good morning stock futures back under pressure after a big day on friday, pointing to a lower open for the first full week of october. jobs friday week, all that happening. developing story out of washington the biden administration sending a warning shot to china. this has nothing to do with taiwan we're talking about vowing to enforce a trade agreement. blowing the whistle on facebook why a former employee is accusing the social media giant of a betrayal of community >> it's monday, october 4th, 2021, "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. it's monday morning and friday was the first day of the new quarter. a good day for stocks. in fact, the dow was up by 1.4%. it was its best day since june for the week the dow down about 1.3% the s&p, nasdaq and nasdaq 100 had their worst weeks since february the trend has been pressure for stocks the s&p was down by 2.2% and the nasdaq down by 3.2%. dow futures down triple digits a decline of 103 s&p off by 15. nasdaq off by 78 check out treasury yields under 1.5% still yeah, at 1.49% for the ten year. looked like we might be headed to 1.6% last week but that's

cooled somewhat. and we are watching oil prices today as well because you have today's opec meeting expectations are they might agree to pump more right now holding steady ahead of that. wti up by a penny. brent up by about 7 cents. and natural gas, that's up another 3.8% this morning. andrew >> that it is. we have other headlines as well. evergrande set to raise more cash as it looks to save itself in major debt issues evergrande will now sell about 51% of the property service arm for more than $5 billion, trading in shares of evergrande and evergrande property services was halted in hong kong today. here in the united states, a facebook whistle-blower, i don't know if you guys watched this last night on "60 minutes" but is now accusing the social media giant of misleading the public and investers, saying facebook

placed profit over safety when it comes to their products and she spoke out in what i thought was a riveting interview. >> one of the consequences of how facebook is picking out that content today it is optimizing for content that gets engagement or reaction. but its own research is showing that content that is hateful, divisive, polarizing, it's easier to inspire people to anger than it is to other emotions realized that if they change the algorithm to be safer, people will spend less time on the site, click on less ads. >> she took a drove of data, para partially leak that to the press and sent to the s.e.c. in a statement facebook saying in part, quote, we continue to make significant improvements to tackle the spread of misinformation and harmful

content. to suggest we encourage bad content and do nothing is just not true we should let you know that facebook's vice president of content policy is going to join us live this morning at 8:45 to talk about this. the whistle-blower said she had empathy for mark zuckerberg and the position he was in but she still very much disagreed with the approach of the company and that he, as the leader of it, were taking. >> i think maybe the most interesting thing the whistle-blower said it was a change in their algorithm that targets some of the more hateful stuff, some of the angry posting. if you're only going to see 100 pieces of data or something if you sit down for five minutes and scroll through social media. they want to get the ones that are most relevant or likely to suck you in. her accusation is they're taking and floating the stuff that's morest most likely to get people angry in order to keep you

hooked and linked in to it that's the question, what does the algorithm do >> twitter have the same algorithm? obviously. we're pushing back against human nature that's what people wanted to see. >> if that was the case, maybe they float porn all the time do you go to people's base behavior. >> i do pictures of my dog right now. random pictures of -- the latest one i put up, it looks like a selfie it looks like he went like this and -- >> that's good content. >> that's not mean it's not -- just gives you a good feeling but where do you think the term clickbait comes from it comes from appealing of the basis -- >> quote/unquote engage you. >> right. >> one of the things i was thinking about the algorithm, spreading hate in terms of engagement, that's one issue the other is mental health,

especially young girls and the like, that is not from images or articles that have anything to do with politics or hate that is, i imagine, you know, images of people on the beach frolicking and trying to look happy. >> it's keeping up with the joneses. >> it's not just young girls >> boys. >> men can get it as well in different ways you're back to human nature this is who we are kind of. and we hope to rise above a lot of this. that was an old cnbc slogan. but we hope to be better but a lot of times we do frolik in the muck it's kind of our fault, too. that's why mark zuckerberg does have a tough -- >> it's one thing to let people be ourselves it's another thing to take the most divisive and corrupting influences and flip them to the top of your feed again and again and again. that's not helpful.

>> it's cool there's an algorithm for it that you can actually quantify it in terms of computer code. >> i want to know more about that hopefully we get to talk about monica about that. she has treasure troves of what i imagine just troves of emails to understand what that is and what that looks like. >> and the data they've been looking at this is the same data leaked to "the wall street journal" when they're look at instagram and knowing it has a negative effect on the teens who use it and going ahead and continuing to allow that to happen it's knowing there's a problem, and are they doing anything to fix or it or doing things to make it worse? >> and the then the question is what's the fix if i told you you were between the ages of let's say, i don't know, 13 and 25, that we're not going to show you pictures of your friends doing certain things -- >> they're talking about kids under 13

we're not broaching that subject. they're talking about putting kids under 13 on instagram too. >> but in terms of affecting teenagers or young adults or, frankly, anybody who i think can get stirred by seeing -- if your friends post a picture, by the way, typically what we're talking about is a -- they post a great picture or what they would think is a great picture and that feeds the insecurity of somebody else, this becomes an interesting dance of what exactly -- >> it's not just that. think about if you're a kid and post something i know they count the number of likes, it's a popularity contest. >> definitely on instagram. >> putting that on young kids, how popular are you? there are games the kids are like i should post between this hour and that, can't post too frequently that gets in their head, you don't have enough issues when

you're a teenager to deal with. >> there were other things happening last night. >> it's been a pretty busy weekend. a lot of news. >> talking about football. >> oh. >> no. >> talking about washington? >> no. >> not football, not washington. what were you betting on last night, then. >> i was betting on a lot of things but i'm talking about the way that major league baseball ended up you see the yankees had a walk off. >> i did see that. >> you know who else won >> the jets won. >> so they're going to face each other, the yankees red sox series it's like a dream. and then brady return and beat belichick. >> and won and the jets won, a rarity. >> i had both new york team osa parlay i had the jets and giants -- >> i said football and you said no >> i was rifted. baseball at the end of the season is every pitch. you can feel the tension in yankee stadium

you could. it was really great. they got one hit in the first eight innings and no score and so it was really cool for a pitching matchup now to washington, you mentioned that, too, what's going on in washington >> we're going down there right now to find out. >> still a lot of uncertainty about a number of economic plans. e ylan mui joins us now. >> reporter: good morning to you, president biden promising to spend more time promoting his economic agenda in hopes of overcoming divisions within his own party. the delay of the infrastructure vote made it clear that democrats still need to figure out what their priorities are, especially since the price tag for the social spending package needs to go to about $2 trillion, biden will go to michigan tomorrow to rally support. >> you asked me if i'm confident, okay. am i unyielding, do i commit

that i'm going to do this? come on. i believe i can get this done. i believe when the american people are aware of what's in it we'll get it done. >> reporter: but there are a lot of hard feelings to overcome congresswoman stephanie murphy said she is profounding disappointed and disillusioned by this process. the business community is also frustrated the sham -- the chamber of commerce called the president wrong for trying to link the bills. house speaker nancy pelosi now wants to pass the infrastructure bill she says by halloween guys >> thank you a lot more to come we'll talk about that and try to figure out what that means to the markets as well. coming up when we return, futures are under pressure but off the lows of the session we'll get you ready for the first full trading day of october, next. ozy media shutting down amid the scandal, carlos watson is going

to join us live on "squawk box" at 8:15 eastern time a conversation you do not want to miss. u' wchg quk yoreatin"sawbox" on cnbc [crowd cheering] how's sanchez looking? with your qb's increased spin rate, any pass with a launch angle of at least 43 degrees puts sanchez in the endzone. you a data analyst or something? an investor in invesco qqq. a fund that gives you access to nasdaq-100 innovations like ai statistical analysis software. how am i gonna do? become an agent of innovation with invesco qqq. ♪♪ don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity.

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bloomburg recording that rich clarida traded between 1 and $5 million in february of 2020 the timing was notable and concerning because it was one day before fed chair jay powell issued a statement about possible policy action because of the pandemic. the trades were described in the 2020 financial disclosures just another point of interest after shrugging off a rough september, a fresh new month upon us. joining us now to weigh in on the markets silvia ja blonski and kevin nickelson. kevin i'm going to start with you. you have thoughts about the fed, with departures that we've seen you think it might take pressure off jay powell to raise rates.

why is that? >> good morning, becky the reason i think that, they were two of the hawks when we look at last week when the dot plots came out, they had nine of the 18 respondents wanted to raise rates in 2022. we believe that two of those were kaplain and rosegrand they believe when the fed replaces them they're going to put doves on the committee so therefore i believe this takes some of the pressure off of jay powell from having to raise rates in 2022 and may move it back to 2023 because jay powell really wants to be more dovish and he's very methodical and wants to give the market more time. so that's why i believe that, you know, this is taking some of the pressure off of him. >> silvia, you agree with that because this may be the biggest

situation or influence on the markets, what the fed is going to do? >> i would agree with that i think the longer term mantra for jay powell has been -- at least in the past year has to be the jobs number has to be back to where it was pre-pandemic we're not there yet and we've had the pull backs and fears and pullbacks over the delta variant. i think when we get to a point the jobs are stable, the inflation rate, the j-- inflatin rates are transitory. >> we have seen the markets pull back a little bit and you think that even though most of the averages are down 5% or less that this is a time that you'd actually buy in. you think stocks are going to be up the last three months of the year >> i do. i think we'll finish in the green. i think september was a little bit of a hoe hum sort of month as it typically is

but fundamentals remain strong, trillions of dollars sitting in savings accounts or money markets that are earning zero. we'll get some sort of spending bill on infrastructure and companies are flush with cash right now, strong balance sheets i think that will translate into hiring earnings have been stellar if that continues i'm bullish towards the end of the year. when i look at the sectors growing, particularly like 5g, the biggest thing since the internet i think, if you think about the tech names and the semiconductor names, those are great opportunities to buy in. >> in video you like you like shares of delta also we did have last week on cnbc an analyst saying she didn't like delta so much because of the high debt they're carrying at this point it doesn't concern you >> it doesn't concern me because i think they're well positioned

to pay off the debt. if you look at the pe on 2021 earnings for delta it's 10.9 versus american which is 28 versus united which is about 14. i think delta is intersected with international travel. and i think travel will pick up. so i think delta is a good value trade right now. cruises, hotels and airlines well off of 52 week highs, still a spot for the longer term buy and hold recovery trade. >> kevin we heard from washington the idea they're still trying to push both of the bills and linked together. people think it's less likely that either of the two will pass what does that do for the market >> in some respects the market will be happy you don't get this extra spending done in

washington because taxes won't go up. that means that, you know, we can basically continue with the status quo however, the issue right now, we have to get the debt ceiling taken care of. that's why i believe the markets have had this pull back because there's so much uncertainty here the market doesn't like uncertainty. and that is what is causing this pullback but as you know, i have said multiple times that i believe that the market is going to be higher by the end of the year and that we just need to digest this at this moment. >> silvia, sekevin want to than you both for being here. good talking to you. >> thank you, becky. coming up, new details about home ownership in america. look at the biggest premarket winners and losers y you're watching "squawk box" on cnbc

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welcome back to "squawk box" this morning it is time for today's exec tiff edge home affordable has dropped to its lowest level in 14 years the median household would need about 32% more of its income to cover mortgage payments the highest since november 2008. we have some sad news this morning about a man who's very familiar to cnbc viewers a

friend of "squawk box" for as long as i can remember citi groups long time chief strategist tobias levkovich has died he had sustained injuries after being hit by a car near his home in september he was a kind person, anybody who knew him, knew that. he was only 60 years old 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,

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good morning, welcome back to "squawk box" here on cnbc let's show you the futures ahead of the open. we are still three hours before we're going to get there but right now we would open down about 100 points nasdaq off about 80 points, s&p

500 down about 17 points the white house is revealing its china trade policy >> reporter: good morning, for the last six months the administration has been conducting an in depth review of the trade policy towards china and whether it should be continued or changed and this morning, they'll outline a strategy that has four parts the first maintaining existing tariffs on roughly $360 billion on chinese goods but starting a new process for companies to apply for exemptions it will also resume direct engagement with chinese counter parts a call is expected to happen in the coming days and aligning policies meant to challenge beijing and finally asking china to maintain its phase one deals. and the purchase pledges are the easiest to challenge

beijing agreed in 2021 it would buy roughly $253 billion in u.s. goods and data shows this year the u.s. has exported only $82 billion to china, about a thursday of the annual stated goal the deal gives several tools to the u.s. to hit back at china for noncompliance but senior officials won't say which of those tools they're leaning towards using. the administration will see how china responds to the overture first but will not be seeking any phase 2 trade deal today i'll sit down with an exclusive interview with ambassador katherine tai >> this is going to sound off topic but it happened about a week ago i wonder what the whole debate with huawei, are going to work that into your conversation? i've been fascinated by the shift in that case, of course

the daughter of the ceo, really means to the relationship between how we're thinking about them and how they're thinking about us >> certainly, andrew, there is going to be a lot to work into that conversation. tech is just one of the issues that we are going to be discussing certainly it came up last week when the u.s. and the european union sat down and they put out joint principles on export controls and investment screenings and there has been some view by the administration that there needs to be more coordination. the u.s. can't be the only one challenging huawei because then it's a game of whack a mole and that technology pops up in europe as well with no reason for china to change behavior that's some discussions with allies at length how it's discussed with beijing, whether that has come up so far in conversations between the two leaders of the countries and whether it comes up between counter parts we'll see but that is top of mind. >> i'm assuming taiwan and

semiconductor chips have to be top of mind as well. >> yes and also some of the recent military action we've seen not only the fact that china has been flying some war planes very close to taiwan, sort of a shot across the bow to the u.s. and japan, but also the u.s.'s military build up with australia in the indoe-pacific there seems to be a lot of puffing up of feathers and perhaps some conflict that has been at least eluded to. so how exactly will the u.s. trade representative try to defuse those tensions even while talking tough on economics it's a tough balance to try to strike. >> kayla, thank you. look forward to talking to you again soon. >> sure. now to the world of autos. after months of talking about the new all electric hummer truck, gm is letting a select few behind the wheel phil lebaeu got his chance

>> reporter: this was an interesting drive one you got to say what is the hummer all about? it's the sense of what gm's new battery platform is all about. so we spent the day just outside of detroit driving the all electric gmc hummer. the first editions will be delivered later this quarter this was a vehicle developed in less than three years. that's the crab walk feature there. a tight turning radius, 1000 horsepower at least on the highest edition versions not quite as much horsepower for the mass market editions that start at $75,000 it was designed for extreme offroading that crab walk you saw a few minutes ago, that's for diagonal driving. we had a chance to go behind the wheel they did not hold us back in terms of what we could do,

how far we could push it off road and it delivered. it had the performance you would expect for extreme offroading. that's me doing the crab walk. you go back and forth and you're driving diagonally, which is a strange feeling the first time you do it. look at what you're looking for in terms of ev sales the next couple of years. the hummer is one of several all electric models now coming to market this is when we start to see electric vehicle sales accelerate because more model are available. prior to this you had a few models most of the sales were tesla models but you have more being offered and this is one we see in acceleration, 6 to 8% of the market, expected to be 10% by 2025. look at shares of general motors we will get an update on general motors' outlook for the rest of the year coming up later this week at the gm investor day. this is when they give us an

update on the remainder of this year and give us a forecast for next year likely and what they're expecting for not just electric vehicle sales. can't emphasize how important this vehicle is for general motors especially after the problems with the chevy bolt and it was underwhelming with response from the public the hummer this is them saying we can compete with tesla when it comes to a vehicle people want to drive. >> so tesla called up 20 plus points this morning. >> reporter: yep. >> and you know the tesla bulls, they're whacky on both sides >> sure. >> i don't know who's worse. but they were complaining over the weekend already that we weren't going to mention it this morning enough or -- >> reporter: i know. >> i'm just pre-empting that can you please mention it. so the record deliveries, right. >> joe, they deserve credit.

tesla deserves credit in a quarter when a number of automakers struggled not only with supply chain problems but the semiconductor shortage that has hit all automakers tesla has been able to maneuver around that elon musk talked about the supply chain challenges early in the quarter and said they would be focussing on how to mitigate the shortage hats off to them they delivered when a company does that, they should get kudos i don't think anybody is saying tesla doesn't deserve kudos for whatthey did in the third quarter, they do because they continue to grow. >> you did it. 6:37 -- >> reporter: we'll still hear from them, joe if you don't say something from either side you get yell at. >> now the other side, those nut jobs are going to be mad that you did mention it so this is what we were talking about earlier with the facebook

algorithm. we appeal to the anger >> the basest behavior >> all right thanks, phil. >> reporter: you bet. >> i got caught in that trap all weekend, joe talking to people about vaccines. >> i saw some stuff -- oh my god, becky that guy -- >> i saw the tweet don't respond to these people. >> i blocked it immediately. >> who have two followers enjoy your weekend. >> you are a liar, you pay no taxes, becky you are a liar face it. some people do not understand that everything is -- >> when you have two employees. >> everything is capped. there's no deductions. >> nothing under the tables here >> no. call me a liar, you a liar. >> becky always has good comebacks. i'm in the camp of just not responding. >> once in a while i can't

ignore them, most of the time i do. >> i've seen you answer. you finally breakdown, you're only human. >> i try not to. >> those algorithms get to you. when we come back, ozy media shutting down amid scandal, less than a week since ben smith first raised questions about the business ben is going to join us live right after this later, ozy media co-founder carlos watson will join us live with his side of the story that's at 8:15 eastern time. quk x"uned you're watching "sawbo and this is cnbc. girls... the chess club has gained an edge on our bake sales. we need more ways of connecting with customers, fast. i know some consultants with great ideas.

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welcome back to "squawk box" now. for the latest in the unraveling of the ozy media, i don't know what we're going to describe this as, but "the new york times" columnist ben smith is here after his article, the media couple closed within days. the latest piece describes the allure that ozy media had for investors. thanks for joining us, ben it was a wild ride we talked to you at the end of the week after you couldn't imagine what would happen in the week then the company effectively closing down what do you think the biggest lesson was for you in watching this all play out?

>>, you know, just that when you have this kind of situation, it's because it appeals powerfully to the people with the money and in some sense the real story is this is a company that didn't have an organic audience a lot of viewers were spending time seeking out ozy media content but advertiser -- they were doing something that advertisers and investors loved, producing news without conflict. kind of diverse, bipartisan, relatable brand safe content that ad buyers loved and wealthy investors loved. even if nobody else did. >> i imagine that ozy would say that advertisers must have tracked some of this and wouldn't have kept advertising if they weren't reaching folks right? >> yeah. i spoke to carlos about this last night and he has an interesting position on this he's totally defiant, first of

all, but also they bought those views, and they paid essentially so you would watch their show in preroll before the video you were trying to watch and i said, carlos, doesn't that mean you don'thave a real audience he said, no, everybody else is throwing their content out there for whoever. we are choosing our audience by marketing it directly to them. that's not how most people see paid views they were real views, it's just that ozy was paying for them. >> maybe not organic but a business model they were arbitraging advertising rates in certain cases. paying for the views and hoping to charge their own advertisers more. >> i think successfully they were charging advertisers for a premium rate for content they couldn't find anywhere else because it didn't make any sense, which is ernest celebrities being their best selves in an interview without

being challenged or pushed or making news. >> what about, though, the investors, the jobs, mark lasry and the like and the diligence or lack of diligence that went on during this period. i'll throw out, maybe you can speak to it, that buzz feed where you worked prior, had looked at the company and did some diligence themselves. >> yeah, let's see i wasn't -- i was on the margins of that process but didn't know a lot about it and can't really speak to it. i left while it was happening. the -- so people stopped telling me things. the -- you know, the investors i think saw what they -- there were two things. one is that lauren powell was in first. i think one of the things you see in the silicone valley community is that there's a herd mentality, you say this person i trust is in, i want to maintain

my relationship with them and improve it by throwing some money in too i think that was a big part of it, the allure of lauren powell jobs, and people investing, in some sense, in their relationship with her. there's not a lot of news content out there that's quite this billionaire friendly. this had this going for it. >> ben, carlos is going to join us later today he's going to say this was real, the journalism was real we had investors. when you look at what happened, is there a look at defrauding investors. i go back to the first column where one of the executives was pretending to be from youtube. are they going to be in trouble for perpetrating that, even though goldman sachs didn't invest at the time >> pretending to be somebody else on the phone during an investment call is in some ways

textbook securities fraud. i think ozy said it was a mental health break, not necessarily an excuse but the question ishow much else in the decks they gave to investors in emails and calls they had was false i think there are some indications around the edges that some of it was. but i think that will be the question. >> what's the one question you want to ask carlos that you still don't have an answer for >> you know, i got to speak to carlos last night and he was -- he was -- he is, you know, totally willing to answer every question so he answered every question and it's in the story. >> ben smith with the story that everyone was talking about last week and i imagine they will still be talking about this week thank you for joining us when we come back a little bit later we'll have ozy's co-founder carlos watson in the 8:00 a.m. hour he's going to respond to the reporting that ben and others

did throughout last week before the company effectively shuttered on friday. coming up, bitcoin pulling back a bit we are digging into the price action and we are going to do it next ay. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.

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bitcoin this morning, 47 and change it was higher than that over the weekend. kind of an interesting rebound given the china news the overall risk off trade joining us now kaveta gupta. i don't know if it means anything more than price at a certain level attracts buyers regardless of the news back drop it seems like people come in and buy it when it is in the

mid-40s. >> i also feel there has been a lot of movements that just happened jerome powell came in and said we are not going to back bitcoin. that has helped out. what we see is there is a huge expectation of the btfs to be approved that's a big jump. all of the energy and the people who love energy mine bitcoin using these. everything positive started coming outlast week. we started to see such a big movement out there people are still deep into the

space. >> i hadn't seen this until i studied up on it over the weekend. this el salvador news. who knew they have started mining bitcoin using the energy from volcanos they've mined $29.69 the president posted a 25 second video that showed the government shipping container of mining equipment. he really staked his presidency on this experiment to some extent

>> we are not saying it is perfect the technology of using it. >> starts from some place and find the adoption imagine if el sal have door can use the power. think of a lot of sun we have the technology we are there now >> who knew the technology is there now. giving them a lot of credit. we did see the market. the angst. bitcoin once again slumped

it seemed highly correlated. it should be going up when the fed puts off tapering. it goes up it should be going down other than interest rates going up >> i also feel like there is a huge part to play. they are buying a lot of ethereum and poin. like e prices have consistently gone up. i feel like all the building that has been happening in the space. yes, one of the big news also on the build up that they have started the tipping service while the big building i feel like it is a big economy

driving right now. >> thank you stay near your phone >> please call me, joe take care. when we come back, engine number one out with a new position the fund's founder out with new details. ozy media founder caosrl watson. this is cnbc

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markets set to kick off the first full trading week of october. all keeping investors on their toes more straight ahead. >> taking a look at the outlook of nationwide problems >> plus a squawk exclusive with the ceo eli lily >> second hour of "squawk box"

begins right now >> good morning. welcome to "squawk box." u.s. equity futures ahead of the open down jones off now by about 14 points i don't know if we want to ascribe football. jobs friday. did you hear fauci doesn't know if it is safe to meet with your family on christmas? he's lost it >> why >> the idea of other variants coming out that's what worries me at this

point. >> i'm not going to come to you for what i think about covid. >> talking about headlines making news this hour. a facebook whistleblower identifying herself as the person who notified the government she went public and accused facebook of choosing to profit over safety when handling misinformation they say, we continue to make significant improvements to tackle the spread of misinformation and harmful content. to say we do nothing is just not true >> from facebook, monika will be here the idea that they build their

algorithm on what is most engaging. tesla reports record vehicle delivers you can look at that stock right now up about 3%. a positive reversal from delta airlines which reinstated initial predictions after cutting that a month ago saying ticket sales have stabilized he expects domestic bookings to stabilize next year. third quarter results happens on october 13 >> let's get to dom. >> let's start with some of the negativity in the market right

now. not one stock in particular. you my recall some of those were in large part otherwise down you mention tesla. on a year to date basis up about 13%, take a look at tesla. those delivery numbers helping the case a little bit here those shares lower

1.5% driven in part by analyst to the equal neutralweight they have some concerns around some of their ability and issues that they have that could be a driver of the dow under performance. >> dom, it is early. have you switched sports what's on your radar >> we have to wait a while >> i did watch the golf. the lpga shoprite. i put it on in the back ground to sooth my sself but i am a football fan. i am a niner's fine.

it has been a couple of tough weeks. there is a weird cross section of fans. i'm a native california grew up in the bay area but at this point, i've been to way more yankee games >> i lost track. 107. 106 at this point. >> the reds choked blue it. thanks, dom. cnbc latest road back bareometer is taking a look at the nation's supply chain problem. this is the big issue everyone

is thinking about now, steve this supply chain getting worse. according to data from ihs, the ontime arrival they call ocean reliability. down 10% is normally 70% averaging $3 a mile now up a dollar the key shortage of chas sis about as bad as it was in january. the system can't keep up

l.a. to phoenix-up the simple piece of equipment. the chassis because drivers are hording them they sit idle. containers sit idle. the system backs up further. most lines don't see relief until the end of 2022 or 2023. the relief in pricing pressure could be further down the road and that could help explain why fed officials more and more see high inflation rates into next year >> this is an interesting point to try and find where the choik points are and why you've got choke points at the ports and the railroads. it is not just the chassis but the labor.

this isn't just the covid situation. you've got a very difficult time finding the labor and the system is broken before it started. >> you make an excellent point >> you have run a lot of things out of it. then something like this comes along and he can ses capacity goes along with all of these tariffs in

place and suppliers are working to catch up. >> and they are dealing with them for a long time coming up, activist hedge fund engine number one we'll speak to the founder chris james when squawk returns right afr isteth [uplifting music playing]

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welcome back to squawk the washington post's pandora papers shielding the rich with tax havens >> it used to be the panama papers now a new one >> the pandora papers. few americans make an appearance in these which document 29,00 off shoer accounts 130 billionaires on the forbes

list the american that makes it on the list is robert smith he was charged with hiding funds. one american state now plays a leading role in global off shoring. that is south dakota they've made it a favorite of chinese billionaires and russians looking to hide their fortunes south dakota trusts holds $370 billion in assets. up from $60 billion a decade ago. trusts in south dakota can last forever. they have sweeping privacy laws that keep them from creditors, tax assessors and ex spouses south dakota is the main reason the u.s. is now ranked second behind the cayman islands on the

tax justice network financial secrecy index. >> how much is putin worth, robert >> no idea whenever i write elon musk or jeff bezos, they always write me and say putin is by far wealthier but we have no idea. >> i love that, 330 government officials. so lucrative that could never happen in this country. >> we are talking other places people in public service their entire life seem to do well here don't they >> they do

talking the ones that document in with nothing and leave with quarter of a billion i won't mention any names. >> merck saying frid its experimental pill for covid-19 reduced hospitalizations and death by half. joining us now, dr. scott gottlieb he serves on the boards of pfizer and illumina. his new book, "uncontrolled spread." it is out as of last month let's talk about the merck pill and some of the after affects. both novavax and moderna shares were down. people are thinking, okay. the pill will be the way maybe that releases some of the vaccines what do you think? >> i don't think the pill is a

replacement. the pill will be very effective helping to treat people. they've authorized the infection. people who don't choose to get vaccinated or can't get vaccinated the first line of defense may be therapeutics as opposed to vaccines this pill in particular looks like it could be a pan coronavirus therapeutic and that it could work against any r respiratory pathogen that begins with rna it is a very profound treatment effect that's why people are so optimistic you saw a profound treatment effect from those at risk and were well into the course. already symptom magnetic with at least five days or up to five

days of treatment and you still saw a very big treatment effect in terms of hospitalization. >> presuming if you could move this earlier and also use it milder patients. you'll see even more profound treatment effect also, will are there people that shouldn't take the pill? >> these are people with one or morris being factors for covid within five days of diagnosis i don't see any reason why they shouldn't. no reason to think this wouldn't work in that setting

merck will start filing this data on a rolling submission they could be ready to produce the authorization and it is a request of how long the drug review will take i expect it won't be as fast as the review but they grant the supplemental this isn't a one to two month review you could see the reverse authorization in commission. the problem is we have 1.7 million doses. a lot of those doses are committed overseas i assume there is more than 1.7 million. to give you a basis of comparison 1.7 million would have been about in you have to cover the

delta wave we stock piled between 50 to 80 million doses of the flu vaccine. we contracted for 1.7 million doses of this drug it is not a lot. >> joe brought up dr. fauci's comments about that we'll have to wait and see if we can get together over christmas. if kids can get vaccinated by the time thanksgiving is here, what will stop us from getting together >> nothing will stop us. we'll get together for thanksgiving and christmas people need to judge the level in the community and in their family setting if you have older individuals. people should be prudent and use testing as a way to secure that encounter.

nothing will prevent us from gathering around the holidays this year. >> that's what i was thinking too. that makes me feel better. jj is going to ask the government for booster shot approval >> the advisory committee is going to meet to gus the j&j booster shot there has probably been a lot of inadvertent challenge. that data does support that. it will not lead to an indication but probably lead to the ability for that label where

you can support and even deliver sub tugs shortly after that then october 26 they'll meet on the pediatric vaccine. the pfizer vax for kids 5 to 11. if pass is any gietd, that reaction assuming you get a positive out come. >> wanted to ask you about the mix and match issue. a lot of folks already out there with the j&j and people who had the moderna early on and saying should i go out now and get the booster. what do you tell them? >> i would tell them we are going to have data in a very short order. in a two-week time frame, we'll have data out that will make

things seamless with the ability to support these things. i would tell them to wait. they'll have a hard time if you've had moderna and you try to get a pfizer booster. if you put in that you've had moderna, they are not going to show you sites you can get a booster. it won't be seamless in a two-week time frame, hopefully it will be >> people i know can't tell the pharmacy they've already had it before >> then what happens if you go in and you don't tell them, what do you get a new card that says you got the booster card later how do you make your cards matchup? >> i'm not sure.

>> it is self-attestation. i'm not advocating that. looking forward to the issues. this is why the fda and cdc have not made a statement yet >> you mention testing are we going to change policies around testing and what a lateral flow test can prove. you can take that test you can prove for the next three or four hours that you are not contagious. >> on the lateral flow tests they are pretty sensitive. tests like the binex now

especially for the delta variant, those are pretty good and i've lost audio. >> scott thank you. great to see you his new book is called "uncontrolled spread." it debuted on the new york times best seller list at number five. ethe eli lily ceo with us strad ahead. dow futures down 132 points. nasdaq down by 102 you are watching "squawk box" and this is cnbc it's another day. and anything could happen.

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welcome back to "squawk box. hedge fund engine number one now showing u showing support and backing

general motors it is great to see you this is a fascinating move a lot of people thought you might take an activist tact. seems like you have shifted gears. >> the believes that led us to general motors are the same that lead us to gm. the similarities is that general motors are in a industry going through a transition exxon is in a position of transition gm has a great board and have decided they are going to embrace the future and make the steps necessary to embrace the future there has been a narrative a long time that only technology

companies can disrupt their industry >> that's what i was going to ask you. there are a lot of questions about legacy companies and whether they can actually do this we are looking at the likes of tesla and thes athen also lucid and the like but you think gm will be the winner >> the reason we published the white paper, it is incredibly complex. gm took -- which happens very rarely they took an all-in, both feet in the pool approach they are launching a new platform and taking a bev, battery electric vehicle only approach not only does it carbonize their fleet. the way we look at the world is

we look at the impact companies have trying to get some indication of what the future potential of the company will be. they went all in on bev. by investing and going all in. we think they could be successful they tend to protect their legacy business first and end up being very slow in the adoption. >> gm is worth $75, $77 billion right now. tesla is worth ten times that. >> correct >> is tesla overvalued or is gm undervalued? do they meet somewhere in the middle or is the price where tesla is at today where it should be? >> not to get too complicated here but we look at it through the total value framework. that is the profitability of the

business and availability that they have. tesla has been very logical. the biggest impact companies have in the auto space are the scope three emissions. there are positive impacts if you put a dollar value on your scope three emissions and look at the size of those, they are huge they are huge negative versus the profitability of the business tesla is hardly any of that. they took a run on 250 cars plus or minus a quarter gm does plus or minus but you have to have the right products, culture and technology to be successful we think tesla will continue to be successful. even on the stretch goals,

they'll do more cars that is possible tesla has continued to surprise all of us on their ability to execute. we have something very unique. we have the larkest player out there, which is toyota if they take an all-in approach creating the value maker. >> when people discuss an active investor, is this very different praising management or am i

misinterpreting it do you have big changes you'd like to see happen as well >> being an activist is probably not a good idea thinking of exxon. we don't think of ourselves as activists. in the case of general motors and exxon, we look at what is the best interest of the company long term. general motors unique in that we think we are doing the right things as an active owner, we wanted to go out and explain what that was. we have an analyst day later this week. we have an opportunity to say to pay attention and look at how a company transitions itself you are right. we are not going in a the al hostile. >> how active have the

conversations been between you, mary barra at gm, what has that engagement been like given that first phone call might have scared them? >> we do tend to preface e-mails with, i'm sure you are not very happy to be receiving this in the case of mary and the entire management team, it was two ways that is a big contrast it was very open we were able to earn gauge constructively about some of the things we saw and frankly, they

had been very thoughtful on their course and the normal back and forth about any engagement had. when we went to the outside to do this white paper, they are very cooperative and very straight forward i have to say it was a real difference and couldn't have been more of a 180 when we were talking to exxon at various stages >> when you talk about exxon, you want that company to do well instead of transitioning too quickly from hydrocarbons. we don't want them to lose money on things that cost products long term, when you worry about a transition going too quickly where some of these renewables

are still not economically and other countries can't a forward to make the transition sometimes the wind stops blowing. even with ev, you've got to power the grid does that include clean hydrocarbons do you worry about moving people to turn away too quickly >> obviously very topical question i think our view and i know it was a little frustrating during the campaign exxon needed to detail what they would need very big picture one that the board needed to come up with in that picture

we did not say do not do those if the case is not there what we are trying to bring to the party is that we have to link esg criteria to outcomes. there are many ways in which you can do that. i thinks that what we are trying to do. our very long-term approach was the emissions you have especially around the scope 3 which is a marker of how much risk you have to the business. you can have a strategy where success only happens if society itself is unsuccessful we think this is a long, slow transition exxon, if we bring capitol

spending and the ability to rebuild the capital sheet. we may be able to build them up and create value going forward >> a lot of people were surprised with your success of exxon mobil because you did it with a smol amount of stake but you convinced some big investors to go in with you. they also happen to be three of the biggest share holders in gm. gm is probably listening you to because of the dynamic have you spoken with state street and van guard about gm? >> no, we have not we do try to speak to as many stake holders as we can. it is important to get a broad perspective of the culture of general motors has been and is going ford

t -- going forward the workers are they all excited about the move going forward it is important to understand how they are going to do that. a big part of what they are also doing is localizing the supply chain which is something we are a huge fan of. bringing these jobs back to the united states or at least where they manufacture, bringing those back there that creates a much more vibrant environmental foot print we have spoken to a lot of people i don't think this is on the list of companies they are particularly worried about right now. >> investment time horizon and what the time will be? >> this entire decade is going to be about this transition. the execution point and near term will be their ability to

ramp the platform and can we see general motors or the entire industry find a market that they can execute on >> what do you think the stock is worth today >> this is a company that has a midsingle digit multiple we think this can be a growth company again. we think the stock can be a triple over the next five years. that for us is something that gets us pretty excited >> 150 bucks plus. great to see you appreciate it. >> great to see you. coming up, eli lily ceo david ricks. we'll be right back.

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what about technologists? 40,000 strong, baby. we'll be able to hit our projections both fiscal and astral. this company sounds great. what do you think, agnes? looks like it's unanimous. coming up, the unraveling of digital media startup, ozy media under scrutiny a number of investors and advertisers flee we'll speak to the founding

director in the next hour. sign up to get our own jim cramer to your email appearing in videos online to give you unique insights to the markets. you can have a front row seat to what stocks jim is trading telling you about his winners and losers in total transparency sign up at cnbc.com/investing club or point your phone to the qr code on the screen we are back after this

welcome back let's get to meg joining us with a special guest. good morning >> good morning, joe the drug industry facing what some call a threat existential threats from the bill f the congressional office sayssh but unsurprisingly the drug industry is fighting this h hard joining us is the ceo of eli lilly. >> it's a really important topic, i think, for our industry, but also for the future health of our country what was proposed in the budget instruction through the senate, paced throat youth through the

house ways and means commute we with a $700 million ask. we think it would fundamentally restructure our on you business model works. if we have a 40% revenue cut, we'll have to cut r&d by more than 40% more importantly, for the small companies that's a fount of innovation, and for the mechanism we oppose in principles as well, in that there's a so-called negotiation between the company and the federal government what is proposed is you either agree to the price or face a 95% gross sales tax. that's not real negotiation. that's just price setting.

we don't like that, either but we have other ideas to premise part d benefit, which is the senior drug benefit, and really close those out-of-pocket gaps in that plan design. >> it seems like just from watching this, analysts don't give it a lot of high expectations that that bill, as written, is really going to get through. this seems to be a lot of fighting about it. there's been some proposals that trim it back a bit i think one of the proposals is that there would be negotiations on some drugs, but not all drugs by medicare. how does the industry feel about that >> this is what is vexing about the 340789, meg, but i'm optimistic two years ago there was an effort to pass a bipartisan reform this is about a third of american innovative drug uses in the part d benefit design. when it was passed 20 years ago

it was done through congress, and there are gaps in the plan design at one phase seniors have to pay 20% of the list price. it's the only major benefit in the u.s. that is uncapped, so if you're on a rare medicine that's expensive you may have to pay thousands of dallas for swung who's on a fixed income. we can do this really by the strict contributing without really much impact to the tax pavers we would like to have something like that done what is being proposed, though, is well, well beyond that. it's designed that way to raise priorities for other priorities. we want to use our returns to invest in r&d appeared create tomorrow's cures >> i've been hearing from patients, particularly people who livewith diabetes, who fee

like they're a piggy bank for the pharmaceutical industry. let's talk about insulin prices. and lilly has taken steps to try to provide less expensive forming of insulin, but some afblgts for lower prices say they field arbitrary you've got an unbranded version that's half the price of your brand humalog. what do you say to patients that these prices are arbitrary for a drug that they're dependent on to live. >> thank for you that question we're deeply committed to making inns lynn affordable to every patient. we have offered a range of programs to do that. i think the most important ones are ones you mentioned, we launch a generic against our own

property, because the system is broken so we have launched initially at half price, and just recently cut it another 40% lilly's generic of our own best-selling product is 70% off. that's had a modest up take in the market i thinkthat demonstrates back total hr-3 and the debates in washington, why just cutting list pricing does not work for patients you need to enhance the benefit so that the out-of-pocket costs are lower. we've done that, too we have a program for all commercially insured or uninsured patients who use daily insulin, that they can pay no more than $35 a month for that arens lynn it's easy to sign up for you can do it at the pharmacy is counter. appeared we worked to launch a model up the cmmi provisions that the hhs secretary has

this is under the previous administration, but it's going now to reduce out of pocket costs for seniors who sign up for a particular type of plant at $35 a month it's wildly successful more than halfway through its first year lilly and others in our industry got together and got it done pricing is important, but more important is plan design and what we ask patients, who are sick with an illness they didn't ask to have, to pay out of pocket lower is better. we want to keep pushing that argument >> we appreciate you joining us this morning, and we'll keep up as this moves its way through. >> thank you very much. joe, back to you. coming up, mohamed el-erian gives us his take on the markets. the futures look like they're down, dow down about 140 down,

21 on the s&p, almost 100 on the nasdaq. plus ozy media cofounder carlos watson will join us to talk about therise of the medi company. stay tuned you're watching "squawk box" on cnbc ♪ ♪ ♪ ♪ ♪ ♪

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got morning. we are looking to open down. and profit over safety, that's the message from the facebook whistle-blower, who is accusing the company of its own interesting. and the man at the center of the story. oy z zy founder carlos watson will join us live. the final hour of "squawk box" begins right now

good morning, welcome back to "squawk box" here on cnbc u.s. equity futures this hour given back some of the strong gains we saw at the end of last week it's jobs week seems like it's late. >> it is it is kind of late. >> like october 8th or something. >> that will be friday >> treasure require yields aren't, after what looked like something big, still under 1.5. we'll see. one of these days we're going to cut you into little pieces that might actually allow investors to reset for the final three months of the year mike santoli joins us to explain this idea.

good morning, mike. >> joe, the markets themselves are undergoing a reset what does that mean? look at the chart of the s&p 500. just in price terms were back to levels basically first reached july 2nd you have three months of the clock work gains you've crunch through some of the shorter-term levels, so you've gotten a bit of a scare that reset sentiment fuls, we dialed back the clock on those streaks we haven't had a 5% pull back, and we brow through the seven-month win streak which was extremely long from february through august all of those things allow you to stop and say what is going on. take a look at the s&p 500 etf relative to a very brought equally weighted russell 1000

etf. they have waxed and waned over here, and then the big growth stocks came back i think under the surface, it's still the cyclical sectors, so maybe it tells you even if the market as a whole is having a bit of a gut check. the five-year treasury note yi yield. >> sort of longer-term inflation expe expectations also, last week we didn't see a lot of net action in the yield context, and earlier last week we got the push higher. this is also supporting banks.

it's not so much the economy that seems like it's headed for the skids necessarily. >> mike, thanks. mondays are, meh, kind of blah you'll be there at 4:00 to summarize things, right? >> yes i'll be there. joining us is mohamed el-erian, also the president of queen's college cambridge. you heard what mike was just talking about. we have inflation concerns out there, questions about what the fed will do next, what are you watching what do you think will be the issue that determined where we really head? >> i think the top four issues are, first and foremost the nature of inflation. the market is starting to realize it's not as transitory

as we thought. this notion of transitory for longer is starting to sneak in even though it doesn't make any analytical sense the fed is becoming less dovish. the third is the mark, and fourth is china. september wasn't great, but it was a lot better than you would have expected. >> okay. so we know the supply chain su issues are a real problem, and even from the fed standpoint, it's not likely to be transitory, could this get out of control at some point, mohammed >> it could. you've heard is say, we have had to change mindsets demand is not the problem, supply is. the company as mindset has

moved, but the policymakers' mindset is not moving fast enough it can be an issue i worry a bit. they may be looking at a pce not coming down from the 3.6 we got last week, but going up to 4% by the end of the year. what are they going to do? i worry they're going to miss the window to taper. >> we had a couple market guests earlier, who are positing that maybe it's less likely that the fed will move now, now that you got rid of kaplan and rosengren. there's also questions about will jay powell feel the extreme pressure, especially right now with the biden administration considering whether they're going to renominate him. you heard what bless warren said last week. >> we don't know, that's the

problem. when you allow opportunities to go by and don't exploit them, you end up in a lose-lose situation. so they really want to start hightening monetary policy already the atlanta fed suggests that we don't have a significant slowdown we've had a significant slowdown of gdp growth in the third quarter. they're ending up in a difficult situation. i feel for them, but it is, unfortunately, a problem of their own making >> what about the fed rule spending these two bills that are now kind of tied together, biden themselves said they are linked, the biden administration infrastructure bill, along with the human capital infrastructure that they're looking to pass, if neither of them pass, because they are linked together and it's too bick of a lift. what will that mean to the economy? because the mart has moved on the assumption that a lot of the

dollars weren't going to make their way into the economy and it would be an issue for the market they both demand and supply enhancing. the demand side, as you say, dollars go into the economy, but even more important is the supply side. we need better infrastructure. we have supply constraints everywhere, and they are multiplying. go to europe and see what happens when you start having they spillover effects the hope is our congress will be able to get its act together and pass the physical infrastructure, and in my mindset, you need to pass the human infrastructure, too, because that's critical. but i worry. i worry look you do. we didn't even mention the debt ceiling. that's out there as well. >> but the market seems to be doing well climbing the wall of worry in all of this if you're betting on this, what do you think happens between now and the end of the year?

>> so i think the -- there is no alternative, fomo, i think that conditioning is still with us. we saw it on friday in a very clear way. that condition is still there, but it is dependent on the backstop of the fed. it goes back to the question, whether the fed taper or not if the fed starts tapering, let me tell you what you're going to see. you're going to see people willing to challenge the fixed-income market, which no one has been willing to challenge. suddenly it will be a less one-sided market, so the yields will start moving you up people will reprice equities so ultimately this conditioning, which has been really strong and helped us enormously is a function of the fed. it goes back to your original question, will they be able to taper or not mohamed, thank you good to see you today. >> thank you. coming up, when we return,

facebook responding. we'll speak to the vice president of content policy, following a whistle-blower's accusations that facebook has repeatedly put profit over safety on "60 minutes. also, the collapse of ozy, we'll hear from carlos watson. don't go awhe.nyer squawk is coming right back.

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the stocks on the move this morning, tesla higher following this weekend's announcement that the company company delivered, the most ever in a quarter shares of j&j this morning are on the move. according to "new york times," this company -- really not on the move much, planning -- -- ahead of third quarter results next week, delta is reinstating its original revenue forecast. the airline cut it a month ago delta's ceo said tickets stabilized, then improved. the airline is expecting 2022

bookings to pass pre-pandemic levels up next, an interview you don't want to miss after the rap fall of ozy media, we'll speak to the company's cow founder, carlos watson you're watching "squawk box" on cnbc need to get your prescriptions refilled? capsule pharmacy can hand deliver your medications - today - for free. go to capsule.com. we handle your insurance. all you have to do is schedule delivery. go to capsule.com to get started in 15 seconds today. ♪ ♪ ♪ ♪ with a bit more thought

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welcome back to "squawk box. our next guest will give us a first-person account of the rise and fall of ozy, following the recording from "new york times" amid misleading statements and actions. carlos watson, good morning to you. >> good morning. >> we have so many questions that have been unanswered. the first, though -- >> do you mind if i start at the top? >> i think what you're about to say -- we just heard -- >> yeah. on friday the company said effectively it was going out of ben. >> suspend operations, but over the weekend, a good conversations with investors, with advertisers, i was warmly surprised to hear from a number of folks, readers, others, as

embarrassing as it may feel to do, i realized we were premature. i think there's a good opportunity. what last week showed me is we have lots of things to improve, we do, and we'll talk about some of those today, but i very engine win lynn feel like we have a meaningful important voice in what is maybe the most transformative decade. i want ozy to be around. i want them to enjoy our podcasts, read our articles, come to our live events. >> for them to do that, if that's going to be the case, they're going to have to trust you. >> yes. >> and trust the ozy brand there were so many questions raised by the reporting in "new york times" last week, plus lots of other reporting in other places. >> and what -- >> i want to say that out lout, which

loud, which is to say the the festival exists, you've won an emmy, that exists, but i think there's other questions whether the numbers were inflated. we heard about this phone call between your cofounder and goldman sachs, apparently impersonating somebody from youtube. we talked about the advertising that suggested that said one thing, but the quotes didn't necessarily come from where they said they were coming from to the extend that you can clear the air other explain it, let's do that. let's starred with the phone call your cofounder had a phone call with goldman sachs and effectively took them off of a zoom and apparently started to impersonate with a fake e-mail address as well somebody from youtube. what happened? >> i don't know. i wasn't there, but i do know that i got a call from the youtube folks after it, saying

something strange had happened we figured out what happened i immediately called back to the folks at goldman right away, not four days ago later as i think someone wrote at one point look, it's heartbreaking, it's not good, it's not okay. i love goldman, i've got a lot of friends there to this day several months afterwards, i'm grateful that we formed a new advertising partnership. so hopefully there was some sense of trust regained. but no doubt about it that fractured a lot of trust not just there, but you saw what happened in a tumultuous week last week. >> as one point the company represented that your show was going to appear on a & e, and i got the e-mail saying this show was going to be on a & e with 95

million households i said to the producer in the ear, by the way, when does this air, thinking it airs on a & e she said, something, you know, we're leaning in hard to online media. this is actually a youtube original what it now appears like is that it wasn't a youtube original, either that was somewhat of what the discussion or the issue was with goldman sachs, you were uploading these videos, but a youtube original is something where they effectively commissioned the program. >> so lots of miscommunication, but i want to clarify that one that was one where we lost a lot of trust you had seen the announcements that we have a multiyear partnership. you know we have done shows on a & e, on their sister networks, and originally in the summer, the conversation was, we created

a sizzle reel together as the summer moved on, we realized they were on a different timetable, so we shifted to youtube we thought there was an opportunity to come back to them, but we clearly shift to do youtube. i know for you and other people, you got e-mails. that was wrong, i don't know whether it was a mistake or intentional, but whatever it is, it was wrong. >> the executive producer that you hired, believed he was making a show for a & e, and in fact suggested on the record with "new york times" last week, that the show -- that every time he was told he wanted to call someone at a & e, he was to do effectively not to. >> i have to saying this, i maid a bad decision last week, i didn't respond to your text. i didn't respond to texts of other people i node. i wish i had engaged, had good conversations. i felt like after that piece, it was open season to throw whatever crazy half-truth and

put it out there to be really clear, some of the things were mistake we made. but that's a good example of one that i think that's true that same producer you're talking about is the same producer who has texted me multiple times with multiple explanation points, saying congratulations on the show bringing matt damon show, congratulations on the show appearing on amazon prime. no doubt about it, last summer, as the show started, we originally hoped it would go to a & e, and it shifted to youtube, and i'm sure we did not communicate that well. i own that that's a mistake. >> you use the wort half-truths. i think there's more than that, in that the producer said to you specifically that you were lying to the staff about the fact this show was supposed to be a a & e, and then apparently lied against when you said it would be a

youtube original. >> i disagree. i don't think that's true. the idea that he said to me i was lying, and then i said to the staff it was youtube original clearly it wasn't. i know what a youtube original was, and it clearly wasn't that? >> why were they telling me, by the way, that it was a youtube original i hope it was only a mix-up of words. it may not have been, but i hope it was only a mix-up of words. what i don't want obscured is we've done 200 episodes. when scarlett johansson has come on, when dr. fauci has come on, when herd has come on t. malcolm -- holds on one second d. they come on knowing they're coming on a terrific youtube show -- >> nobody is disputing the quality of the program by the way, you just mentioned this being on amazon prime, which became another issue, which is that you advertised -- it was the first talk show on amazon prime

you were uploading that show to prime. i was thinking, that's amazing, and then when i found out -- >> no, no, it's not -- time out, guys again, thank you for the time. joe, you mind if i hit this first and come to you? >> i'm seeing a pattern and wondering who is in charge -- >> you know what let me answer that and come back to that. that also ties to the question of regaining trust there's a larger question. that's a totally legitimate question, to be really clear, getting on amazon prime, not everyone can upload it it's a very rare thing the suggestion in one of the articles that any random yahoo can do that, you can't do that you should speak to amazon about that it is a big deal our understanding from them is that we were the only talk show, and part of what was special about that is they hadn't done it otherwise and they weren't in

a place where they were willing to put their own money what they were willing to do, in terms of a large up-front payment, but what they were willing to do for a few people is allow you to be part where you take risk and they take risk the more views you have -- >> but to put a fine point, they asked you to stop advertising. >> because we are not convinced we are going to get into the talk show business if you advertise like that, you'll have other people and their agents calling they said take it down, not because it was true, but we don't want you stimulating more pitches in a space we haven't committed to so, please, with all of these things, let's have the conversation, right, because we definitivelily made the mistake

and i nope we said to have a conversation whether mistakes are ingrained, or whether, like a lot of young companies, we made mistakes, but that's the 20%, not 9the 80% we are we are on amazon prime, there's only two ways to get in there. there's two ways to get on there. our understanding is we were the only talk show, and their hesitation about having it out there was that no that wasn't true, but they didn't want to stimulate more demand. becky has a question for you. >> carlos, just really quickly -- >> i apologize i'm not hearing you yet. >> can you hear me now >> i don't hear her yet. >> joe's got a question. >> i'm wondering the aggressive

marketing that caused to sort of over-sell. you can call it aggressive, or some of it was downright falsehoods, where you buy some advertising somewhere, and then the entity, suddenly the "los angeles times" is saying -- who was that because it happens again and again and again. a head of marketing? >> let me start with a makecro place, joe as you said before t. we have a real business. real newsletters that millions of people get. we have real tv shows. we have real podcasts in the top ten on apple we have real festivals that people come to we have tried to market these very different franchises to market them well i would tell you one of the mistakes we made is sometimes we were too aggressive in marketing them, unequivocally. i own that that is my mistakes, i'm the

ceo, i'm responsible we tried our best. if you're asking me, do i think we got it wrong 50% of the time or 80% of the time no did we get it wrong 20% of the time yes, and i own that. >> so 80% of the market was true i don't believe that's true. >> why do you not think it's true look, it was an incredibly salacious week i do think at some point you'll invite me back to talk about the state of journalism. last week i thought there was not only real critique, and make no mistake, i own the things we need toad before on data, on marketing, on leadership and culture. i clearly own that, and clearly have thoughts about where we can go from that, but i thought there was a wild piling on, and

that left you and a lot of other people saying, is this everything about ozy even andrew, you sent me a text after you were on my show, and you said i've never had so many people tell any membership watching where did you get the magic from >> i think what i said -- >> no, no, no, i'm happy to read it. >> i was amazed by how many people were watching it on youtube. >> you told me, in text, i'm happy to bring it up -- >> you can. >> you said, on the text to me and i'll read it to, if you like -- you said. >> i was amazed how many were watching. >> quote, you have a business audience on youtube. i carry hearing from various people who saw it. i would love to talk to you. >> right. >> that's what you said, keep hearing from people. look, i need you guys to be fair about this, and thoughtful about

this, and not go with the runaway digital mob. >> becky has a question, but i want to ask you one other, which relates to the newsletter franchise. 26 million people you talked about getting this newsletter. i don't disbelieve you have 26 million addresses in your database you can buy some of those, you can do it organically. >> you can partner, and i've partnered before on newsletter efforts with the "new york times" and the wire and others. >> i saw a 25% open rate on those 26 million newsletter subscribers. that's a very high open rate for what i don't believe is a fully organic list do you really have a 25% open rate on 26 million subscribers >> we do not i hope what it said, for our best, most regular people it was

25 pu 25%. i hope what it said is we have a 25% open rate. >> this was a deck for your series d, which brings me to another question the investors who invested after this now infamous call between your executive and goldman s sachs, were they made aware of the call and the questions that have been raised that we're talking about today? >> you know what because you know that is fraught and there's a lot of questions, i will not go into that, but i will say this. you know this with private companies, when you invest in a private company, you don't just have one conversation. you know it will can be a 3 to 12-month process you know you often have dozens of conversations, both ones that the company sets up, but also ones that you do yourself. there are lots of data point,

you sync is all through, and i'm confident that all investors did. i'm confident they consumed our newsletters, our tv shows, and podcasts, and many would come, in the early days, to our festivals as well. >> hey, carlos, just on that point, though -- >> becky, can i -- i'm sorry, can i say one thing. >> i want to clarify the point you're making. we know the conversation with samir, that was a conversation where you say there was a mental break. were there any other occasions where investors were given misleading information or was that a one-off event? >> i hope and believe that that was a one-off event. it's a tragic event, a horrific event, it's a wrong event. i hope and trust that was a one-off.

but let me say something else. again, i think this is important and it started the beginning of the conversation i think it's completely inappropriate and not thoughtful, these kind of comparisons. theranos didn't have a real product, you have seen the emmy we won you received our newsletters i want to make sure we have a grounded, thoughtful conversation investors who were thinking about us, considering us, by the way, were also investing in other companies, in reese witherspoon's hello sunshine, business insider, the atlantic and all other sorts of companies. they're often investors who know the media space, maybe even better than i do. >> the point that ben smith made in today's column was it was a group think, everybody was trying to be part of a club and they actually didn't go their due diligence at all

>> what i would say is, i think ben smith should never have had a chance to write this piece i've shared what number of people before. two years ago, ben smith sent an emate and the then-ceo, you guys should get together, and talk about buying they had all their top leaders in marketing, in finance, they went through our numbers back and forward. they put together a joint presentation, and made us in november, right before thanksgiving, joe, they made us an offer of nearly a quarter billion for a company that now ben smith sets up that it was just group think how is it possible that ben, who's been in media for a number of years, kicked off a process, fogged up, and they made an offer for $225 million for what

they now say was group think and made up. two weeks later, he quit, went to the times and first column in march of 2020 was, i guess new media can't work, i guess i have to join the times. just becauseit didn't work, it's not okay for him to take a potshot. did he tell his editor that he was in conflict and still owns lots of stock, he didn't i don't think he should have written that piece and the other pieces and create this false narrative because ozy doesn't look like something he wants it to be, and because we said no to him. >> but clearly you're acknowledging that there are things that were misleading that were fair game for a journalist to write about >> we definitely should have

been better with data. i call us a modern media company, because we have tv shows, newsletters, podcasts and other vessels. joe, we got it wrong, it's not okay what we did,i noting b. i don't think it was 80% of the time, but probably more like 20% of the time and there's some things around her and culture that we need to be better at. >> carlos, can i clarify, the things you say you own because you were the leader, you own it because people were doing things you didn't know about, or things they were doing -- >> becky, that's such a broad question >> no, i'm saying, is it your fault because you didn't know, or that you did and you didn't stop it. >> i should have figured out a third-party group that could have done not just digital like com score does, because it only

looks at website traffic or mainly looks at website traffic. we have done a third party that has done a preliminary look, and we will share it broadly with people going forward every month, we'll share our data we have nothing to hide. we have good things there. i own that i didn't make sure that happened, and i nigh that was cry tal to us. we did it piecemeal, but i should have someone external do it consistently and share it with people in an easy, consumable way. >> but when we're talking about made-up marketing numbers, did you know that was happening? >> i don't believe we have made-up marketing numbers. i've heard that say that repeatedly what it is is ben smith and people like him who only believe what happens on twitter and web sites matter, and discount newsletters and discount podcasts, and discount tv shows, and discount festivals their belief is if you're not

doing that, if you're not active on twitter and doing snarky things on twitter, you're not a real media company a big part of the reason we're going to continue going forward, i don't think it's a good world where the only media companies you are are the kinds that get ben smith excited. what about the rest of us? >> i'm looking at the dec. 25 percent e-mail opens. 25% open rate. and 3% ctr it doesn't have a star next to it that says just the people who are actively engaged with you in some way >> you know, i need to look at that more closely, but let's make sure we do something here, which is that i don't want -- if you and i looked at any small company, or a large company, we would find a handful of things that aren't great. >> right we would >> just because something is

sloppy or stupid doesn't mean it's illegal i want to be clear about that. >> i recognize mistakes can be made the question is whether there's a series of mistakes, a pattern, and i think that's the largest issue. another one, sharon osbourne, you made a comment she was a friend and investor. >> i didn't say she was a friend >> we can probably go and get the tape please, go ahead and play the tape cue up the tape. this is an obama/romney moment show me the tape here's what i said and here is what is true we have a wonderful music and ideas festival i've invited you becky, you were going to come, we had a conversation, you couldn't do it we went back and fourth. >> yeah, it was something i couldn't do. >> and sharon osbourne and the folks said it was too close to

something did called oz fest the final resolution is they would ultimately get about 50,000 shares in our stock i think on this show, maybe a couple others, in my mind, people who own shares in our company are investors. >> hang on -- >> hang on. >> they do that proactively and you didn't say they happened to get shares instead of cash there is a difference. >> andrew, andrew, andrew, there of -- there's no doubt it's different. do you think i'm saying to serious investors, invest because of sharon osbourne is that a calling card do you think that's what i was doing, or do you think i was having a light moment and we were making a joke and i said that play the tape. i'm sure there's a light moment. i'm not going to say to anyone s. you know why you should

invest sharon osbourne is investing in ozy. we were having a light moment. >> i wanted to go back to this, though you're going to try to continue this company and keep going. >> yeah. and it will be tough as you said, joe, we'll have to regain trust. >> the investors apparently have left the company ron conway effectively said i'm giving back the shares. >> i need you, andrew, as sophisticated you are about this stuff, you know we raise millions of dollars of capital so for you to bandy about ron conway -- >> it's the first time i mentioned his name. >> today, but you mentioned it before, in the last week for you to keep bandying that about, that's not accurate that's what i said before, joe, about the things that are misleading i'm sorry to see him go. he's a terrific investor. >> why did they abandon the

company? if things are as good -- mark lazzeri defended you, that he thought this was real, dealt with appropriately, you know, 72 hours later, he's gone why? tell us about that. >> i can't speak to that except to say it's heartbreaking. i'm a big fan of mark's. i've been lucky to get a chance to work with him he was great as an investor, a board member he joined me here on this show, as you know, i think more than once he helped me with a number of keep business developments i'm sure he and i both wish last week hadn't happened i think weboth felt like ozy had momentum this year part of my opportunity going forward is to make sure we build back stronger, we create something that he and others can

be proud of. you know, joe, you probably remembered the tylenol situation moments ago, that was a moment of leadership, it looked like a company with us going to go away do you remember that >> i remember it well. >> we may not get there, right this is going to be hard, but at our best, this may be our lauds russ -- lazarus moment what do you? you have to bring back the advertising community to ultimately support this, and then readers and the public. >> i think the first thing is think about my team. >> are they going to stay with you, by the way? >> you know what that's a good question. >> have you talked to them >> i've talked to some of them this has all happened quickly. they were as traumatized last week, as i was whatever you want to say, you and i both know, whenever you met people from ozy, they loved

ozy. they loved it. >> by the way, there were a number of reports last week, at least from ex-employees who clearly didn't love ozy. >> fair enough of. the nearly 1,000 people we've hired, part time and full time, to freelance reporters, and other folks, people ran with stories from, for example, one gentleman we fired for lying multiple times, but they set him occupy and allowed he quote to run wild as though he's a credibl credible source. i'm happy to have conversations about that but what i need to do next, put our team in a good place and that won't be easy have to regain the trust of investors. that won't be easy, either at the end of the day, if we

don't have tv shows that people want to watch, if we don't have podcasts that people put their headphones on. if we don't have an ozy fest, that will be important we have to change substantially on data, on leadership and culture, on market carlos watson, we very much you appreciate being here. >> you know, i wish i could have last week. >> i wish you luck, i really do. >> i hope i have a chance to come back. thank you, joe thank you, becky. when we come back, we'll speak with facebook's vice president of content, and whistle-blower's statements. stay with us

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baaam. internet that doesn't miss a beat. that's cute, but my internet streams to my ride. adorable, but does yours block malware? nope. -it crushes it. pshh, mine's so fast, no one can catch me. big whoop! mine gives me a 4k streaming box. -for free! that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that? jim, i just want to ask, as an investor, you heard what carlos watson would say, would you invest >> invest? no >> i thought that might be your answer no i was on the show and i kept

thinking that when is it going to run because i hadn't heard from anybody. i mean, like no one. i asked him, when is it going to return, whoever i got ahold of they said, it ran a couple weeks ago. i know andrew compared it to theranos that is a benchmark of bad, but i've got to tell you guys, that was a remarkable performance we just saw there was no admission of anything, anything at all. becky, i'm still stunned i don't even know what to say. i mean, it's easier to talk about -- i don't know. i feel like it's easy to talk about facebook and the revelations. that's more positive andrew, what do you think?

>> no -- can i talk about mark i feel like mark zuckerberg comes out ahead of that last interview, right >> look, i think that -- i think there's questions which has had a greater effect on society? and i think we could agree that facebook has had a much larger impact. >> trust. >> i'm sure carlos watson would love to have that kind of impact i think one version is very misleading, and the other is maybe misleading as well, but in a different way. >> facebook is horrible. that's the benchmark anybody who has read these things and still feels the same about facebook must be in the inner circle of facebook maybe sheryl i don't know that was just horrible the stuff they did to teenagers,

my charitable trust owns -- i can't in good conscience own it. it was horrible. the ozy fest was interesting, because many who were involved, we had been in the shows, and it was like, we are we part of it i felt like i was part of it it was so incredible the interview where there was a guy pretending to be from you youtube? why not just accept that that was just horrible and try to defend whether you were in on it ozy said he wasn't in on it. i'm trying to say, how is that possible >> yeah, carlos watson. >> yes, how is that possible carlos watson was not in on it i wish your next guest luck, because i've been a somewhat believer that facebook could get through this, and now we need real answers that was just terrible

>> anybody who says they have a small by says this is the best way to reach people, but this is a real -- >> we've done great with our restaurant and instagram i just feel like that series was devastating. a lot of devastation this morning. the carlos watson interview was devastating. i want to hear what facebook has to say, but i think that series -- aren't you guys just stunned? >> as a parent of teenagers or preteens, it is something you are concerned about. we have seenle fallout i think this is now hitting the point where people have serious questions, where congress is likely going to dig into this. >> yes, yes. marc benioff last week at a conference said, there's truth or there's power

you have to elect which one you want facebook has clearly selected power. at this point in our lives i think we just want truth there was not a lot of truth expressed by the company versus what we read. >> jim, thank you. >> great interview, honestly it was just unbelievable, guys, just unbelievable. great to see you, jim. we'll see you in a few minutes. the new cnbc investing club that jim is doing, you can sign up to find out more, or just point your phone at the code at the screen and it will take you straight there "squawk box" will be right back. now we're going to move to another issue. facebook whistle-blower now accusing the social media giant of misleading the public and

investors, saying -- we're joined bymonica van -- vice president of facebook content. you watched the "60 minutes" interview, and effectively she she said the company changed the algorithm such to create more engagement by surfacing stories that involve either misinformation or effectively hate what do you make of that >> first of all, that's absolutely not accurate. the news feed agoal rhythm change was in january 2018, that was designed to prioritize meaningful interaction between friends and families, basically to have the exact opposite effect it was supposed to connect people with the ability to have conversations with their friends and family, which research told us would be good for people's

wel well-being with y we knew it would be a hit to our business, and we've continued to make refinements. we published our demotions, meaning the kinds of content we ruse if you look at the demotions, you'll see we actively work to reduce of visibility of clickbait, sensationalist content. >> part of the report identified a document from leaders in the eu that suggested they needed to of move their campaigns to be more aggressive on different sides of the aisle, to get the right or enough engagement >> well, you know anecdotal feedback about why they have posted are doing well or not is

not the same thing showing that we have somehow decided to prioritize clickbait other ingaugement bait the january 28th change had a reduction in sources of kept that may lead people to polarization this is a stat that i don't think people often realize only about 6% of the content and people's news feed is political content. that's not what we are about we're trying to connect people with friends and family, groups and pages they have chosen to follow, sure, but this is about given people a place to have meaningful conversations just a funny anecdote, if you they about the around the elections, we saw double the increase in posting on halloween, about halloween than we did about the elections on election day this is a place where people can connect with family and friends.

it continues to be so. any suggestion we are trying to prioritize engagement bait is blatantly false. >> let's talk about some of the -- i give you credit for doing the research, the question, therefore, is what do you do with that research? clearly the research suggests that for some young women, this creates a terrible situation for them the question from a technological perspective, is what do you do for that? >> thanks for pointing this out. i hope people will understand, if we were a company who didn't care about safety, if we were about trying to prioritize profit over safety,we wouldn't do this kind of research the whole point is understanding how to do better and make a better experience. on the instagram teen research, first, just to put it in context, we are a company that has more than 1,000 working on

these issues, we have researchers. this was an internal discussion over a survey of something like 40 respondents from teens already struggstruggling, but oy issue we asked teen girls about issues, teen boys on 12 issues, every single issue on the majority of respond it is said that instagram made them feel better or had no material effect. >> monika -- >> that matters to me. i spent my career in child safety this matters to all of us we want to do better. >> monika, we have to run. do you think it was criminal for her to take those documents -- >> what i can tell you is the stolen documents have often been

taken out of context we're ready to answer any questions any regulators have. >> do you plan to sue her? >> i can't answer that my safety, the band ground of people, safety it our priority. >> monika, thank you for joining us make sure to join us tomorrow "squawk on the street" begins right now. good monday morning, welcome to "squawk on the street." i'm here with jim cramer and david faber here on the stock exchange best day for the s&p since july, but futures are weak a big week ahead we'll look at isms our road map begins with facebook, though, as that whistle-blower publicly accuses the social media network of prioritizing profits over publ