have an m.i.t. guy there these are -- you wouldn't want your average regulator or some

of the questions i always hear in front of congress we should be happy we have gensler because this is going to be -- you know, this takes some serious knowledge about what you're doing to not -- and consequences maybe this guy is the right man at the right time. we'll see. later today the afore mentioned gary gensler will be on "squawk box" at 9 a.m. eastern good to talk to some of your people today, andrew, about this i was thinking about, you know, it's above 60,000. this is bitcoin, trillion dollar 60,000 28,000, 42,000 if you're going to try to protect people from never losing any money and if there's leverage, how can you possibly do that? regulations are not going to make this, you know, some -- you know, like a key bank, right that's caveat.

you need to be ready for volatility if you're going in there. you can't protect everyone. >> right we will see. i imagine a lot of people will be talking about what gary gensler says on our air later today. we have ray dalio on again later on stage we have him talking about that in addition. he has some interesting views about crypto. meantime, when we come back after this, president biden set to meet with top corporate executives today to talk about a vaccine mandate. would era hwe're going to break down when we come back after this we're going to break that down when we come back after this we're going to break that down when we come back after this we're going to break that down when we come back after this we're going to break that dn when we come back after this we'n when we come back after this e'r when we come back after this

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welcome back to "squawk box" this morning president biden is going to try to advance its corporate vaccine mandate. the executives expect to talk about the steps their company's already taken and issues that have arisen as a result. all of this coming as a number of republican governors threatening to sue the government as they say the mandates are unconstitutional. >> some are calling it the employee burnout epidemic. new survey by watson towers willis exclusive to cnbc found that 87% of employers said that stress and burnout are issues for their work force 78% cited mental and behavioral health as the main focus to improve workers' health over the next three years sharon epperson takes a look at how one corporate executive has dealt with his own workers stru

struggles. >> i was having a hard time at work and i went to my hr at that time and what i was told to do is go hoeme and take a nap. >> reporter: that past experience shaped with how he copes with anxiety. >> the first thing i do, i wake up in the morning, i give thanks and meditate. >> reporter: a global c suite exec he was open about his challenges how important is it to have someone in your role be able to talk about the importance of mental health and mental well-being. >> workplaces tend to reward overworking and the strength of being tough but now we know sharing your experience with mental health is okay. it's okay to not be okay. >> reporter: over worked and overwhelmed, burnout is one of the leading issues. >> burnout is someone who wants to do a good job, is capable of doing a good job but there's a system that prevents them from doing it and then they get exhausted, then they give up.

>> reporter: a recent survey of 1,000 full-time workers found 89% said they've experienced burnout over the past year and 70% said they would leave their current job for another offering better resources to reduce feelings of burnout workers also may not be aware or don't understand how to use benefits their employer provides what is the issue with trying to access mental health programs when you're already feeling burnt out? >> some people feel overwhelmed. they just don't know how to take that first step forward. but it's really worth while to put the energy in and figure out how the programs can help you. >> reporter: kinney who shares his experience in his podcast says it is important for employers to have a holistic approach to wellness. >> we tell people on your first day at work that mental health and your mental well-being is part of what we consider this journey, right we don't make it something that's separate. >> reporter: hr and benefits

expert jen ben said since the pandemic more c suite leaders are talking about mental health and wellness >> sharon, we keep hearing about this great resignation movement that we've seen where employees are quitting their jobs, kind of moving on. how much does burnout play a factor in terms of that? and how expensive is it for companies to have to replace all of these employees >> reporter: you know, experts we talk to say burnout is definitely a contributing factor to the great resignation having workers quit because of stress and burnout is very costly there was a new survey found by work human employees plan to find a new job. the cost of replacing an employee can be twice their salary an average salary of $50,000, they could see the great resignation cost them up to $4

million this year and that doesn't even count for the intellectual capital and knowledge that just walks out the door when they leave the building or their laptop >> right sharon, thank you. big problem and one i know a lot of employers are thinking about. thanks great to see you. >> absolutely. pepsi wants to cut its classic use. this morning's news from the ghbaoxcos en "squawk b" me rit ck hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business, you can pick the best plan for each employee

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pepsico rolling out pep positive what the company is calling a strategic transformation around sustainability and sara eisen spoke with the ceo hi, sara. >> reporter: hi, good morning, joe. it's not just another esg announcement it's what they're calling an end-to-end strategic

transformation built around sustainability that will change how pepsi markets products to consumers, innovates, builds out its supply chain it takes sustainability from a policy and puts it into all the company decisions and the consumer outreach. because pepsico says he wants consumers to see they want that. he's found that in the research. he wants investors to see pepsi sees a competitive advantage by appealing directly to consumers who want to know, for instance, where the potatoes in their lays potato chips were grown. another example of how the ceo says they will operate in the day-to-day business come from the bubly sparkling water brand. >> it's already a no plastic brand. zero plastic we are making it available for our soda stream business there we're eliminating not only the plastic but we're eliminating the co2 that gets

generated by moving the routes around the water that is required it's expensive to move water around this is fed positive. >> for pepsi though, the whole finding of positive purpose in everything does run a big counter to some of the health questions around some of their biggest hits, doritoss, cheetoes, gatorades. high sugar, high salt content. not necessarily good for you or the planet a challengethey're working to improve, healthier options and sourcing better ingredients. using chickpeas and protein more the topic of inflation, very hot. supply chain, consumer habits post covid and much more coming up full interview on closing belle. j -- "closing bell.

>> i learned a whole new word, sara couciferous. as you get -- >> for your stomach. >> yeah. well, stomach and beyond >> yeah. cauliflower -- >> so you over did it on the cauliflower. >> brussel sprouts >> gaseous ones. broccoli >> anything in moderation, right? what i'm more worried about is the taco bell subscription where you actually can go in and you have to use a certain amount per month. that's what i'm -- you know, anything in moderation don't you think a few doritos is okay you don't have to have chick pea, yuck, whatever that is? >> agree >> that's what i would say >> anything in moderation, sure. agreed, but i do think for this new strategy, they want to put it into practice in everything they do so it will be interesting to see whether there

are changes made to some of those crazy flaming hot doritoss >> it's great. >> they're best sellers. >> that's a great point. a lot of the stuff isn't necessarily -- isn't fit in with the woke mentality. >> positive. >> trying to convey -- yeah, exactly. >> be careful with that. >> oh, i'm done. done with that anyway, thank you. green beans. andrew >> i should have some kind of comment about taco bell but i've got nothing right now. all i've got is a coffee. coming up when we return, universal founder mark spitznagel has become an investor in the storms we'll see whether a storm is brewing. stay tuned, you're watching

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welcome back to "squawk box" this morning our next guest manages $11 billion in assets. joining us universa, mark spitznagel he's the author of "safe haven." out last month you hang out with naseem great to see you thanks for coming. >> great to be here. >> i think we're all trying to make sense of where we are right now. you're always looking for a storm and trying to hedge risk where are we and what kind of risk are you trying to hedge >> where are we? we're in the middle of a massive boom/bust cycle. we've been here for a while. there's no telling when we're going to get out of this we know the bigger the boom, the bigger the bust.

we learned this -- we learned this from history but we also learn from history is we don't learn from history that's why these boom/bust cycles persist like this. >> the question becomes, what inning are we really in, excuse the baseball analogy as an investor, you have this incredible quarter in the middle of a true crisis i assume it's harder when you don't think a crisis is at hand, at least right in front of you >> well, i don't need to time these things i can remain agnostic about it i need to, risk mitigation you go into extra innings, it can go on forever, right i don't think it can go on forever. you need to act as if it can my point in my book is that risk mitigation is something you should be agnostic it shouldn't be tactical, it should be strategic. it shouldn't require a crystal ball. >> one of the things people are thinking of using as a risk

mitigation for inflation is crypto and bitcoin we're talking all day long the number of people at this great conference fascinated by crypto. guys in suits and sneakers what's your take on crypto right now? >> i think the thinking behind crypto is good i think the people are thinking about the problems of monetary interventionism. the risks to our banking system. that's underlying a lot of this. the problem is i feel like we've kind of killed the golden goose with speculation behind it people think of crypto as sort of an antidote for the things i'm talking about, systemic risk, speculative nature of the market what it is is more of a symptom. i think they've got that wrong it's because we're in this credit boom that we're seeing something like this. there's too much liquidity and it needs to find assets. crypto is one of those. >> the question right now, do you believe we're still in this massive boom cycle without a

bust in sight, does that mean you're massively long or not how do you think about that tail risk which is what your firm is famous for >> it's not being long or short, that means you have to time it risk mitigation doesn't have to be that way. risk mitigation doesn't have to be do i think the market is going up or down we can think of risk mitigation being like a driver driving slower it hurts your returns. you can think about it as doing something that allows you to drive fast, like a pit stop in racing it allows you to actually drive faster this isn't the way modern finance works. you take more risk to get more return if you take less risk, you get res return as long as you get that ratio right, risk adjusted returns go up it's a whole problem now massive dilemma that investors face. >> what are they supposed to do about it first, they need to recognize it, right? we need to think about risk mitigation strategies. we need to think about them as

being cost effective this is a term you don't use too often when it comes to risk mitigation because none of these things really are. there's a notion of diversification in a portfolio the strategy's are the jervisifier. costs money all in the name of lower volatility this term risk adjusted return everybody uses is an adaptation. a sales tactic what does it really do for somebody investing in the deduction of risk mitigation should be to raise your wealth, it shouldn't be to lower your volatility. >> i guess what i'm trying to understand is understanding the framework, what's the practical application of that? >> okay. so the only way for risk mitigation to be cost effective is for it to be explosive. what makes something cost effective in risk mitigation is how little of it you need to be

effective. it needs to be explosive otherwise, it's too much of a drag on your portfolio this is too much of a drag in the name of lower volatility, lower risk we need to think about it in those terms and understand what our goals are. >> that raises lots of questions about all of the folks who have been told forever to diversify, dive diversify, diversify. >> it sure does. modern finance is all about this why do we do it? what's the point of risk mitigation if it costs you more to mitigate a risk than risk would have cost you if you had actually experienced in this case, all over finance the cure is worse than the disease. far, far worse than the disease. >> what do you make of the next generation, retail investors coming into this market are not necessarily focused on diversification at all maybe they're following a strategy which is to say they're all in a heavily concentrated portfolio and talking about it on reddit and buying and selling

on robinhood >> i don't want to lead you to believe someone should be all in and concentrate fully. i'm probably the most bearish person you'll ever meet. i think there's no way to time something like this. the end of this could happen after our lifetimes are over so what do you do about that? i wouldn't want the message to be that you should just go for it you just need to understand what you're doing when you engage in risk mitigation. when you do that, you're not going to like risk mitigation. >> the bearish person i'm ever going to meet sounds bullish. >> it's not bullish. you're going to drive fast around the track that would be reckless i'm saying you should stop in the pit lanes to get better tires. that's the risk mitigation we need >> final question, you own a goat farm. is that -- >> i do. >> you make cheese >> make pretty good cheese. >> make pretty good cheese >> yeah. >> what's going on in this -- both the supply chain and all of the issues we're seeing that

seem to be indicative of inflation in all sorts of markets? and i assume it may be even impacting your own farm? >> yeah. we need to remember the inflation of the '70s wasn't an entirely monetary number we had grain embargo, oil issues, we had a drought there are other things that kind of -- that led to that so inflation doesn't always have to just be monetary phenomena it can come from logistic call problems. >> are we inflationary -- by the way, we had kathy woods here from s.a.l.t. on monday. she said deflationary. >> i worry about deflation. >> to -- >> to say i worry about it, deflation can be a healthy thing. too obvious to say deflation is because of fed balance sheets. >> mark, thank you congratulations on the book. >> my pleasure. >> thanks, andrew. when we come back, swiss shoe maker debuting on the new york stock exchange. they're running from battery

park to the new york stock exchange ahead of ringing the opening belle there. the company's co-founder will joins veex uli nt. ♪ ♪ i had the nightmare again maxine. the world was out of wonka bars... relax. you just need digital workflows. they help keep everyone supplied and happy, proactively. let's workflow it. then you can stop having those nightmares. no, i would miss them too much.

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the post labor day ipo market is here one of the first names out is swiss shoemaker on and priced offerings at $24 a share above the already raised proposed range cofounder and co-executive chairman the team is running a 5

k this morning >> good morning. we brought a few runners to run with us today. >> first, i thought you were running from the battery to the nyse but you are doing a full 5 k, right >> we are probably going to take some turns we are excited to ring that bell together with our community. >> you operated in stealth mode for some time. it is nich what is it about on shoes that has people so fefr enter about the brand

we've been working on the performance to sustainability. it has turned into a movement of millions and become one of the fastest growth brands. >> i've seen over 10% annual growth rate. where is it at the end of the cycle, where is it over the last year or two? >> we continue to grow 85% from last year. for us, it is important we are reaching the community and runners around the world on has been from the very beginning a very global brand. we are resonating with consumers. actually north america has become our biggest market with

half of our community here >> no question growth is pretty phenomenal your latest gross margin is 59%. people do ask about the price. it came in above expectations even the valuation now north of $7 million. your sales were $616 million you look at somebody like nike trading, how do you justify that higher premium >> you are right we are having very high growth because we are a premium sports brand. we are just seeing how we are embraced by runners around the

world. intending to grow that to the most important cities around the globe. also in asia and china with growth over the year so that is going to continue >> how do you balance the issue of function and fashion. i know a large group of people who are wearing your shoes because of the fashion element men wearing them with suits. a lot of sneaker companies that have been highly fashion for a period and then gone out of fashion. >> some of the first people who

came knocking on our door were proathletes. the six times iron man winner. it was the pros who discovered on first we've grown. because of the combination and the people who said, hey, couldn't i bare my most comfortable running shoe all day, everyday as well. we've seen over the last decade, the performance has overtaken fashion. we are creating staples to power a very, very active life it is great to see people using them for running and exploring as well because running is really on fire >> we want to thank you for your time today we wish you well on your run

thank you for the opening bell today. >> thank you for having me >> when we come back, cnbc kicks off hispanic heritage month. we'll bring you the latest numbers and a special guest esenan herrera pridt d ceo of united states chamber of commerce i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech. that could really help us manage inventory. and save us a ton of dough. then let's take back our market share. checkmate, chess heads. girls, i said “bedtime”!

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off a string of bad trading coming up. covid boosters and getting children vaccinated among the issues impacting businesses. dr. gottlieb joins us live >> apple rolling out new products but do analystscare good morning i'm at the salt conference in new york we'll have former fda commissioner dr. gottlieb in person and bridgewater founder

and chief ray dalio will be our special guest. lots going on here right now, the dow will open higher the s&p looking to open about six points higher. also what is going on. pfizer said to apply for u.s. approval in use for children aged 6 months to 5 years old studying comments made at an industry conference. drug maker said to be planning to submit in november. pfizer already on track for approval to use in children aged

5 to 11. >> microsoft boosting by 11% to the payoff to 62 cents per share. the 12th straight year, announcing the buy back over the debate california governor newsom projected to beat the recall over pandemic-related shut downs. >> crazy it was a blowout double complicated yes versus no whatever means he gets to keep his job got twice as many votes as the other one >> the tax reconciliation plan democrats are finishing writing

the text of the sweeping social package, let's get more details. >> this is the fourth day of debate off the ways and means committee. one of the last to wrap up work on the $3.5 trillion social spending members will meet at 9:00 a.m. yesterday, they went for about 11 hours one big point of contention was whether to lift the cap. the democratic governor seaid lawmakers are considering a repeal he slammed republicans for capping it in 2017 majority leader down played divisions between moderates and progressives in its party from the size of the package yesterday. >> there are members of our

caucus who wanted higher than 3.5, members that quantitied lower. we will have to come together and we will come together. democrats are already asking for one power point presentation from yesterday saying a time frame of weeks, not months to reach a compromise >> interesting piece of who might stick to their gun doing the bird rule or birdbath in the budget. you see that they want to legalize the dreamer is it a budget item. there are some major practices that are clearly not budgetary

a couple of bernie sanders things if they divert the rule there is no bird rule. she's struck that out and ruled how many times they would use that with just 51 votes. certainly, she has been in a tough spot there has been wide-spread support keeping her in the position even though you do hear calls of whether or not she should remain in that role the house had to take a second

vote of the final version of that tax bill because of the name on the bill that republicans had. this works both ways the birdbath is one of those tools the parties like to use against each other >> definitely need to raise for what she needs to go to. thank you. >> join us with the latest from washington and much more when we come back, the growing economic importance of the latino community and recognition in the board room. we'll kick off national hispanic heritage club with george her rare raw the founder of herrera-christina group. let's check the markets this morning. dow futures now indicated up by 23 not as strong as we saw earlier this morning

s&p up by seven. the nasdaq coming off five losing sessions in a row the dow and s&p have been down the last five of six sessions. we'll see how things continue as we look at the opening bell. wondering what actually goes into your multivitamin? at new chapter,

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>> we begin with a look at reputation on corporate boards more on where progress has been made and more work still needs to be done >> hispanic reputation pales in comparison to the u.s. population hispanics and latinos make up 19% of the overall population. accounting for over half of the growth in the past decade. among all the board seats in the s&p 500, just 5% are held by latinos. on the for opportunity 1,000 side is just 3% the roughly 3%

along the index. along with qualcomm ceo who was the latest to join that list in june of this past year so it is a relative few the food, beverage and tobacco industry with at least one latin x director buttocks the list is technology which we know has faced calls in recent years to increase

diversity accord together latest reports leading fewer than 10% of tech positions as giants like facebook, apple, amazon and microsoft. progress being made but still a lot of work to be done the tech stands out as well >> getting attacked on a number of fronts. it is about trying to make its way more accessible out there that is not part of the centric silicon valley community >> talking more about hispanic reputation in the board room joining us with more is founder and ceo of the her

rarery-christina group special eyes in marketing, communication, corporate diversity and research former ceo of hispanic chamber of commerce in the united states good morning >> happy to be with you. >> you are a member of several boards you've been tracking this closely. why do you think there is so little reputation in the board room representative to the population of consumers out there? >> i must say the numbers we just saw is disheartening to me. dating back to the presidency and more decline in terms of hispanic reputation in the corporate board room it is a continuing struggle. what we always used to hear that

we couldn't find qualified hispanics and that's not true. the reason the numbers are disheartening, there are almost 800 companies that have zero hispanics on the board 85% of tech firms in the united states has zero latino reputation the numbers are more for latinos that represent more. we need to continue to advocate and initiate dialogue for the corporate ceo to let them know we have the talent and we have huge purchasing power base

$ $1.9 trillion. one of the largest ones. larger than brazil my message is you either play with us now or pay later we are one of the most brand loyal consumers in the country we want the reciprocal business relationship with you. >> what do you think is missing when we don't have the reputation on the board. what is missing there? we talk about all the time that it just makes better business sense, what are some of the issues that might get missed

that needs to be a sincere commitment and they need to show ownership and be embedded within the dna of their respective companies. with that model of the community other than products and services to us. they need to take that model and transfer it to the governance portion and when it comes to philanthropy and the c suite there should be no reason the numbers of hispanics in c suite positions are also low any public company i've sat on the board of, i've always had a ceo who has owned it and been driven from the ceo down, it

changes the whole landscape and dynamic of the corporate board room many times these board members don't have relationships when it comes time to represen someone for a vacancy, it is usually not a person of color. we need to try to continue to get them to socialize more to show them the wealth of talent with the fastest growing wealth

combination, it makes sense for you to start thinking in your board room and to make sure the community is being respected within the small company >> when you look at small businesses, hispanic entrepreneurs are leading companies. what does that tell you? >> we stand at 4.56 million strong currently the hispanic small business community is growing at an incredible base about six times faster than the small business community. and being driven by latino entrepreneurs being driven three times faster the revenues of these small hispanic-owned companies have increased and stand at $5

million or $million a year you are seeing a large emergence being driven by latino entrepreneurs. we are seeing a road block with covid and we are seeing many that don't have a strong balance sheet. also important right now that we start to talk about some of the barriers confronting small businesses a lot of these just want the debt capital in the mainstream of american society. >> where do you stand on the covid vaccine mandates >> listen, it is a personal

decision i've taken the vaccine i see there is a big issue in black and brown communities. i've seen that 54% of the brown population is unvaccinated and many in the black community are unvaccinated we need to mobilize the church and community leaders, those individuals in the community they have relationships with we don't have relationships with these national big voice, none community leaders. they are the ones that can deliver the message. we trust them. hopefully with that positive message that to get vaccinated makes sense for you, you are

sending them to school, they are 12 years and above, i think it is really important you consider getting you and your family vaccinated it is a personal decision. i can understand the trials and tribulations a lot of these parents are going through. >> you don't think it should be mandated by employers? >> i think it should be mandated i think it is important we have a safe and healthy work place. just take a look at what has happened in the travel and leisure industry covid has brought about a new series of safety and health protocols. we want to make a lot of these locations safe they want to feel

safe going to these resorts or destinations and hopefully we'll be able to come to a compromise when it comes to a health or religious issue. it is important to get back to what it was prepandemic days >> thank you for your time today. >> i'm happy to be with you. thank you for celebrating hispanic heritage month. >> thank you. coming up, macau casino stocks plunge spooking

eninv investors. a quick look at the futures now. ahead of the open. nasdaq looking to open about 28 points higher and 4.5 points higher dr. gottlieb is in the house he will be with us live later back at the salt conference after this >> announcer: time for today's aflac trivia question, which legendary actor is the son of a former georgia-pacific ecuvexeti and an ibm operator? es to wear . style, charisma, and a smile, that's a 21 out of 10! [aflac!] you know, aflac can help keep unexpected healthcare costs from ruining someone's finances. check out this coverage... you still got it coach, you still got it! i never lost it! yeah! [aflac!] you see that coverage? with that wingspan i see why you got more rings than a cell phone. there's always room for one more.

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casino stocks getting slammed after the investors fear concerns could be tighter on the horizon. we have more on the story. we are talking about some big selloffs in these stocks >> absolutely. authorities say they are going to review the rules. these licenses are 20 years old for the wynn, the sands and others that will expire next

june if there is a need to install those and give tighter recognitions for the approval of profits and share holders and residents. promoting nongaming elements and social responsibility that has been a longer term trend and to diversify offerings away from gambling jp morgan down graded from overweight to neutral to

underweight. still unclear that we don't have a lot of detail. >> we know that china is cracking down on technology and the big banks as of right now, the cosmetics industry could be the next one targeted because of beauty ads and markets need to be better regulated. we knew these licenses will be

required also worried about the capital flow we've seen a tightening and noted a crackdown on various industries is shocking people. investors have sold off these stocks yes, they have coming up, back to the salt conference taking place in new york we'll hear from dr. gottlieb next we'll find out what ship that is behind them. that is a big, big cruise ship we'll get the name of it or her when we come right back. ebt into one simple monthly payment. debt free! thanks to sofi.

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this is hannah, she's a posh virtual receptionist at the ready 24-7 to answer your calls and assist your clients. you can't be in two places at once. let posh answer. posh virtual receptionists. welcome back we are live at new york's javits center expansion kicking off getting children

vaccinated on the front of minds. in person today, dr. scott gottlieb with a new book with an amazing review, called "uncontrolled spread why covid-19 crutches us and how we can defeat the next pandemic." it is out this month how long has it been >> a couple of years two years i think this is the first time we are doing and in-person conference they asked for vaccination cards and masks.

as we've discussed some people have unvaccinated children at home, some don't i don't think you can begrudge some people over others. >> a lot of the residual anxiety is that they are vaccinated but worried they'll get an infection and bring it back to the home to the unvaccinated children. people will have to figure out what risks they are willing to take this is a safe venue in the setting of covid they are requiring vaccinations and used a very big venue. we'll have to learn how to live with this. >> talking about the booster

shot and thin thern are some others coming out for children 2 to 5 if you are looking at a calendar right now for the average family with kids 5 to 12, when do you think they'll have an opportunity? >> the 5 to 11 is a 10 microgram dose basically one-third the dose but the same vaccine pfizer will have data on that. if fda does a four-week review, it could be available before the end of october we'll slip into november hopefully the fda does a positive review. with respect to the vaccine for younger kids 6 months to four

years, more likely, end of november that could be something if it becomes available in 2021 with how long the review is 4 to 11 could be available by halloween. there is a view by then boosters will be done can makes sense but a lot of uncertainty about this delta wave >> i think this is the last big wave and then we'll have to deal with it more as an endemic virus. a lot of businesses don't know what that delta wave will look like here in the northeast

i think it will sharply pick up this month it will decline on the back end to maybe 20 cases per 100,000 per day. vaccinating kids will be a part of that. >> scott, i'll start with something maybe positive if you add natural immunity, let's not even get into that if we add natural immunity, what do you estimate it is in the country right now? >> first of all, it is not uniform across the country but closer to the level we are approaching some type of herd immunity where you are going to see case rates start to decline. you are seeing that already in the south.

it is probably hire than 80% of people have some form of immunity 75% of adults over the age of 18 have been vaccinated with at least one dose most will complete the series. with the remaining 25%, most have had covid probably the people unvaccinated are overrepresented by people who have had covid then you have 80, 85%. >> the chance of a more vir u lent dr. fauci said a monster train if everyone gets vaccinated, we could hope for not as many muations have you seen that before where

it gets more virulent, the further you get from the original strain? is that possible >> it is unpredictable is the bottom line. conventional wisdom says as this virus evolves, you'll not have a sudden shift it defeats our immunity. most people think if a new strain emerges, it's probably going to be in a delta lynn yan. in that case, you could develop a case that targets the delta back boen and what could be closer to those emerging pfizer and others are developing vaccines based on the delta

backbone to be in their back pocket that will be a 2022 event if we end up revaccinating in 2022 making a decision about what that will look like. i think we should be prepared for it there is nothing on the horizon right now but the wisdom is that this virus will continue to slowly evolve away but we'll know how to deal with it >> suggesting that moderna's shot has more lasting availability are there questions of better availability if you started with one and then got your booster from another brand is anybody studying that >> people are studying the

so-c so-called mixing and matching. there is no data that suggests one or the other is better there is also no data that shows you can mix without any issues you want to add data to demonstrate thats that safe. i've said all along that these vaccines are comparable. i could sit here and tell you reasons why some of the data is showing a difference right now i don't believe that is a durable difference we are collecting the data with pfizer authorized sooner so people who got pfizer early on are now further out from their vaccines. i think that is some artifact and i've been consistent with the belief that these are slightly better. the bottom line, once we start

boosting the population, any small difference in the vaccines will come out in the wash. i think people should be confident that they are all effective including the j&j vaccine. offering a very durable response i think they'll have even more data affirming that. that is still the vaccine. looking at j&j as the six-month vaccine. we need to remember that we have three safe and effective vaccines that all look good at the same time. >> you've been suggesting we could get a real peak out in the northeast. right now in man at and the rate is 2.61% what do you think will create or

given the level of herd immunity in places like new york and in the northeast, are these going to be largely breakthrough cases? >> they are all going to be breakthrough cases delta is very good at getting the hole in the northeast, we have much better rates delta is very good in get being in those geographic come partments. i don't think we'll have anything like the weavave we sai the south. with back to work and back to school, i think this delta bump we had in the summer gave us some false comfort i think it will pick up october, november that's the pattern we had last year as well we felt pretty good in september

in new york, by election day, it was clear there was more spread. i don't think it will be as bad as the south but it will pick up >> if we are looking at halloween before kids under 12 can get vaccinated or will we be through the wave but any immunity kicks in with that group? if they get it in october, will there be different places they can go >> it will not derive immediate protection it will be widely available. this actually is the same shot the dose for kids is the same as for adults just one-third the amount. you need to put it in smaller viles, you can use the same vile

and withdraw one-third or a less the amount of the current vile, you go back in 10 times. you can't go into a vile 30 times. the worry of the risk of infection is the concern going back into a vile >> doing a fist bump here. >> the new book called uncontrolled spread. out this month hope to see you tomorrow hopefully on the air but maybe from a distance. see you soon >> wide shot andrew. i see lulus. >> no, no. i upgraded to some ralph lauren today. you know, at home -- when we are together, it is like be egg at home i wear my lulus at home.

when i go out to see people. let's ramp it up maybe some jamis here on the set. let's do it on a friday. ap apple launched four new phones company also made some big news with changes to the apple watch. we'll talk to the analysts about e unveil and what it means for investors when we come right back ngthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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ur. apple announced its new products yesterday unveiling the iphone 13 lineup, the new ipad, ipad minis and the series 7 watch joining us now, senior veresearh analysts lots of different screens, different cameras and screens, battery life is it enough, do you think, to match the reception of the last phone, the 12? >> good morning, joe it is the complete lineup.

phones are being refreshed it is the most important thing there is something for everyone. the question is, does everyone need to upgrade their phone this year there aren't that many first time buyers. we had such a strong cycle last year and we had particular strength with the most expensive phones, perhaps in part because of covid and because apple's enthus yas tick upgraders ran out and bought 5 g phones. certainly, there is choice for everyone the question is, will you have 230 million or 240 million go out and buy phones

or will it be lower? >> what would you remember as a stock that has done well with that hold and weakness, what are you recommending? >> our view on the stock is to hold we believe apple is a durable franchise with over a billion and a half users trading between 18 and 32 times earnings at the high end of its range we think over the next year, revenue and eps estimates are likely to show very limited growth we have earnings being flat over the next year. high valuation and flattish

earnings are comparable, we think makes it difficult to make a catalyst to the stock here the market weight and the shares is what we recommend for the investors. >> anyway the watch is going to move the needle near term or the ipad mini or otherwise >> not nearly, the watch is about 10% of the revenue, watches and minis are not big enough categories to change the narrative. it is really all about the phone in contribution to revenue >> i thought about it. i'd love an extra 2.5 hours on my battery my new phone, i used to have an hour that's such a horrible feeling

i'm not sure can i leave the charger. i don't know what would happen so this is amazing i'd like another 2.5 hours but i don't think i'll upgrade >> having the seven, you've got to get current here. >> i'm good. i've got the real smooth -- got to go. pat toomey coming up with ibm, you can do both. businesses like insurers can automate it processes across clouds. so agents can spend more time on customer needs. and whatever comes your way, you've got it covered. saving time and improving customer service, that's why so many businesses work, with ibm. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this.

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asian gaming stocks plummet as it appears gambling may be the next sector to feel the crack down bridgewater founder and kyle bass should the crypto industry brace for new regulations. speaking with the ranking member of the senate banking committee. preparing for liftoff. the first flight with only private citizens set to launch tonight. the live report from the pad in florida. we kick off now.

>> does it make you uncomfortable? >> it does 4,000, 5,000 at the buffet line? i don't know maybe later for that couple decades later i don't want to say anything

>> too late. >> indicated down a little bit nasdaq weaker in recent sessions relative to the other averages we'll see by the end of the day. up with a pretty sharp selloff the treasury yields, go figure but back below at 1.27 guys, did we decide bitcoin took that tumble because of the light coin rumor and that wasa hoax.

>> getting over to dom with the latest look this morning >> first of all, we have a deal to talk about. still notable. it is goldman sachs. they'll buy greensky what do they do? they are a buy now, pay later company. they provide large specialty loans for surgical procedures, construction projects, home improvement. we've seen a lot of that buy now, pay later space get very

hot. one deal to watch there. taking a look at the casino stocks the macau market in china. 10% for las vegas sands. mgm down another 2%. this is all over concerns that the pressure could be brought to bear coming in coming months and years. watch those gamg stocks. microsoft also on the move up by 11% at 62 cents per share per quarter. how do you get a stock higher. you announce the massive buy back as we do, in the most popular ticker searches, number one, no

surprise goes to apple because of the iphone screening event. 10-year note drops to the second place. the dow industrial comes in at number three wynn casinos and just about 2% or 3% away from the record highs. knowing where we are the top five, the top 10, highlights from the top 50 are on my twitter feed and back to you. >> top five are always the same other than today, the wynne resorts. moderna is off and on there, tesla is off and on. amazon is off and on >> widely known and widely interested thank you. facing the senate banking

committee for the first time as sec chair. in the spotlight, cryptocurrency facing new regulations he does not think the u.s. has enough investor progressions in finance. >> it is more like the wild west i've asked our sec staff with bank regulators and the treasury as well using current authorities to best bring investor protection to these markets. >> joining us now from pennsylvania, he questioned the sec chair. good to see you today, senator thank you for being here.

>> the sec has not laid out what type of cryptocurrencies at least certain types the chairman will a being knowledge those that are not in securities

they don't actually meet the test i'm asking the sec to provide some security. what are the characteristics that make it security, so that people will know we may make those changes. i'm not in the camp this there should be any regulations. the sec is taking enforcement actions without first having laid out how they interreceipt and apply. >> it has been hard for regulators to keep up. it often is hard for regulators to keep up he makes a point saying, it is the wild, wild west out there. the fake release that went out

and said walmart was going to be accepting it saying, hey, there is some oversight needed and maybe it will take too long just a way to signal those coming up. >> no doubt some of these will end badly. some of these projects are offering returns that don't make sense to me. it is hard to imagine how they are sustainable. i think it is also the case that the sec owes americans generally and everyone in this space transparency saying we'll regulate it as such

cash markets are better regulated. we have multiple bank regulators we have to sort this out we ought to have transparency if we have enforcement. >> changing it around. what do you agree and are there areas you say, okay, he's right on this? there are certainly products being offered with funds and money market accounts that ought to be comparable regimes over products we agree that some of the most popular cryptocurrencies in the world are not securities crypto is not, ethereum is not and they agree with that

there is considerable overlap. we have a struggle over what he believes to be securities and why. >> is there another place you think there is more oversite i do think the regulators are working on this. looking at how these should be regulated. congress needs to be involved and i want to make sure we proceed with very much caution it will transform finance and i

don't want us to stifle what is or is not coming out of this place. have they given you any information about when that might be made public to others >> i've had private conversations working on getting the clarity. his position will be enough about what the law says. i don't think that's true when you apply it to this cat gory. talking about the draft and how that might be able to work its way in the senate or not

>> what do you think the biggest sticking point is? it is massive. the hit it has on small business the rate and reduction of the corporate rate that's a huge problem. that has to be a source of resistance the question is both in the house and the senate i don't know how to answer that. finding the administration has floated their plan

how they sort through this >> one thing they've paid attention to is the wash sales rules saying for any cryptocurrencies and commodities and currencies if you were to sell them immediately, you couldn't buy them back and still get the tax benitys for these things that makes sense would you at least sign off on something like that. >> i thought we had some existing wash sale rules and i'm not sure how they intend to change it. that's pretty deep in the weeds.

we don't know whether that will survive in the senate or in the house this has been released i'm not sure how it will play out in the end >> senator, thank you for being with us today. a quick programming note don't miss the exclusive interview with sec chair gary gensler at 9:00 a.m. don't want to miss that. coming up, we'll talk about the state of today's mark elts with the hedge fund titan. we'll ask about china and the crack down on the business after that, sharing his own take

on the escalating chinese situation. next, prepare for takeoff. morgan is live at the kennedy space center ahead of the special launch. >> reporter: in a matter of hours, four private citizens will climb into that capsule we have the count wndo to liftoff coming up. stay with us for mac. who can come to a stop with barely a bobble. lucia. who announces her intentions even if no one's there. and sgt moore. who leaves room for her room. with usaa safepilot, when you drive safe... ...you can save up to 30% on your auto insurance. get a quote and start saving. usaa. what you're made of, we're made for.

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tonight, spacex is expecting a giant leap in space flight and tourism. the countdown is on at kennedy space center >> this could happen in as little as 12 hours from now. poise the to make history with the inspiration 4 lifts off marking the first time ever on a fully private crew without any government backing has launched. the missions commander here

jared isaacman raised for st. jude coming together including scientists and he had kator, -- educator, lockheed engineer and bone cancer survivor >> no one spared us on any of the review thousands of pages and a lot of power point to support it. that transitioned into simulation starting with how this is how it looks and up to full john emergencies

they will liftoff from 30 a. farther for humans in space since the huble telescope repairs more than a decade ago three days orbiting. conducting health experiences and carrying payload branson's flight was one hour. jeff bezos was 62 miles. if all goes according to plan, this will mark a major milestone

for space flights. >> those numbers are unbelievable how many miles and not in the last decade >> not since 2009. >> 22 times the sound versus three times. >> yes the rate as which they accelerate to get to this altitude and then need to maintain the speed to or yit the earth every 90 minutes and conduct the experiments for three days before they splash back down to earth this is huge in the past, government astronauts spent years training for a mission like this. they did this in six months.

this is like head and shoulders above. weigh wish them well god speed. good luck. everything you can say how is the weather weather looks good >> the launch is a go. opening at 8:02 pm eastern and more of that interview with the crew coming up on squawk on the street as well snoochlt when we come back, a wide ranger interview you don't want to miss with ray dalio on the menu, markets, fed, bitcoin and more this is cnbc

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coming up, hedge fund legend ray dalio, live after this

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welcome to our special guest at the salt conference, i haven't seen you for very long >> we are coming out seen every morning in where we are in this economy.

i haven't had an opportunity to hear from you and ask you where things stand for now thinking about this in the machine. help us know what's going on in your head right now? >> i think the relevant time frame is the next few years. and i think you have to put things in context. there are three main forces at work first is the debt money thing. how does that pass through and what does that mean for the markets and so on. we are in a different era now. zero interest rates produce a lot of debt providing that >> that condition flikt and the third is the rising of a great power in the form of china challenging the exiting great

power and existing world order those three things are coming together at the same time as we have a pandemic. each one of those is eye cycle what is happening now has not happened before in our lifetime but has happened in the 1930 to 45 time period i went back and studied it if we are talking about those things, we should look at those. >> starting with the debt situation in the country and the zero interest rates. given you are a student of history, what happens next >> not enough money to go around we are spending more than we are earning. we have to do that because of the social redistribution and the printing of money. it is the mechanics of that.

that devalues the value of money. cash is trash. >> you came on the air at davos and says cash is trash this is not guaranteed you have to look at the cost of the money. that interest rate the bond or the cash rate, you are not going to get that. you have this wonderful sugar high, which is distributing the checks and so on that means everything else goes up in relationship that goes back under way what you do know must be below the nominal growth rate in order to deal with all of that debt to finance that

that devalues the cash and money. that's the dynamic that is bullish on the record. on the margin. if we look at the expected return of equities, you do the projections of the present discounted values. you probably have 3.5 to 4% return, so relative to the return of cash it is a better deal. as those equity prices go up, those returns go down and produce a bubble and the lower returns there. as that shrinks as you should have rates to rise, that cushion narrows and you come into more and more danger. sos that what is happening

talking on monday deflationary >> those are the pros and cons we are in an era of redemtiveness. if this is managed well and converted to productivity, that is a deflationary force. this this world, which nobody is really going to get paid for those assets you have to have the debtmonetie there is a big increase in the value. think about how much of your net worth is in financial network

for those things and equity. too much of that money in the assets that will neverbe able to get paid. if you calculate how much is it in the financial asset and if that is only a claim to buy goods and services, there is an enormous amount of that. how is that going to be dealt

with >> the most important thing any investor can do is know how to diversify well all of those those currencies and asset classes and so on, the balance, then you take those moves from there know how to diversify as well. most people diversify that and think it is okay to the stock market and most think it is attractive to the relationships. diversify well in those areas. the country, the currency, the asset class. >> i mention the idea of crypto.

a lot of people think of that as a new investment class i think it is worth considering all the alternatives to ksh and some of the fanl assets. so bitcoin has -- is a possibility. i have a certain amount of money in bitcoin it is a small percentage i have in gold, which is a relatively small percentage of what i have in other asset classes and so on >> attached to where it is in the interest of time if it is successful, the

governments are successful >> we have seen governments like el salvador. >> you have india and china getting rid of it and united states talking about how to regulate and still be in control. that's what it looks like. >> if you are el salvador and you are talking about the mb, that is a different thing. >> do you think regulation will kill it? >> i think regulation -- i think at the end of the day if it is really successful, they'll kill it they will kill it because they have ways of killing it. that doesn't mean it doesn't have a place or values if you put cryptocurrencies or bitcoin in the historical

perspective. there are so many things that didn't have intrinsic value and then became hot or cold, you have to know what it is. it could be tulips in holland. i'm no expert. you asked me my opinion. take it for what it is worth diversification values how much stuff like that do they have do they have gold in okay. how much do you have in gold versus bitcoin and do you have diversification in what you call for the money with a fiat

system where is your hard money that's the question. however you go after it, that is the answer >> you spelled out three different pieces of machinery. maybe five in total. the political environment, you have long talked about taxes and equality overlay that on what you just said we have large wealth and opportunity gaps a couple of years ago, i wrote a piece called why and how capitalism will be reformed. besides not being fair, you'll be achieving the goal that creates prosperity created in a different way for different

people those who earn the money then take care of their kids with a better education and so on if you look at the bigger cycle, you get into problems, you have wealth gaps and the challenge that is the cycle we are in. the question is how do you make productivity continue to increase rather than redistribution that's where we are politically. we have seen the left/right conflict we'll see it in the 2022 elections. that conflict itself is some form of civil war conflict it doesn't lend itself towards working together >> the question is what's a war, it doesn't have to be killing each other i don't mean it that way but

sometimes when it gets out of control. it does lead to that how that history is left to in the past we have a war developing between the various factions the states and so on how that will be resolved. still the question and talk of systematically challenging those elections. that is a challenge of democracy. if you don't get the system of votes, that depends on how we'll talk about we will go there. we will be aware of it the more we are aware of it and more cautious about how to be

that way if we keep fighting with each other and have this together with the bad finances and together with the rising power challenging the exiting power, that's not putting forward our best. >> as an investor, how do you assess the risk you even described in 2022. the first thing you have to do is take care of the tail risk. and go from there. you can eliminate the risks with a very small percentage of the portfolio. >> that is a structural question not only what assets or what options you might hold to eliminate that tale risk the market is not really taking that tale risk and pricing that in or eliminating it in market positions, you can do that >> let's talk about china. you have a view that china will

eventually overtake the great american empire, no? >> if you just take lines on charts and see what's going on in terms of basic fundamentals they are more than four times as many chinese if they had an average per capita income that was half as america, they would be tries as large as the united states you take their growth rate today, china is comparable in many ways. comparable in world trade, in gdp. whether you are doing ppp, adjusted or not. so it is a reality today they are roughly comparable and get their strength at a faster rate than we are >> given the crack down, a lot of people say you shouldn't be

investing in china you have a different view? >> first of all, i think a lot of people have not spent a lot of time there. eye been going there since 1984. i'm lucky to know a lot of people from the most common to t the senior leadership and so forth. everybody follows the approach they believe is best for their own country. i can't tell you whether their approach, our approach -- my job isn't to do that they have a top down rather than bottom up approach very much like a strict parent the question, the riddle, you have to have answered before is how does a communist party that talks about marxist lennonism and at the same time has the largest capital market and

development exist? the answer is that they believe capital is the way of influencing the wealth of the country. that is key. the same time as it is important to redistribute it looking at the policies now, they are not going to disrupt or go back to what you would call the old communism. they are very practical people the issue is more control. they will tell your kids how many video games they can watch where you wouldn't they are like a strict parent. they'll redistribute the wealth. i have a lot of measures i won't get into united states and china are the most capital iflt countries. you can say, will they go as far

to the left as europe has gone whether those are tax, redistribution, the effect on the market and the like. you can't get in and out of a place. in addition, you need diversification. you need two great powers. two developments, you are looking what percentage of the portfolio do you have here or there, diversification is a key. when i look at it, i think there are risks in the united states diversifications are important the fundamentals are basically sound. >> critics fund and manage some money. your view is related to that >> i manage money for the american fund and for investors

along the way. i can't survive and i can't be myself if i'm not speaking honestly about that. i've been in china 20 years before i did anything economic with them. i went in 1984, they didn't have any money. i liked them and i was policed to be part of helping them develop their capitol markets over the time for not money reasons. if you think money, i've got enough money what have i got in terms of my choice i do business with a lot of people who can choose those types of things. the issues i'm talking about okay, you've got these two competitors. do you want to bet at all on one? and look at the track record >> this is going to be a longer conversation we'll have it later at the salt

conference thank you for the conversation >> thank you let's get down to the new york stock exchange. jim cramer joins us now. there are so many things to talk about today. i don't know if you want to talk about the direction of the markets, the fade away the casinosthere do you want to talk about crypto, what strikes your fancy today? what are you watching? >> we do have the chairman, gary gensler on we're going to be talking about crypto and what are the real regulations if there really are in the wild west as we heard from the clip earlier the chinese crackdown, we're going to try to figure out some of the parts for some of the casino companies they could be north of where they are even if you get a say 40% decline in business. i think we have to talk about the idea that every time the market rallies sellers come in i think they're trying to get ahead of what it's historically been for 20 years a very difficult period in the markets, becky. you can tell the momentum sucks people in and people lose money.

we've got to be a little more careful, a little more circu circumspect. >> do you think if people are trying to get ahead of it that maybe diminishes the potential downturn later or is there no way of knowing at this point >> absolutely it does. i think that they sell earlier and then come back and buy earlier too, which would typically mean instead of the second week of october being good, maybe it's the first i do think earnings could be good we had a couple of companies that preannounced. i thought there would be a plethora, and there hasn't i'm feeling pretty good. i'm also listening to dr. gottlieb who makes me feel when he even mentions something about herd immunity i feel much stronger. >> we're going to be watching gary gensler and that interview coming up, and it's an important one. we will see you in a few minutes on "squawk on the street." >> thank you, becky. >> thanks, jim. all morning long we've been monitoring the big declines in the casino stocks due to the macao gambling situation,

tighter regulations in that gaming hub hitting those names hard meantime, wall street journal op-ed published this week, s.e.c. chair gary gensler said that the firms that audit chinese and hong kong companies must themselves be open to u.s. audits, otherwise he say more than 250 related china companies could face u.s. trading bans our next guest says that's too long joining us is kyle bass, chief investment officer you've got some interesting notions, obviously, strong feelings about china, kyle, and i was just trying to -- you really call it an evil regime, and i'm not sure whether you're talking about uyghurs or human rights or that a lot of the companies are just not subject to normal audit or financial rules that we would think you need to have to even consider here in this country, and now

you got three years. that's a throwback to an agreement with trump, that president trump had negotiated, right? you think that's way too long. >> joe, imagine if we decided that we understood that enron was potentially cooking their books, and we said, you know, we're going to really hold you accountable enron and your management team, but we're going to give you three years to comply with our new accounting regulations. what this did is the holding foreign companies accountable act was something that was a vital piece of legislation here in the united states, but we gave them a three-year period for compliance, and as you know, in political years, that's a lifetime that's basically allowing chinese companies and whatever fraud they might be committing against u.s. investors, it's an open season on u.s. investors for the next three years the three-year time frame needs to be collapsed to less than one. i think this is -- i think the

three-year time frame was simple political cover, and what i'd love to talk about in furtherance to that question, the largest policy gap potentially in u.s. history for u.s. national security is the fact that we have the commerce department, the treasury and the pentagon all on different pages. so if the commerce department investigates chinese military companies and decides that they are working against either u.s. national security or u.s. foreign policy or chitting gross human rights violations, they put them on analyst. they can't receive exports from anywhere in the u.s. u.s. investors can continue to invest either wittingly or unwittingly into these enterprises that another department of the u.s. government has determined contrary to u.s. national security so we've got a harmonize this policy if you're a policymaker or legislator or on the legislative staff, we've got to close the

gap. the u.s. treasury, the commerce department and the pentagon all need to be in the same place it shouldn't be that hard. mnuchin's treasury did everything they could do to accommodate the chinese government, the chinese military and their nefarious practices. >> so kyle, were you listening to andrew's interview, our interview with ray dalio just now? >> yeah. >> how would you characterize his relationship with china? i guess it's just about -- figures it's a place where you can make money you dispute that, but i guess would you criticize ray dalio and the blackrock, the blackstones for enabling china in some of the -- what you would call an evil regime in some of their actions? >> well, you know, look, we -- tony blinken's state department and the mike pompeo state department both classified china and their government as committing gross human rights violations, genocide, and crimes

against humanity and yet, when we here on wall street start talking about china, we talk about how ray's been there since 1984. i wonder what he thought about the 1989 tee anman square massacre i wonder how he feels about investing and enabling a government that is not a responsible global actor and that the u.s. state department classifies as something that we shouldn't be investing in, and yet, the treasury and the commerce department, you knows go other ways. there's this skis m in all of our minds on wall street all we think about is making money. he says you have to own both when there's two competes powers the shanghai index over the last ten years has annualized a positive 3.5% return the s&p when we have a rule of law and the country that ray dalio grew up in annualized at 14%. you're not being compensated for the risks you're taking in china. it's crazy to say you should be

invested in china today. >> ray seems to have more problem with the capitalist -- the unequal capitalistic system in the united states than any of the things you just brought up about china. >> maybe ray should move to china. >> all right do you have a feeling about whether we're headed because of the inequities in our capitalistic system, do you think -- i mean, how would you fix that in terms of -- because as you just heard, some people do better in the capitalistic system than other people i know that almost seems like we should be heading to something where you worry about outcomes, not the front end of opportunities. >> yeah, i think, look, ray is a much better investor than i am truthfully multiple times over i think it's important to note that what he said about the inequities and the potential economic civil war, this is all a net result of the world's central banks, right

we went through the global financial crisis, and what did we do, we extended our balance sheet, abandoned moral hazard. we supported a lot of these capitalistic institutions that should have gone bankrupt and we should have learned larger lessons. and you know, capitalism without bankruptcy is like christianity without hell if there are no consequences to taking on enormous amounts of leverage and basically betting shareholders' money, and then you get down to the fed and the fed not only our fed but the pboc and the bank of japan and the rest of the central banks, they're causing the net result of inflating asset prices, making real wages drop, right? inflation in the u.s. and the cpi is a plus 6.5 and wages are only growing call it 4.2 we have real wages dropping 2% the middle class can't reach up anymore, and the poor are even poorer because the price of their basic things continues to

rise, the food and shelter so at some point in time, central bank policy, derivative central bank policy is creating a larger wealth gap. and all that's going to do is bring more tension, whether it's economic tension, political tension or let's hope it doesn't turn into kinetic tension at some point in time but china's fighting this today, the u.s. is fighting it, all of the countries of the world are seeing that wealth gap widen because of central bank policy you say how do you fix it? well, there are a myriad of opportunities to try to narrow that gap you're seeing china do it with a sledge hammer with their rationalization of policy, but in the u.s., we're going to see higher taxes and we're going to see more friction on the political front. >> we can do some of that redistribution that ray wants to do with some of those higher taxes. we got to run. appreciate that you were there it's good to have you after the last interview.

>> thanks for having me. >> you're welcome. a reminder, cnbc's annual alpha conference on september 29th we will feature the biggest names in investing, politics, and corporate america. you can register today at deliveringalpha.com. the dow's up, guys, right now, andrew big show. really big shoe. >> that's the old sullivan show. great job, becky, great to see you. we'll see everyone tomorrow. "squawk on the street" is up good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. in a few moments, s.e.c. chair gary gensler is with us to discuss everything from crypto regulation to china to spacs to gamification and payment for order flow lots to get to with the chair. in the meantime, futures steady. china weakness is again on the radar. nice upside surprise from empire today at nearly twice the estimate, david. >> carl, yeah,